1
EXHIBIT 4.2
EXECUTION COPY
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ADVANTA BUSINESS SERVICES CORP.,
Individually and as the Servicer,
ADVANTA LEASING RECEIVABLES CORP. VIII,
as an Obligor
ADVANTA LEASING RECEIVABLES CORP. IX,
as an Obligor
and
BANKERS TRUST COMPANY,
as Trustee
=========================================
SERIES 1999-1 SUPPLEMENT
Dated as of August 26, 1999
to the
MASTER FACILITY AGREEMENT
Dated as of August 26, 1999
================================================================================
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ADVANTA EQUIPMENT RECEIVABLES
ASSET-BACKED NOTES
Reconciliation and Tie between the Master Agreement and Series 1999-1
Supplement and the Trust Indenture Act of 1939, as amended
Trust Indenture Act Section Master Agreement Series 1999-1 Supplement
----------------------------- ------------------------ ---------------------------------
Section 310(a)(1) Section 11.08 Section See Master Agreement
(a)(2) 11.08 See Master Agreement
(a)(3) 11.15 See Master Agreement
(a)(4) Not Applicable Not Applicable
(a)(5) Not Applicable Not Applicable
(b) 11.07 See Master Agreement
(c) Not Applicable Not Applicable
311(a) 11.12 See Master Agreement
(b) 11.12 See Master Agreement
(c) Not Applicable Not Applicable
312(a) 12.01, 12.02 See Master Agreement
(b) 12.02 See Master Agreement
(c) 12.02 See Master Agreement
313(a) 12.03 See Master Agreement
(b)(1) Not Applicable Not Applicable
(b)(2) 12.03 See Master Agreement
(c) 12.03; 1.03 See Master Agreement
(d) 12.03 See Master Agreement
314(a) 12.04; 6.07; 6.08; 1.03 See Master Agreement
(b) Not Applicable Not Applicable
(c)(1) See Series 1999-1
Supplement 6.03
(c)(2) See Series 1999-1
Supplement 6.03
(c)(3) 1.05 See Master Agreement
(d) 1.05 See Master Agreement
(e) See Series 1999-1
Supplement 6.03
(f) Not Applicable Not Applicable
315(a) 11.01(a) See Master Agreement
(b) 11.02; 1.03 See Master Agreement
(c) 11.01(b) See Master Agreement
(d) 11.01(c) See Master Agreement
(e) 10.10 4.14
316(a)(1)(A) 10.08 4.12
(a)(1)(B) See Series 1999-1
Supplement 4.13
(a)(2) Not Applicable Not Applicable
(a)(last sentence) 1.01 See Master Agreement
(b) 10.04, 13.01(c) See Master Agreement
(c) 10.09 See Master Agreement
317(a)(1) See Series 1999-1
Supplement 4.03(c)
(a)(2) 10.02(c) 4.04
(b) 14.06 See Master Agreement
318(a) 1.05 See Master Agreement
(c) 1.05 See Master Agreement
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TABLE OF CONTENTS
PAGE
ARTICLE I
CREATION OF THE SERIES 1999-1 NOTES
SECTION 1.01 Designation.............................................................1
SECTION 1.02 Pledge of Series 1999-1 Trust Estate....................................1
SECTION 1.03 Custody of the Series 1999-1 Trust Estate...............................2
SECTION 1.04 Conditions to Issuance of the Series 1999-1 Notes.......................2
SECTION 1.05 Acceptance by Trustee...................................................3
SECTION 1.06 Liabilities of the Trustee and Parties to the Master
Agreement, this Series 1999-1 Supplement and the Series
1999-1 Notes; Limitations Thereon.......................................4
SECTION 1.07 Forms of Notes and Denominations........................................5
ARTICLE II
DEFINITIONS
SECTION 2.01 Definitions.............................................................5
ARTICLE III
SERIES ACCOUNTS; DISTRIBUTIONS AND STATEMENTS TO SERIES 1999-1
NOTEHOLDERS; SERIES 1999-1 SPECIFIC COVENANTS
SECTION 3.01 Collection Account.....................................................18
SECTION 3.02 Reserve Account and Residual Account...................................20
SECTION 3.03 Investment of Monies Held in the Series 1999-1 Accounts;
Subaccounts............................................................21
SECTION 3.04 Flow of Funds..........................................................22
SECTION 3.05 Statements to Series 1999-1 Noteholders................................23
SECTION 3.06 Compliance With Withholding Requirements...............................25
SECTION 3.07 Servicer Advances......................................................26
SECTION 3.08 Modifications of Contracts and Purchase of Contracts...................26
SECTION 3.09 Servicer to Act as Custodian...........................................26
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE IV
SERIES 1999-1 EVENTS OF DEFAULT
SECTION 4.01 Events of Default......................................................28
SECTION 4.02 Acceleration of Maturity; Rescission and
Annulment..............................................................29
SECTION 4.03 Remedies...............................................................30
SECTION 4.04 Trustee Shall File Proofs of Claim.....................................31
SECTION 4.05 Trustee May Enforce Claims Without Possession of Series 1999-
1 Notes................................................................31
SECTION 4.06 Application of Money Collected.........................................32
SECTION 4.07 Limitation on Suits....................................................32
SECTION 4.08 Unconditional Right of Series 1999-1 Noteholders to Receive
Principal and Interest.................................................33
SECTION 4.09 Restoration of Rights and Remedies.....................................33
SECTION 4.10 Rights and Remedies Cumulative.........................................34
SECTION 4.11 Delay or Omission Not Waiver...........................................34
SECTION 4.12 Control by Series 1999-1 Noteholders...................................34
SECTION 4.13 Waiver of Events of Default............................................34
SECTION 4.14 Undertaking for Costs..................................................35
SECTION 4.15 Waiver of Stay or Extension Laws.......................................35
SECTION 4.16 Sale of Series 1999-1 Trust Estate.....................................35
ARTICLE V
PREPAYMENT AND REDEMPTION
SECTION 5.01 Optional "Clean-up Call" Redemption of Series 1999-1 Notes.............37
SECTION 5.02 Class B Special Redemption............................................37
SECTION 5.03 Notice of Redemption and Disposition of Funds..........................38
ARTICLE VI
MATTERS RELATING TO THE CLASS B NOTES
SECTION 6.01. Transfer Restrictions.................................................39
SECTION 6.02. Rule 144A Information.................................................40
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 6.03. Investor Letters......................................................40
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Ratification of Master Agreement.......................................41
SECTION 7.02 Counterparts...........................................................41
SECTION 7.03 GOVERNING LAW..........................................................41
SECTION 7.04 Amendments and Waivers.................................................41
SECTION 7.05 Non-petition Clause....................................................41
SECTION 7.06 Officer's Certificate and Opinion of Counsel as to Conditions
Precedent..............................................................42
SECTION 7.07 Restriction on Further Indebtedness....................................42
SECTION 7.08 Special Covenants and Acknowledgements.................................42
SECTION 7.09 Actions Taken by the Series Controlling Party..........................43
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TABLE OF CONTENTS
EXHIBIT A -- FORM OF SERVICER'S CERTIFICATE
EXHIBIT B -- FORM OF CONTRACT
EXHIBIT C -- FORMS OF NOTES
EXHIBIT D -- FORMS OF INVESTOR LETTER IF CLASS B NOTES IN
DEFINITIVE FORM
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This Series 1999-1 Supplement, dated as of August 26, 1999 (the "Series
1999-1 Supplement"), supplements the Master Agreement (as described herein) and
is by and among Advanta Business Services Corp., a Delaware corporation,
individually ("ABS"), as the entity which originated or acquired the Contracts
and which will sell or contribute the Contracts and other property, rights and
interests to the Obligors (in such capacity, the "Originator"), and as initial
servicer (ABS in such capacity or any successor, the "Servicer"), Advanta
Leasing Receivables Corp. VIII, a Nevada corporation, as an obligor ("ALRC
VIII"), Advanta Leasing Receivables Corp. IX, a Nevada corporation, as an
obligor ("ALRC IX" and, together with ALRC VIII, the "Obligors") and Bankers
Trust Company, a New York banking corporation, as trustee (in such capacity, the
"Trustee") for the Series 1999-1 Noteholders.
RECITALS
This Series 1999-1 Supplement is being executed and delivered by the
parties hereto pursuant to Section 13.02 of the Master Facility Agreement, dated
as of August 26, 1999 (the "Master Agreement"), among the Servicer, the Obligors
and the Trustee. In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Master Agreement, the terms and provisions of this Series 1999-1 Supplement
shall govern with respect to the Series 1999-1 Notes. Capitalized terms used
herein, but not defined herein, shall have the meaning set forth in the Master
Agreement.
ARTICLE I
CREATION OF THE SERIES 1999-1 NOTES
SECTION 1.01 Designation. There is hereby created a Series of Notes to
be issued pursuant to the Master Agreement and this Series 1999-1 Supplement to
be known as "Equipment Receivables Asset-Backed Notes, Series 1999-1" (the
"Series 1999-1 Notes"). The Obligors with respect to the Series 1999-1 Notes are
ALRC VIII and ALRC IX, jointly and severally. The Series 1999-1 Notes shall be
issued in four Classes. The first Class shall be known as the "Equipment
Receivables Asset-Backed Notes, Series 1999-1, Class A-1." The second Class
shall be known as the "Equipment Receivables Asset-Backed Notes, Series 1999-1,
Class A-2." The third Class shall be known as the "Equipment Receivables
Asset-Backed Notes, Series 1999-1, Class A-3." The fourth Class shall be known
as the "Equipment Receivables Asset-Backed Notes, Series 1999-1, Class B."
SECTION 1.02 Pledge of Series 1999-1 Trust Estate. (a) Each Obligor
hereby pledges to the Trustee and grants a security interest to the Trustee for
the benefit of the Series 1999-1 Noteholders, and the Trustee hereby accepts the
pledge of and grant of a security interest in, all of such Obligor's now owned
and existing and hereafter acquired or arising right, title and interest, if
any, in, to and under all accounts, general intangibles, instruments, chattel
paper, documents, money, letters of credit, advices of credit, deposit accounts,
certificates of deposit, investment property, goods and other property
consisting of, arising from or related to any of the following: (1) each and
every Contract now or hereafter listed as a Series 1999-1 Contract on the List
of Contracts delivered to the Trustee together with all amounts due or to become
due under such Series 1999-1 Contracts, (2) all Collections and Related Security
associated therewith, (3) all
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balances, instruments, monies, securities, investment property or other property
received or held from time to time in the Collection Account, the Reserve
Account and the Residual Account, (4) the Contribution Agreement and the Series
1999-1 Contribution Agreement Supplement and all of its rights to enforce the
provisions of, and to benefit from the representations, warranties and covenants
made in, the Contribution Agreement and the Series 1999-1 Contribution Agreement
Supplement, (5) the Equipment associated with the Series 1999-1 Contracts and
the Residual Interest therein, and (6) all proceeds of each of the foregoing,
but excluding any obligations of the Obligors under the Contribution Agreement
and the Series 1999-1 Contribution Agreement Supplement and excluding any
Servicing Charges, taxes, Initial Unpaid Amounts and Security Deposits, all in
accordance with, and for the purposes set forth in, this Series 1999-1
Supplement (such property, the "Series 1999-1 Trust Estate").
(b) It is the intention of the Obligors, which intention is acknowledged
by the Trustee, that this Series 1999-1 Supplement, together with the Master
Agreement, shall be deemed to be a security agreement within the meaning of
Article 8 and Article 9 of the UCC as in effect in the States of New York,
Nevada and Delaware and the pledge provided for by this Section 1.02 and
elsewhere herein shall be deemed to be a grant by the Obligors to the Trustee
for the benefit of the Series 1999-1 Noteholders of a valid first-priority
perfected security interest in all of the Obligors' right, title and interest in
and to the Series 1999-1 Trust Estate. The Obligors hereby grant and assign such
interests, in each case to the Trustee, to secure the obligations of the
Obligors to the Trustee and the Series 1999-1 Noteholders hereunder and under
the Series 1999-1 Notes.
(c) The Obligors and ABS represent that as of the Closing Date, UCC-1
financing statements will have been filed against the User and in favor of ABS
in respect of each item of Equipment having an original Equipment cost greater
than $25,000. The Obligors and ABS also represent that as of the Closing Date,
UCC-1 financing statements showing the Originator as debtor and ALRC VIII as
secured party and ALRC VIII as debtor and the Trustee as secured party will have
been filed in certain states representing at least 85% of the Statistical
Aggregate Contract Principal Balance.
(d) In the case of any Series 1999-1 Contract which has been prepaid in
full during the period from the related Cut-Off Date to the Closing Date, the
Obligors shall, on the Closing Date, deposit the Prepayment Amount therefor in
the Collection Account in lieu of pledging such Series 1999-1 Contract to the
Trustee.
SECTION 1.03 Custody of the Series 1999-1 Trust Estate. For the
avoidance of doubt, the parties agree that notwithstanding the use of the terms
"deposit," "deposited," "transfer" and "transferred" in this Series 1999-1
Supplement, the Trustee will not take physical possession of any of the Series
1999-1 Trust Estate (other than the amounts on deposit in the Series 1999-1
Accounts) pursuant to the terms hereof. Instead, the Servicer will hold the
Series 1999-1 Trust Estate (other than the amounts on deposit in the Series
1999-1 Accounts) as custodian on behalf of the Trustee as further described in
Section 3.09 hereof.
SECTION 1.04 Conditions to Issuance of the Series 1999-1 Notes. As
conditions to the execution by the Obligors, and the authentication and delivery
by the Trustee of the Series 1999-1 Notes at the written direction of the
Obligors and the sale of the Series 1999-1 Notes by the
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Obligors on the Closing Date, (i) the Obligors shall have received by wire
transfer the net proceeds of sale of the Class A Notes and the Class B Notes and
(ii) the Trustee shall have received the following on or before the Closing
Date:
(a) The List of Contracts;
(b) Copies of resolutions of the board of directors of ABS and of each
of ALRC VIII and ALRC IX, approving the execution, delivery and performance of
this Series 1999-1 Supplement and the transactions contemplated hereby,
certified, in each case, by a secretary or an assistant secretary of the
respective corporation;
(c) A copy of an officially certified document, dated not more than 30
days prior to the Closing Date and evidencing the due organization and good
standing of each of ABS and the Obligors in their respective states of
organization;
(d) Copies of the Certificate of Incorporation and By-Laws of ABS and
copies of the Articles of Incorporation and By-Laws of each of ALRC VIII and
ALRC IX certified, in each case, by a secretary or an assistant secretary of the
respective corporation;
(e) Delivery of executed UCC-1 financing statements, prepared by the
Servicer for filing (i) with the Secretary of State of New Jersey, naming the
Originator as the debtor and the Obligors as secured parties, and (ii) with the
Secretary of State of Nevada naming the Obligors as the debtors and the Trustee
as secured party;
(f) A certificate listing the Servicing Officers as of the Closing Date;
and
(g) An executed copy each of the Contribution Agreement, the Series
1999-1 Contribution Agreement Supplement, the Master Agreement and this Series
1999-1 Supplement.
SECTION 1.05 Acceptance by Trustee. The Trustee acknowledges its
acceptance, simultaneously with the execution and delivery of this Series 1999-1
Supplement, of the pledge of and security interest in all right, title and
interest in and to the Series 1999-1 Trust Estate and declares that the Trustee
holds and will continue to hold the pledge of and security interest in such
right, title and interest in and to the Series 1999-1 Trust Estate for the
benefit of all present and future Series 1999-1 Noteholders for the use and
purpose and subject to the terms and provisions of this Series 1999-1
Supplement. The Obligors hereby (x) appoint the Trustee as the Obligors'
attorney-in-fact with all power independently to enforce all of the Obligors'
rights against the Originator and the Servicer under the Contribution Agreement
and the Series 1999-1 Contribution Agreement Supplement, as applicable and (y)
shall direct the Trustee to enforce such rights in writing. The Trustee hereby
accepts such appointment and agrees to enforce such rights.
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SECTION 1.06 Liabilities of the Trustee and Parties to the Master
Agreement, this Series 1999-1 Supplement and the Series 1999-1 Notes;
Limitations Thereon. The obligations evidenced by the Series 1999-1 Notes
provide recourse only to the Series 1999-1 Trust Estate and provide no recourse
against either of the Obligors generally, the Originator, the Servicer, the
Trustee, or any other Person.
(a) The Obligors, the Servicer and the Originator shall not be liable to
the Trustee except as expressly provided herein and in the Master Agreement,
and, with respect to the Originator, as provided in the Contribution Agreement
and Series 1999-1 Contribution Agreement Supplement. The Obligors, the
Originator and the Servicer shall not be liable to the Series 1999-1 Noteholders
except, with respect to the Obligors and the Servicer, for the non-performance
of obligations expressly undertaken by them pursuant hereto and, with respect to
the Originator, as expressly provided for in the Contribution Agreement and
Series 1999-1 Contribution Agreement Supplement. Without limiting the generality
of the foregoing, if any User fails to pay any Scheduled Payment, Final Contract
Payment, Prepayment Amount or other amounts due under a Series 1999-1 Contract,
then neither the Trustee nor the Series 1999-1 Noteholders will have any
recourse against the Obligors, the Originator or the Servicer for such Scheduled
Payment, Final Contract Payment, Prepayment Amount, other amounts due under such
Series 1999-1 Contract or any losses, damages, claims, liabilities or expenses
incurred by any Series 1999-1 Noteholder as a direct or indirect result thereof;
provided, however, that the Trustee shall have recourse against the Servicer for
any losses, damages, claims, liabilities or expenses (including legal fees and
expenses) incurred by the Trustee as a direct or indirect result thereof.
(b) In the event of a default by a User under the terms of a Series
1999-1 Contract, which default is not cured within any applicable cure period
set forth in such Series 1999-1 Contract, the Series 1999-1 Noteholders shall be
expressly limited to the sources of payment specified herein. In addition, the
Trustee shall have the right to exercise the rights of the Originator (which
rights have been assigned to the Obligors and then to the Trustee) under the
Series 1999-1 Contracts, the Insurance Policies, any document in any Contract
File and any Related Document in the name of the Trustee and the Series 1999-1
Noteholders, either directly or through the Servicer as agent, and the Trustee
is hereby directed by the Obligors to exercise such rights; provided, however,
that the Trustee shall not be required to take any action pursuant to this
Section 1.06 except upon written instructions from the Servicer and to the
extent it is fully indemnified to its satisfaction therefor.
(c) A carbon, photographic or other reproduction of the Master
Agreement, this Series 1999-1 Supplement or any financing statement is
sufficient as a financing statement in any applicable jurisdiction.
The receipt of the Series 1999-1 Trust Estate by the Trustee (through
possession thereof by the Servicer acting as custodian) does not constitute and
is not intended to result in an assumption by the Trustee or any Series 1999-1
Noteholder of any obligation of the Originator, either Obligor or the Servicer
to any User or other Person in connection with the Equipment, the Series 1999-1
Contracts, the Insurance Policies, any document in the Contract Files or any
Related Document.
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SECTION 1.07 Forms of Notes and Denominations. The Series 1999-1 Notes
shall be in the forms set forth in Exhibit C hereto. The Class A Notes are
issuable only in minimum denominations of $1,000 and integral multiples of
$1,000 in excess thereof, except that one Class A Note of each Class may be
issued in another denomination. The Class B Notes are issuable only in minimum
denominations of $100,000 and integral multiples of $1,000 in excess thereof,
except that one Class B Note may be issued in another denomination.
ARTICLE II
DEFINITIONS
SECTION 2.01 Definitions.
(a) Whenever used in this Series 1999-1 Supplement and when used in the
Master Agreement with respect to the Series 1999-1 Notes, the following words
and phrases shall have the following meanings, and the definitions of such terms
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such terms.
Unless otherwise defined in this Series 1999-1 Supplement, terms defined in the
Master Agreement are used herein as therein defined.
ABS: Advanta Business Services Corp., a Delaware corporation.
Additional Principal: With respect to each Payment Date, an amount equal
to the Monthly Payment Amount less the Class A Principal Payment Amount and the
Class B Principal Payment Amount for such date.
Aggregate Contract Principal Balance: With respect to any Calculation
Date, the aggregate of the Contract Principal Balances of all Series 1999-1
Contracts in the Series 1999-1 Trust Estate as of such date.
