1
EXHIBIT 4.2
OH&S DRAFT
05/26/99
================================================================================
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 ________ __, 1999
to the
MASTER FACILITY AGREEMENT
Dated as of __________ __, 1999
================================================================================
2
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
(b) 11.07 See Master Agreement
(c) Not Applicable Not Applicable
311 (a) 11.12 See Master Agreement
(b) 11.12 See Master Agreement
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 6.06
(c)(2) See Series 1999-1 Supplement 6.06
(c)(3) 1.05 See Master Agreement
(d) 1.05 See Master Agreement
(e) See Series 1999-1 Supplement 6.06
(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
3
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...........................................................3
SECTION 1.04 Conditions to Issuance of the Series 1999-1 Notes...................................................3
SECTION 1.05 Acceptance by Trustee...............................................................................4
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......................................................................................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......................................................................................21
SECTION 3.05 Statements to Series 1999-1 Noteholders............................................................23
SECTION 3.06 Compliance With Withholding Requirements...........................................................25
SECTION 3.07 Servicer Advances..................................................................................25
SECTION 3.08 Modifications......................................................................................25
SECTION 3.09 Servicer to Act as Custodian.......................................................................25
ARTICLE IV
SERIES 1999-1 EVENTS OF DEFAULT
SECTION 4.01 Events of Default..................................................................................26
SECTION 4.02 Acceleration of Maturity; Rescission and Annulment.................................................27
SECTION 4.03 Remedies...........................................................................................29
-i-
4
TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 4.04 Trustee Shall File Proofs of Claim.................................................................29
SECTION 4.05 Trustee May Enforce Claims Without Possession of Series 1999-1 Notes...............................30
SECTION 4.06 Application of Money Collected.....................................................................30
SECTION 4.07 Limitation on Suits................................................................................31
SECTION 4.08 Unconditional Right of Series 1999-1 Noteholders to Receive Principal and Interest.................32
SECTION 4.09 Restoration of Rights and Remedies.................................................................32
SECTION 4.10 Rights and Remedies Cumulative.....................................................................32
SECTION 4.11 Delay or Omission Not Waiver.......................................................................32
SECTION 4.12 Control by Series 1999-1 Noteholders...............................................................33
SECTION 4.13 Waiver of Events of Default........................................................................33
SECTION 4.14 Undertaking for Costs..............................................................................33
SECTION 4.15 Waiver of Stay or Extension Laws...................................................................34
SECTION 4.16 Sale of Series 1999-1 Trust Estate.................................................................34
ARTICLE V
PREPAYMENT AND REDEMPTION
SECTION 5.01 Optional "Clean-up Call" Redemption of Series 1999-1 Notes.........................................35
SECTION 5.02 Notice of Redemption and Disposition of Funds......................................................36
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 Ratification of Master Agreement...................................................................36
SECTION 6.02 Counterparts.......................................................................................36
SECTION 6.03 GOVERNING LAW......................................................................................36
SECTION 6.04 Amendments and Waivers.............................................................................37
SECTION 6.05 Non-petition Clause................................................................................37
SECTION 6.06 Officers' Certificate and Opinion of Counsel as to Conditions Precedent............................37
SECTION 6.07 Restriction on Further Indebtedness................................................................38
SECTION 6.08 Special Covenants and Acknowledgements.............................................................38
-ii-
5
TABLE OF CONTENTS
PAGE
EXHIBIT A -- FORM OF SERVICER'S CERTIFICATE
EXHIBIT B -- FORM OF CONTRACT
EXHIBIT C -- FORMS OF NOTES
6
This Series 1999-1 Supplement, dated as of ________ __, 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 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 ________ __, 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 as
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 "Advanta Business Receivables Master Facility 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.
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 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 and other securities and investments from
time to time in the Collection Account, the Advance Funding Account, the Reserve
Account and the Residual Account, (4) the Contribution Agreement and the Series
1999-1 Contribution Agreement Supplement for Series 1999-1 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) all rights, if any, of the Obligor
in the Equipment associated with the Series 1999-1 Contracts and the Residual
Interest therein, and (6) all proceeds of each of the foregoing and all
accounts, contract rights, general intangibles,
7
chattel paper, instruments, documents, money, deposit accounts, certificates of
deposit, goods, letters of credit, advices of credit, certificated securities
and uncertificated securities consisting of, arising from or related to any of
the foregoing, but excluding any obligations of the Obligors, if any, under each
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. In addition, the Obligors represent that as of the Closing Date
UCC-1 financing statements naming the Obligors as the "debtors" will be filed in
favor of Trustee on the Series 1999-1 Trust Estate with the Secretary of State
of each of the 50 states, other than [Georgia, Louisiana, Maryland, Oklahoma and
Tennessee,] and in the following counties: (i) Xxxx, Georgia, (ii) Xxxxxx,
Georgia and (iii) Oklahoma, Oklahoma.
(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.
(e) [Any Noteholder of Class A Notes, Class B Notes or Class C Notes
using the assets of (i) an employee benefit plan (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) that
is subject to the provisions of Title I of ERISA, (ii) a plan described in
Section 4957 (e) (1) of the Internal Revenue Code of 1986, as amended, or (iii)
any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (collectively, a "Plan") to purchase the Class A Notes,
Class B Notes or Class C Notes, or to whom the Class A Notes, Class B Notes or
Class C Notes are transferred, will be deemed to have represented that the
acquisition and continued holding of the Class A Notes, Class B Notes or Class C
Notes will be covered by a U.S. Department of Labor Class Exemption. Any
Noteholder of Class D Notes will be deemed to have represented that it is not
using the assets of a Plan to purchase the Class D Notes.]
2
8
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 3.10 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 Obligors on the Closing
Date, (i) the Obligors shall have received by wire transfer the net proceeds of
sale of the Class A Notes, the Class B Notes and the Class C Notes (the "Offered
Notes"), together with the Class D 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, 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 each of the 50 states, other than [Georgia, Louisiana,
Maryland, Oklahoma and Tennessee], and in the following counties: (i) Xxxx,
Georgia, (ii) Xxxxxx, Georgia and (iii) Oklahoma, Oklahoma naming the Obligors
as the debtors and the Trustee as secured party;
(f) A certificate listing the Servicing Officers as of the Closing
Date;
(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; and
(h) Copies of resolutions of the board of directors of ABS approving
the execution, delivery and performance of the Master Agreement, this Series
1999-1 Supplement, the
3
9
Contribution Agreement, the Series 1999-1 Contribution Agreement Supplement and
the transactions contemplated hereby and thereby, certified on behalf of such
entity by a secretary or an assistant secretary of such entity.
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)
direct the Trustee to enforce such rights. The Trustee hereby accepts such
appointment and agrees to enforce such rights.
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.
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. Without limiting the generality of the foregoing, if any
User fails to pay any Scheduled Payment, Final Contract Payment, exercised
Purchase Option Payment 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, exercised Purchase Option Payment, other
amounts due under such Series 1999-1 Contract or any losses, damages, claims,
liabilities or expenses incurred by the Trustee or any Series 1999-1 Noteholder
as a direct or indirect result thereof.
(b) The Trustee agrees that 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 Trustee and
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
4
10
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 reasonable
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 (except for the obligation not to disturb a User's
right of quiet enjoyment) 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.
SECTION 1.07 Forms of Notes. The Series 1999-1 Notes shall be in the
forms set forth in Exhibit C hereto.
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.
Aggregate Contract Balance Remaining: With respect to any Payment Date,
the aggregate Contract Balances Remaining of all Series 1999-1 Contracts (other
than Charged-Off Contracts) in the Series 1999-1 Trust Estate as of the related
Calculation Date.
Aggregate Contract Principal Balance: With respect to any date, the
aggregate Contract Principal Balances of all Series 1999-1 Contracts (other than
Charged-Off 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.
5
11
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, insufficient funds charges, and the like.
Applicable Discount Rate: The sum of (i) the weighted average (as of
the Closing Date) of the Class A Interest Rate, the Class B Interest Rate and
the Class C Interest Rate and (ii) the Servicer Fee Percentage.
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, Final Contract
Payments, Defaulted Residual Receipts, Residual Receipts (but only if the
Residual Cap Amount has not yet been reached), Prepayment Amounts, 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.
Charged-Off Contract: Any Series 1999-1 Contract (a)(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 and (b) as to
which a Release Event has not occurred; provided, however, that if a Series
1999-1 Contract is a Charged-Off Contract at the time that a Release Event
occurs such Series 1999-1 Contract shall nevertheless continue to be treated as
a "Charged-Off Contract" for purposes of calculating the Cumulative Net Loss
Percentage.
Class A Initial Principal Balance: $___________________.
Class A Interest Rate: ____ % per annum.
Class A Maturity Date: ____________ _____ Payment Date.
Class A Note Factor: With respect to any Payment Date, a seven digit
decimal number representing the ratio of the (the Class A Principal Balance
which will be outstanding on such
6
12
Payment Date (after taking into account all distributions and allocations to be
made on such Payment Date) to (ii) the Class A Initial Principal Balance.
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 (i)
the product of (A) the Class A Principal Balance immediately prior to such
Payment Date and (B) one-twelfth of the Class A Interest Rate and the Class A
Overdue Interest from the Preceding Payment Date.
Class A Notes: The Equipment Receivables Asset-Backed Notes, Series
1999-1 Class A issued by ALRC VIII and ALRC IX.
Class A Overdue Interest: With respect to any Payment Date, the sum of:
(i) the excess, if any, of any Class A Note Interest due on
such Payment Date over the Class A Note Interest paid on such Payment
Date; and
(ii) the product of (i) the amount of Class A Overdue Interest
due on the immediately preceding Payment Date and not paid on such
immediately preceding Payment Date and (ii) one-twelfth of the Class A
Interest Rate.