ALRC VIII: Advanta Leasing Receivables Corp. VIII, a Nevada
corporation.
ALRC IX: Advanta Leasing Receivables Corp. IX, a Nevada corporation.
Ancillary Servicing Income: Certain miscellaneous amounts which revert
to the Servicer in consideration of the servicing function performed by the
Servicer, such as late fees (if a Servicer Advance has been made for such late
payment), insufficient funds charges, and the like.
Applicable Discount Rate: The rate of 7.645% which is equal to the sum
of (a) the weighted average of the Class A-1 Interest Rate, Class A-2 Interest
Rate, Class A-3 Interest Rate and the Class B Interest Rate, each weighted by
(i) the initial principal balance of the Class A-1 Notes, the initial principal
balance of the Class A-2 Notes, the initial principal balance of the Class A-3
Notes and the initial principal balance of the Class B Notes and (ii) the
weighted average life to call of the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class B Notes under a 6.0% conditional prepayment rate
and no loss scenario, as applicable, and (b) the Servicer Fee Rate.
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Available Funds: With respect to a Payment Date, (i) all amounts on
deposit in the Collection Account which relate to the Collection Period for such
Payment Date (including, without limitation, Scheduled Payments, Servicer
Advances, Residual Receipts, Prepayment Amounts, amounts deposited into the
Collection Account as a result of the release of a Contract under Section 6.15
of the Master Agreement or Section 6.12 of the Master Agreement, amounts of
Security Deposits deposited into the Collection Account to cover User defaults
on the related Contract and investment earnings on each of the Series 1999-1
Accounts), plus (ii) amounts transferred from the Reserve Account and/or the
Residual Account with respect to such Payment Date and deposited in the
Collection Account.
Available Reserve Amount: As of any date of determination, the amount on
deposit in the Reserve Account on such date.
Available Residual Amount: As of any date of determination, the amount
on deposit in the Residual Account on such date.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended, as codified
under Title 11 of the United States Code, and the bankruptcy rules promulgated
thereunder, as the same may be in effect from time to time.
Balloon Payment: With respect to any Contract, a final payment which is
more than 10% greater in amount than any prior Scheduled Payment.
Class A Initial Principal Balance: $98,876,125.
Class A Noteholder: Person in whose name a Class A Note is registered in
the Note Register.
Class A Note Interest: With respect to any Payment Date, the sum of the
Class A-1 Note Interest, the Class A-2 Note Interest and the Class A-3 Note
Interest.
Class A Notes: The Class A-1 Notes, the Class A-2 Notes and the Class
A-3 Notes.
Class A Percentage: A fraction, expressed as a percentage, equal to (i)
the sum of the Class A-2 Initial Principal Balance and the Class A-3 Initial
Principal Balance divided by (ii) the Initial Aggregate Contract Principal
Balance minus the Class A-1 Initial Principal Balance, and being approximately
80.5195%.
Class A Principal Balance: As of any date of determination, the sum of
the Class A-1 Principal Balance, the Class A-2 Principal Balance and the Class
A-3 Principal Balance.
Class A Principal Payment Amount: (a) With respect to any Payment Date
on which all or a portion of the Class A-1 Notes remain outstanding after giving
effect to payments on such day, the Monthly Principal Amount, (b) with respect
to the Payment Date on which the outstanding principal of the Class A-1 Notes is
reduced to $0, the sum of (i) the amount necessary to reduce
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the outstanding principal of the Class A-1 Notes to $0 and (ii) the amount
necessary to reduce the sum of the outstanding principal amount of the Class A-2
Notes and the Class A-3 Notes to the Class A Target Investor Principal Amount or
(c) on any subsequent Payment Date, the amount necessary to reduce the sum of
the outstanding principal amount of the Class A-2 Notes and the Class A-3 Notes
to the Class A Target Investor Principal Amount.
Class A Target Investor Principal Amount: With respect to each Payment
Date, an amount equal to the product of (i) the Class A Percentage and (ii) the
Aggregate Contract Principal Balance as of the related Calculation Date.
Class A-1 Initial Principal Balance: $50,929,490.
Class A-1 Interest Rate: 5.76664% per annum.
Class A-1 Maturity Date: September 2000 Payment Date.
Class A-1 Note Factor: The seven digit decimal number that the Servicer
will compute or cause to be computed for each Collection Period and will make
available on the related Determination Date representing the ratio of (i) the
Class A-1 Principal Balance which will be outstanding on the next Payment Date
(after taking into account all distributions and allocations to be made on such
Payment Date) to (ii) the Class A-1 Initial Principal Balance.
Class A-1 Noteholder: Person in whose name a Class A-1 Note is
registered in the Note Register.
Class A-1 Note Interest: With respect to any Payment Date, the sum of
(i) the product of (A) the Class A-1 Principal Balance immediately prior to such
Payment Date, (B) the actual number of days in the related Interest Accrual
Period divided by 360 and (C) the Class A-1 Interest Rate and (ii) the Class A-1
Overdue Interest from the preceding Payment Date; provided that on the first
Payment Date, the Class A-1 Interest shall be $163,162.24.
Class A-1 Notes: The Equipment Receivables Asset-Backed Notes, Series
1999-1, Class A-1 issued by ALRC VIII and ALRC IX.
Class A-1 Overdue Interest: With respect to any Payment Date, the sum
of:
(i) the excess, if any, of any Class A-1 Note Interest due on such
Payment Date over the Class A-1 Note Interest paid on such
Payment Date; and
(ii) the product of (a) the amount of Class A-1 Overdue Interest due
on the immediately preceding Payment Date and not paid on such
immediately preceding Payment Date, (b) the actual number of days
in the related Interest Accrual Period divided by 360 and (c) the
Class A-1 Interest Rate.
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Class A-1 Principal Balance: As of any date of determination, an amount
equal to the Class A-1 Initial Principal Balance less any principal payments
previously made on the Class A-1 Notes.
Class A-2 Initial Principal Balance: $38,500,927.
Class A-2 Interest Rate: 6.64% per annum.
Class A-2 Maturity Date: September 2002 Payment Date.
Class A-2 Note Factor: The seven digit decimal number that the Servicer
will compute or cause to be computed for each Collection Period and will make
available on the related Determination Date representing the ratio of (i) the
Class A-2 Principal Balance which will be outstanding on the next Payment Date
(after taking into account all distributions and allocations to be made on such
Payment Date) to (ii) the Class A-2 Initial Principal Balance.
Class A-2 Noteholder: Person in whose name a Class A-2 Note is
registered in the Note Register.
Class A-2 Note Interest: With respect to any Payment Date, the sum of
(i) the product of (A) the Class A-2 Principal Balance immediately prior to such
Payment Date and (B) one-twelfth of the Class A-2 Interest Rate and (ii) the
Class A-2 Overdue Interest from the preceding Payment Date; provided that on the
first Payment Date, the Class A-2 Note Interest shall be $134,924.36.
Class A-2 Notes: The Equipment Receivables Asset-Backed Notes, Series
1999-1, Class A-2 issued by ALRC VIII and ALRC IX.
Class A-2 Overdue Interest: With respect to any Payment Date, the sum
of:
(i) the excess, if any, of any Class A-2 Note Interest due on such
Payment Date over the Class A-2 Note Interest paid on such
Payment Date; and
(ii) the product of (a) the amount of Class A-2 Overdue Interest due
on the immediately preceding Payment Date and not paid on such
immediately preceding Payment Date and (b) one-twelfth of the
Class A-2 Interest Rate.
Class A-2 Principal Balance: As of any date of determination, an amount
equal to the Class A-2 Initial Principal Balance less any principal payments
previously made on the Class A-2 Notes.
Class A-3 Initial Principal Balance: $9,445,708.
Class A-3 Interest Rate: 6.90% per annum.
Class A-3 Maturity Date: November 2003 Payment Date.
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Class A-3 Note Factor: The seven digit decimal number that the Servicer
will compute or cause to be computed for each Collection Period and will make
available on the related Determination Date representing the ratio of (i) the
Class A-3 Principal Balance which will be outstanding on the next Payment Date
(after taking into account all distributions and allocations to be made on such
Payment Date) to (ii) the Class A-3 Initial Principal Balance.
Class A-3 Noteholder: Person in whose name a Class A-3 Note is
registered in the Note Register.
Class A-3 Note Interest: With respect to any Payment Date, the sum of
(i) the product of (A) the Class A-3 Principal Balance immediately prior to such
Payment Date and (B) one-twelfth of the Class A-3 Interest Rate and (ii) the
Class A-3 Overdue Interest from the Preceding Payment Date; provided that on the
first Payment Date, the Class A-3 Note Interest shall be $34,398.12.
Class A-3 Notes: The Equipment Receivables Asset-Backed Notes, Series
1999-1, Class A-3 issued by ALRC VIII and ALRC IX.
Class A-3 Overdue Interest: With respect to any Payment Date, the sum
of:
(i) the excess, if any, of any Class A-3 Note Interest due on such
Payment Date over the Class A-3 Note Interest paid on such
Payment Date; and
(ii) the product of (a) the amount of Class A-3 Overdue Interest due
on the immediately preceding Payment Date and not paid on such
immediately preceding Payment Date and (b) one-twelfth of the
Class A-3 Interest Rate.
Class A-3 Principal Balance: As of any date of determination, an amount
equal to the Class A-3 Initial Principal Balance less any principal payments
previously made on the Class A-3 Notes.
Class B Floor: With respect to each Payment Date, (i) 2.875% of the
Initial Aggregate Contract Principal Balance, plus (ii) the Cumulative Loss
Amount as of such Payment Date, minus (iii) the sum of the amounts on deposit in
the Reserve Account and the Residual Account after giving effect to payments and
withdrawals on such Payment Date.
Class B Initial Principal Balance: $11,599,991.
Class B Interest Rate: 7.27% per annum.
Class B Maturity Date: April 2005 Payment Date.
Class B Noteholder: The Person in whose name a Class B Note is
registered in the Note Register.
Class B Notes: The Equipment Receivables Asset-Backed Notes, Series
1999-1, Class B issued by ALRC VIII and ALRC IX.
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Class B Note Factor: The seven digit decimal number that the Servicer
will compute or cause to be computed for each Collection Period and will make
available on the related Determination Date representing the ratio of (i) the
Class B Principal Balance which will be outstanding on the next Payment Date
(after taking into account all distributions and allocations to be made on such
Payment Date) to (ii) the Class B Initial Principal Balance.
Class B Note Interest: With respect to any Payment Date, the sum of (i)
the product of (A) the Class B Principal Balance immediately prior to such
Payment Date and (B) one-twelfth of the Class B Interest Rate and (ii) the Class
B Overdue Interest from the preceding Payment Date; provided that on the first
Payment Date, the Class B Note Interest shall be $44,508.52.
Class B Overdue Interest: With respect to any Payment Date, the sum of:
(i) the excess, if any, of any Class B Note Interest due on such
Payment Date over the Class B Note Interest paid on such Payment
Date; and
(ii) the product of (a) the amount of Class B Overdue Interest due on
the immediately preceding Payment Date and not paid on such
immediately preceding Payment Date and (b) one-twelfth of the
Class B Interest Rate.
Class B Percentage: A fraction, expressed as a percentage, equal to (i)
the Class B Initial Principal Balance divided by (ii) the Initial Aggregate
Contact Principal Balance minus the Class A-1 Initial Principal Balance, and
being approximately 19.4805%.
Class B Principal Balance: As of any date, an amount equal to the Class
B Initial Principal Balance less any principal payments previously made on the
Class B Notes.
Class B Principal Payment Amount: An amount equal to (a) for any Payment
Date on which all or a portion of the Class A-1 Notes remain outstanding after
giving effect to payments on such day, $0, and (b) for any subsequent Payment
Date, the amount necessary to reduce the aggregate outstanding principal amount
of the Class B Notes to the greater of the Class B Target Investor Principal
Amount and the Class B Floor.
Class B Target Investor Principal Amount. With respect to each Payment
Date, an amount equal to the product of (i) the Class B Percentage and (b) the
Aggregate Contract Principal Balance as of the related Calculation Date.
Closing Date: August 26, 1999.
Collateral Factor: The seven digit decimal number that the Servicer will
compute or cause to be computed for each Collection Period and will make
available on the related Determination Date representing the ratio of (i) the
Aggregate Contract Principal Balance as of the immediately preceding Calculation
Date to (ii) the Initial Aggregate Contract Principal Balance.
Collection Account: The account by that name established and maintained
by the Trustee pursuant to subsection 3.01(a) of the Series Supplement.
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Contracts: The Series 1999-1 Contracts as identified on the List of
Contracts.
Contract Principal Balance: As of any date of calculation with respect
to a Series 1999-1 Contract, the present value of the Scheduled Payments to
become due with respect to such Series 1999-1 Contract on and after such date of
calculation (but in any event on or prior to March 31, 2005) (excluding
Scheduled Payments previously due and unpaid), discounted monthly at one-twelfth
of the Applicable Discount Rate, except that a Defaulted Contract has a Contract
Principal Balance of $0. Contracts which have been prepaid or otherwise
terminated or released from the Series 1999-1 Trust Estate shall also have a
Contract Principal Balance of $0.
Contribution Agreement: That certain Master Sale and Contribution
Agreement, dated as of August 26, 1999, by and among ALRC VIII, ALRC IX and ABS.
Cumulative Loss Amount: The excess, if any, of (a) the remainder of (i)
the Outstanding Principal Balance of the Series 1999-1 Notes minus (ii) the
lesser of (A) the Monthly Principal Amount and (B) Available Funds (after the
payment of amounts described in subsection 3.04(a)(i) through (iv) hereof) over
(b) the Aggregate Contract Principal Balance as of the related Calculation Date.
Cumulative Net Loss Percentage: With respect to each Collection Period,
the percentage equivalent of a fraction, the numerator of which is the excess of
(x) the aggregate amount of the Contract Principal Balances (calculated as of
the date immediately before such Contract become a Defaulted Contract) of all
Series 1999-1 Contracts which become Defaulted Contracts during all prior
Collection Periods over (y) the aggregate amount of all Recoveries collected by
the Servicer with respect to such Collection Periods and the denominator of
which is the Initial Aggregate Contract Principal Balance.
Cut-Off Date: With respect to the Series 1999-1 Contracts, the opening
of business on August 1, 1999.
Defaulted Contract: Any Series 1999-1 Contract (i) that is a Delinquent
Contract with respect to which a User is contractually delinquent for 121 days
or more (without regard to any Servicer Advances or the application of any
Security Deposit) or (ii) as to which the Servicer has determined in accordance
with its customary servicing practices that eventual payment of the remaining
Scheduled Payments thereunder is unlikely or (iii) that has been rejected by or
on behalf of the User in a bankruptcy proceeding.
Delinquent Contract: As of any date, a Series 1999-1 Contract as to
which a Scheduled Payment, or part thereof, remains unpaid for more than sixty
(60) days from the original due date for such Scheduled Payment.
Determination Date: The third Business Day prior to each Payment Date.
Eligible Contracts: Means, as of the Closing Date or, where indicated,
the Cut-Off Date, a Series 1999-1 Contract which:
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(i) (a) is with a User whose billing address is in the United
States or its territories and possessions and requires all payments
under such Series 1999-1 Contract to be made in United States dollars
and (b) is with a User who, if a natural person, is a resident of the
United States or its territories and possessions with legal capacity to
contract or, if a corporation or other business organization, is
organized under the laws of the United States, its territories or any
political subdivision thereof and has its chief executive office in the
United States or its territories;
(ii) has not had any of its terms, conditions or provisions
modified or waived other than in compliance with the Credit and
Collection Policy and has not been restructured at any time when the
Series 1999-1 Contract was a Delinquent Contract;
(iii) the payments arising under the Series 1999-1 Contract
constitute an account or general intangible which is evidenced by a
Contract that constitutes "chattel paper" within the meaning of Section
9-105(b) of the UCC of all applicable jurisdictions and for which there
is only one original of such Series 1999-1 Contract that constitutes
"chattel paper" for purposes of the UCC (other than those which are in
the form of a loan which may be evidence by a promissory note);
(iv) does not contravene any applicable federal, state and local
laws and regulations thereunder (including, without limitation, any law,
rule and regulation relating to truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and, with respect to which no part of such Series
1999-1 Contract thereto is in violation of any applicable law, rule or
regulation;
(v) satisfies in all material respects all applicable
requirements of the Credit and Collection Policy;
(vi) is not a Municipal Contract;
(vii) as of the Cut-Off Date, is not a Delinquent Contract;
provided, however, that a Series 1999-1 Contract can be a Delinquent
Contract so long as the Contract is not more than ninety (90) days
delinquent and so long as the Contract Principal Balance of such Series
1999-1 Contract when added to the Contract Principal Balances of all
other Contracts which are more than sixty (60) days delinquent is less
than 2% of the Initial Aggregate Contract Principal Balance;
(viii) as of the Cut-Off Date, the Series 1999-1 Contract is not
a Defaulted Contract;
(ix) (other than a Contract which is a loan in form), (a)
contains "hell or high water" provisions requiring the related User to
assume all risk of loss or malfunction of the related Equipment, (b)
makes the related User absolutely and unconditionally liable for all
payments required to be made thereunder, (c) is a triple-net lease and
(d) is not cancellable at the option of the User;
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(x) as of the Cut-Off Date, when aggregated with the sum of the
Contract Principal Balances of all other Series 1999-1 Contracts
relating to a single User, shall not be greater than the product of (a)
1% and (b) the Aggregate Contract Principal Balance at that time;
(xi) creates a valid and enforceable security or ownership
interest in favor of the Originator in the related Equipment, if any,
which has been perfected for Equipment with an initial balance of more
than $25,000;
(xii) has only one set of original documentation;
(xiii) is free and clear of any Adverse Claims, other than the
claims arising pursuant to the Master Agreement, this Series 1999-1
Supplement and the Series Related Documents; provided, however, that
nothing in this clause (xiii) shall prevent or be deemed to prohibit the
Originator from allowing any Adverse Claim for federal, state, municipal
or other local taxes to exist upon such Series 1999-1 Contract if such
taxes shall not at the time be due and payable or if the Originator
shall concurrently be contesting the validity thereof in good faith by
appropriate proceedings that have stayed enforcement thereof and shall
have set aside on its books adequate reserves with respect thereto;
(xiv) is in full force and effect in accordance with its terms
and contains enforceable provisions such that the right and remedies of
the holder thereof shall be adequate for realization against the
Equipment, if any, thereunder and of the benefits of any security
granted thereunder;
(xv) does not provide for the substitution, exchange, or addition
of any other items of Equipment pursuant to such Contract which would
result in any reduction or extension of payments due thereunder;
(xvi) by its terms is due and payable on or within 84 months of
the Closing Date and, in either event, has not had its payment terms
extended other than in compliance with the Credit and Collection Policy;
(xvii) is in substantially the form of one of the standard form
contracts that ABS uses (set forth in Exhibit B hereto) or a form
reviewed and accepted by ABS;
(xviii) (a) does not preclude the pledge, transfer or assignment
thereof, (b) does not require the consent of the User to the pledge,
assignment or transfer thereof, and (c) does not contain a
confidentiality provision that purports to restrict the ability of the
Trustee to exercise its rights under the Series Related Documents with
respect thereto, including, without limitation, its right to review the
Series 1999-1 Contract;
(xix) was originated or purchased by the Originator in the
ordinary course of its business, (b) approved and purchased or funded in
the ordinary course of the Originator's business and (c) if purchased
from a broker or vendor, has been re-underwritten by the
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Originator in the ordinary course of the Originator's business and in
compliance with its underwriting policies;
(xx) either (a) is an account receivable representing all or part
of the sales price of merchandise, insurance and/or services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940, as
amended, or (b) represents a financial asset that converts to cash
within a finite period of time within the meaning of Rule 3a-7
promulgated under the Investment Company Act of 1940, as amended;
(xxi) does not require a Balloon Payment;
(xxii) relates to Equipment which is located in the United States
of America, its territories or possessions;
(xxiii) as of the Cut-Off Date, the Contract Principal Balance of
the Contract when aggregated with the Contract Principal Balances of all
Contracts acquired by the Originator or its affiliates from the same
single broker or vendor, shall not exceed 6% of the Aggregate Contract
Principal Balance at that time;
(xxiv) it is not a consumer lease;
(xxv) is not subject to any guaranty by the Originator;
(xxvi) no adverse selection was used in selecting the Contract
for transfer to the Obligors;
(xxvii) the information with respect to the Contract contained on
the List of Contracts delivered to the Trustee is true and correct in
all material respects; and
(xxviii) all filings necessary to evidence the conveyance or
transfer of the Contract and security interest in the related Equipment,
if any, to one of the Obligors have been made in all appropriate
jurisdictions.