Class A Overdue Principal: With respect to any Payment Date, the
positive difference, if any, between (i) the aggregate of the Class A-1
Principal Payments due on all prior Payment Dates and (ii) the aggregate amount
of the principal (from whatever source) actually distributed to the Class A
Noteholders on all prior Payment Dates.
Class A Percentage: A fraction, expressed as a percentage, equal to the
Class A Initial Principal Balance divided by the Initial Aggregate Contract
Principal Balance.
Class A Principal Balance: As of any date of determination, an amount
equal to the Class A Initial Principal Balance less any Class A Principal
Payments previously made on the Class A Notes.
Class A Principal Payment: With respect to any Payment Date, [the Class
A Percentage of the positive difference between the Aggregate Contract Principal
Balance as of the Calculation Date in second preceding month and the Aggregate
Contract Principal Balance as of the Calculation Date for the current Payment
Date.]
Class B Initial Principal Balance: $___________.
Class B Interest Rate: ____% per annum.
Class B Maturity Date: _________ ____ Payment Date.
Class B Note Factor: With respect to any Payment Date, a seven digit
decimal number representing the ratio of (i) the Class B Principal Balance which
will be outstanding on the such
7
13
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 Noteholder: The Person in whose name a Class B Note is
registered in the Note Register.
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.
Class B Notes: The Equipment Receivables Asset-Backed Notes, Series
1999-1, Class B issued by ALRC VIII and ALRC IX.
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 Overdue Principal: With respect to any Payment Date, the
positive difference, if any, between (i) the aggregate of the Class B Principal
Payments due on all prior Payment Dates and (ii) the aggregate amount of the
principal (from whatever source) actually distributed to the Class B Noteholders
on all prior Payment Dates.
Class B Percentage: A fraction, expressed as a percentage, equal to the
Class B Initial Principal Balance divided by the Initial Aggregate Contact
Principal Balance.
Class B Principal Balance: As of any date, an amount equal to the Class
B Initial Principal Balance less any Class B Principal Payments previously made
on the Class B Notes.
Class B Principal Payment: With respect to any Payment Date, [the Class
B Percentage of the positive difference between the Aggregate Contract Principal
Balance as of the Calculation Date in the second preceding month and the
Aggregate Contract Principal Balance as of the Calculation Date for the current
Payment Date.]
Class C Initial Principal Balance: $_____________.
Class C Interest Rate: _______% per annum.
Class C Maturity Date: __________ ____ Payment Date.
Class C Note Factor: With respect to any Payment Date, a seven digit
decimal number representing the ratio of (i) the Class C Principal Balance which
will be outstanding on the such
8
14
Payment Date (after taking into account all distributions and allocations to be
made on such Payment Date) to (ii) the Class C Initial Principal Balance.
Class C Noteholder: The Person in whose name a Class C Note is
registered in the Note Register.
Class C Note Interest: With respect to any Payment Date, the sum of (i)
the product of (A) the Class C Principal Balance immediately prior to such
Payment Date and (B) one-twelfth of the Class C Interest Rate and (ii) the Class
C Overdue Interest from the preceding Payment Date.
Class C Notes: The Equipment Receivables Asset-Backed Notes, Series
1999-1, Class C issued by ALRC VIII and ALRC IX.
Class C Overdue Interest: With respect to any Payment Date, the sum of:
(i) the excess, if any, of any Class C Note Interest due on
such Payment Date over the Class C Note Interest paid on such Payment
Date and;
(ii) the product of (a) the amount of Class C 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 C
Interest Rate.
Class C Overdue Principal: With respect to any Payment Date, the
positive difference, if any, between (i) the aggregate of the Class C Principal
Payments due on all prior Payment Dates and (ii) the aggregate amount of the
principal (from whatever source) actually distributed to the Class C Noteholders
on all prior Payment Dates.
Class C Percentage: A fraction, expressed as a percentage, equal to the
Class C Initial Principal Balance divided by the Initial Aggregate Contract
Principal Balance.
Class C Principal Balance: As of any date, an amount equal to the Class
C Initial Principal Balance less any Class C Principal Payments previously made
on the Class C Notes.
Class C Principal Payment: With respect to any Payment Date, [the Class
C Percentage of the positive difference between the Aggregate Contract Principal
Balance as of the Calculation Date in the second preceding month and the
Aggregate Contract Principal Balance as of the Calculation Date for the current
Payment Date.]
Class D Initial Principal Balance: $__________.
Class D Note Factor: With respect to any Payment Date, a seven digit
decimal number representing the ratio of (i) the Class D Principal Balance which
will be outstanding on the such Payment Date (after taking into account all
distributions and allocations to be made on such Payment Date) to (ii) the Class
D Initial Principal Balance.
Class D Noteholder: The Person in whose name a Class D Note is
registered in the Note Register.
9
15
Class D Notes: The Equipment Receivables Asset-Backed Notes, Series
1999-1, Class D issued by ALRC VIII and ALRC IX.
Class D Overdue Principal: With respect to any Payment Date, the
positive difference, if any, between (i) the aggregate of the Class D Principal
Payments due on all prior Payment Dates and (ii) the aggregate amount of the
principal (from whatever source) actually distributed to the Class D Noteholders
on all prior Payment Dates.
Class D Percentage: A fraction, expressed as a percentage, equal to the
Class D Initial Principal Balance divided by the Initial Aggregate Contract
Principal Balance.
Class D Principal Balance: With respect to any Payment Date, the Class
D Initial Principal Balance less any Class D Principal Payments previously made
on the Class D Notes.
Class D Principal Payment: With respect to any Payment Date, [the Class
D Percentage of the positive difference between the Aggregate Contract Principal
Balance as of the Calculation Date in the second preceding month and the
Aggregate Contract Principal Balance as of the Calculation Date for the current
Payment Date or, if all Offered Notes have been paid in full, the entire
positive difference between the Aggregate Contract Principal Balance as of the
Calculation Date in the preceding month and the Aggregate Contract Principal
Balance as of the Calculation Date for the current Payment Date.]
Closing Date: ________ __, 1999.
Collateral Factor: With respect to any Payment Date, the seven digit
decimal number 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) hereof.
Contribution Agreement: That certain Contribution and Sale Agreement,
dated as of ________ __, 1999, by and between ALRC III and ABR LLC and ABS.
Contracts: The Series 1999-1 Contracts pledged to the Trustee on the
Closing Date, 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 prior to __________ ____), together with all
Scheduled Payments previously due and unpaid which were not the subject of a
Servicer Advance on or prior to such date, discounted monthly to the Calculation
Date immediately prior to such date of calculation (or to such date of
calculation if such date of calculation is a Calculation Date) at one-twelfth of
the Applicable Discount Rate, except that a Charged-Off Contract has a Contract
Principal Balance of $0.
10
16
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 of all Series 1999-1
Contracts which become Charged-Off Contracts during all prior Collection Periods
over (y) the aggregate amount of all Defaulted Residual Receipts 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 _________ __, 1999.
Defaulted Residual Receipts: With respect to any Series 1999-1 Contract
which has previously become a Charged-Off Contract, all proceeds of the sale of
the Equipment, all Insurance Proceeds and any amounts collected related to the
failure of a User to pay any required amounts under the related Series 1999-1
Contract or to return the Equipment, in each case as reduced by (i) any
unreimbursed Servicer Advances with respect to such Series 1999-1 Contract or
such Equipment and (ii) any reasonably incurred out-of-pocket expenses incurred
by the Servicer in enforcing such Series 1999-1 Contract or in liquidating such
Equipment.
Delinquent Contract: As of any date, a Contract as to which a Scheduled
Payment, or part thereof, remains unpaid for more than 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, at the time of pledge, a Series 1999-1
Contract which:
(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 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 except by instruments or documents contained in the
related Contract File;
(iii) constitutes "chattel paper" within the meaning of
Section 9-105(b) of the UCC of all applicable jurisdictions (other than
a Contract which is a loan in form and does not purport to evidence a
security interest in goods within the meaning of Section 9-105(h) of
the UCC of all applicable jurisdictions) and for which there is only
one original of such Contract that constitutes "chattel paper" for
purposes of the UCC;
11
17
(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 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) if it is a Municipal Contract, does not have a Contract
Principal Balance that, when aggregated with the Contract Principal
Balances of all other Municipal Contracts included as Series 1999-1
Contracts, exceeds ___% of the Aggregate Contract Principal Balance at
that time;
(vii) as of the Closing Date, is not a Delinquent Contract;
(viii) as of the Closing Date (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 and (b) makes the related User absolutely and
unconditionally liable for all payments required to be made thereunder,
without any right of set-off, counterclaim, or other defense (other
than the discharge in bankruptcy of such related User) and without any
right to prepay the Contract or any contingencies tied to the Obligors;
provided that a Series 1999-1 Contract may be an Eligible Contract,
notwithstanding the fact that it does not meet the requirements of
provision (a) of this paragraph (viii) so long as contracts
representing at least 90% of the sum of the Contract Principal Balance
for the Series 1999-1 Contracts which qualify as Eligible Contracts do
meet the requirements of such provision (a);
(ix) 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) ____% and (b) the
Aggregate Contract Principal Balance of all other Series 1999-1
Contracts Outstanding at that time;
(x) creates a valid and enforceable security or ownership
interest in the related Equipment, if any, in favor of the Originator;
(xi) 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 Related Documents; provided, however, that nothing
in this clause (xi) shall prevent or be deemed to prohibit the Obligors
from suffering to exist upon such Series 1999-1 Contract any Adverse
Claim for federal, state, municipal or other local taxes if such taxes
shall not at the time be due and payable or if the Obligors 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;
12
18
(xii) 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;
(xiii) 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;
(xiv) by its terms is due and payable on or within ___ 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;
(xv) arises under a Contract in substantially the form of one
of the form contracts set forth in Exhibit B hereto or otherwise
approved by the Obligors in writing, which is in full force and effect
and constitutes the legal, valid and binding obligation of the related
User, enforceable against the User in accordance with its terms,
subject to no offset, counterclaim or other defense (other than the
discharge in bankruptcy of such User);
(xvi) (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 Related Documents with respect
thereto, including, without limitation, its right to review the Series
1999-1 Contract;
(xvii) was immediately prior to the sale or contribution to
the Obligors, the Originator was the sole owner of such Contract free
and clear of any liens or encumbrances;
(xviii) is not and has never been a Charged-Off Contract;
(xix) 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; and
(xx) in the case of a Non-Monthly Payment Contract or a
Variable Payment Contract, does not have a Contract Principal Balance
which, when aggregated with the Contract Principal Balances of all
other Series 1999-1 Contracts having a balloon payment, exceeds [15]%
of the Aggregate Contract Principal Balance at that time;
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.