Equipment: The equipment leased to or sold to a User pursuant to any
Contract and any security interest in such equipment and the Residual Interest
therein or derived therefrom.
Event of Default: As defined in Section 4.01 hereof.
Final Contract Payment: With respect to any Series 1999-1 Contract, any
specified amount or minimum specified amount set forth in such Series 1999-1
Contract and required to be paid by the related User at the maturity of such
Series 1999-1 Contract.
Initial Aggregate Contract Principal Balance: The Aggregate Contract
Principal Balances on the Closing Date, which is an amount equal to
$110,476,118.
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Interest Accrual Period: With respect to any Payment Date, the period
commencing on and including the prior Payment Date (or in the case of the first
Payment Date, the Closing Date) and ending on and including the day immediately
preceding such Payment Date.
List of Contracts: With respect to the Series 1999-1 Contracts, a
printed or electronic list of such Contracts, certified by an Authorized Officer
of each of the Obligors.
Master Agreement: The Master Facility Agreement, dated as of August 26,
1999, among the Servicer, ALRC VIII, ALRC IX and the Trustee.
Monthly Delinquency Percentage: With respect to any Payment Date, the
percentage equivalent of a fraction (a) the numerator of which is the aggregate
Contract Balance Remaining of all Contracts which are 31 or more days
delinquent, determined as of the related Calculation Date and (b) the
denominator of which is the aggregate Contract Balance Remaining as of the
related Calculation Date.
Monthly Principal Amount: With respect to any Payment Date, the excess
of (a) the aggregate outstanding principal amount of all Classes of Series
1999-1 Notes as of the immediately preceding Payment Date after giving effect to
all principal payments on that day, over (b) the Aggregate Contract Principal
Balance as of the related Calculation Date.
Monthly Residual Receipt Percentage: With respect to any Payment Date,
the percentage equivalent of a fraction (a) the numerator of which is the
aggregate of the cumulative amount of Residual Receipts collected on all
Contracts as to which the Servicer, during the related Collection Period,
determined that the full amount of Residual Receipts to be received with respect
to the related Equipment has been collected, and (b) the denominator of which is
equal to the aggregate Booked Residual Value with respect to such Contracts.
Monthly Remittance Amount: With respect to any Payment Date, the
aggregate amount of Collections received by the Servicer during the prior
Collection Period with respect to the Series 1999-1 Trust Estate (other than
Collections representing Advance Payments until such Advance Payments are
applied as Collections), together with all Servicing Advances paid by the
Servicer with respect to such Payment Date.
Nonrecoverable Advances: With respect to any Delinquent Contract, a
Servicer Advance which the Servicer has determined that it will be unable to
recover, in whole or in part, with respect to such Delinquent Contract.
Obligors: Advanta Leasing Receivables Corp. VIII and Advanta Leasing
Receivables Corp. IX.
Obligors' Interest: The Obligors' reversionary rights to the Series
1999-1 Trust Estate and the proceeds thereof, to the extent such proceeds are
not needed to make payments on the Series 1999-1 Notes and satisfy other
obligations under the Series Related Documents.
Originator: Advanta Business Services Corp. and its successors and
assigns.
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Outstanding Principal Balance: As of any date of determination, the sum
of the Class A Principal Balance and the Class B Principal Balance as of such
date.
Payment Date: The 15th day of each month, or, if such day is not a
Business Day, the next succeeding Business Day, commencing September 15, 1999.
Principal Payments: The payments of principal each Class of Series
1999-1 Notes is entitled to receive in accordance with the priorities set forth
in Section 3.04 hereof.
Rating Agencies: Xxxxx'x and Fitch.
Record Date: With respect to any Payment Date, the close of business on
the Business Day preceding such Payment Date; provided, however, that if
Definitive Notes are issued, the Record Date shall be the last day of the
immediately preceding calendar month.
Required Reserve Amount: With respect to any Payment Date, an amount
equal to the lesser of (i) the greater of 1% of the Initial Aggregate Contract
Principal Balance and 5% of the Outstanding Principal Balance of the Series
1999-1 Notes and (ii) the Outstanding Principal Balance of the Series 1999-1
Notes.
Reserve Account: The account or accounts by that name established and
maintained by the Trustee pursuant to Section 3.02 hereof.
Reserve Account Initial Deposit: $1,104,761.16.
Residual Account: The account or accounts by that name established and
maintained by the Trustee pursuant to subsection 3.02(b) hereof.
Residual Event: Means the occurrence of one or more of the following:
(a) the occurrence of an Event of Default; (b) the occurrence of an Event of
Servicer Termination; (c) ABS or an Affiliate of ABS is no longer the Servicer;
(d) the Three-Month Residual Receipt Percentage calculated on the related
Calculation Date is less than 100%; (e) the Three-Month Delinquency Percentage
calculated on the related Calculation Date is greater than 10.50%; or (f) the
Cumulative Net Loss Percentage as of any Calculation Date occurring during the
following periods exceeds the "Loss Trigger Level Percentage" set forth below:
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Loss Trigger
Period Level Percentage
------ ----------------
First Collection Period through 12th Collection
Period thereafter 4.0%
13th Collection through 24th
Collection Period thereafter 5.5%
25th Collection Period and thereafter 7.0%
Notwithstanding the foregoing: (i) the Residual Event referred to in
clause (d) may be cured if the Three-Month Residual Receipt Percentage is
greater than or equal to 100%, (ii) the Residual Event referenced in clause (e)
may be cured if the Three-Month Delinquency Percentage for any Collection Period
thereafter is less than or equal to 10.50% and (iii) the Residual Event
referenced in cause (f) may be cured if the Cumulative Net Loss Percentage,
although it exceeds the "Loss Trigger Level Percentage" in a prior period, is
less than or equal to the "Loss Trigger Level Percentage" in a subsequent
period.
Rule 144A Global Note: A global note in fully registered form registered
in the name of a nominee of The Depository Trust Company and representing the
full amount of the Class B Notes.
Scheduled Payments: With respect to any Series 1999-1 Contract, the
stated periodic payments (exclusive of any amounts in respect of insurance or
taxes) set forth in such Series 1999-1 Contract due from the related User.
Series 1999-1 Accounts: The Collection Account, the Residual Account and
the Reserve Account.
Series 1999-1 Contracts: The Contracts pledged to the Trustee on the
Closing Date pursuant to Section 1.02 hereof and listed on the List of
Contracts.
Series 1999-1 Contribution Agreement Supplement: The Contribution
Agreement Supplement, dated as of August 26, 1999, and delivered with respect to
the Series 1999-1 Trust Estate.
Series 1999-1 Noteholders: The Class A Noteholders and the Class B
Noteholders.
Series 1999-1 Notes: Collectively, the Class A Notes and the Class B
Notes.
Series 1999-1 Trust Estate: As defined in Section 1.02 hereof.
Series Related Documents: The Master Agreement, the Series 1999-1
Supplement, the Contribution Agreement, the Series 1999-1 Contribution Agreement
Supplement and all amendments and supplement thereto.
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Servicer: The Person performing the duties of the Servicer hereunder,
initially Advanta Business Services Corp., a Delaware corporation.
Servicer Fee Rate: 1% per annum.
Servicer's Certificate: A written informational statement, substantially
in the form of Exhibit A hereto, to be provided by the Servicer in accordance
with Section 6.06 of the Master Agreement and signed by a Servicing Officer and
furnished to the Trustee and each Rating Agency by the Servicer.
Servicing Fee: The fee payable to the Servicer on each Payment Date in
consideration for the Servicer's performance of its duties pursuant to Article
VI of the Master Agreement hereof in an amount equal to the product of (a)
one-twelfth of the Servicer Fee Rate and (b) the Aggregate Contract Principal
Balance as of the beginning of the previous Collection Period.
Settlement Date: For the purpose of this Series 1999-1 Supplement, each
Payment Date.
Stated Maturity Date: For any Class, is the maturity date for such Class
and which are defined herein as the Class A-1 Maturity Date, Class A-2 Maturity
Date, Class A-3 Maturity Date and Class B Maturity Date.
Statistical Aggregate Contract Principal Balance: The aggregate of the
Contract Principal Balances of the related Contracts calculated as of July 1,
1999 using the statistical discount rate of 7.18% all as set forth in the
Prospectus related to the Class A Notes.
Three-Month Delinquency Percentage: With respect to any Payment Date
commencing with the third Payment Date, the percentage equivalent of a fraction,
(a) the numerator of which is the sum of the Monthly Delinquency Percentage for
such Payment Date and the two immediately preceding Payment Dates and (b) the
denominator of which is three.
Three-Month Residual Receipt Percentage: With respect to any Payment
Date commencing with the third Payment Date, the percentage equivalent of a
fraction, (a) the numerator of which is the sum of the Monthly Residual Receipt
Percentage for such Payment Date and the two immediately preceding Payment Dates
and (b) the denominator of which is three.
Trustee: Bankers Trust Company, a New York banking corporation.
ARTICLE III
SERIES ACCOUNTS; DISTRIBUTIONS AND STATEMENTS TO
SERIES 1999-1 NOTEHOLDERS; SERIES 1999-1 SPECIFIC COVENANTS
SECTION 3.01 Collection Account.
(a) The Trustee, for the benefit of the Series 1999-1 Noteholders, shall
establish and maintain an account (the "Collection Account") as a segregated
trust account in the Corporate
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Trust Office, identified as the "Advanta Leasing Receivables Asset-Backed Notes
Series 1999-1 Collection Account in trust for the Series 1999-1 Noteholders."
The Trustee shall make or permit withdrawals from the Collection Account only as
provided in this Series 1999-1 Supplement.
(b) Except as otherwise provided in this Series 1999-1 Supplement, the
Servicer and the Obligors shall deposit to the Collection Account any
Collections received by any of them as soon as practicable (and, in any event,
within two Business Days) after their respective receipt thereof.
Notwithstanding anything else in the Master Agreement or this Series 1999-1
Supplement to the contrary, for so long as Advanta Business Services Corp. or an
Affiliate thereof remains the Servicer and (x) maintains a short-term debt
rating of A-1 by S&P, P-1 by Xxxxx'x and F1 by Fitch (if rated by Fitch) (or
such other rating above A-1, P-1 or F1 (if rated by Fitch), as the case may be),
or (y) the Servicer has provided to the Trustee a letter of credit covering
collection risk of the Servicer, the Servicer and the Obligors need not make the
daily deposits of Collections into the Collection Account as provided in the
preceding sentence, but the Servicer may make a single deposit in the Collection
Account in immediately available funds not later than 12:00 noon, New York City
time, on the date which is the Business Day immediately preceding each
Settlement Date following the Collection Period in which the deposits were to
have been made into the Collection Account. Notwithstanding anything else in the
Master Agreement or this Series 1999-1 Supplement to the contrary, with respect
to any Collection Period, whether the Servicer is required to make deposits of
Collections pursuant to the first or the second preceding sentence, (i) the
Servicer will only be required to deposit Collections into the Collection
Account up to the Monthly Remittance Amount for such Collection Period and (ii)
if at any time prior to such Settlement Date, the amount of Collections
deposited in the Collection Account exceeds the amount required to be deposited
pursuant to clause (i) above, the Servicer will be permitted to withdraw the
excess from the Collection Account and pay such amount to the Obligors.
(c) Furthermore, the Servicer is required to deposit Advance Payments
received by the Servicer in the Collection Account not later than two Business
Days after receipt thereof; provided, however, that the Advance Payment or any
portion thereof shall be treated as Collections of Scheduled Payments only in
the Collection Period in which such payment is due and owing.
(d) Notwithstanding the foregoing, the Trustee at the written direction
of the Servicer and/or the Servicer may deduct from amounts otherwise specified
for deposit to the Collection Account any amounts previously deposited by the
Trustee or the Servicer into the Collection but which are (i) subsequently
uncollectible as a result of dishonor of the instrument of payment for or on
behalf of the User or (ii) later determined to have resulted from mistaken
deposits.
(e) The Collection Account shall be under the sole dominion and control
of the Trustee for the benefit of the Series 1999-1 Noteholders; provided,
however, that the Trustee may conclusively rely on the information and
instructions provided by the Servicer in determining the amount of any
withdrawals or payments to be made from either such account for the purposes of
carrying out the Trustee's duties under the Master Agreement or under this
Series 1999-1 Supplement. Neither the Trustee nor the Servicer shall have any
right of setoff or banker's lien against, and no right to otherwise deduct from,
any funds held in the Collection Account for any amount owed to it by the
Servicer, the Obligors, the Trustee, or any Series 1999-1 Noteholder.
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(f) On each Payment Date the Trustee shall distribute the Monthly
Remittance Amount with respect to such Payment Date as provided in Section 3.04
hereof.
(g) The Trustee shall deposit all net investment earnings on each Series
1999-1 Account, as collected, on a monthly basis to the Collection Account.
SECTION 3.02 Reserve Account and Residual Account.
(a) (i) The Trustee shall establish and maintain an account (the
"Reserve Account") as one or more segregated trust accounts in the Corporate
Trust Office in the name of "Advanta Equipment Receivables Asset-Backed Notes
Series 1999-1 Reserve Account, in trust for the Series 1999-1 Noteholders." The
Trustee shall make or permit withdrawals from the Reserve Account only as
provided in this Series 1999-1 Supplement.
(ii) If, based solely on information contained in the Servicer's
Certificate delivered on the related Determination Date as specified in
Section 3.05 hereof:
(A) on any Payment Date, (x) the amounts described in clauses
(a)(iii), (a)(iv), (a)(v), (a)(vi) and (a)(vii) of Section 3.04
hereof exceed the Available Funds (exclusive of any Reserve Account
transfers, but inclusive of any Residual Account transfers pursuant
to paragraph (b) below) in the Collection Account after taking into
account the payment of amounts described in clauses (a)(i) and
(a)(ii) of Section 3.04 on such Payment Date;
(B) then, to the extent of the Available Reserve Amount on
deposit in the Reserve Account, the Trustee shall transfer, upon
written direction of the Servicer or as provided in the Servicer's
Certificate prior to making payments to the Series 1999-1 Noteholders
on such Payment Date, from the Reserve Account to the Collection
Account such amount as shall be necessary to fund any such shortfall.
(iii) In the event that after giving effect to all the
disbursements required to be made on any Payment Date, the Available
Reserve Amount exceeds the Required Reserve Amount, the Trustee shall
transfer, not later than the end of business on such Payment Date, an
amount equal to such excess to the Obligors, in the proportions set
forth in the Servicer's Certificate delivered on the related
Determination Date as specified in Section 3.05 hereof, as the holders
of the Obligors' Interest.
(iv) Upon payment in full of the Series 1999-1 Notes, any balance
remaining in the Reserve Account, after all obligations to the
Noteholders and the Trustee hereunder and under the Master Agreement
have been fully satisfied, shall be paid to the Obligors, as holders of
the Obligors' Interest.
(b) (i) The Trustee shall establish and maintain an account (the
"Residual Account") as one or more segregated trust accounts in the Trustee's
corporate trust department, in the name of "Advanta Leasing Receivables
Asset-Backed Notes Series 1999-1 Residual Account, in trust for
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the Series 1999-1 Noteholders." The Trustee shall make or permit withdrawals
from the Residual Account only as provided in this Series 1999-1 Supplement.
(ii) If, on any Payment Date, a Residual Event of which a
Responsible Officer of the Trustee has actual knowledge is in effect
(i.e., has occurred and not been cured), the Trustee shall deposit to
the Residual Account the amounts described in subsection 3.04(a)(ix).
(iii) If, based solely on information contained in the Servicer's
Certificate delivered on the related Determination Date as specified in
Section 3.05 hereof:
(A) on any Payment Date, (x) the amounts described in clauses
(a)(iii), (a)(iv), (a)(v), (a)(vi) and (a)(vii) of Section 3.04
hereof exceed (y) the Available Funds (exclusive of any Reserve
Account or Residual Account transfers) in the Collection Account
after taking into account the payment of amounts described in clauses
(a)(i) and (a)(ii) of Section 3.04 on such Payment Date;
(B) then, to the extent of the Available Residual Amount on
deposit in the Residual Account, the Trustee shall transfer, prior to
making payments to the Series 1999-1 Noteholders on such Payment Date
and prior to making any transfers from the Reserve Account on such
Payment Date, from the Residual Account to the Collection Account
such amount as shall be necessary to fund any such shortfall.
(iv) In the event that on any Payment Date the Servicer
determines that a Residual Event which has previously occurred has been
cured, the Trustee, upon written direction and prior to making any other
transfers or disbursements from the Series 1999-1 Accounts on such
Payment Date, shall transfer the full amount then on deposit in the
Residual Account to the Collection Account.
(v) Upon payment in full of the Series 1999-1 Notes, any balance
remaining in the Residual Account, after all obligations to the
Noteholders and the Trustee hereunder and under the Master Agreement
have been fully satisfied, shall be paid to ALRC VIII.
(c) If, on any Payment Date, the aggregate amount on deposit in the
Collection Account, Reserve Account and Residual Account is greater than or
equal to the sum of (i) the Outstanding Principal Balance, (ii) the accrued and
unpaid interest, (iii) the accrued and unpaid Servicing Fee and (iv) the
unreimbursed Servicer Advances, the amount on deposit in both the Reserve
Account and Residual Account will be deposited in the Collection Account and
used to repay in full the Class A and Class B Notes.
SECTION 3.03 Investment of Monies Held in the Series 1999-1 Accounts;
Subaccounts.
(a) The Servicer shall direct the Trustee in writing to invest the
amounts in each Series 1999-1 Account in Eligible Investments that mature or are
otherwise available not later than the Business Day immediately preceding the
next Payment Date following the investment of such amounts. Eligible Investments
shall not be sold or disposed of prior to their maturities. Net
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investment earnings on amounts held in any Series 1999-1 Account shall be
deposited in the Collection Account on a monthly basis. In no event shall the
Trustee be liable for the selection of investments or for investment losses
incurred thereon. The Trustee shall have no liability in respect of losses
incurred as a result of the failure of the party directing such investment to
provide timely written investment direction. The Trustee shall have no
obligation to invest or reinvest any amounts held hereunder in the absence of
such written investment direction.
(b) The Trustee and the Servicer may, from time to time and in
connection with the administration of each Series 1999-1 Account, establish and
maintain with the Trustee one or more additional accounts of any of the Series
1999-1 Accounts, as the Trustee and/or the Servicer may consider useful.
SECTION 3.04 Flow of Funds.