13
19
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.
Included Residual Receipts: With respect to any Payment Date, the
aggregate, cumulative amount of Residual Receipts included as part of the
Monthly Remittance Amount on such Payment Date and all prior Payment Dates.
Initial Aggregate Contract Principal Balance: The Aggregate Contract
Principal Balances on the Closing Date, which is an amount equal to
$______________.
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 Contracts, securing the Notes,
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 __________,
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 Net Loss Percentage: With respect to any 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 of all Series 1999-1
Contracts which became Charged-Off Contracts during such Collection Period over
(y) the aggregate amount of all Defaulted Residual Receipts collected by the
Servicer with respect to such Collection Periods, and the denominator of which
is the Aggregate Contract Principal Balance as of the beginning of such
Collection Period.
Monthly Residual Realization Percentage: With respect to any Payment
Date, the percentage equivalent of a fraction (a) the numerator of which is the
aggregate dollar amount of Residual Receipts collected during the immediately
preceding Collection Period and (b) the denominator of which is equal to the
aggregate Booked Residuals with respect to those Series 1999-1 Contracts for
which Residual Receipts were collected during such immediately preceding
Collection Period.
Monthly Remittance Amount: With respect to any Payment Date (x)
occurring on or prior to the Residual Cap 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),
14
20
together with all Servicing Advances paid by the Servicer with respect to such
Payment Date and (y) occurring after the Residual Cap Date, the amount described
in clause (x) above less any Residual Receipts with respect to the related
Collection Period. With respect to the Payment Date which is the Residual Cap
Date, Residual Receipts with respect to the related Collection Period will only
be included in the Monthly Remittance Amount to the extent that such inclusion
would not result in Included Residual Receipts exceeding the Residual Cap
Amount.
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.
Obligor's 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.
Obligor's Interest Principal Balance: As of any date of determination,
an amount equal to the excess of (x) the Aggregate Contract Principal Balance
over (y) the Outstanding Note Principal Balance, as of such date.
Offered Notes: As defined in Section 1.05 hereof.
Originator: Advanta Business Services Corp. and its successors.
Outstanding Note Principal Balance: As of any date of determination,
the sum of the Class A Principal Balance, the Class B Principal Balance, the
Class C Principal Balance and the Class D Principal Balance as of such date.
Outstanding Note Principal Balance of the Offered Notes: As of any date
of determination, the sum of the Class A Principal Balance, the Class B
Principal Balance and the Class C Principal Balance.
Outstanding Residual Interest Principal Balance: As of any Payment
Date, the excess, if any, of (x) the Aggregate Contract Principal Balance as of
the related Calculation Date over (y) the Outstanding Note Principal Balance at
the end of such Payment Date.
Payment Date: The 15th day of each month, or, if such day is not a
Business Day, the next succeeding Business Day, commencing _________ __, 1999.
Predecessor Contract: As defined in Section 3.09 hereof.
Principal Payments: The payments of principal each Class of Notes is
entitled to receive in accordance with the priorities set forth in subsection
3.05(b) hereof.
15
21
Rating Agencies: ________________.
Record Date: With respect to any Payment Date, the close of business on
the Business Day preceding such Payment Date.
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.
Release Event: With respect to any Series 1999-1 Contract, a payment in
full of such Series 1999-1 Contract or a removal of such Series 1999-1 Contract
from the Series 1999-1 Trust Estate following the deposit of the related
Prepayment Amount in the Collection Account or if such Series 1999-1 Contract is
a Charged-Off Contract removal from the Series 1999-1 Trust Estate of such
Contract as a result of the sale of such Contract and a deposit of the sale
proceeds into the Collection Account.
Required Reserve Amount: With respect to any Payment Date, an amount
equal to the greater of (x) ____% of the aggregate Outstanding Note Principal
Balance of the Offered Notes (after taking into account all payments of
principal on such Payment Date) and (y) the Reserve Account Floor.
Reserve Account: The account or accounts by that name established and
maintained by the Trustee pursuant to Section 3.02 hereof.
Reserve Account Floor: With respect to any Payment Date, an amount
equal to the lesser of (a) _____% of the initial Outstanding Note Principal
Balance of the Offered Notes and (b) the then aggregate Outstanding Note
Principal Balance of the Offered Notes.
Reserve Account Funding Date: The first date on which the Reserve
Account is funded to the level of the Required Reserve Amount.
Reserve Account Initial Deposit: $_____________.
Residual Account: The account or accounts by that name established and
maintained by the Trustee pursuant to subsection 3.02(c) hereof.
Residual Amount Cap: An amount equal to $_____________.
Residual Cap Date: The first date on which the Residual Amount Cap is
reached.
Residual Event: Means the occurrence of one or more of the following:
(a) the occurrence of an Event of Default; or (b) the Cumulative Net Loss
Percentage as of any Calculation Date occurring during the following periods
exceeds the "Loss Trigger Level Percentage" set forth below:
16
22
Loss Trigger
Period Level Percentage
------ ----------------
First Collection Period through 12th Collection
Period thereafter [____]%
13th Collection through 24th
Collection Period thereafter [____]%
25th Collection Period and thereafter [____]%
Notwithstanding the foregoing: (i) the Residual Event referred to in
clause (b) 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.
Scheduled Payments: With respect to any Series 1999-1 Contract, the
stated periodic rental payments (exclusive of any amounts in respect of
insurance or taxes) set forth in such Series 1999-1 Contract due from the
related User, together with any Final Contract Payment.
Series 1999-1 Accounts: The Collection Account, the Advance Funding
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 _______, 1999 and delivered with respect to the
Series 1999-1 Trust Estate.
Series 1999-1 Noteholders: The Class A Noteholders, the Class B
Noteholders, the Class C Noteholders and the Class D Noteholders.
Series 1999-1 Notes: As defined in Section 1.01 hereof.
Series 1999-1 Trust Estate: As defined in Section 1.02 hereof.
Servicer: The Person performing the duties of the Servicer hereunder,
initially Advanta Business Services Corp., a Delaware corporation.
Servicer Fee Percentage: The product of one-twelfth and the Servicer
Fee Rate.
Servicer Fee Rate: 1.00%.
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
17
23
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 Section
3.06 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: _________ ____ Payment Date.
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 Trustee's corporate trust department, 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 or better by S&P and P-1 by Xxxxx'x (or such other rating below
A-1 or P-1, 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 Collection 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
18
24
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) The Trustee, for the benefit of the Series 1999-1 Noteholders,
shall also establish and maintain an account (the "Advance Payment Account") as
a non-interest bearing segregated trust account in the Trustee's corporate trust
department, identified as the "Advance Payment Account for the Advanta Leasing
Receivables Asset-Backed Notes Series 1999-1, in trust for the registered
Holders of the Notes." The Trustee shall make or permit withdrawals from the
Advance Payment Account only as provided in this Series 1999-1 Supplement. The
Trustee shall possess all right, title and interest in and to all funds from
time to time on deposit in the Advance Payment Account and in all proceeds
thereof (other than any Investment Earnings on amounts from time to time on
deposit therein).
(d) All Advance Payments received by the Servicer, the Trustee or any
Obligor, shall be deposited monthly to the Advance Payment Account in the same
manner as Collections are deposited to the Collection Account.
(e) Notwithstanding the foregoing, the Trustee and/or the Servicer may
deduct from amounts otherwise specified for deposit to the Collection Account or
the Advance Payment Account, as applicable, any amounts previously deposited by
the Trustee or the Servicer into the Collection Account or the Advance Payment
Account, as the case may be, 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.
(f) The Collection Account and the Advance Payment Account shall each
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 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 or the Advance Payment
Account for any amount owed to it by the Servicer, the Obligors, the Trustee, or
any Noteholder.
(g) On each Payment Date, (i) the Trustee shall distribute the Monthly
Remittance Amount with respect to such Payment Date as provided in Section 3.04
hereof and (ii) on each Payment Date occurring after the Residual Cap Date, the
Trustee, based solely on information contained in the Servicer's Certificate
delivered on the related Determination Date as specified in Section 3.06 hereof,
shall pay to the Obligors all Residual Receipts with respect to the Series
1999-1 Contracts with respect to the related Collection Period. On the Payment
Date which is the Residual Cap Date, any excess of the Residual Receipts with
respect to the Series 1999-1 Contracts for such related Collection Period over
such Residual Receipts as are included in the Monthly Remittance Amount on such
Payment Date shall be paid to the Obligors by the Trustee.
(h) The Trustee shall deposit all net investment earnings on each
Series 1999-1 Account, as collected, to the Collection Account.
19
25
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 Trustee's
corporate trust department 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), (a)(vii) and
(a)(viii) of Section 3.04 hereof exceed (y) 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 3.05 on such Payment Date;
(B) then, to the extent of the Available Reserve
Amount on deposit in the Reserve Account, the Trustee shall
transfer, 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 Residual 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 hereunder have been fully satisfied, shall be paid to
reimburse the Trustee for any amounts owing to it arising from the
performance of its obligations under the Master Agreement and this
Series 1999-1 Supplement and, then, to the Obligors, as holders of the
Residual 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 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 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)(xiv).