(a) On the Payment Date, the Trustee (based solely on information
contained in the Servicer's Certificate delivered on the related Determination
Date as specified in Section 3.05 hereof) will be required to make the following
payments from the Available Funds (including amounts transferred from the
Reserve Account and/or the Residual Account on such Payment Date) then on
deposit in the Collection Account, in the following order of priority:
(i) from the Available Funds, to the Servicer, any
Nonrecoverable Advances;
(ii) from the Available Funds then remaining in the Collection
Account to the Servicer, the Servicing Fee then due, together with the
Ancillary Servicing Income;
(iii) from the Available Funds then remaining in the Collection
Account, to the Class A Noteholders, the Class A Note Interest for the
related Interest Accrual Period, pro rata based on interest due with
respect to the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes;
(iv) from the Available Funds then remaining in the Collection
Account, to the Class B Noteholders, the Class B Note Interest for the
related Interest Accrual Period;
(v) from Available Funds then remaining in the Collection
Account, until the Class A-1 Principal Balance has been reduced to zero,
to the Class A-1 Noteholders, the Class A Principal Payment Amount; when
the Class A-1 Principal Balance has been reduced to zero, then until the
Class A-2 Principal Balance has been reduced to zero, to the Class A-2
Noteholders, the Class A Principal Payment Amount; after the Class A-1
Principal Balance and the Class A-2 Principal Balance have been reduced
to zero, then until the Class A-3 Principal Balance has been reduced to
zero, the Class A-3 Noteholders, the Class A Principal Payment Amount;
(vi) until the Class B Principal Balance has been reduced to
zero, to the Class B Noteholders, from the Available Funds then
remaining in the Collection Account, the Class B Principal Payment
Amount;
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(vii) if on such date the Class B Floor is greater than the Class
B Target Investor Principal Amount, an amount equal to the Additional
Principal for such date shall be to the extent thereof, shall be paid
sequentially to the Class A-2 Noteholders, Class A-3 Noteholders and
Class B Noteholders, in that order, until the principal amount of such
Class has been reduced to zero;
(viii) from the Available Funds then remaining in the Collection
Account, to the Reserve Account, the amount needed to increase the
amount on deposit in the Reserve Account to the Required Reserve Amount
for such Payment Date;
(ix) upon the occurrence and continuance of a Residual Event, the
lesser of (A) the remaining Available Funds and (B) the aggregate amount
of Residual Receipts originally included in Available Funds for such
Payment Date will be deposited to the Residual Account;
(x) to the Trustee the amount due to the Trustee for fees and
expenses including any conversion costs and then, if during the
preceding Collection Period any Contract in the form of a loan is
prepaid and the actual amount paid by the User to terminate such
agreement is less than the Prepayment Amount for such Contract, the
Servicer shall retain the difference between the Prepayment Amount and
the actual amount paid by the User in the Collection Account and such
amount so retained shall be included in Available Funds in the following
Payment Date and then any remaining Available Funds to the Obligors, in
the proportions set forth in the Servicer's Certificate delivered on the
related Determination Date as specified in Section 3.05 hereof, as the
holders of the Obligors' Interest, any remaining Available Funds on
deposit in the Collection Account.
(b) All payments to Series 1999-1 Noteholders shall be made on each
Payment Date to each Series 1999-1 Noteholder of record on the related Record
Date by check, or, if requested in writing by such Series 1999-1 Noteholder, by
wire transfer to the account designated in writing delivered to the Trustee on
or prior to the related Determination Date, in immediately available funds, in
amounts equal to such Series 1999-1 Noteholder's pro rata share of such payment.
(c) If funds are deposited into the Collection Account on any Payment
Date, pursuant to subsection 3.02(c), such funds will be used on that Payment
Date to pay all Series 1999-1 Notes Outstanding.
SECTION 3.05 Statements to Series 1999-1 Noteholders.
(a) Provided that the Servicer shall have delivered to the Trustee the
Servicer's Certificate on the preceding Determination Date containing all
information necessary to enable the Trustee to make all distributions pursuant
to Section 3.04 hereof as well as all distributions and transfers pursuant to
Sections 3.01 and 3.02 hereof, then on each Payment Date, the Trustee will
forward to each Rating Agency, and mail to each Series 1999-1 Noteholder, a
statement based solely on such Servicer's Certificate, not later than such
Payment Date, setting forth the following information (per $1,000 of Class A-1
Initial Principal Balance, Class A-2 Initial Principal Balance,
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Class A-3 Initial Principal Balance and Class B Initial Principal Balance (as
the case may be) as to (i) and (ii) below):
(i) The amount of such payment allocable to the Class A-1
Principal Payment Amount, Class A-2 Principal Payment Amount, Class A-3
Principal Payment Amount or Class B Principal Payment Amount, as
applicable;
(ii) The amount of such payment allocable to such Class A-1 Note
Interest, Class A-2 Note Interest, Class A-3 Note Interest or Class B
Note Interest, as applicable;
(iii) The aggregate amount of fees and compensation received by
the Servicer for the related Collection Period;
(iv) The aggregate Class A-1 Principal Balance, Class A-2
Principal Balance, Class A-3 Principal Balance and Class B Principal
Balance, as applicable, and the Class A-1 Note Factor, Class A-2 Note
Factor, Class A-3 Note Factor, or Class B Note Factor, as applicable,
after taking into account all distributions made on such Payment Date,
the Aggregate Contract Principal Balance and the Collateral Factor;
(v) The total unreimbursed Servicer Advances with respect to the
related Collection Period;
(vi) The aggregate Contract Principal Balance for all Series
1999-1 Contracts that became Defaulted Contracts during the related
Collection Period, calculated immediately prior to the time such
Contracts became Defaulted Contracts;
(vii) The amount on deposit in the Reserve Account and the
Residual Account;
(viii) 31-60, 61-90 and greater than 90 days delinquencies as of
the end of the related Collections Period; and
(ix) Prepayment Amounts received during the related Collection
Period;
provided, however, the Trustee may deliver a copy of the Servicer's
Certificate to each Series 1999-1 Noteholder and Rating Agency in
satisfaction of the requirement set forth in this Section.
(b) By January 31 of each calendar year, commencing January 31, 2000, or
as otherwise required by applicable law, the Trustee shall, upon written
request, furnish to each Person who at any time during the immediately preceding
calendar year was a Series 1999-1 Noteholder a statement containing the
applicable aggregate amounts of interest and principal paid to such Noteholder
for such calendar year or, in the event such Person was a Series 1999-1
Noteholder during a portion of such calendar year, for the applicable portion of
such year, for the purposes of such Series 1999-1 Noteholder's preparation of
federal income tax returns. In addition to the foregoing, the Trustee shall make
available to Series 1999-1 Noteholders any other information provided to the
Trustee or otherwise in the Trustee's possession reasonably requested
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in writing by Series 1999-1 Noteholders in connection with tax matters, in
accordance with the written directions of the Servicer. The obligation of the
Trustee set forth in this paragraph shall be deemed to have been satisfied to
the extent that substantially comparable information shall be provided by the
Servicer pursuant to any requirements of the Code.
(c) The Servicer and the Trustee shall furnish to each Series 1999-1
Noteholder, on written request, such periodic, special or other reports or
information not specifically provided for herein, as shall be necessary,
reasonable or appropriate with respect to such Series 1999-1 Noteholder and at
the expense of such requesting party all such reports or information to be
provided by and in accordance with such written applicable instructions and
directions as the Series 1999-1 Noteholder may reasonably require and as the
Servicer and the Trustee may reasonably be able to produce. A Series 1999-1
Noteholder may, by written notice to the Trustee, waive receipt of any reports.
The Trustee's obligation under this subsection 3.05(c) shall only pertain to
information provided by the Servicer to the Trustee or otherwise in the
Trustee's possession.
(d) The Trustee shall promptly send to each Series 1999-1 Noteholder and
to each Rating Agency in writing:
(i) Notice of any breach by the Originator, either Obligor or the
Servicer of any of their respective representations, warranties and
covenants made herein or in the Contribution Agreement;
(ii) A copy of each Servicer compliance statement delivered to
the Trustee pursuant to Section 6.07 of the Master Agreement;
(iii) A copy of each financial statement delivered to the Trustee
pursuant to Section 6.08 of the Master Agreement;
(iv) Notice of any failure of the Trustee to conform to the
eligibility requirements for the Trustee pursuant to Section 11.08 of
the Master Agreement;
(v) Notice of the appointment of any co-trustee or separate
trustee pursuant to Section 11.15 of the Master Agreement; and
(vi) Notice of the occurrence of any Event of Servicer
Termination or of any Event of Default;
provided, however, that in each case the Trustee shall only be required to send
such notices and other items to the Series 1999-1 Noteholders to the extent that
a Responsible Officer of the Trustee has itself received the related information
and the Series 1999-1 Noteholders have not already received such notice or other
items. The Trustee shall have no obligation to seek to obtain any such
information.
SECTION 3.06 Compliance With Withholding Requirements. Notwithstanding
any other provisions of the Master Agreement and this Series 1999-1 Supplement,
the Trustee, as paying
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agent for and on behalf of, and at the written direction of the Servicer, shall
comply with all federal withholding requirements respecting payments (or
advances thereof) to Series 1999-1 Noteholders as may be applicable to
instruments constituting indebtedness for federal income tax purposes. Any
amounts so withheld shall be treated as having been paid to the related Series
1999-1 Noteholder for all purposes of this Series 1999-1 Supplement. In no event
shall the consent of Series 1999-1 Noteholders be required for any withholding.
SECTION 3.07 Servicer Advances. No later than one Business Day preceding
each Payment Date, the Servicer may, but is not required, to make a Servicer
Advance for each Series 1999-1 Contract which is a Delinquent Contract with
respect to each overdue Scheduled Payment as of the related Calculation Date in
an amount equal to the Scheduled Payments, or portion thereof, which were due
but not received during the related Collection Period (and not previously
covered by an unreimbursed Servicer Advance). On each Determination Date, the
Servicer shall deliver to the Trustee the Servicer's Certificate listing the
aggregate amount of Scheduled Payments not received for the immediately prior
Collection Period as of the related Calculation Date, together with a listing of
which such unpaid Scheduled Payments will not be the subject of a corresponding
Servicer Advance. The Servicer shall remit any Servicer Advances to the
Collection Account.
SECTION 3.08 Modifications of Contracts and Purchase of Contracts.
(a) The Servicer may allow modifications and prepayments of Contracts as
provided in Sections 6.01, 6.02 and 6.03 of the Master Agreement.
(b) The Obligors may, at their option, remove Defaulted Contracts from
the Series 1999-1 Trust Estate. The aggregate amount of Defaulted Contracts
which the Obligors may remove from the Series 1999-1 Trust Estate shall not,
however, exceed 5% of the Initial Aggregate Contract Principal Balance. In
determining the amount of a Defaulted Contract which is removed, the amount of
such Contract shall be equal to the Contract Principal Balance of such Contract
calculated as if it were not a Defaulted Contract.
(c) The Obligors shall remove from the Series 1999-1 Trust Estate those
contracts described in Section 6.15 of the Master Agreement and such removal
shall occur as provided in such Section 6.15.
(d) Upon removal of a Contract from the Series 1999-1 Trust Estate under
(b) or (c) above, the appropriate Obligor shall pay the Prepayment Amount to the
Servicer for deposit into the Collection Account.
SECTION 3.09 Servicer to Act as Custodian.
(a) The Servicer shall hold and acknowledges that it is holding the
Series 1999-1 Contracts hereunder as custodian for the Trustee.
(b) The Servicer shall promptly report to the Trustee any failure by it
to hold the Series 1999-1 Contracts as herein provided and shall promptly take
appropriate action to remedy any
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such failure but only to the extent (i) any such failure is caused by the acts
or omissions of the Servicer and (ii) such remedial action is otherwise within
its capabilities or control. As custodian, the Servicer shall have and perform
the following powers and duties:
(1) hold the Series 1999-1 Contracts on behalf of the Trustee
for the benefit of the Series 1999-1 Noteholders, maintain accurate
records pertaining to each Series 1999-1 Contract to enable it to
comply with the terms and conditions of the Master Agreement and this
Series 1999-1 Supplement, and maintaining a current inventory
thereof;
(2) implement or maintain policies and procedures in
accordance with the Servicer's normal business practices with respect
to persons authorized to have access to the Contract Files and to the
handling and custody of the Series 1999-1 Contracts so that the
integrity and physical possession of the Series 1999-1 Contracts will
be maintained; and
(3) attend to all details in connection with maintaining
custody of the Series 1999-1 Contracts on behalf of the Trustee on
behalf of the Series 1999-1 Noteholders.
(c) In acting as custodian of the Series 1999-1 Contracts, the Servicer
agrees further that it does not and will not have or assert any beneficial
ownership interest in such Series 1999-1 Contracts. The Servicer on behalf of
the Series 1999-1 Noteholders shall xxxx conspicuously its master data
processing records evidencing each Series 1999-1 Contract with a legend
evidencing that all right, title and interest in the Series 1999-1 Contracts has
been granted to the Trustee as provided in this Series 1999-1 Supplement.
(d) The Servicer agrees to maintain the Series 1999-1 Contracts at
either its office in Voorhees, New Jersey or at such other location as shall
from time to time be identified by prior written notice to the Trustee. Subject
to the foregoing, the Servicer may temporarily move individual Series 1999-1
Contracts or any portion thereof without notice as necessary to conduct
collection and other servicing activities; provided, however, that the Servicer
will take all action necessary to maintain the perfection of the Trustee's
interest in the Contracts and the proceeds thereof. It is intended that by the
Servicer's agreement pursuant to this Section 3.09, the Trustee shall be deemed
to have possession of the Contract Files for purposes of Section 9-305 of the
Uniform Commercial Code of the State in which the Contract Files are located.
(e) In performing its duties under this Section 3.09, the Servicer
agrees to act with reasonable care, using that degree of skill and care that it
exercises with respect to similar contracts owned and/or serviced by it, and in
any event with no less degree of skill and care than would be exercised by a
prudent servicer of such financed items. The Servicer shall promptly report to
the Trustee in writing any failure by it to hold the Contract Files as herein
provided and shall promptly take appropriate action to remedy any such failure.
In acting as custodian of the Contract Files, the Servicer further agrees not to
assert any legal or beneficial ownership interest in the Contracts or the
Contract Files.
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ARTICLE IV
SERIES 1999-1 EVENTS OF DEFAULT
SECTION 4.01 Events of Default. Events of Default and Notice thereof.
The following events constitute "Events of Default":
(a) default by the Obligors in making payment of any installment of
interest on any Series 1999-1 Note when such payment becomes due and payable and
continuation of such default for five calendar days;
(b) the outstanding principal balance of a Class of Series 1999-1 Notes
is not reduced to zero by that Class's Stated Maturity Date;
(c) default in the performance, or breach, by either Obligor of the
provisions of its related organizational documents relating to corporate
separateness;
(d) default in the performance, or breach, of any covenant of either
Obligor in the Master Agreement, or herein, and continuance of such default or
breach for a period of 30 days after the earliest of (i) any officer of either
Obligor first acquiring the knowledge thereof, (ii) the Trustee's giving written
notice thereof to the applicable Obligor or (iii) the holders of a majority of
the then Outstanding Principal Balance giving written notice thereof to the
Obligors and the Trustee;
(e) if any representation or warranty of either Obligor made in the
Master Agreement, this Series 1999-1 Supplement or any other writing provided to
the Series 1999-1 Noteholders proves to be incorrect in any material respect as
of the time when the same has been made; provided, however, that the breach of
any representation or warranty made by either Obligor will be deemed to be
"material" only if it negatively affects the Series 1999-1 Noteholders, the
enforceability of the Master Agreement, this Series 1999-1 Supplement or the
Series 1999-1 Notes;
(f) the commencement by or against either or both of the Obligors of a
voluntary or involuntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization, or other similar law, or the
consent by either or both of the Obligors to the entry of a decree or order for
relief in respect of either or both of the Obligors in an involuntary case or
proceeding under any applicable federal or state bankruptcy or insolvency case
or proceeding against either or both of the Obligors, or the filing by either or
both of the Obligors of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession of any
substantial part of the property of either or both of the Obligors by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of either or both of the Obligors, or the making by either or both of
the Obligors of an assignment for the benefit of creditors, or the failure by
either or both of the Obligors to pay their debts generally as they become due,
or the taking of corporate action by either or both of the Obligors in
furtherance of any such action; or
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(g) either or both of the Obligors becomes an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
The Trustee shall give the Series 1999-1 Noteholders notice of all
uncured defaults actually known to a Responsible Officer of the Trustee or of
which the Trustee has received written notice.
The Obligors shall furnish to the Trustee, annually before January 31st
of each year, commencing in 2000, a statement of certain officers of the
Obligors to the effect that to the best of their knowledge the Obligors is not
in default in the performance and observance of the terms of the Master
Agreement, this Series 1999-1 Supplement or the Series 1999-1 Notes or, if the
Obligors are in default, specifying such default.
SECTION 4.02 Acceleration of Maturity; Rescission and Annulment.
(a) If an Event of Default of the kind specified in subsection 4.01(f)
occurs, the unpaid principal amount of the Series 1999-1 Notes shall
automatically become due and payable at par together with all accrued and unpaid
interest thereon, without presentment, demand, protest or notice of any kind,
all of which are hereby waived by the Obligors. If an Event of Default (other
than an Event of Default of the kind described in subsection 4.01(f)) occurs and
is continuing, then and in every such case the Trustee may, or if so directed by
the holders of Series 1999-1 Notes evidencing 66 2/3% of the then Outstanding
Principal Balance, shall declare the unpaid principal amount of all the Series
1999-1 Notes to be due and payable immediately, by a notice in writing to the
Obligors (and to the Trustee if given by Series 1999-1 Noteholders), and upon
any such declaration such principal amount shall become immediately due and
payable together with all accrued and unpaid interest thereon, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Obligors.
(b) At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the holders of Series
1999-1 Notes evidencing 66 2/3% of the then Outstanding Principal Balance, by
written notice to the Obligors and the Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Obligors have paid or deposited with the Trustee a sum
sufficient to pay:
(A) all principal on any Class A Notes and Class B Notes which
has become due otherwise than by such declaration of acceleration and
interest thereon from the date when the same first became due until the
date of payment or deposit at the Class A-1 Interest Rate, Class A-2
Interest Rate, Class A-3 Interest Rate and the Class B Interest Rate, as
applicable;
(B) all interest due with respect to any Class A Notes or Class B
Notes and, to the extent that payment of such interest is lawful,
interest upon overdue interest from the
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date when the same first became due until the date of payment or deposit
at a rate per annum equal to the Class A-1 Interest Rate, Class A-2
Interest Rate, Class A-3 Interest Rate, or Class B Interest Rate, as
applicable; and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements, and advances of the
Trustee, its agents and counsel;
and
(ii) all Events of Default, other than the non-payment of the
Outstanding Principal Balance which has become due solely by such
declaration of acceleration, have been cured or waived.
No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon.
SECTION 4.03 Remedies.
(a) If an Event of Default occurs and is continuing of which a
Responsible Officer has actual knowledge, the Trustee shall immediately give
notice to each Series 1999-1 Noteholder and shall solicit the Series 1999-1
Noteholders for advice. The Trustee shall then take such action as the Trustee
shall deem appropriate provided that, if the Trustee is directed to take action
by the holders of Series 1999-1 Notes evidencing a majority of the then
Outstanding Principal Balance the Trustee shall act in accordance with such
direction subject to the provisions of Sections 4.12 and 4.16 hereof.
(b) Following any acceleration of the Series 1999-1 Notes, the Trustee
shall, subject to the restrictions imposed under Section 4.16, have all of the
rights, powers and remedies with respect to the Series 1999-1 Trust Estate as
are available to secured parties under the UCC or other applicable law. Such
rights, powers and remedies may be exercised by the Trustee in its own name as
trustee of an express trust.
(c) If an Event of Default specified in subsection 4.01(a) or (b) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Obligors for the whole amount of
principal and interest remaining unpaid.
(d) In exercising its rights and obligations under this Section 4.03,
the Trustee may sell the Series 1999-1 Trust Estate only under the circumstances
described in Section 4.16 and in accordance with Section 4.16 hereof. Neither
the Trustee nor any Series 1999-1 Noteholder shall have any rights against the
Obligors other than to enforce the Lien against the Series 1999-1 Trust Estate
and to sell the Series 1999-1 Trust Estate.
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SECTION 4.04 Trustee Shall File Proofs of Claim.
(a) In case of the tendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition,
or other judicial proceeding relative to the Obligors, the Originator, the
Servicer or any other obligor upon the Series 1999-1 Notes or the other
obligations secured hereby or relating to the property of the Obligors, the
Originator, the Servicer or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Series 1999-1 Notes shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Obligors,
the Originator or the Servicer for the payment of overdue principal or interest
or any such other obligation) shall by intervention in such proceeding or
otherwise,
(i) file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Series 1999-1 Notes and any
other obligation secured hereby and file such other papers or documents
as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Series 1999-1 Noteholders allowed in such judicial proceeding,
and
(ii) collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Series 1999-1 Noteholder to make such payments to the Trustee, as
administrative expenses associated with any such proceeding and, in the event
that the Trustee shall consent to the making of such payments directly to the
Series 1999-1 Noteholders to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee.
(b) Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Series 1999-1
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Series 1999-1 Notes or the rights of any holder thereof or to
authorize the Trustee to vote in respect of the claim of any Series 1999-1
Noteholder in any such proceeding.
SECTION 4.05 Trustee May Enforce Claims Without Possession of Series
1999-1 Notes. All rights of action and claims under the Master Agreement, this
Series 1999-1 Supplement or the Series 1999-1 Notes may be prosecuted and
enforced by the Trustee without the possession of any of the Series 1999-1 Notes
or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the holders
of the Series 1999-1 Notes in respect of which such judgment has been recovered.
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SECTION 4.06 Application of Money Collected. Any money collected by the
Trustee pursuant to this Article, and any moneys that may then be held or
thereafter received by the Trustee shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of the
entire amount due on account of principal or interest, upon presentation of the
Series 1999-1 Notes and surrender thereof:
first to the payment of all fees, costs and expenses including
conversion costs due to the Trustee (including the reasonable fees and
expenses of any counsel to the Trustee);
second to the payment of all fees, costs, and expenses due to the
Noteholders (including the reasonable fees and expenses of any counsel
to the Noteholders);
third to the payment of all Servicing Fees then due to the
Servicer;
fourth first, pro rata, to the payment of all accrued and unpaid
interest on the Class A-1 Principal Balance, Class A-2 Principal Balance
and Class A-3 Principal Balance, respectively, to the date of payment
thereof, including (to the extent permitted by applicable law) interest
on any overdue installment of interest and principal from the maturity
of such installment to the date of payment thereof at the rate per annum
equal to the Class A-1 Interest Rate, Class A-2 Interest Rate and the
Class A-3 Interest Rate, respectively; second, to the payment of all
accrued and unpaid interest on the Class B Principal Balance to the date
of payment thereof, including (to the extent permitted by applicable
law) interest on any overdue installment of interest and principal from
the maturity of such installment to the date of payment thereof at the
rate per annum equal to the Class B Interest Rate; third, to the payment
of the Outstanding Principal Balance of the Class A-1 Notes to the date
of payment when the balance is reduced to zero; fourth, to the payment
to the Class A-2 Notes and Class A-3 Notes pro rata to the date when the
balance is reduced to zero and fifth, to the payment of the Outstanding
Principal of the Class B Notes to the date of payment when the balance
is reduced to zero; provided that the Series 1999-1 Noteholders may
allocate such payments for interest and principal at their own
discretion, except that no such allocation shall affect the allocation
of such amounts or future payments received by any other Series 1999-1
Noteholder; and
fifth to the Obligors or any other Person legally entitled
thereto.
SECTION 4.07 Limitation on Suits. None of the Series 1999-1 Noteholders
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Master Agreement, this Series 1999-1 Supplement or the Series
1999-1 Notes, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Series 1999-1 Noteholder has previously given written
notice to the Trustee of a continuing Event of Default;
(ii) the holders of not less than a majority of the then
Outstanding Principal Balance of the Series 1999-1 Notes shall have made
written request to the Trustee to
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institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(iii) such Series 1999-1 Noteholder or Series 1999-1 Noteholders
have offered to the Trustee indemnity satisfactory to it against the
costs, expenses and liabilities to be incurred in compliance with such
request;
(iv) the Trustee for 30 days after its receipt of such notice,
request and offer of indemnity failed to institute any such proceeding;
and
(v) so long as any of the Series 1999-1 Notes remain Outstanding,
no direction inconsistent with such written request has been given to
the Trustee during such 30-day period by the holders of a majority of
the then Outstanding Principal Balance of the Series 1999-1 Notes; it
being understood and intended that no one or more Series 1999-1
Noteholders shall have any right in any manner whatever by virtue of, or
by availing of, any provision of the Master Agreement, this Series
1999-1 Supplement or the Series 1999-1 Notes to affect, disturb, or
prejudice the rights of any other Series 1999-1 Noteholders, or to
obtain or to seek to obtain priority or preference over any other Series
1999-1 Noteholders or to enforce any right under the Master Agreement,
this Series 1999-1 Supplement or the Series 1999-1 Notes, except in the
manner herein provided and for the equal and ratable benefit of all the
Series 1999-1 Noteholders. It is further understood and intended that so
long as any portion of the Series 1999-1 Notes remains Outstanding, ABS
shall not have any right to institute any proceeding, judicial or
otherwise, with respect to the Series 1999-1 Notes or for the
appointment of a receiver or trustee (including, without limitation, a
proceeding under the Bankruptcy Code), or for any other remedy
hereunder. Nothing in this Section 4.07 shall be construed as limiting
the rights of otherwise qualified Series 1999-1 Noteholders to petition
a court for the removal of a Trustee pursuant to Section 11.09 of the
Master Agreement.
SECTION 4.08 Unconditional Right of Series 1999-1 Noteholders to Receive
Principal and Interest. Notwithstanding any other provision in the Master
Agreement, this Series 1999-1 Supplement or the Series 1999-1 Notes other than
the provisions hereof limiting the right to recover amounts due on the Series
1999-1 Notes to recoveries from the property of the Series 1999-1 Trust Estate,
the holder of any Series 1999-1 Note shall have the absolute and unconditional
right to receive payment of the principal of and interest on such Series 1999-1
Note on the related stated maturity date thereof, and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Series 1999-1 Noteholder.
SECTION 4.09 Restoration of Rights and Remedies. If the Trustee or any
Series 1999-1 Noteholder has instituted any proceeding to enforce any right or
remedy under the Master Agreement, this Series 1999-1 Supplement or the Series
1999-1 Notes and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Series 1999-1
Noteholder, then and in every such case, subject to any determination in such
proceeding, the Obligors, the Trustee and the Series 1999-1 Noteholders shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and
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remedies of the Trustee and the Series 1999-1 Noteholders continue as though no
such proceeding had been instituted.
SECTION 4.10 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost, or stolen Series 1999-1 Notes, no right or remedy herein conferred upon or
reserved to the Trustee or to the Series 1999-1 Noteholders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 4.11 Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any holder of any Series 1999-1 Note to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Series 1999-1 Noteholders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Series 1999-1 Noteholders, as
the case may be.
SECTION 4.12 Control by Series 1999-1 Noteholders. The Holders of a
majority of the then Outstanding Principal Balance shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Series 1999-1 Notes. Notwithstanding the foregoing:
(i) no such direction shall be in conflict with any rule of law
or with the Master Agreement, this Series 1999-1 Supplement or the
Series 1999-1 Notes and, in particular, no sale of the Series 1999-1
Trust Estate shall occur except as provided in Section 4.16;
(ii) the Trustee shall not be required to follow any such
direction which the Trustee reasonably believes might result in any
personal liability on the part of the Trustee for which the Trustee is
not indemnified to its satisfaction; and
(iii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with any such direction; provided that
the Trustee shall give notice of any such action to each Noteholder.
SECTION 4.13 Waiver of Events of Default.
(a) The Holders of a 66-2/3% of the then Outstanding Principal Balance
may, by one or more instruments in writing, waive any Event of Default hereunder
and its consequences, except a continuing Event of Default:
(i) in respect of the payment of the principal of or premium or
interest on any Series 1999-1 Note (which may only be waived by the
holder of such Note); or
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(ii) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the holder of each
Outstanding Series 1999-1 Note affected (which only may be waived by the
holders of all Outstanding Series 1999-1 Notes affected).
(b) A copy of each waiver pursuant to subsection 4.13(a) shall be
furnished by the Obligors to the Trustee. Upon any such waiver, such Event of
Default shall cease to exist and shall be deemed to have been cured, for every
purpose of the Master Agreement, this Series 1999-1 Supplement or the Series
1999-1 Notes; but no such waiver shall extend to any subsequent or other Event
of Default or impair any right consequent thereon.
SECTION 4.14 Undertaking for Costs. All parties hereto agree (and each
Series 1999-1 Noteholder by its acceptance thereof shall be deemed to have
agreed) that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under the Master Agreement, this Series
1999-1 Supplement or the Series 1999-1 Notes, or in any suit against the Trustee
for any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 4.14 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Series 1999-1
Noteholder, or group of Series 1999-1 Noteholders, holding in the aggregate more
than 10% of the then Outstanding Principal Balance of the Series 1999-1 Notes,
or to any suit instituted by any Series 1999-1 Noteholder for the enforcement of
the payment of the principal of or interest on any Series 1999-1 Note on or
after the maturity date for such payments.
SECTION 4.15 Waiver of Stay or Extension Laws. The Obligors covenant (to
the extent that they may lawfully do so) that they will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of the
Master Agreement, this Series 1999-1 Supplement or the Series 1999-1 Notes, and
the Originator (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 4.16 Sale of Series 1999-1 Trust Estate.
(a) Notwithstanding any other provision of this Series 1999-1 Supplement
or the Master Agreement, the Trustee shall not sell the Series 1999-1 Trust
Estate following an Event of Default unless (i) the Holders of all the
outstanding Notes consent to the sale; (ii) the proceeds of the sale
distributable to the Holders of the Notes are sufficient to pay in full the
principal and accrued interest on all the outstanding Notes at the date of the
sale; or (iii) the Trustee determines that the Series 1999-1 Trust Estate may
not continue to provide sufficient funds for the payment of interest and
principal on the Notes as such amounts would have become due if the Notes had
not been declared due and payable and the Trustee obtains the written consent of
the holders of
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66-2/3% of principal amount of the each Class of Series 1999-1 Notes
Outstanding. In determining the sufficiency or insufficiency with respect to
clause (ii) or (iii) of the preceding sentence, the Trustee may, but need not,
obtain and conclusively rely upon an opinion of an investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and the sufficiency of the Series 1999-1 Trust Estate for such purpose.
In no event shall the Trustee be liable for making any such determination or in
relying upon any such opinion.
(b) If the conditions set forth in (a) above are met with respect to the
sale of the Series 1999-1 Trust Estate, the power to effect such sale of any
portion of the Series 1999-1 Trust Estate shall not be exhausted by any one or
more sales as to any portion of the Series 1999-1 Trust Estate remaining unsold,
but shall continue unimpaired until the entire Series 1999-1 Trust Estate shall
have been sold or all amounts payable on the Series 1999-1 Notes shall have been
paid. The Trustee may from time to time, upon written directions in accordance
with Section 4.12, postpone any public sale by public announcement made at the
time and place of such sale. For any public sale of the Series 1999-1 Trust
Estate, the Trustee shall have provided each Series 1999-1 Noteholder with
notice of such sale at least two weeks in advance of such sale which notice
shall specify the date, time and location of such sale.
(c) To the extent permitted by applicable law and if the Trustee is
permitted to sell the Series 1999-1 Trust Estate pursuant to subsection (a)
above, the Trustee shall nevertheless not sell the Series 1999-1 Trust Estate,
or any portion thereof in a private sale unless:
(i) the holders of 66-2/3% of the principal amount of each Class
of Series 1999-1 Notes Outstanding consent to or direct the Trustee in
writing to conduct such a private sale; or
(ii) the proceeds of such sale would be not less than the sum of
all amounts due to the Trustee hereunder and the entire Outstanding
Principal Balance and interest due or to become due thereon on the
Payment Date next succeeding the date of such sale.
The foregoing provisions shall not preclude or limit the ability of the Trustee
to purchase all or any portion of the Series 1999-1 Trust Estate at a private
sale provided the requirements of subsection (a) above are first satisfied.
(d) In connection with a sale of all or any portion of the Series
1999-1 Trust Estate:
(i) any one or more Series 1999-1 Noteholders may bid for and
purchase the property offered for sale, and upon compliance with the
terms of sale may hold, retain, and possess and dispose of such
property, without further accountability, and any Series 1999-1
Noteholder may, in paying the purchase money therefore, deliver in lieu
of cash any Outstanding Series 1999-1 Notes or claims for interest
thereon for credit in the amount that shall, upon distribution of the
net proceeds of such sale, be payable thereon, and the Series 1999-1
Notes, in case the amounts so payable thereon shall be less than the
amount due thereon, shall be returned to the Series 1999-1 Noteholders
after being appropriately stamped to show such partial payment;
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(ii) the Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the
Series 1999-1 Trust Estate in connection with a sale thereof;
(iii) the Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Originator to transfer and convey its interest
in any portion of the Series 1999-1 Trust Estate in connection with a
sale thereof, and to take all action necessary to effect such sale; and
(iv) no purchaser or transferee at such a sale shall be bound to
ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(e) The method, manner, time, place and terms of any sale of all or any
portion of the Series 1999-1 Trust Estate shall be commercially reasonable.
ARTICLE V
PREPAYMENT AND REDEMPTION
SECTION 5.01 Optional "Clean-up Call" Redemption of Series 1999-1 Notes.
On any Payment Date following any Calculation Date as of which the Aggregate
Contract Principal Balance is less than ten percent (10%) of the Initial
Aggregate Contract Principal Balance, the Servicer shall have the option to
cause the redemption of the Series 1999-1 Notes by depositing with the Trustee
the sum of (i) the Class A Principal Balance and the Class B Principal Balance
as of such Payment Date (after giving effect to the payment of any principal on
such Payment Date) and (ii) the Class A Note Interest and Class B Note Interest
due on such Payment Date. Upon receipt of such amounts and all amounts then owed
to the Trustee, the Trustee shall (x) make the final payment in full of the
Outstanding Principal Balance and all accrued and unpaid interest to the Series
1999-1 Noteholders and (y) release any remaining Series 1999-1 Trust Estate to
the Obligors, as the holder of the Residual Interest.
SECTION 5.02 Class B Special Redemption. The Class B Notes may be
redeemed ("Class B Special Redemption") on any Payment Date at the option of the
Obligors at a price equal to the sum of (i) the then Class B Principal Balance,
accrued and unpaid interest thereon and (ii) the Class B Special Redemption
Premium.
The Class B Special Redemption Premium will equal the excess, if any,
discounted as described below, of (i) the amount of interest that would accrue
on the aggregate outstanding principal balance of the Class B Notes at the Class
B Interest Rate during the period beginning on and including the Payment Date on
which such Class B Special Redemption Premium is required to be paid to the
Class B Noteholders to but excluding the Class B Maturity Date, over (ii) the
amount of interest that would have accrued on the aggregate outstanding Class B
Principal Balance over the same period at a per annum rate of interest equal to
the bond equivalent yield to maturity on the Determination Date preceding such
Payment Date of a United States Treasury security, which is trading in the
public securities market, maturing on a date closest to the date
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equal to the remaining average life of the Class B Notes minus 0.5%. Such excess
shall be discounted to the present value to such Payment Date at the applicable
yield described in clause (ii) above. For purposes of this paragraph only, (i)
the Class B Principal Balance upon which interest will be deemed to accrue, and
(ii) the average weighted life of the Class B Notes, shall be determined based
upon the amortization of the Aggregate Contract Principal Balance remaining at
such Payment Date at a rate of 6.0% conditional payment rate and no losses.
If the Class B Notes are redeemed pursuant to a Class B Special
Redemption, the Class B Notes will be deemed to have been repurchased by the
Obligors. In such an event, the Obligors will be entitled to receive payments of
principal and interest on the Class B Notes, and the Class B Principal Balance
will thereafter continue to amortize as provided in this Series 1999-1
Supplement.
SECTION 5.03 Notice of Redemption and Disposition of Funds.
(a) Written notice of any redemption pursuant to Section 5.01 shall be
given to the Trustee by the Obligors not later than ten (10) Business Days prior
to the date that the Trustee is required to give notice to the Noteholders and
then, promptly by the Trustee, by letter to Noteholders and to each Rating
Agency mailed not earlier than the 10th day and not later than the 30th day of
the month immediately preceding the month of such final Payment Date specifying
(i) the Payment Date upon which final payment of the Series 1999-1 Notes so
called for redemption will be made, (ii) the scheduled amount of any such final
payment, (iii) that interest shall cease to accrue on the Series 1999-1 Notes so
called for redemption on such final Payment Date and (iv) at the option of the
Trustee, the address for presentation of the Series 1999-1 Notes so called for
redemption for final payment. On such final Payment Date, the Trustee shall
cause to be distributed to the Series 1999-1 Noteholders so called for
redemption an amount equal to the amount deposited by the Obligors pursuant to
Section 5.01, as applicable. After such Payment Date, interest on the Series
1999-1 Notes so redeemed shall cease to accrue. Each Series 1999-1 Noteholder
shall use reasonable efforts to present its redeemed Series 1999-1 Note to the
Trustee at the office, if any, specified in the notice described in clause (iv)
of this paragraph (a), or in any similar written notice, within sixty (60) days
of such Series 1999-1 Noteholder's receipt of the final payment of its Series
1999-1 Note. Each Noteholder shall indemnify the Trustee and its officers,
directors, agents and employees for any damages suffered by the Trustee or any
such officer, director, agent or employee of the Trustee as a result of the
Noteholder's failure to present its Series 1999-1 Note on or after the final
Payment Date thereof.
(b) Written notice of any redemption of the Class B Notes pursuant to
Section 5.02 shall be given to the Trustee by the Obligors not later than ten
(10) Business Days prior to the date that the Trustee is required to give notice
to the Noteholders, and then, promptly by the Trustee, by letter to the Class B
Noteholders mailed not earlier than the 10th day and not later than the 30th day
of the month immediately preceding the month of such redemption specifying (i)
the Payment Date upon which the redemption of the Class B Notes will occur, (ii)
the scheduled amount of such redemption, (iii) that with respect to the then
holders of the Class B Notes, interest shall cease to accrue on the Class B
Notes so called for redemption and (iv) at the option of the Trustee, the
address for presentation of the Class B Notes so called for redemption for final
payment. On such final Payment Date, the Trustee shall cause to be distributed
to the holders of the Class B
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Notes so called for redemption an amount equal to the amount deposited by the
Obligors for such purpose. After such Payment Date, interest on the Class B
Notes so redeemed shall accrue to the benefit of the Obligors. Each Class B
Noteholder with respect to Class B Notes which have been called for redemption
shall use reasonable efforts to present its redeemed Class B Notes to the
Trustee at the office, if any, specified in the notice described in clause (iv)
of this paragraph (b), or in any similar written notice, within sixty (60) days
of such Class B Noteholder's receipt of the final payment of its Class B Note.
Each Noteholder shall indemnify the Trustee and its officers, directors, agents
and employees for any damages suffered by the Trustee or any such officer,
director, agent or employee of the Trustee as a result of the Noteholder's
failure to present its Class B Note on or after the stated redemption date
therefor.
(c) In the event that any amount due to any Series 1999-1 Noteholder
remains unclaimed after the final Payment Date or redemption date, the Servicer
shall, at its expense, cause to be published once, in the eastern edition of The
Wall Street Journal, notice that such money remains unclaimed. If, within the
period then specified in the escheat laws of the State of New York after such
publication, such amount remains unclaimed, the Obligors shall be entitled to
all unclaimed funds and other assets which remain subject hereto, and the
Trustee upon transfer of such funds shall be discharged of any responsibility
for such funds and, the Series 1999-1 Noteholders shall look to the Obligors for
payment.
ARTICLE VI
MATTERS RELATING TO THE CLASS B NOTES.
SECTION 6.01. Transfer Restrictions.
Other than the initial purchase occurring on the Closing Date, neither
the Class B Notes nor any interest therein may be offered or sold except to a
Person whom the transferor of the Class B Notes or an interest therein
reasonably believes is a Qualified Institutional Buyer ("QIB") purchasing for
its own account in accordance with Rule 144A under the Securities Act.
Prospective investors in the Class B Notes are hereby notified that transferors
of the Class B Notes are relying on the exemption from the provisions of the
Securities Act provided by Rule 144A. Each Class B Noteholder and each
beneficial owner of Class B Notes, by its acceptance thereof or of such
beneficial interest, will be deemed to have represented and agreed as follows:
(i) such Holder or owner understands that the Class B Notes may be resold only
to QIBs pursuant to Rule 144A and that the Class B Notes will be available only
as beneficial interests in the Rule 144A Global Note; (ii) such Holder or owners
understands that the Class B Notes are restricted securities and have not been
and will not be registered under the Securities Act or any state or other
applicable securities law and that the Class B Notes, or any interest or
participation therein, may not be offered, sold, pledged or otherwise
transferred unless registered pursuant to, or exempt from registration under,
the Securities Act and any other applicable securities law; (iii) such Holder or
owner acknowledges that none of the initial investors has made any
representation to it with respect to the offering or sale of any Class B Notes,
other than the information contained in the Class B Private Placement Memorandum
(including the exhibit attached thereto) which has been delivered to it and upon
which it is relying in making its investment decision with respect to the Class
B Notes; (iv) it has had access to such financial and other information
concerning the Class B Notes as it has
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deemed necessary in connection with its decision to purchase the Class B Notes;
(v) such Holder or owner acknowledges that the Class B Notes will bear a legend
as set forth in the form of Class B Note attached as Exhibit C hereto; (vi) if
it is acquiring any Class B Note, or any interest or participation therein, as a
fiduciary or agent for one or more investor accounts, such Holder or owner
represents that it has sole investment discretion with respect to such account
and that it has full power to make the acknowledgments, representations and
agreements contained herein on behalf of each such account; (vii) such Holder or
owner (1) is a QIB, (2) is aware that the sale to it is being made in reliance
on Rule 144A and if it is acquiring such Class B Notes or any interest or
participation therein for the account of another QIB, such other QIB is aware
that the sale is being made in reliance on Rule 144A and (3) is acquiring such
Class B Notes or any interest or participation therein for its own account or
for the account of a QIB; (viii) such Holder or owner is purchasing the Class B
Notes for its own account, or for one or more investor accounts for which it is
acting as fiduciary or agent, in each case for investment, and not with a view
to, or for offer or sale in connection with, any distribution thereof in
violation of the Securities Act, subject to any requirements of law that the
disposition of its property or the property of such investor account or accounts
be at all times within its or their control and subject to its or their ability
to resell such Class B Notes, or any interest or participation therein, as
provided herein and in the Master Agreement; (ix) such Holder or owner agrees
that if in the future it should offer, sell or otherwise transfer such Class B
Note or any interest or participation therein, it will do so only (A) to the
Obligors, or (B) pursuant to Rule 144A to a person whom it reasonably believes
is a QIB in a transaction meeting the requirements of Rule 144A, purchasing for
its own account or for the account of a QIB, whom it has informed that such
offer, sale or other transfer is being made in reliance on Rule 144A, (x) such
Holder or owner acknowledges that the Class B Notes will be represented by a
Rule 144A Global Note and that transfers thereof or any interest or
participation therein are restricted; and (xi) such Holder or owner acknowledges
that the Obligors and the Originator, and others will rely on the truth and
accuracy of the foregoing acknowledgments, representations and agreements, and
agrees that if any of the foregoing acknowledgments, representations and
agreements deemed to have been made by it are no longer accurate, it shall
promptly notify the Obligors and the Originator.
SECTION 6.02. Rule 144A Information. In order to preserve the exemption
for resales and other transfers under Rule 144A under the Securities Act, the
Obligors shall provide to any Class B Noteholder and any prospective purchaser
or transferee designated by a Class B Noteholder, upon request of the Class B
Noteholder or prospective purchaser or transferee, the information required by
Rule 144A to enable resales of such Class B Notes to be made pursuant to Rule
144A.
SECTION 6.03. Investor Letters. In the event the Class B Notes are at
any time available as Definitive Notes, it shall be a condition to the transfer
of any Class B Definitive Note that there be delivered to the Trustee a letter
from the proposed transferee of any such Class B Notes in substantially the form
and substance set forth as Exhibit D to this Series Supplement.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Ratification of Master Agreement. As supplemented by this
Series 1999-1 Supplement, the Master Agreement is in all respects ratified and
confirmed and the Master Agreement, as so supplemented by this Series 1999-1
Supplement shall be read, taken and construed as one and the same instrument.
SECTION 7.02 Counterparts. This Series 1999-1 Supplement may be executed
in one or more counterparts, each of which so executed shall be deemed to be an
original, but all of which shall together constitute but one and the same
instrument.
SECTION 7.03 GOVERNING LAW. THIS SERIES 1999-1 SUPPLEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT TAKING INTO ACCOUNT THE CONFLICT
OF LAWS PRINCIPLES OF ANY JURISDICTION.
SECTION 7.04 Amendments and Waivers.
(a) Notwithstanding anything contained in the Master Agreement to the
contrary, no term or condition of this Series 1999-1 Supplement shall be
amended, modified, waived or terminated except in compliance with the terms of
Section 13.01 of the Master Agreement and assuming that such amendment,
modification, waiver or termination were to be accomplished through a Master
Agreement Supplement executed in accordance with Section 13.01 of the Master
Agreement.
(b) No waiver with respect to any term or condition of the Master
Agreement or this Series 1999-1 Supplement shall extend to any subsequent or
other event, circumstance or default or impair any right consequent thereon
except to the extent expressly so waived.
SECTION 7.05 Non-petition Clause. Notwithstanding anything contained in
Section 4.07 hereof, or elsewhere herein, the Trustee hereby, and each Series
1999-1 Noteholder, by its acceptance of the Series 1999-1 Note, shall be deemed
to have agreed that, prior to the date which is one year and one day after the
termination of the Master Agreement, such Person shall not acquiesce, petition
or otherwise invoke or cause either Obligor to invoke the process of any
Governmental Authority for the purpose of commencing or sustaining a case
against such Obligor under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of or for such Obligor or any substantial
part of its property or ordering the winding-up or liquidation of the affairs of
such Obligor; provided, however, that nothing herein shall prohibit the Trustee
from filing a proof of claim or otherwise participating in any proceedings
instituted by any other person.
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SECTION 7.06 Officer's Certificate and Opinion of Counsel as to
Conditions Precedent. Upon any request or application by the Obligors or the
Servicer to the Trustee to take any action under the Master Agreement or this
Series 1999-1 Supplement, the Obligors or the Servicer, as the case may be,
shall furnish to the Trustee:
(a) an Officer's Certificate stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in the
Master Agreement or this Series 1999-1 Supplement relating to the proposed
action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent and covenants have been complied with.
Each Officer's Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in the Master Agreement or
this Series 1999-1 Supplement shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 7.07 Restriction on Further Indebtedness. Neither Obligor shall
issue any indebtedness, including any new Series of Notes, or execute and
deliver any guaranties, unless the Obligors shall have previously received
confirmation of the ratings then assigned to the Series 1999-1 Notes by each of
Xxxxx'x and Fitch.
SECTION 7.08 Special Covenants and Acknowledgements.
(a) With respect to the Series 1999-1 Notes, each Obligor does hereby
represent and warrant, as of the Closing Date:
(i) "Pledged Property." The Pledged Property for Series 1999-1 is
the Series Trust Estate.
(ii) "Series Controlling Party." The parties hereto acknowledge
that the Trustee is the "Series Controlling Party" with respect to the
Series 1999-1 Notes for purposes of the Master Agreement.
49
(iii) "Support Defaults." There are no "Support Default" events
with respect to the Series 1999-1 Notes.
(iv) "Series Trustee Secured Obligations." The "Series Trustee
Secured Obligations" and the "Series Secured Obligations" with respect
to the Series 1999-1 Notes shall mean, collectively (x) any amounts due
to the Series 1999-1 Noteholders hereunder, and (y) any fees and
expenses due to the Trustee with respect to the Series 1999-1 Notes.
(v) "Series Secured Parties." The "Series Secured Parties" with
respect to the Series 1999-1 Notes are the Trustee and the Series 1999-1
Noteholders.
(vi) "Original Servicer Fee Rate." The "Original Servicer Fee
Rate" with respect to the Series 1999-1 Notes is the Servicing Fee.
(vii) "Original Issue Date." The "Original Issue Date" with
respect to the Series 1999-1 Notes is August 26, 1999.
(b) Notwithstanding the provisions of Section 3.02 of the Master
Agreement, with respect to any interest which the Obligors may have in the
Equipment, the Obligors shall be obligated to perfect such interest only with
respect to contracts which in the aggregate represent not less than 85% of the
Statistical Aggregate Contract Principal Balance.
SECTION 7.09 Actions Taken by the Series Controlling Party. With respect
to Series 1999-1 the Series Controlling Party is the Trustee. With respect to
Series 1999-1, the Series Controlling Party shall (i) give its consent, as
provided in Section 3.04 and Section 6.03 of the Master Agreement, (ii) waive
any past Default or Event of Default as provided in Section 10.09 of the Master
Agreement and (iii) give the direction to be provided in Section 14.04 of the
Master Agreement as follows:
(i) With respect to any consent to be given under Section 3.04 or
6.03 of the Master Agreement, the Trustee shall give such consent
only with the consent of the holders of a majority in principal
amount of the Series 1999-1 Notes Outstanding.
(ii) With respect to the waiver of any past Default or Event of
Default as provided in Section 10.09 of the Master Agreement, the
Trustee, as Series Controlling Party shall consent to the waiver
of any past Default or Event of Default only upon the
satisfaction of the conditions to the waiver of an Event of
Default as provided in Section 4.13 of this Series 1999-1
Supplement.
(iii) With respect to the direction to be provided in Section 14.04 of
the Master Agreement, subject to Section 4.16 of this Series
Supplement (if an Event of Default has occurred and is continuing
and a Responsible Officer of the Trustee has actual knowledge of
such Event of Default), the Trustee shall give such direction if
it has been directed to do so in writing by the holders of a
majority in principal amount of the Series 1999-1 Notes
Outstanding.
43
50
IN WITNESS WHEREOF, the Obligors, ABS, in its individual capacity, as
Originator and as the Servicer and the Trustee have caused this Series 1999-1
Supplement to be fully executed by their respective officers as of the day and
year first above written.
ADVANTA BUSINESS SERVICES CORP.,
in its individual capacity and as Servicer
and Originator
By: /s/ XXXX XXXXXXX
-------------------------------
Name: Xxxx Xxxxxxx
Title: Assistant Treasurer
ADVANTA LEASING RECEIVABLES CORP. VIII,
as an Obligor
By: /s/ XXXX XXXXXXX
-------------------------------
Name: Xxxx Xxxxxxx
Title: Treasurer
ADVANTA LEASING RECEIVABLES CORP. IX,
as an Obligor
By: /s/ XXXX XXXXXXX
-------------------------------
Name: Xxxx Xxxxxxx
Title: Treasurer
BANKERS TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By: /s/ XXXX XXXXXXX
-------------------------------
Name: Xxxx Xxxxxxx
Title: Assistant Vice President
51
EXHIBIT C -- FORM OF NOTES
CLASS A-1 NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY ("DTC") TO THE SERIES OBLIGORS OR THEIR AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE ON THE PAYMENT DATES AND IN THE AMOUNTS
DESCRIBED HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE PRINCIPAL BALANCE OF THIS
NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF AND MAY BE
ASCERTAINED ONLY BY OBTAINING A WRITTEN CONFIRMATION THEREOF FROM THE TRUSTEE
NAMED HEREIN OR ITS SUCCESSOR.
ADVANTA EQUIPMENT RECEIVABLES ASSET-BACKED NOTES, SERIES 1999-1
5.76664% NOTE CLASS A-1
Issued under the terms of a Master Facility Agreement dated August 26,
1999 (the "Master Agreement") among Advanta Business Services Corp. ("Advanta"),
as Servicer, and Advanta Leasing Receivables Corp. VIII ("ALRC VIII"), Advanta
Leasing Receivables Corp. IX ("ALRC IX") and Bankers Trust Company, as Trustee
(the "Trustee"), and the Series 1999-1 Supplement thereto also dated August 26,
1999 (the "Series 1999-1 Supplement") also among Advanta, ALCR VIII, ALRC IX and
the Trustee (the Master Agreement together with the Series 1999-1 Supplement
are, herein, the "Agreement"). This Class A-1 Note is secured by the Series
1999-1 Trust Estate (as defined herein), which includes, but is not limited to,
a pool of equipment leases and loans and other property appurtenant thereto
pledged to the Trustee by ALRC VIII and ALRC IX.
Principal in respect of this Class A-1 Note is payable monthly as set
forth herein and the Agreement.
This Class A-1 Note does not represent any interest in or obligation of
Advanta or any Affiliate of Advanta, other than the Series Obligors. Neither the
Class A-1 Notes nor the Contracts are insured by any governmental agency.
52
CUSIP: 00000XXX0
Class A-1
Note $50,929,490 Class A-1 Percentage
No. A-1-1 Initial Principal Balance Interest: 100%
ALRC VIII and ALRC IX (each, a "Series Obligor" and, together, the
"Series Obligors"), for value received, hereby promise to pay to CEDE & CO. the
principal sum of Fifty Million Nine Hundred Twenty-Nine Thousand Four Hundred
Ninety Dollars ($50,929,490) in monthly installments and to pay interest monthly
in arrears on the unpaid portion of said principal sum (and, to the extent that
the payment of such interest shall be legally enforceable, on any overdue
installment of interest on this Note) on the 15th day of each month or, if such
15th day is not a Business Day, the Business Day immediately following (each, a
"Payment Date"), commencing on September 15, 1999, for the period commencing on
and including the immediately preceding Payment Date (or commencing on the
Closing Date with respect to the initial Payment Date) and ending on and
including the day immediately preceding such Payment Date, until such unpaid
principal is fully paid, at a rate per annum equal to 5.76664% (the "Class A-1
Interest Rate"); provided, however, that interest on any amount of principal or
interest that is not timely paid when due shall accrue interest until paid at
the Class A-1 Interest Rate. The Series Obligors hereby agree to pay to such
registered holder its pro rata share of the amounts which all Class A-1
Noteholders are entitled to receive, as hereinafter set forth in this Class A-1
Note and as more fully set forth in the Agreement, at all times from the sources
and on the terms and conditions hereinafter set forth and as more fully set
forth in the Agreement.
This Class A-1 Note is one of the duly authorized Class A-1 Notes
designated as "5.76664% Equipment Receivables Asset-Backed Notes, Series 1999-1,
Class A-1" (the "Class A-1 Notes"). This Class A-1 Note is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which the
holders of the Class A Notes (the "Class A Noteholders"), by virtue of their
acceptance hereof, assents and by which the Class A Noteholders are bound. To
the extent not otherwise defined herein, capitalized terms used herein have the
meanings assigned in the Agreement.
Each Series Obligor has pledged to the Trustee and has granted a security
interest to the Trustee for the benefit of the Class A Noteholders and the
holders of the Class B Notes (collectively, the "Series 1999-1 Noteholders"),
and the Trustee has accepted the pledge of and grant of a security interest in,
all of such Series Obligor's now owned and existing and hereafter acquired or
arising right, title and interest, if any, in, to and under all accounts,
general intangibles, instruments, chattel paper, documents, money, letters of
credit, advices of credit, deposit accounts, certificates of deposit, investment
property, goods and other property consisting of, arising from or related to any
of the following: (1) each and every Contract now or hereafter listed as a
Series 1999-1 Contract on the List of Contracts delivered to the Trustee
together with all amounts due or to become due under such Series 1999-1
Contracts, (2) all Collections and Related Security associated therewith, (3)
all balances, instruments, monies, securities, investment property or other
property received or held from time to time in the Collection Account, the
Reserve Account and the Residual Account, (4) the Contribution Agreement and the
Series 1999-1 Contribution Agreement Supplement and all of its rights to
2
53
enforce the provisions of, and to benefit from the representations, warranties
and covenants made in, the Contribution Agreement and the Series 1999-1
Contribution Agreement Supplement, (5) the Equipment associated with the Series
1999-1 Contracts and the Residual Interest therein and (6) all proceeds of each
of the foregoing, but excluding any obligations of the Series Obligors under the
Contribution Agreement and the Series 1999-1 Contribution Agreement Supplement
and excluding any Servicing Charges, taxes, Initial Unpaid Amounts and Security
Deposits, all in accordance with, and for the purposes set forth in, this Series
1999-1 Supplement (such property, the "Series 1999-1 Trust Estate").
This Class A-1 Note does not purport to summarize the Agreement and
reference and direction is made to the Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Series Obligors. Copies of
the Agreement and all amendments thereto will be provided to any Class A-1
Noteholder, at its expense, upon a written request to the Servicer: Advanta
Business Services Corp., 0000 Xxxxxx Xxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000-0000;
Attention: Treasurer.
The Holder hereof, by its acceptance of this Class A-1 Note, agrees to
look solely to the funds in the Series 1999-1 Accounts to the extent available
for payment to the Holder hereof as provided in the Agreement for payment
hereunder and agrees that the Trustee in its individual capacity is not
personally liable to the Holder hereof for any amounts due under this Class A-1
Note or the Agreement.
The Class A-1 Notes are limited in right of payment to certain
collections and recoveries respecting the Contracts, all as more specifically
set forth in the Agreement. Pursuant to the Agreement, the Trustee shall, in
addition to the Class A-1 Notes, authenticate Class A-2 Notes and Class A-3
Notes (collectively with the Class A-1 Notes, the "Class A Notes") and Class B
Notes (the "Class B Notes"). PAYMENTS OF INTEREST WITH RESPECT TO EACH CLASS OF
CLASS A NOTES ARE PAYABLE ON EACH PAYMENT DATE PRO RATA ON THE BASIS OF INTEREST
THEN DUE ON THE VARIOUS CLASSES OF CLASS A NOTES AND THE RIGHT TO RECEIVE
PAYMENTS OF PRINCIPAL WITH RESPECT TO EACH CLASS OF CLASS A NOTES IS ON A
SEQUENTIAL-PAY BASIS WHEREBY PRINCIPAL IS APPLIED TO REDUCE THE NOTE PRINCIPAL
BALANCE OF THE CLASS A NOTES THEN OUTSTANDING AND HAVING THE LOWEST NUMERICAL
DESIGNATION (E.G., FIRST TO THE CLASS A-1 NOTES) TO ZERO BEFORE ANY PRINCIPAL
PAYMENT IS MADE TO THE NEXT CLASS. THE RIGHT TO RECEIVE INTEREST PAYMENTS WITH
RESPECT TO THE CLASS B NOTES IS SUBORDINATE TO THE PAYMENT OF INTEREST DUE AND
PAYABLE ON THE CLASS A NOTES ON EACH PAYMENT DATE AND THE RIGHT TO RECEIVE ANY
PRINCIPAL PAYMENTS ON THE CLASS B NOTES IS SUBORDINATE TO THE PAYMENT IN FULL OF
PRINCIPAL ON THE CLASS A-1 NOTES AND AFTER THE CLASS A-1 NOTES HAVE BEEN PAID IN
FULL, MONTHLY PAYMENTS OF PRINCIPAL ON THE CLASS B NOTES ARE SUBORDINATE TO THE
PAYMENT OF PRINCIPAL AS PROVIDED IN THE AGREEMENT ON THE CLASS A NOTES. NO
PRINCIPAL PAYMENTS WILL BE MADE IN RESPECT OF THE CLASS B NOTES UNTIL THE FINAL
PRINCIPAL PAYMENT HAS BEEN MADE TO THE CLASS A-1 NOTEHOLDERS.
3
54
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Series Obligors, the Servicer and the Trustee and the rights of the Class A-1
Noteholders under the Agreement at any time by the Servicer, the Series Obligors
and the Trustee without, in certain cases, the consent of the Series 1999-1
Noteholders, as more particularly described in the Agreement. Any such consent
by the Holder of this Class A-1 Note shall be conclusive and binding on such
Holder and upon all future Holders of this Class A-1 Note and of any Class A-1
Note issued upon the transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent is made upon this Class A-1 Note.
Unless earlier declared, or they otherwise become, due and payable by
reason of an Event of Default, the Notes are payable only at the time and in the
manner provided in the Agreement and are not redeemable or prepayable before
such time except that the Series Obligors will have the option, subject to
certain conditions set forth in the Agreement, to cause early retirement of the
Notes as of any Payment Date following the date on which the Aggregate Contract
Principal Balance is less than 10.00% of the Initial Aggregate Contract
Principal Balance. In the event of such redemption, the entire Class A
Outstanding Principal Balance and Class B Outstanding Principal Balance,
together with accrued interest thereon at the related Interest Rate, will be
required to be paid to the respective Class A Noteholders and the respective
Class B Noteholders. In addition, if on any Payment Date, the aggregate amounts
on deposit in the Collection Account, Reserve Account and Residual Account are
greater than or equal to the sum of (i) the remaining principal balance of the
Class A Notes and the Class B Notes and (ii) the accrued and unpaid interest,
the accrued and unpaid Servicing Fee and any unreimbursed Servicer Advances, the
amount on deposit in both the Reserve Account and the Residual Account will be
deposited into the Collection Account and used to redeem in full any unpaid
Class A Notes and Class B Notes. If an Event of Default as defined in the
Agreement shall occur and be continuing, the principal of all the Notes may
become or be declared due and payable in the manner and with the effect provided
in the Agreement.
The Servicer, the Series Obligors and the Trustee and any agent of any of
the foregoing may treat the person in whose name this Class A-1 Note is
registered as the owner hereof for all purposes, and none of the foregoing shall
be affected by any notice to the contrary.
4
55
IN WITNESS WHEREOF, the Series Obligors have caused this Class A-1 Note
to be duly executed.
ADVANTA LEASING RECEIVABLES CORP. VIII,
as Series Obligor
By: _________________________
Name:
Title:
ADVANTA LEASING RECEIVABLES CORP. IX,
as Series Obligor
By: _________________________
Name:
Title:
Dated: August 26, 1999
56
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Notes of the Series designated herein, issued under
the within-mentioned Agreement.
BANKERS TRUST COMPANY, not in its
individual capacity but solely as Trustee
By: _________________________
Name:
Title:
57
CLASS A-2 NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY ("DTC") TO THE SERIES OBLIGORS OR THEIR AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE ON THE PAYMENT DATES AND IN THE AMOUNTS
DESCRIBED HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE PRINCIPAL BALANCE OF THIS
NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF AND MAY BE
ASCERTAINED ONLY BY OBTAINING A WRITTEN CONFIRMATION THEREOF FROM THE TRUSTEE
NAMED HEREIN OR ITS SUCCESSOR.
ADVANTA EQUIPMENT RECEIVABLES ASSET-BACKED NOTES, SERIES 1999-1
6.64% NOTE CLASS A-2
Issued under the terms of a Master Facility Agreement dated August 26,
1999 (the "Master Agreement") among Advanta Business Services Corp. ("Advanta"),
as Servicer, and Advanta Leasing Receivables Corp. VIII ("ALRC VIII"), Advanta
Leasing Receivables Corp. IX ("ALRC IX") and Bankers Trust Company, as Trustee
(the "Trustee"), and the Series 1999-1 Supplement thereto also dated August 26,
1999 (the "Series 1999-1 Supplement") also among Advanta, ALCR VIII, ALRC IX and
the Trustee (the Master Agreement together with the Series 1999-1 Supplement
are, herein, the "Agreement"). This Class A-2 Note is secured by the Series
1999-1 Trust Estate (as defined herein), which includes, but is not limited to,
a pool of equipment leases and loans and other property appurtenant thereto
pledged to the Trustee by ALRC VIII and ALRC IX.
Principal in respect of this Class A-2 Note is payable monthly as set
forth herein and the Agreement.
This Class A-2 Note does not represent any interest in or obligation of
Advanta or any Affiliate of Advanta, other than the Series Obligors. Neither the
Class A-2 Notes nor the Contracts are insured by any governmental agency.
58
CUSIP: 00000XXX0
Class A-2
Note $38,500,927 Class A-2 Percentage
No. A-2-1 Initial Principal Balance Interest: 100%
ALRC VIII and ALRC IX (each, a "Series Obligor" and, together, the
"Series Obligors"), for value received, hereby promise to pay to CEDE & CO. the
principal sum of Thirty-Eight Million Five Hundred Thousand Nine Hundred Twenty
Seven Dollars ($38,500,927) in monthly installments and to pay interest monthly
in arrears on the unpaid portion of said principal sum (and, to the extent that
the payment of such interest shall be legally enforceable, on any overdue
installment of interest on this Note) on the 15th day of each month or, if such
15th day is not a Business Day, the Business Day immediately following (each, a
"Payment Date"), commencing on September 15, 1999, for the period commencing on
and including the immediately preceding Payment Date (or commencing on the
Closing Date with respect to the initial Payment Date) and ending on and
including the day immediately preceding such Payment Date, until such unpaid
principal is fully paid, at a rate per annum equal to 6.64% (the "Class A-2
Interest Rate"); provided, however, that interest on any amount of principal or
interest that is not timely paid when due shall accrue interest until paid at
the Class A-2 Interest Rate. The Series Obligors hereby agree to pay to such
registered holder its pro rata share of the amounts which all Class A-2
Noteholders are entitled to receive, as hereinafter set forth in this Class A-2
Note and as more fully set forth in the Agreement, at all times from the sources
and on the terms and conditions hereinafter set forth and as more fully set
forth in the Agreement.
This Class A-2 Note is one of the duly authorized Class A-2 Notes
designated as "6.64% Equipment Receivables Asset-Backed Notes, Series 1999-1,
Class A-2" (the "Class A-2 Notes"). This Class A-2 Note is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which the
holders of the Class A Notes (the "Class A Noteholders"), by virtue of their
acceptance hereof, assents and by which the Class A Noteholders are bound. To
the extent not otherwise defined herein, capitalized terms used herein have the
meanings assigned in the Agreement.
Each Series Obligor has pledged to the Trustee and has granted a security
interest to the Trustee for the benefit of the Class A Noteholders and the
holders of the Class B Notes (collectively, the "Series 1999-1 Noteholders"),
and the Trustee has accepted the pledge of and grant of a security interest in,
all of such Series Obligor's now owned and existing and hereafter acquired or
arising right, title and interest, if any, in, to and under all accounts,
general intangibles, instruments, chattel paper, documents, money, letters of
credit, advices of credit, deposit accounts, certificates of deposit, investment
property, goods and other property consisting of, arising from or related to any
of the following: (1) each and every Contract now or hereafter listed as a
Series 1999-1 Contract on the List of Contracts delivered to the Trustee
together with all amounts due or to become due under such Series 1999-1
Contracts, (2) all Collections and Related Security associated therewith, (3)
all balances, instruments, monies, securities, investment property or other
property received or held from time to time in the Collection Account, the
Reserve Account and the Residual Account, (4) the Contribution Agreement and the
Series 1999-1 Contribution Agreement Supplement and all of its rights to
2
59
enforce the provisions of, and to benefit from the representations, warranties
and covenants made in, the Contribution Agreement and the Series 1999-1
Contribution Agreement Supplement, (5) the Equipment associated with the Series
1999-1 Contracts and the Residual Interest therein, and (6) all proceeds of each
of the foregoing, but excluding any obligations of the Series Obligors under the
Contribution Agreement and the Series 1999-1 Contribution Agreement Supplement
and excluding any Servicing Charges, taxes, Initial Unpaid Amounts and Security
Deposits, all in accordance with, and for the purposes set forth in, this Series
1999-1 Supplement (such property, the "Series 1999-1 Trust Estate").
This Class A-2 Note does not purport to summarize the Agreement and
reference and direction is made to the Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Series Obligors. Copies of
the Agreement and all amendments thereto will be provided to any Class A-2
Noteholder, at its expense, upon a written request to the Servicer: Advanta
Business Services Corp., 0000 Xxxxxx Xxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000-0000;
Attention: Treasurer.
The Holder hereof, by its acceptance of this Class A-2 Note, agrees to
look solely to the funds in the Series 1999-1 Accounts to the extent available
for payment to the Holder hereof as provided in the Agreement for payment
hereunder and agrees that the Trustee in its individual capacity is not
personally liable to the Holder hereof for any amounts due under this Class A-1
Note or the Agreement.
The Class A-2 Notes are limited in right of payment to certain
collections and recoveries respecting the Contracts, all as more specifically
set forth in the Agreement. Pursuant to the Agreement, the Trustee shall, in
addition to the Class A-2 Notes, authenticate Class A-1 Notes and Class A-3
Notes (collectively with the Class A-2 Notes, the "Class A Notes") and Class B
Notes (the "Class B Notes"). PAYMENTS OF INTEREST WITH RESPECT TO EACH CLASS OF
CLASS A NOTES ARE PAYABLE ON EACH PAYMENT DATE PRO RATA ON THE BASIS OF INTEREST
THEN DUE ON THE VARIOUS CLASSES OF CLASS A NOTES AND THE RIGHT TO RECEIVE
PAYMENTS OF PRINCIPAL WITH RESPECT TO EACH CLASS OF CLASS A NOTES IS ON A
SEQUENTIAL-PAY BASIS WHEREBY PRINCIPAL IS APPLIED TO REDUCE THE NOTE PRINCIPAL
BALANCE OF THE CLASS A NOTES THEN OUTSTANDING AND HAVING THE LOWEST NUMERICAL
DESIGNATION (E.G., FIRST TO THE CLASS A-1 NOTES) TO ZERO BEFORE ANY PRINCIPAL
PAYMENT IS MADE TO THE NEXT CLASS. THE RIGHT TO RECEIVE INTEREST PAYMENTS WITH
RESPECT TO THE CLASS B NOTES IS SUBORDINATE TO THE PAYMENT OF INTEREST DUE AND
PAYABLE ON THE CLASS A NOTES ON EACH PAYMENT DATE AND THE RIGHT TO RECEIVE ANY
PRINCIPAL PAYMENTS ON THE CLASS B NOTES IS SUBORDINATE TO THE PAYMENT IN FULL OF
PRINCIPAL ON THE CLASS A-1 NOTES AND AFTER THE CLASS A-1 NOTES HAVE BEEN PAID IN
FULL, MONTHLY PAYMENTS OF PRINCIPAL ON THE CLASS B NOTES ARE SUBORDINATE TO THE
PAYMENT OF PRINCIPAL AS PROVIDED IN THE AGREEMENT ON THE CLASS A NOTES. NO
PRINCIPAL PAYMENTS WILL BE MADE IN RESPECT OF THE CLASS B NOTES UNTIL THE FINAL
PRINCIPAL PAYMENT HAS BEEN MADE TO THE CLASS A-1 NOTEHOLDERS.
3
60
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Series Obligors, the Servicer and the Trustee and the rights of the Class A-2
Noteholders under the Agreement at any time by the Servicer, the Series Obligors
and the Trustee without, in certain cases, the consent of the Series 1999-1
Noteholders, as more particularly described in the Agreement. Any such consent
by the Holder of this Class A-2 Note shall be conclusive and binding on such
Holder and upon all future Holders of this Class A-2 Note and of any Class A-2
Note issued upon the transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent is made upon this Class A-2 Note.
Unless earlier declared, or they otherwise become, due and payable by
reason of an Event of Default, the Notes are payable only at the time and in the
manner provided in the Agreement and are not redeemable or prepayable before
such time except that the Series Obligors will have the option, subject to
certain conditions set forth in the Agreement, to cause early retirement of the
Notes as of any Payment Date following the date on which the Aggregate Contract
Principal Balance is less than 10.00% of the Initial Aggregate Contract
Principal Balance. In the event of such redemption, the entire Class A
Outstanding Principal Balance and Class B Outstanding Principal Balance,
together with accrued interest thereon at the related Interest Rate, will be
required to be paid to the respective Class A Noteholders and the respective
Class B Noteholders. In additional, if on any Payment Date, the aggregate
amounts on deposit in the Collection Account, Reserve Account and Residual
Account are greater than or equal to the sum of (i) the remaining principal
balance of the Class A Notes and the Class B Notes, and (ii) the accrued and
unpaid interest, the accrued and unpaid Servicing Fee and any unreimbursed
Servicer Advances, the amount on deposit in both the Reserve Account and the
Residual Account will be deposited into the Collection Account and used to
redeem in full any unpaid Class A Notes and Class B Notes. If an Event of
Default as defined in the Agreement shall occur and be continuing, the principal
of all the Notes may become or be declared due and payable in the manner and
with the effect provided in the Agreement.
The Servicer, the Series Obligors and the Trustee and any agent of any of
the foregoing may treat the person in whose name this Class A-2 Note is
registered as the owner hereof for all purposes, and none of the foregoing shall
be affected by any notice to the contrary.
4
61
IN WITNESS WHEREOF, the Series Obligors have caused this Class A-2 Note
to be duly executed.
ADVANTA LEASING RECEIVABLES CORP. VIII,
as Series Obligor
By: _________________________
Name:
Title:
ADVANTA LEASING RECEIVABLES CORP. IX,
as Series Obligor
By: _________________________
Name:
Title:
Dated: August 26, 1999
62
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Notes of the Series designated herein, issued under
the within-mentioned Agreement.
BANKERS TRUST COMPANY, not in its
individual capacity but solely as Trustee
By: _________________________
Name:
Title:
63
CLASS A-3 NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY ("DTC") TO THE SERIES OBLIGORS OR THEIR AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE ON THE PAYMENT DATES AND IN THE AMOUNTS
DESCRIBED HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE PRINCIPAL BALANCE OF THIS
NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF AND MAY BE
ASCERTAINED ONLY BY OBTAINING A WRITTEN CONFIRMATION THEREOF FROM THE TRUSTEE
NAMED HEREIN OR ITS SUCCESSOR.
ADVANTA EQUIPMENT RECEIVABLES ASSET-BACKED NOTES, SERIES 1999-1
6.90% NOTE CLASS A-3
Issued under the terms of a Master Facility Agreement dated August 26,
1999 (the "Master Agreement") among Advanta Business Services Corp. ("Advanta"),
as Servicer, and Advanta Leasing Receivables Corp. VIII ("ALRC VIII"), Advanta
Leasing Receivables Corp. IX ("ALRC IX") and Bankers Trust Company, as Trustee
(the "Trustee"), and the Series 1999-1 Supplement thereto also dated August 26,
1999 (the "Series 1999-1 Supplement") also among Advanta, ALCR VIII, ALRC IX and
the Trustee (the Master Agreement together with the Series 1999-1 Supplement
are, herein, the "Agreement"). This Class A-3 Note is secured by the Series
1999-1 Trust Estate (as defined herein), which includes, but is not limited to,
a pool of equipment leases and loans and other property appurtenant thereto
pledged to the Trustee by ALRC VIII and ALRC IX.
Principal in respect of this Class A-3 Note is payable monthly as set
forth herein and the Agreement.
This Class A-3 Note does not represent any interest in or obligation of
Advanta or any Affiliate of Advanta, other than the Series Obligors. Neither the
Class A-3 Notes nor the Contracts are insured by any governmental agency.
64
CUSIP: 00000XXX0
Class A-3
Note $9,445,708 Class A-3 Percentage
No. A-3-1 Initial Principal Balance Interest: 100%
ALRC VIII and ALRC IX (each, a "Series Obligor" and, together, the
"Series Obligors"), for value received, hereby promise to pay to CEDE & CO. the
principal sum of Nine Million Four Hundred Forty-Five Thousand Seven Hundred and
Eight Dollars ($9,445,708) in monthly installments and to pay interest monthly
in arrears on the unpaid portion of said principal sum (and, to the extent that
the payment of such interest shall be legally enforceable, on any overdue
installment of interest on this Note) on the 15th day of each month or, if such
15th day is not a Business Day, the Business Day immediately following (each, a
"Payment Date"), commencing on September 15, 1999, for the period commencing on
and including the immediately preceding Payment Date (commencing or on the
Closing Date with respect to the initial Payment Date) and ending on and
including the day immediately preceding such Payment Date, until such unpaid
principal is fully paid, at a rate per annum equal to 6.90% (the "Class A-3
Interest Rate"); provided, however, that interest on any amount of principal or
interest that is not timely paid when due shall accrue interest until paid at
the Class A-3 Interest Rate. The Series Obligors hereby agree to pay to such
registered holder its pro rata share of the amounts which all Class A-3
Noteholders are entitled to receive, as hereinafter set forth in this Class A-3
Note and as more fully set forth in Agreement, at all times from the sources and
on the terms and conditions hereinafter set forth and as more fully set forth in
the Agreement.
This Class A-3 Note is one of the duly authorized Class A-3 Notes
designated as "6.90% Equipment Receivables Asset-Backed Notes, Series 1999-1,
Class A-3" (the "Class A-3 Notes"). This Class A-3 Note is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which the
holders of the Class A Notes (the "Class A Noteholders"), by virtue of their
acceptance hereof, assents and by which the Class A Noteholders are bound. To
the extent not otherwise defined herein, capitalized terms used herein have the
meanings assigned in the Agreement.
Each Series Obligor has pledged to the Trustee and has granted a security
interest to the Trustee for the benefit of the Class A Noteholders and the
holders of the Class B Notes (collectively, the "Series 1999-1 Noteholders"),
and the Trustee has accepted the pledge of and grant of a security interest in,
all of such Series Obligor's now owned and existing and hereafter acquired or
arising right, title and interest, if any, in, to and under all accounts,
general intangibles, instruments, chattel paper, documents, money, letters of
credit, advices of credit, deposit accounts, certificates of deposit, investment
property, goods and other property consisting of, arising from or related to any
of the following: (1) each and every Contract now or hereafter listed as a
Series 1999-1 Contract on the List of Contracts delivered to the Trustee
together with all amounts due or to become due under such Series 1999-1
Contracts, (2) all Collections and Related Security associated therewith, (3)
all balances, instruments, monies, securities, investment property or other
property received or held from time to time in the Collection Account, the
Reserve Account and the Residual Account, (4) the Contribution Agreement and the
Series 1999-1 Contribution Agreement Supplement and all of its rights to
2
65
enforce the provisions of, and to benefit from the representations, warranties
and covenants made in, the Contribution Agreement and the Series 1999-1
Contribution Agreement Supplement, (5) the Equipment associated with the Series
1999-1 Contracts and the Residual Interest therein, and (6) all proceeds of each
of the foregoing, but excluding any obligations of the Series Obligors under the
Contribution Agreement and the Series 1999-1 Contribution Agreement Supplement
and excluding any Servicing Charges, taxes, Initial Unpaid Amounts and Security
Deposits, all in accordance with, and for the purposes set forth in, this Series
1999-1 Supplement (such property, the "Series 1999-1 Trust Estate").
This Class A-3 Note does not purport to summarize the Agreement and
reference and direction is made to the Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Series Obligors. Copies of
the Agreement and all amendments thereto will be provided to any Class A-3
Noteholder, at its expense, upon a written request to the Servicer: Advanta
Business Services Corp., 0000 Xxxxxx Xxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000-0000;
Attention: Treasurer.
The Holder hereof, by its acceptance of this Class A-3 Note, agrees to
look solely to the funds in the Series 1999-1 Accounts to the extent available
for payment to the Holder hereof as provided in the Agreement for payment
hereunder and agrees that the Trustee in its individual capacity is not
personally liable to the Holder hereof for any amounts due under this Class A-3
Note or the Agreement.
The Class A-3 Notes are limited in right of payment to certain
collections and recoveries respecting the Contracts, all as more specifically
set forth in the Agreement. Pursuant to the Agreement, the Trustee shall, in
addition to the Class A-3 Notes, authenticate Class A-1 Notes and Class A-2
Notes (collectively with the Class A-3 Notes, the "Class A Notes") and Class B
Notes (the "Class B Notes"). PAYMENTS OF INTEREST WITH RESPECT TO EACH CLASS OF
CLASS A NOTES ARE PAYABLE ON EACH PAYMENT DATE PRO RATA ON THE BASIS OF INTEREST
THEN DUE ON THE VARIOUS CLASSES OF CLASS A NOTES AND THE RIGHT TO RECEIVE
PAYMENTS OF PRINCIPAL WITH RESPECT TO EACH CLASS OF CLASS A NOTES IS ON A
SEQUENTIAL-PAY BASIS WHEREBY PRINCIPAL IS APPLIED TO REDUCE THE NOTE PRINCIPAL
BALANCE OF THE CLASS A NOTES THEN OUTSTANDING AND HAVING THE LOWEST NUMERICAL
DESIGNATION (E.G., FIRST TO THE CLASS A-1 NOTES) TO ZERO BEFORE ANY PRINCIPAL
PAYMENT IS MADE TO THE NEXT CLASS. THE RIGHT TO RECEIVE INTEREST PAYMENTS WITH
RESPECT TO THE CLASS B NOTES IS SUBORDINATE TO THE PAYMENT OF INTEREST DUE AND
PAYABLE ON THE CLASS A NOTES ON EACH PAYMENT DATE AND THE RIGHT TO RECEIVE ANY
PRINCIPAL PAYMENTS ON THE CLASS B NOTES IS SUBORDINATE TO THE PAYMENT IN FULL OF
PRINCIPAL ON THE CLASS A-1 NOTES AND AFTER THE CLASS A-1 NOTES HAVE BEEN PAID IN
FULL, MONTHLY PAYMENTS OF PRINCIPAL ON THE CLASS B NOTES ARE SUBORDINATE TO THE
PAYMENT OF PRINCIPAL AS PROVIDED IN THE AGREEMENT ON THE CLASS A NOTES. NO
PRINCIPAL PAYMENTS WILL BE MADE IN RESPECT OF THE CLASS B NOTES UNTIL THE FINAL
PRINCIPAL PAYMENT HAS BEEN MADE TO THE CLASS A-1 NOTEHOLDERS.
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66
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Series Obligors, the Servicer and the Trustee and the rights of the Class A-3
Noteholders under the Agreement at any time by the Servicer, the Series Obligors
and the Trustee without, in certain cases, the consent of the Series 1999-1
Noteholders, as more particularly described in the Agreement. Any such consent
by the Holder of this Class A-3 Note shall be conclusive and binding on such
Holder and upon all future Holders of this Class A-3 Note and of any Class A-3
Note issued upon the transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent is made upon this Class A-3 Note.
Unless earlier declared, or they otherwise become, due and payable by
reason of an Event of Default, the Notes are payable only at the time and in the
manner provided in the Agreement and are not redeemable or prepayable before
such time except that the Series Obligors will have the option, subject to
certain conditions set forth in the Agreement, to cause early retirement of the
Notes as of any Payment Date following the date on which the Aggregate Contract
Principal Balance is less than 10.00% of the Initial Aggregate Contract
Principal Balance. In the event of such redemption, the entire Class A
Outstanding Principal Balance and Class B Outstanding Principal Balance,
together with accrued interest thereon at the related Interest Rate, will be
required to be paid to the respective Class A Noteholders and the respective
Class B Noteholders. In addition, if on any Payment Date, the aggregate amounts
on deposit in the Collection Account, Reserve Account and Residual Account are
greater than or equal to the sum of (i) the remaining principal balance of the
Class A Notes and the Class B Notes and (ii) the accrued and unpaid interest,
the accrued and unpaid Servicing Fee and any unreimbursed Servicer Advances, the
amount on deposit in both the Reserve Account and the Residual Account will be
deposited into the Collection Account and used to redeem in full any unpaid
Class A Notes and Class B Notes. If an Event of Default as defined in the
Agreement shall occur and be continuing, the principal of all the Notes may
become or be declared due and payable in the manner and with the effect provided
in the Agreement.
The Servicer, the Series Obligors and the Trustee and any agent of any of
the foregoing may treat the person in whose name this Class A-3 Note is
registered as the owner hereof for all purposes, and none of the foregoing shall
be affected by any notice to the contrary.
4
67
IN WITNESS WHEREOF, the Series Obligors have caused this Class A-3 Note
to be duly executed.
ADVANTA LEASING RECEIVABLES CORP. VIII,
as Series Obligor
By: _________________________
Name:
Title:
ADVANTA LEASING RECEIVABLES CORP. IX,
as Series Obligor
By: _________________________
Name:
Title:
Dated: August 26, 1999
68
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Notes of the Series designated herein, issued under
the within-mentioned Agreement.
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Trustee
By: _________________________
Name:
Title:
69
CLASS B NOTE
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW. THE
HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES THAT THIS SECURITY MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY TO THE ISSUERS OR PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A (a "QIB") PURCHASING FOR ITS OWN ACCOUNT, IN ACCORDANCE WITH RULE
144A, WHOM THE HOLDER HAS INFORMED THAT THE REOFFER, RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A. THIS SECURITY WILL NOT BE
ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON PRESENTATION OF EVIDENCE
SATISFACTORY TO THE TRUSTEE THAT THE RESTRICTIONS ON TRANSFER HAVE BEEN COMPLIED
WITH.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY ("DTC") TO THE SERIES OBLIGORS OR THEIR AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE ON THE PAYMENT DATES AND IN THE AMOUNTS
DESCRIBED HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE PRINCIPAL BALANCE OF THIS
NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF AND MAY BE
ASCERTAINED ONLY BY OBTAINING A WRITTEN CONFIRMATION THEREOF FROM THE TRUSTEE
NAMED HEREIN OR ITS SUCCESSOR.
ADVANTA EQUIPMENT RECEIVABLES ASSET-BACKED NOTES, SERIES 1999-1
7.27% NOTE CLASS B
Issued under the terms of a Master Facility Agreement dated August 26,
1999 (the "Master Agreement") among Advanta Business Services Corp. ("Advanta"),
as Servicer, and Advanta Leasing Receivables Corp. VIII ("ALRC VIII"), Advanta
Leasing Receivables Corp. IX ("ALRC IX") and Bankers Trust Company, as Trustee
(the "Trustee"), and the Series 1999-1 Supplement thereto also dated August 26,
1999 (the "Series 1999-1 Supplement") also among Advanta, ALCR VIII, ALRC IX and
the Trustee (the Master Agreement together with the Series 1999-1 Supplement
are, herein, the "Agreement"). This Class B Note is secured by the Series
70
1999-1 Trust Estate (as defined herein), which includes, but is not limited to,
a pool of equipment leases and loans and other property appurtenant thereto
pledged to the Trustee by ALRC VIII and ALRC IX.
Principal in respect of this Class B Note is payable monthly as set forth
herein and the Agreement.
This Class B Note does not represent any interest in or obligation of
Advanta or any Affiliate of Advanta other than the Series Obligors. Neither the
Class B Notes nor the Contracts are insured by any governmental agency.
71
CUSIP: 00000XXX0
Class B
Note $11,599,991 Class B Percentage
No. B-1-1 Initial Principal Balance Interest: 100%
ALRC VIII and ALRC IX (each, a "Series Obligor" and, together, the
"Series Obligors"), for value received, hereby promise to pay to CEDE & CO. the
principal sum of Eleven Million, Five Hundred Ninety-Nine Thousand Nine Hundred
Ninety-One Dollars ($11,599,991) in monthly installments and to pay interest
monthly in arrears on the unpaid portion of said principal sum (and, to the
extent that the payment of such interest shall be legally enforceable, on any
overdue installment of interest on this Note) on the 15th day of each month or,
if such 15th day is not a Business Day, the Business Day immediately following
(each, a "Payment Date"), commencing on September 15, 1999, for the period
commencing on and including the immediately preceding Payment Date (or
commencing on the Closing Date with respect to the initial Payment Date) and
ending on and including the day immediately preceding such Payment Date, until
such unpaid principal is fully paid, at a rate per annum equal to 7.27% (the
"Class B Interest Rate"); provided, however, that interest on any amount of
principal or interest that is not timely paid when due shall accrue interest
until paid at the Class B Interest Rate. The Series Obligors hereby agree to pay
to such registered holder its pro rata share of the amounts which all Class B
Noteholders are entitled to receive, as hereinafter set forth in this Class B
Note and as more fully set forth in the Agreement, at all times from the sources
and on the terms and conditions hereinafter set forth and as more fully set
forth in the Agreement.
This Class B Note is one of the duly authorized Class B Notes designated
as "7.27% Equipment Receivables Asset-Backed Notes, Series 1999-1, Class B" (the
"Class B Notes"). This Class B Note is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which the holders of the Class B
Notes (the "Class B Noteholders"), by virtue of their acceptance hereof, assents
and by which the Class B Noteholders are bound. To the extent not otherwise
defined herein, capitalized terms used herein have the meanings assigned in the
Agreement.
Each Series Obligor has pledged to the Trustee and has granted a security
interest to the Trustee for the benefit of the Class B Noteholders and the
holders of the Class A Notes (collectively, the "Series 1999-1 Noteholders"),
and the Trustee has accepted the pledge of and grant of a security interest in,
all of such Series Obligor's now owned and existing and hereafter acquired or
arising right, title and interest, if any, in, to and under all accounts,
general intangibles, instruments, chattel paper, documents, money, letters of
credit, advices of credit, deposit accounts, certificates of deposit, investment
property, goods and other property consisting of, arising from or related to any
of the following: (1) each and every Contract now or hereafter listed as a
Series 1999-1 Contract on the List of Contracts delivered to the Trustee
together with all amounts due or to become due under such Series 1999-1
Contracts, (2) all Collections and Related Security associated therewith, (3)
all balances, instruments, monies, securities, investment property or other
property received or held from time to time in the Collection Account, the
Reserve Account and the Residual Account, (4) the Contribution Agreement and the
Series 1999-1 Contribution Agreement Supplement and all of its rights to
3
72
enforce the provisions of, and to benefit from the representations, warranties
and covenants made in, the Contribution Agreement and the Series 1999-1
Contribution Agreement Supplement, (5) the Equipment associated with the Series
1999-1 Contracts and the Residual Interest therein and (6) all proceeds of each
of the foregoing, but excluding any obligations of the Series Obligors under the
Contribution Agreement and the Series 1999-1 Contribution Agreement Supplement
and excluding any Servicing Charges, taxes, Initial Unpaid Amounts and Security
Deposits, all in accordance with, and for the purposes set forth in, this Series
1999-1 Supplement (such property, the "Series 1999-1 Trust Estate").
This Class B Note does not purport to summarize the Agreement and
reference and direction is made to the Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Series Obligors. Copies of
the Agreement and all amendments thereto will be provided to any Class B
Noteholder, at its expense, upon a written request to the Servicer: Advanta
Business Services Corp., 0000 Xxxxxx Xxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000-0000;
Attention: Treasurer.
The Holder hereof, by its acceptance of this Class B Note, agrees to look
solely to the funds in the Series 1999-1 Accounts to the extent available for
payment to the Holder hereof as provided in the Agreement for payment hereunder
and agrees that the Trustee in its individual capacity is not personally liable
to the Holder hereof for any amounts due under this Class B Note or the
Agreement.
The Class B Notes are limited in right of payment to certain collections
and recoveries respecting the Contracts, all as more specifically set forth in
the Agreement. Pursuant to the Agreement, the Trustee shall, in addition to the
Class B Notes, authenticate Class A-1 Notes, Class A-2 Notes and Class A-3 Notes
(collectively, the "Class A Notes"). PAYMENTS OF INTEREST WITH RESPECT TO EACH
CLASS OF CLASS A NOTES ARE PAYABLE ON EACH PAYMENT DATE PRO RATA ON THE BASIS OF
INTEREST THEN DUE ON THE VARIOUS CLASSES OF CLASS A NOTES AND THE RIGHT TO
RECEIVE PAYMENTS OF PRINCIPAL WITH RESPECT TO EACH CLASS OF CLASS A NOTES IS ON
A SEQUENTIAL-PAY BASIS WHEREBY PRINCIPAL IS APPLIED TO REDUCE THE NOTE PRINCIPAL
BALANCE OF THE CLASS A NOTES THEN OUTSTANDING AND HAVING THE LOWEST NUMERICAL
DESIGNATION (E.G., FIRST TO THE CLASS A-1 NOTES) TO ZERO BEFORE ANY PRINCIPAL
PAYMENT IS MADE TO THE NEXT CLASS. THE RIGHT TO RECEIVE INTEREST PAYMENTS WITH
RESPECT TO THE CLASS B NOTES IS SUBORDINATE TO THE PAYMENT OF INTEREST DUE AND
PAYABLE ON THE CLASS A NOTES ON EACH PAYMENT DATE AND THE RIGHT TO RECEIVE ANY
PRINCIPAL PAYMENTS ON THE CLASS B NOTES IS SUBORDINATE TO THE PAYMENT IN FULL OF
PRINCIPAL ON THE CLASS A-1 NOTES AND AFTER THE CLASS A-1 NOTES HAVE BEEN PAID IN
FULL, MONTHLY PAYMENTS OF PRINCIPAL ON THE CLASS B NOTES ARE SUBORDINATE TO THE
PAYMENT OF PRINCIPAL AS PROVIDED IN THE AGREEMENT ON THE CLASS A NOTES. NO
PRINCIPAL PAYMENTS WILL BE MADE IN RESPECT OF THE CLASS B NOTES UNTIL THE FINAL
PAYMENT HAS BEEN MADE TO THE CLASS A-1 NOTEHOLDERS.
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73
THE HOLDER OF EACH CLASS B NOTE HEREBY AGREES THAT ITS RIGHTS SHALL BE
AND ARE SUBORDINATED TO THE RIGHTS OF THE HOLDERS OF THE CLASS A NOTES AS
PROVIDED IN THE AGREEMENT.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Series Obligors, the Servicer and the Trustee and the rights of the Class B
Noteholders under the Agreement at any time by the Servicer, the Series Obligors
and the Trustee without, in certain cases, the consent of the Series 1999-1
Noteholders, as more particularly described in the Agreement. Any such consent
by the Holder of this Class B Note shall be conclusive and binding on such
Holder and upon all future Holders of this Class B Note and of any Class B Note
issued upon the transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent is made upon this Class B Note.
Unless earlier declared, or they otherwise become, due and payable by
reason of an Event of Default, the Notes are payable only at the time and in the
manner provided in the Agreement and are not redeemable or prepayable before
such time except that the Series Obligors will have the option, subject to
certain conditions set forth in the Agreement, to cause early retirement of the
Notes as of any Payment Date following the date on which the Aggregate Contract
Principal Balance is less than 10.00% of the Initial Aggregate Contract
Principal Balance. In the event of such redemption, the entire Class A
Outstanding Principal Balance and Class B Outstanding Principal Balance,
together with accrued interest thereon at the related Interest Rate, will be
required to be paid to the respective Class A Noteholders and the respective
Class B Noteholders. In addition, if on any Payment Date, the aggregate amounts
on deposit in the Collection Account, Reserve Account and Residual Account are
greater than or equal to the sum of (i) the remaining principal balance of the
Class A Notes and the Class B Notes and (ii) the accrued and unpaid interest,
the accrued and unpaid Servicing Fee and any unreimbursed Servicer Advances, the
amount on deposit in both the Reserve Account and the Residual Account will be
deposited into the Collection Account and used to redeem in full any unpaid
Class A Notes and Class B Notes. If an Event of Default as defined in the
Agreement shall occur and be continuing, the principal of all the Notes may
become or be declared due and payable in the manner and with the effect provided
in the Agreement. The Class B Notes may be redeemed ("Class B Special
Redemption") on any Payment Date at the option of the Obligors at a price equal
to the sum of (i) the then Class B Principal Balance, accrued and unpaid
interest thereon and (ii) the Class B Special Redemption Premium. The Class B
Special Redemption Premium shall only be payable upon a Class B Special
Redemption.
The Servicer, the Series Obligors and the Trustee and any agent of any of
the foregoing may treat the person in whose name this Class B Note is registered
as the owner hereof for all purposes, and none of the foregoing shall be
affected by any notice to the contrary.
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74
IN WITNESS WHEREOF, the Series Obligors have caused this Class B Note to
be duly executed.
ADVANTA LEASING RECEIVABLES CORP. VIII,
as Series Obligor
By: _________________________
Name:
Title:
ADVANTA LEASING RECEIVABLES CORP. IX,
as Series Obligor
By: _________________________
Name:
Title:
Dated: August 26, 1999
75
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Notes of the Series designated herein, issued under
the within-mentioned Agreement.
BANKERS TRUST COMPANY, not in its
individual capacity but solely as Trustee
By: _________________________
Name:
Title:
76
EXHIBIT D
FORM OF INVESTOR LETTER
Advanta Leasing Receivables VIII
Advanta Leasing Receivables IX
Bankers Trust Company,
as Trustee
[date]
Re: Advana Leasing Services Corp. VIII
Advanta Leasing Services Corp. IX
Equipment Receivables Asset-Backed Notes, Series 1999-1
Class B
Ladies and Gentlemen:
This letter (the "Investment Letter") is delivered by the undersigned
(the "Purchaser") pursuant to the Series 1999-1 Supplement dated as of August
26, 1999 (the "Series Supplement") among Advanta Business Services Corp.
("ABS"), individually and as servicer, Advanta Leasing Receivables VIII ("ALRC
VIII"), Advanta Leasing Receivables Corp. IX ("ALRC IX") and Bankers Trust
Company, as Trustee. The Purcahser is delivering this letter in connection with
the transfer to it of an Equipment Receivables Asset-Backed Note, Series 1999-1
Class B (a "Class B Note"). Capitalized terms used herein without definition
shall have the meanings provided in the Series Supplemental.
The Purchaser hereby represents, warrants and covenants with ALRC VIII,
ALRC IX and the Trustee as follows:
(i) It understands that the Class B Notes may be resold only to QIBs
pursuant to Rule 144A and that the Class B Notes will be available
only as beneficial interests in the Rule 144A Global Note.
(ii) It understands that the Class B Notes have not been and will not be
registered under the Securities Act or any state or other applicable
securities law and that the Class B Notes, or any interest or
participation therein, may not be offered, sold, pledged or otherwise
transferred unless registered pursuant to, or exempt from registration
under, the Securities Act and any other applicable securities law.
(iii) It acknowledges that none of the Initial Investors has made any
representation to it with respect to the offering or sale of any Class
B Notes, other than the information contained in this Memorandum and
the Exhibit hereto which has been delivered to it
77
and upon which it is relying in making its investment decision with
respect to the Class B Notes. It has had access to such financial and
other information concerning the Class B Notes as it has deemed
necessary in connection with its decision to purchase the Class B
Notes.
(iv) It acknowledges that the Class B Notes bear the following legend:
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES THAT
THIS SECURITY MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND
ONLY TO THE ISSUERS OR PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A
PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A (a "QIB") PURCHASING FOR ITS OWN
ACCOUNT, IN ACCORDANCE WITH RULE 144A, WHOM THE HOLDER HAS INFORMED THAT
THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A. THIS SECURITY WILL NOT BE ACCEPTED FOR REGISTRATION OF TRANSFER
EXCEPT UPON PRESENTATION OF EVIDENCE SATISFACTORY TO THE TRUSTEE THAT THE
RESTRICTIONS ON TRANSFER HAVE BEEN COMPLIED WITH.
(v) If it is acquiring any Class B Note, or any interest or participation
therein, as a fiduciary or agent for one or more investor accounts, it
represents that it has sole investment discretion with respect to such
account and that it has full power to make the acknowledgments,
representations and agreements contained herein on behalf of each such
account.
(vi) It (1) is a QIB, (2) is aware that the sale to it is being made in
reliance on Rule 144A and if it is acquiring such Class B Notes or any
interest or participation therein for the account of another QIB, such
other QIB is aware that the sale is being made in reliance on Rule
144A and (3) is acquiring such Class B Notes or any interest or
participation therein for its own account or for the account of a QIB.
(vii) It is purchasing the Class B Notes for its own account, or for one or
more investor accounts for which it is acting as fiduciary or agent,
in each case for investment, and not with a view to, or for offer or
sale in connection with, any distribution thereof in violation of the
Securities Act, subject to any requirements of law that the
disposition of its property or the property of such investor account
or accounts be at all times within its or their control and subject to
its or their ability to resell such Class B Notes, or any interest or
participation therein, as described herein and as provided in the
Indenture.
(viii) It agrees that if in the future it should offer, sell or otherwise
transfer such Class B Note or any interest or participation therein,
it will do so only (A) to the Issuers, or (B) pursuant to Rule 144A to
a person whom it reasonably believes is a QIB in a transaction meeting
the requirements of Rule 144A, purchasing for its own account or for
the account of a QIB, whom it has informed that such offer, sale or
other transfer is being made in reliance on Rule 144A.
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(ix) It acknowledges that the Class B Notes will be represented by a Rule
144A Global Note and that transfers thereof or any interest or
participation therein are restricted.
(x) It acknowledges that the Issuers, the Originator, the Initial
Investors and others will rely on the truth and accuracy of the
foregoing acknowledgments, representations and agreements, and agrees
that if any of the foregoing acknowledgments, representations and
agreements deemed to have been made by it are no longer accurate, it
shall promptly notify the Issuers, the Originator and the Initial
Investors.
The Purchaser further represents, warrants and covenants that the
Class B Notes or any interest therein may be transferred to any Person unless
such Person has executed and delivered the Investor Letter to the Trustee, ALRC
VIII and ALRC IX.
Very truly yours,
---------------------------------------------
(type name of Purchaser above)
By:
---------------------------------
Name:
Title:
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