20
26
(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), (a)(vii) and
(a)(viii) 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 Trustee
determines that a Residual Event which has previously occurred has been
cured, the Trustee, 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 hereunder have been fully satisfied, shall be paid to
reimburse the Trustee for any amounts owing to it arising from the
performance of its obligations under the Master Agreement and this
Series 1999-1 Supplement and, then, to ALRC VIII.
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 investment
earnings on amounts held in any Series 1999-1 Account shall be deposited in the
Collection Account as earned.
(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 sub-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
21
27
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 and Class A Overdue Interest for the related Interest Accrual
Period;
(iv) from the Available Funds then remaining in the Collection
Account, to the Class B Noteholders, the Class B Note Interest and the
Class B Overdue Interest for the related Interest Accrual Period;
(v) from the Available Funds then remaining in the Collection
Account, to the Class C Noteholders, the Class C Note Interest and the
Class C Overdue Interest for the related Interest Accrual Period;
(vi) until the Class A Principal Balance has been reduced to
zero, to the Class A Noteholders, from the Available Funds then
remaining in the Collection Account, the Class A Principal Payment and
the Class A Overdue Principal;
(vii) 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 and
the Class B Overdue Principal;
(viii) until the Class C Principal Balance has been reduced to
zero, to the Class C Noteholders, from the Available Funds then
remaining in the Collection Account, the Class C Principal Payment and
the Class C Overdue Principal;
(ix) 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;
(x) 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;
(xi) from the Available Funds then remaining in the Collection
Account, to the Class D Noteholders, the Class D Principal Payment and
the Class D Overdue Principal;
(xii) 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
22
28
holders of the Residual 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 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.
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 one
Business Day prior to such Payment Date, setting forth the following information
(per $1,000 of Class A Initial Principal Balance, Class B Initial Principal
Balance, Class C Initial Principal Balance or Class D 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
Principal Payment, Class B Principal Payment, Class C Principal Payment
or Class D Principal Balance as applicable, and the Class A Overdue
Principal, Class B Overdue Principal, Class C Overdue Principal or
Class D Overdue Principal, as applicable;
(ii) The amount of such payment allocable to such Class A Note
Interest, Class B Note Interest or Class C Note Interest, as
applicable, and the Class A Overdue Interest, Class B Overdue Interest
or Class C Overdue 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 Principal Balance, Class B
Principal Balance, Class C Principal Balance and Class D Principal
Balance, as applicable, and the Class A Note Factor, Class B Note
Factor, Class C Note Factor or Class D 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 Charged-Off Contracts during the related
Collection Period calculated immediately prior to the time such
Contracts became Charged-Off Contracts; and
23
29
(vii) The amount on deposit in the Reserve Account and the
Residual Account; 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 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 by Series 1999-1 Noteholders in
connection with tax matters, in accordance with the 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 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 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 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
24
30
(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
the Trustee has itself received the related information and the Series 1999-1
Noteholders have not already received such notice or other items. Except as may
be specifically provided herein, 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 agent for and on behalf of, and at the 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. The Servicer may allow modifications and
prepayments of Contracts as provided in Sections 6.01, 6.02 and 6.03 of the
Master Agreement.
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 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:
25
31
(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 policies and procedures in accordance with the
Servicer's normal business practices with respect 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.
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 Offered Note when such payment become due and payable and
continuation of such default for five calendar days;
(b) default in reducing the Outstanding Note Principal Balance of any
Class of Offered Notes to zero by the 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;
26
32
(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 Obligors or (iii) the holders of a majority of the then
Outstanding Note 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; 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; or
(f) the commencement by either or both of the Obligors of a voluntary
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.
The Trustee shall give the Series 1999-1 Noteholders notice of all
uncured defaults known to it.
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
Note 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
27
33
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. The Trustee may, however, if the
Event of Default involves other than non-payment of principal or interest on the
Series 1999-1 Notes, not sell the Series 1999-1 Trust Estate unless such sale is
for an amount greater than or equal to the Outstanding Note Principal Balance of
the Series 1999-1 Notes unless directed to do so by the holders of 66-2/3% of
the then Outstanding Note Principal Balance.
(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 Note 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, Class B Notes and
Class C 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 Interest
Rate, the Class B Interest Rate and the Class C Interest Rate, as
applicable;
(B) all interest due with respect to any Class A Notes, Class
B Notes and Class C Notes and, to the extent that payment of such
interest is lawful, interest upon overdue interest from the date when
the same first became due until the date of payment or deposit at a
rate per annum equal to the Class A Interest Rate, Class B Interest
Rate or Class C 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 Note 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.
28
34
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 66-2/3% of the then Outstanding
Note Principal Balance the Trustee shall act in accordance with such direction
subject to the provisions of Section 4.12 hereof.
(b) Following any acceleration of the Series 1999-1 Notes, the Trustee
shall 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 in accordance with Section
4.16 hereof; provided that, if the Event of Default involves other than
non-payment of principal or interest on the Series 1999-1 Notes, then such sale
must be for an amount greater than or equal to amounts due under clauses first
through fourth in Section 4.06. 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.
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
29
35
(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 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.
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 costs and expenses of collection
incurred by the Trustee and the Series 1999-1 Noteholders (including
the reasonable fees and expenses of any counsel to the Trustee and the
Series 1999-1 Noteholders);
second to the payment of all Servicing Fees then due to such
person;
third first, to the payment of all accrued and unpaid interest
on the Class A 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 A Interest Rate, 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
30
36
the Class B Interest Rate, third, to the payment of all accrued and
unpaid interest on the Class C 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 C Interest Rate, fourth, to the payment to
zero of the Class A Principal Balance and any Class A Overdue
Principal, fifth, to the payment to zero of the Class B Principal
Balance and any Class B Overdue Principal and, sixth, to the payment of
the Class C Principal Balance and any Class C Overdue Principal;
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;
fourth to the payment of amounts then due the Trustee
hereunder;
fifth to the Class D Noteholders to the extent of the Class D
Principal Balance and any Class D Overdue Principal;
sixth 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 66-2/3% of the then
Outstanding Note Principal Balance of the Series 1999-1 Notes shall
have made written request to the Trustee to 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 adequate indemnity 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
66-2/3% of the then Outstanding Note 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
31
37
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 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
32
38
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 Note 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;
(ii) (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 adequately indemnified; 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 majority] of the then Outstanding Note 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
(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
33
39
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 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 Note
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) The power to effect any sale of any portion of the Series 1999-1
Trust Estate pursuant to Section 4.03 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 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.
(b) To the extent permitted by applicable law, the Trustee shall not in
any private sale sell to a third party the Series 1999-1 Trust Estate, or any
portion thereof unless,
(i) the holders of 66-2/3% of the then Outstanding Note
Principal Balance consent to or direct the Trustee in writing to make
such 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
Note 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.
(c) In connection with a sale of all or any portion of the Series
1999-1 Trust Estate:
34
40
(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;
(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.
(d) 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 (10.00%) of the
Initial Aggregate Contract Principal Balance, the Obligors 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, the Class B Principal
Balance, the Class C Principal Balance and the Class D Principal Balance as of
such Payment Date (after giving effect to the payment of any principal on such
Payment Date and any allocation of losses on such Payment Date), (ii) the Class
A Note Interest, Class B Note Interest and Class C Note Interest due on such
Payment Date and (iii) the amount, if any, of all Class A Overdue Principal, all
Class B Overdue Principal, all Class C Overdue Principal and all Class D Overdue
Principal and all Class A Overdue Interest, all Class B Overdue Interest and all
Class C Overdue Interest. Upon receipt of such amounts and all amounts then owed
to the Trustee, the Trustee shall (x) make the final payment in full 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.
35
41
SECTION 5.02 Notice of Redemption and Disposition of Funds.
(a) Notice of any termination pursuant to this Article V shall be given
to the Trustee by the Obligors, 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 for any damages suffered by 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) In the event that any amount due to any Series 1999-1 Noteholder
remains unclaimed after the final Payment 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
MISCELLANEOUS
SECTION 6.01 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 6.02 Counterparts. This Series 1999-1 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 6.03 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
36
42
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
TAKING INTO ACCOUNT THE CONFLICT OF LAWS PRINCIPLES OF ANY JURISDICTION.
SECTION 6.04 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 without the prior written consent of the
Obligors, the Servicer and the Trustee.
(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 6.05 Non-petition Clause. Notwithstanding anything contained in
Section 4.07 hereof, or elsewhere herein, the Trustee hereby, and by its
acceptance of the Series 1999-1 Note, each Series 1999-1 Noteholder 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.
SECTION 6.06 Officers' Certificate and Opinion of Counsel as to
Conditions Precedent. Upon any request or application by the Obligors to the
Trustee to take any action under the Master Agreement or this Series 1999-1
Supplement, the Obligors 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;
37
43
(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 6.07 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
[ Rating Agencies].
SECTION 6.08 Special Covenants and Acknowledgements. With respect to
the Series 1999-1 Notes, each Obligor does hereby represent and warrant, as of
the Closing Date:
(i) "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.
(ii) "Support Defaults." There are no "Support Default" events
with respect to the Series 1999-1 Notes.
(iii) "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.
(iv) "Series Secured Parties." The "Series Secured Parties"
with respect to the Series 1999-1 Notes are the Trustee and the Series
1999-1 Noteholders.
(v) "Original Servicer Fee Rate." The "Original Servicer Fee
Rate" with respect to the Series 1999-1 Notes is the Servicing Fee.
(vi) "Original Issue Date." The "Original Issue Date" with
respect to the Series 1999-1 Note is ________ __, 1999.
38
44
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 _________________________________________
Name:
Title:
ADVANTA LEASING RECEIVABLES CORP. VIII, as an
Obligor
By _________________________________________
Name:
Title:
ADVANTA LEASING RECEIVABLES CORP. IX, as an
Obligor
By _________________________________________
Name:
Title:
BANKERS TRUST COMPANY, as Trustee
By _________________________________________
Name:
Title:
