1
Exhibit 4.2
OH&S DRAFT
8/10/99
======================================================================
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 August __, 1999
to the
MASTER FACILITY AGREEMENT
Dated as of August __, 1999
======================================================================
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ADVANTA EQUIPMENT RECEIVABLES
ASSET-BACKED NOTES
Reconciliation and Tie between the Master Agreement and Series 1999-1 Supplement
and the Trust Indenture Act of 1939, as amended
Trust Indenture
Act Section Master Agreement Series 1999-1 Supplement
Section 310(a)(1) Section 11.08 Section See Master Agreement
(a)(2) 11.08 See Master Agreement
(a)(3) 11.15 See Master Agreement
(a)(4) Not Applicable Not Applicable
(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
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TABLE OF CONTENTS
PAGE
EXHIBIT A -- FORM OF SERVICER'S CERTIFICATE
EXHIBIT B -- FORM OF CONTRACT
EXHIBIT C -- FORMS OF NOTES
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This Series 1999-1 Supplement, dated as of August __, 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 August __, 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 Reserve Account and the Residual
Account, (4) the Contribution Agreement and the Series 1999-1 Contribution
Agreement Supplement and all of its rights to enforce the provisions of, and to
benefit from the representations, warranties and covenants made in, the
Contribution Agreement and the Series 1999-1 Contribution Agreement Supplement,
(5) 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
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accounts, contract rights, general intangibles, 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.
(d) In the case of any Series 1999-1 Contract which has been prepaid in
full during the period from the related Cut-Off Date to the Closing Date, the
Obligors shall, on the Closing Date, deposit the Prepayment Amount therefor in
the Collection Account in lieu of pledging such Series 1999-1 Contract to the
Trustee.
SECTION 1.03 Custody of the Series 1999-1 Trust Estate. For the avoidance
of doubt, the parties agree that notwithstanding the use of the terms "deposit,"
"deposited," "transfer" and "transferred" in this Series 1999-1 Supplement, the
Trustee will not take physical possession of any of the Series 1999-1 Trust
Estate (other than the amounts on deposit in the Series 1999-1 Accounts)
pursuant to the terms hereof. Instead, the Servicer will hold the Series 1999-1
Trust Estate (other than the amounts on deposit in the Series 1999-1 Accounts)
as custodian on behalf of the Trustee as further described in Section 3.10
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 and the Class B Notes and (ii) the Trustee shall have
received the following on or before the Closing Date:
(a) The List of Contracts;
(b) Copies of resolutions of the board of directors of ABS and of each of
XXXX XXXX,
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0
XXXX IX, approving the execution, delivery and performance of this Series 1999-1
Supplement and the transactions contemplated hereby, certified, in each case, by
a secretary or an assistant secretary of the respective corporation;
(c) A copy of an officially certified document, dated not more than 30
days prior to the Closing Date and evidencing the due organization and good
standing of each of ABS and the Obligors in their respective states of
organization;
(d) Copies of the Certificate of Incorporation and By-Laws of ABS and
copies of the Articles of Incorporation and By-Laws of each of ALRC VIII and
ALRC IX certified, in each case, by a secretary or an assistant secretary of the
respective corporation;
(e) Delivery of executed UCC-1 financing statements, prepared by the
Servicer for filing (i) with the Secretary of State of New Jersey, naming the
Originator as the debtor and the Obligors as secured parties, and (ii) with the
Secretary of State of Nevada naming the Obligors as the debtors and the Trustee
as secured party;
(f) A certificate listing the Servicing Officers as of the Closing Date;
and
(g) An executed copy each of the Contribution Agreement, the Series 1999-1
Contribution Agreement Supplement, the Master Agreement and this Series 1999-1
Supplement.
SECTION 1.05 Acceptance by Trustee. The Trustee acknowledges its
acceptance, simultaneously with the execution and delivery of this Series 1999-1
Supplement, of the pledge of and security interest in all right, title and
interest in and to the Series 1999-1 Trust Estate and declares that the Trustee
holds and will continue to hold the pledge of and security interest in such
right, title and interest in and to the Series 1999-1 Trust Estate for the
benefit of all present and future Series 1999-1 Noteholders for the use and
purpose and subject to the terms and provisions of this Series 1999-1
Supplement. The Obligors hereby (x) appoint the Trustee as the Obligors'
attorney-in-fact with all power independently to enforce all of the Obligors'
rights against the Originator and the Servicer under the Contribution Agreement
and the Series 1999-1 Contribution Agreement Supplement, as applicable and (y)
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
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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 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
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such terms. Unless otherwise defined in this Series 1999-1 Supplement, terms
defined in the Master Agreement are used herein as therein defined.
ABS: Advanta Business Services Corp., a Delaware corporation.
Additional Principal: With respect to each Payment Date, an amount equal
to the Monthly Payment Amount less the Class A Principal Payment Amount and the
Class B Principal Payment Amount to be made on such date.
Aggregate Contract Balance Remaining: With respect to any Payment Date,
the aggregate Contract Balances Remaining of all Series 1999-1 Contracts (other
than Defaulted Contracts) in the Series 1999-1 Trust Estate as of the related
Calculation Date.
Aggregate Contract Principal Balance: With respect to any Calculation
Date, the aggregate of the Contract Principal Balances of all Series 1999-1
Contracts (other than Defaulted Contracts) in the Series 1999-1 Trust Estate as
of such date.
ALRC VIII: Advanta Leasing Receivables Corp. VIII, a Nevada corporation.
ALRC IX: Advanta Leasing Receivables Corp. IX, a Nevada corporation.
Ancillary Servicing Income: Certain miscellaneous amounts which revert to
the Servicer in consideration of the servicing function performed by the
Servicer, such as late fees (if a Servicer Advance has been made for such late
payment), insufficient funds charges, and the like.
Applicable Discount Rate: The rate of [__%] which is equal to the sum of
(a) the weighted average of the Class A-1 Interest Rate, Class A-2 Interest
Rate, Class A-3 Interest Rate and the Class B Interest Rate, each weighted by
(i) the initial principal balance of the Class A-1 Notes, the initial principal
balance of the Class A-2 Notes, the initial principal balance of the Class A-3
Notes and the initial principal balance of the Class B Notes and (ii) the
weighted average life to call of the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class B Notes under a 6.0% conditional prepayment rate
and no loss scenario, as applicable, and (b) the Servicer Fee Rate.
Available Funds: With respect to a Payment Date, (i) all amounts on
deposit in the Collection Account which relate to the Collection Period for such
Payment Date (including, without limitation, Scheduled Payments, Servicer
Advances, Residual Receipts, Prepayment Amounts, amounts deposited into the
Collection Account as a result of the repurchase of a Contract under Section
6.15 of the Master Agreement or subsection 6.12(b) of the Master Agreement 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.
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Available Residual Amount: As of any date of determination, the amount on
deposit in the Residual Account on such date.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended, as codified
under Title 11 of the United States Code, and the Bankruptcy Rules promulgated
thereunder, as the same may be in effect from time to time.
Balloon Payment: With respect to any Contract, a final payment which is
more than 10% greater in amount than any prior Scheduled Payment.
Class A Initial Principal Balance: $99,907,209.
Class A Noteholder: Person in whose name a Class A Note is registered in
the Note Register.
Class A Note Interest: With respect to any Payment Date, the sum of the
Class A-1 Note Interest, the Class A-2 Note Interest and the Class A-3 Note
Interest.
Class A Notes: The Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes.
Class A Percentage: A fraction, expressed as a percentage, equal to (i)
the sum of the Class A-2 Initial Principal Balance and the Class A-3 Initial
Principal Balance divided by (ii) the Initial Aggregate Contract Principal
Balance minus the Class A-1 Initial Principal Balance, and being __%.
Class A Principal Balance: As of any date of determination, the sum of the
Class A-1 Principal Balance, the Class A-2 Principal Balance, and the Class A-3
Principal Balance.
Class A Principal Payment Amount: (a) With respect to any Payment Date on
which all or a portion of the Class A-1 Notes remain outstanding after giving
effect to payments on such day, the Monthly Principal Amount, (b) with respect
to the Payment Date on which the outstanding principal of the Class A-1 Notes is
reduced to $0, the sum of (i) the amount necessary to reduce the outstanding
principal of the Class A-1 Notes to $0 and (ii) the amount necessary to reduce
the sum of the outstanding principal amount of the Class A-2 Notes and the Class
A-3 Notes to the Class A Target Investor Principal Amount or (c) on any
subsequent Payment Date, the amount necessary to reduce the sum of the
outstanding principal amount of the Class A-2 Notes and the Class A-3 Notes to
the Class A Target Investor Principal Amount.
Class A Target Investor Principal Amount: With respect to each Payment
Date, an amount equal to the product of (i) the Class A Percentage and (ii) the
Aggregate Contract Principal Balance as of the related Calculation Date.
Class A-1 Initial Principal Balance: $51,460,585.
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Class A-1 Interest Rate: ____ % per annum.
Class A-1 Maturity Date: September 2000 Payment Date.
Class A-1 Note Factor: The seven digit decimal number that the Servicer
will compute or cause to be computed for each Collection Period and will make
available on the related Determination Date representing the ratio of (i) the
Class A-1 Principal Balance which will be outstanding on the next Payment Date
(after taking into account all distributions and allocations to be made on such
Payment Date) to (ii) the Class A-1 Initial Principal Balance.
Class A-1 Noteholder: Person in whose name a Class A-1 Note is registered
in the Note Register.
Class A-1 Note Interest: With respect to any Payment Date, the sum of (i)
the product of (A) the Class A-1 Principal Balance immediately prior to such
Payment Date and (B) one-twelfth of the Class A-1 Interest Rate from the
preceding Payment Date; provided that on the first Payment Date, the Class A-1
Interest shall be $_____.
Class A-1 Notes: The Equipment Receivables Asset-Backed Notes, Series
1999-1, Class A-1 issued by ALRC VIII and ALRC IX.
Class A-1 Percentage: A fraction, expressed as a percentage, equal to the
Class A-1 Initial Principal Balance divided by the Initial Aggregate Contract
Principal Balance.
Class A-1 Principal Balance: As of any date of determination, an amount
equal to the Class A-1 Initial Principal Balance less any principal payments
previously made on the Class A-1 Notes.
Class A-2 Initial Principal Balance: $38,232,647.
Class A-2 Interest Rate: ____ % per annum.
Class A-2 Maturity Date: September 2002 Payment Date.
Class A-2 Note Factor: The seven digit decimal number that the Servicer
will compute or cause to be computed for each Collection Period and will make
available on the related Determination Date representing the ratio of (i) the
Class A-2 Principal Balance which will be outstanding on the next Payment Date
(after taking into account all distributions and allocations to be made on such
Payment Date) to (ii) the Class A-2 Initial Principal Balance.
Class A-2 Noteholder: Person in whose name a Class A-2 Note is registered
in the Note Register.
Class A-2 Note Interest: With respect to any Payment Date, the sum of (i)
the product of (A) the Class A-2 Principal Balance immediately prior to such
Payment Date and (B) one-twelfth
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of the Class A-2 Interest Rate and the Class A-2 Overdue Interest from the
Preceding Payment Date; provided that on the first Payment Date, the Class A-2
Note Interest shall be $ ________.
Class A-2 Notes: The Equipment Receivables Asset-Backed Notes, Series
1999-1, Class A-2 issued by ALRC VIII and ALRC IX.
Class A-2 Percentage: A fraction, expressed as a percentage, equal to the
Class A-2 Initial Principal Balance divided by the Initial Aggregate Contract
Principal Balance.
Class A-2 Principal Balance: As of any date of determination, an amount
equal to the Class A-2 Initial Principal Balance less any principal payments
previously made on the Class A-2 Notes.
Class A-3 Initial Principal Balance: $10,213,977.
Class A-3 Interest Rate: ____ % per annum.
Class A-3 Maturity Date: November 2003 Payment Date.
Class A-3 Note Factor: The seven digit decimal number that the Servicer
will compute or cause to be computed for each Collection Period and will make
available on the related Determination Date representing the ratio of (i) the
Class A-3 Principal Balance which will be outstanding on the next Payment Date
(after taking into account all distributions and allocations to be made on such
Payment Date) to (ii) the Class A-3 Initial Principal Balance.
Class A-3 Noteholder: Person in whose name a Class A-3 Note is registered
in the Note Register.
Class A-3 Note Interest: With respect to any Payment Date, the sum of (i)
the product of (A) the Class A-3 Principal Balance immediately prior to such
Payment Date and (B) one-twelfth of the Class A-3 Interest Rate and the Class
A-3 Overdue Interest from the Preceding Payment Date; provided that on the first
Payment Date, the Class A-3 Note Interest shall be $ ________.
Class A-3 Notes: The Equipment Receivables Asset-Backed Notes, Series
1999-1, Class A-3 issued by ALRC VIII and ALRC IX.
Class A-3 Percentage: A fraction, expressed as a percentage, equal to the
Class A-3 Initial Principal Balance divided by the Initial Aggregate Contract
Principal Balance.
Class A-3 Principal Balance: As of any date of determination, an amount
equal to the Class A-3 Initial Principal Balance less any principal payments
previously made on the Class A-3 Notes.
Class B Floor: With respect to each Payment Date, (i) _____ % of the
Initial Aggregate Contract Principal Balance, plus (ii) the Cumulative Loss
Amount as of such Payment Date, minus (iii) the sum of the amounts on deposit in
the Reserve Account and the Residual Account after giving effect to payments and
withdrawals on such Payment Date.
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Class B Initial Principal Balance: $11,720,956.
Class B Interest Rate: ____% per annum.
Class B Maturity Date: April 2005 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 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; provided that on the first
Payment Date, the Class B Note Interest shall be $_____.
Class B Notes: The Equipment Receivables Asset-Backed Notes, Series
1999-1, Class B issued by ALRC VIII and ALRC IX.
Class B Percentage: A fraction, expressed as a percentage, equal to (i)
the Class B Initial Principal Balance divided by (ii) the Initial Aggregate
Contact Principal Balance minus the Class A-1 Initial Principal Balance, and
being approximately __%.
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 Amount: An amount equal to (a) for any Payment
Date on which all or a portion of the Class A-1 Notes remain outstanding after
giving effect to payments on such day, $0, and (b) for any subsequent Payment
Date, the amount necessary to reduce the aggregate outstanding principal amount
of the Class B Notes to the greater of the Class B Target Investor Principal
Amount and the Class B Floor.
Closing Date: August __, 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.
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Contribution Agreement: That certain Master Sale and Contribution
Agreement, dated as of August __, 1999, by and among ALRC VIII, ALRC IX and ABS.
Contracts: The Series 1999-1 Contracts pledged to the Trustee or the
receivables of which are 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 on or prior to March 31, 2005 (excluding Scheduled
Payments previously due and unpaid), discounted monthly at one-twelfth of the
Applicable Discount Rate, except that a Defaulted Contract has a Contract
Principal Balance of $0.
Cumulative Loss Amount: The excess, if any, of (a) the remainder of (i)
the outstanding principal amount of the Series 1999-1 Notes minus (ii) the
lesser of (A) the Monthly Principal Amount and (B) Available Funds (after the
payment of amounts described in Section 3.04(a)(i) through (iv) hereof) over (b)
the Aggregate Contract Principal Balance as of the related Calculation Date.
Cumulative Net Loss Percentage: With respect to each Collection Period,
the percentage equivalent of a fraction, the numerator of which is the excess of
(x) the aggregate amount of the Contract Principal Balances of all Series 1999-1
Contracts which become Defaulted 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 August 1, 1999.
Defaulted 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.
Defaulted Residual Receipts: With respect to any Series 1999-1 Contract
which has previously become a Defaulted 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 Series 1999-1 Contract as to which
a Scheduled
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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, as of the Closing Date or, where indicated, the
Cut-Off Date, 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
Series 1999-1 Contract to be made in United States dollars and (b) is with
a User who, if a natural person, is a resident of the United States or its
territories and possessions with legal capacity to contract or, if a
corporation or other business organization, is organized under the laws of
the United States, its territories or any political subdivision thereof
and has its chief executive office in the United States or its
territories;
(ii) has not had any of its terms, conditions or provisions modified
or waived other than in compliance with the Credit and Collection Policy
and has not been restructured at any time when the Series 1999-1 Contract
was a Delinquent Contract;
(iii) the payments arising under the Series 1999-1 Contract
constitute an account or general intangible which is evidenced by a
Contract that constitutes "chattel paper" within the meaning of Section
9-105(b) of the UCC of all applicable jurisdictions and for which there is
only one original of such Series 1999-1 Contract that constitutes "chattel
paper" for purposes of the UCC;
(iv) does not contravene any applicable federal, state and local
laws and regulations thereunder (including, without limitation, any law,
rule and regulation relating to truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and, with respect to which no part of such Series
1999-1 Contract thereto is in violation of any applicable law, rule or
regulation;
(v) satisfies in all material respects all applicable requirements
of the Credit and Collection Policy;
(vi) is not a Municipal Contract;
(vii) as of the Cut-Off Date, is not a Delinquent Contract;
provided, however, that the Series 1999-1 Contract can be a Delinquent
Contract so long as the Contract is not more than 90 days delinquent and
so long as the Contract Principal Balance of such Series 1999-1 Contract
when added to the Contract Principal Balances of all other Contracts which
are more than 61 days delinquent is less than 2% of the Initial Aggregate
Contract Principal Balance;
(viii) as of the Cut-Off Date, the Series 1999-1 Contract is not a
Defaulted
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Contract;
(ix) (other than a Contract which is a loan in form), (a) contains
"hell or high water" provisions requiring the related User to assume all
risk of loss or malfunction of the related Equipment, (b) makes the
related User absolutely and unconditionally liable for all payments
required to be made thereunder, (c) is a triple-net base and (d) is not
cancellable at the option of the User;
(x) as of the Cut-Off Date, when aggregated with the sum of the
Contract Principal Balances of all other Series 1999-1 Contracts relating
to a single User, shall not be greater than the product of (a) 1% and (b)
the Aggregate Contract Principal Balance at that time;
(xi) creates a valid and enforceable security or ownership interest
in favor of the Originator in the related Equipment, if any, for Equipment
with an initial balance of more than $25,000;
(xii) has only one set of original documentation;
(xiii) is free and clear of any Adverse Claims, other than the
claims arising pursuant to the Master Agreement, this Series 1999-1
Supplement and the Related Documents; provided, however, that nothing in
this clause (xii) shall prevent or be deemed to prohibit the Originator
from allowing any Adverse Claim for federal, state, municipal or other
local taxes to exist upon such Series 1999-1 Contract if such taxes shall
not at the time be due and payable or if the Originator shall concurrently
be contesting the validity thereof in good faith by appropriate
proceedings that have stayed enforcement thereof and shall have set aside
on its books adequate reserves with respect thereto;
(xiv) is in full force and effect in accordance with its terms and
contains enforceable provisions such that the right and remedies of the
holder thereof shall be adequate for realization against the Equipment, if
any, thereunder and of the benefits of any security granted thereunder;
(xv) does not provide for the substitution, exchange, or addition of
any other items of Equipment pursuant to such Contract which would result
in any reduction or extension of payments due thereunder;
(xvi) by its terms is due and payable on or within 84 months of the
Closing Date and, in either event, has not had its payment terms extended
other than in compliance with the Credit and Collection Policy;
(xvii) is in substantially the form of one of the standard form
contracts that ABS uses (set forth in Exhibit B hereto) or a form reviewed
and accepted by ABS;
(xviii) (a) does not preclude the pledge, transfer or assignment
thereof, (b) does not
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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;
(xix) was originated or purchased by the Originator in the ordinary
course of its business, (b) approved and purchased or funded in the
ordinary course of the Originator's business and (c) if purchased from a
broker or vendor, has been re-underwritten by the Originator in the
ordinary course of the Originator's business and in compliance with its
underwriting policies;
(xx) either (a) is an account receivable representing all or part of
the sales price of merchandise, insurance and/or services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940, as
amended, or (b) represents a financial asset that converts to cash within
a finite period of time within the meaning of Rule 3a-7 promulgated under
the Investment Company Act of 1940, as amended;
(xxi) does not require a Balloon Payment;
(xxii) relates to Equipment which is located in the United States of
America, its territories or possessions;
(xxiii) as of the Cut-Off Date, the Contract Principal Balance of
the Contract when aggregated with the Contract Principal Balances of all
Contracts acquired by the Originator or its affiliates from the same
single broker or vendor, shall not exceed 6% of the Aggregate Contract
Principal Balance at that time;
(xxiv) it is not a consumer lease;
(xxv) is not subject to any guaranty by the Originator;
(xxvi) no adverse selection was used in selecting the Contract for
transfer to the Obligors;
(xxvii) the information with respect to the Contract is true and
correct in all material respects; and
(xxviii) all filings necessary to evidence the conveyance or
transfer of the Contract and security interest in the related Equipment,
if any, to one of the Obligors have been made in all appropriate
jurisdictions.
Equipment: The equipment leased to or sold to a User pursuant to any
Contract and any security interest in such equipment and the Residual Interest
therein or derived therefrom.
Event of Default: As defined in Section 4.01 hereof.
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Final Contract Payment: With respect to any Series 1999-1 Contract, any
specified amount or minimum specified amount set forth in such Series 1999-1
Contract and required to be paid by the related User at the maturity of such
Series 1999-1 Contract.
Initial Aggregate Contract Principal Balance: The Aggregate Contract
Principal Balances on the Closing Date, which is an amount equal to $__________.
Interest Accrual Period: With respect to any Payment Date, the period
commencing on and including the prior Payment Date (or in the case of the first
Payment Date, the Closing Date) and ending on and including the day immediately
preceding such Payment Date.
List of Contracts: With respect to the Series 1999-1 Contracts, a printed
or electronic list of such Contracts, certified by an Authorized Officer of each
of the Obligors.
Master Agreement: The Master Facility Agreement, dated as of August __,
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 Principal Balance 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 Defaulted 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 Principal Amount: With respect to any Payment Date, is the excess
of (a) the aggregate outstanding principal amount of all Classes of Series
1999-1 Notes as of the immediately preceding Payment Date after giving effect to
all principal payments on that day, over (b) the Aggregate Contract Principal
Balance as of the related Calculation Date.
Monthly Residual Receipt Percentage: With respect to any Payment Date, the
percentage equivalent of a fraction (a) the numerator of which is the aggregate
dollar amount of Residual Receipts collected during the immediately preceding
Collection Period and (b) the denominator of which is equal to the aggregate
Booked Residual Value 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, the aggregate
amount of Collections received by the Servicer during the prior Collection
Period with respect to the Series
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1999-1 Trust Estate (other than Collections representing Advance Payments until
such Advance Payments are applied as Collections), together with all Servicing
Advances paid by the Servicer with respect to such Payment Date.
Nonrecoverable Advances: With respect to any Delinquent Contract, a
Servicer Advance which the Servicer has determined that it will be unable to
recover, in whole or in part, with respect to such Delinquent Contract.
Obligors: Advanta Leasing Receivables Corp. VIII and Advanta Leasing
Receivables Corp. IX.
Obligors' Interest: The Obligors' reversionary rights to the Series 1999-1
Trust Estate and the proceeds thereof, to the extent such proceeds are not
needed to make payments on the Series 1999-1 Notes.
Obligors' 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 Principal Balance as of such date.
Originator: Advanta Business Services Corp. and its successors and
assigns.
Outstanding Obligors 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 Principal Balance at the end
of such Payment Date.
Outstanding Principal Balance: As of any date of determination, the sum of
the Class A Principal Balance and the Class B Principal Balance as of such date.
Payment Date: The 15th day of each month, or, if such day is not a
Business Day, the next succeeding Business Day, commencing September 15, 1999.
Principal Payments: The payments of principal each Class of Series 1999-1
Notes is entitled to receive in accordance with the priorities set forth in
Section 3.04 hereof.
Rating Agencies: Xxxxx'x and Fitch.
Record Date: With respect to any Payment Date, the close of business on
the Business Day preceding such Payment Date.
Required Reserve Amount: With respect to any Payment Date, an amount equal
to the lesser of (x) the sum of 1% of the Initial Aggregate Contract Principal
Balance and 2% of the Outstanding Principal Balance and (y) the outstanding
principal amount of the Series 1999-1 Notes.
Reserve Account: The account or accounts by that name established and
maintained by the
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Trustee pursuant to Section 3.02 hereof.
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 Event: Means the occurrence of one or more of the following: (a)
the occurrence of an Event of Default; (b) ABS or an Affiliate of ABS is no
longer the Servicer; (c) the Three-Month Residual Receipt Percentage calculated
on the related Calculation Date is less than [100%]; (d) the Three-Month
Delinquency Percentage calculated on the related Calculation Date is greater
than [10.50%]; or (e) the Cumulative Net Loss Percentage as of any Calculation
Date occurring during the following periods exceeds the "Loss Trigger Level
Percentage" set forth below:
Loss Trigger
Period Level Percentage
------ ----------------
First Collection Period through 12th Collection
Period thereafter [4.0]%
13th Collection through 24th
Collection Period thereafter [5.5]%
25th Collection Period and thereafter [7.0]%
Notwithstanding the foregoing: (i) the Residual Event referred to in
clause (c) may be cured if the Three-Month Residual Receipt Percentage is
greater than or equal to [100%], (ii) the Residual Event referenced in clause
(d) may be cured if the Three-Month Delinquency Percentage for any Collection
Period thereafter is less than or equal to [10.50%] and (iii) the Residual Event
reference in cause (e) 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.
Series 1999-1 Accounts: The Collection Account, the Residual Account and
the Reserve Account.
Series 1999-1 Contracts: The Contracts pledged to the Trustee on the
Closing Date pursuant to Section 1.02 hereof and listed on the List of
Contracts.
Series 1999-1 Contribution Agreement Supplement: The Contribution
Agreement
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Supplement, dated as of August __, 1999, and delivered with respect to the
Series 1999-1 Trust Estate.
Series 1999-1 Noteholders: The Class A Noteholders and the Class B
Noteholders.
Series 1999-1 Notes: Collectively, the Class A Notes and the Class B
Notes.
Series 1999-1 Trust Estate: As defined in Section 1.02 hereof.
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% per annum.
Servicer's Certificate: A written informational statement, substantially
in the form of Exhibit A hereto, to be provided by the Servicer in accordance
with Section 6.06 of the Master Agreement and signed by a Servicing Officer and
furnished to the Trustee and each Rating Agency by the Servicer.
Servicing Fee: The fee payable to the Servicer on each Payment Date in
consideration for the Servicer's performance of its duties pursuant to 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.
Series Related Documents: The Master Agreement, the Series 1999-1
Supplement, the Contribution Agreement, the Series 1999-1 Contribution Agreement
Supplement and all amendments and supplement thereto.
Settlement Date: For the purpose of this Series 1999-1 Supplement, each
Payment Date.
Three-Month Delinquency Percentage: With respect to any Payment Date
commencing with the third Payment Date, the percentage equivalent of a fraction,
(a) the numerator of which is the sum of the Monthly Delinquency Percentage for
such Payment Date and the two immediately preceding Payment Dates and (b) the
denominator of which is three.
Three-Month Residual Receipt Percentage: With respect to any Payment Date
commencing with the third Payment Date, the percentage equivalent of a fraction,
(a) the numerator of which is the sum of the Monthly Residual Receipt Percentage
for such Payment Date and the two immediately preceding Payment Dates and (b)
the denominator of which is three.
Trustee: Bankers Trust Company, a New York banking corporation.
ARTICLE III
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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 Collections pursuant to the first or
the second preceding sentence, (i) the Servicer will only be required to deposit
Collections into the Collection Account up to the Monthly Remittance Amount for
such Collection Period and (ii) if at any time prior to such Settlement Date,
the amount of Collections deposited in the Collection Account exceeds the amount
required to be deposited pursuant to clause (i) above, the Servicer will be
permitted to withdraw the excess from the Collection Account and pay such amount
to the Obligors.
(c) Furthermore, the Servicer is required to deposit Advance Payments
received by the Servicer in the Collection Account not later than the
Determination Date for the related Collection Period; provided, however, that
the Advance Payment or any portion thereof shall be treated as collections of
Scheduled Payments only in the Collection Period in which such payment is due
and owing.
(d) Notwithstanding the foregoing, the Trustee and/or the Servicer may
deduct from amounts otherwise specified for deposit to the Collection Account
any amounts previously deposited by the Trustee or the Servicer into the
Collection but which are (i) subsequently uncollectible as a result of dishonor
of the instrument of payment for or on behalf of the User or (ii) later
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determined to have resulted from mistaken deposits.
(e) The Collection Account shall be under the sole dominion and control of
the Trustee for the benefit of the Series 1999-1 Noteholders; provided, however,
that the Trustee may rely on the information and instructions provided by the
Servicer in determining the amount of any withdrawals or payments to be made
from either such account for the purposes of carrying out the Trustee's duties
under the Master Agreement or under this Series 1999-1 Supplement. Neither the
Trustee nor the Servicer shall have any right of setoff or banker's lien
against, and no right to otherwise deduct from, any funds held in the Collection
Account for any amount owed to it by the Servicer, the Obligors, the Trustee, or
any Series 1999-1 Noteholder.
(f) On each Payment Date the Trustee shall distribute the Monthly
Remittance Amount with respect to such Payment Date as provided in Section 3.04
hereof.
(g) The Trustee shall deposit all net investment earnings on each Series
1999-1 Account, as collected, to the Collection Account.
SECTION 3.02 Reserve Account and Residual Account.
(a) (i) The Trustee shall establish and maintain an account (the "Reserve
Account") as one or more segregated trust accounts in the 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) and (a)(vii) of Section 3.04
hereof exceed the Available Funds (exclusive of any Reserve Account
transfers, but inclusive of any Residual Account transfers pursuant
to paragraph (b) below) in the Collection Account after taking into
account the payment of amounts described in clauses (a)(i) and
(a)(ii) of Section 3.04 on such Payment Date;
(B) then, to the extent of the Available Reserve Amount on
deposit in the Reserve Account, the Trustee shall transfer, 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
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Servicer's Certificate delivered on the related Determination Date as
specified in Section 3.05 hereof, as the holders of the Obligors'
Interest.
(iv) Upon payment in full of the Series 1999-1 Notes, any balance
remaining in the Reserve Account, after all obligations to the Noteholders
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 Obligors' Interest.
(b) (i) The Trustee shall establish and maintain an account (the "Residual
Account") as one or more segregated trust accounts in the Trustee's corporate
trust department, in the name of "Advanta Leasing Receivables Asset-Backed Notes
Series 1999-1 Residual Account, in trust for 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)(x).
(iii) If, based solely on information contained in the Servicer's
Certificate delivered on the related Determination Date as specified in
Section 3.05 hereof:
(A) on any Payment Date, (x) the amounts described in clauses
(a)(iii), (a)(iv), (a)(v), (a)(vi) and (a)(vii) of Section 3.04
hereof exceed (y) the Available Funds (exclusive of any Reserve
Account or Residual Account transfers) in the Collection Account
after taking into account the payment of amounts described in
clauses (a)(i) and (a)(ii) of Section 3.04 on such Payment Date;
(B) then, to the extent of the Available Residual Amount on
deposit in the Residual Account, the Trustee shall transfer, prior
to making payments to the Series 1999-1 Noteholders on such Payment
Date and prior to making any transfers from the Reserve Account on
such Payment Date, from the Residual Account to the Collection
Account such amount as shall be necessary to fund any such
shortfall.
(iv) In the event that on any Payment Date the 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
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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 hereof) will be required to make the following
payments from the Available Funds (including amounts transferred from the
Reserve Account and/or the Residual Account on such Payment Date) then on
deposit in the Collection Account, in the following order of priority:
(i) from the Available Funds, to the Servicer, any Nonrecoverable
Advances;
(ii) from the Available Funds then remaining in the Collection
Account to the Servicer, the Servicing Fee then due, together with the
Ancillary Servicing Income;
(iii) from the Available Funds then remaining in the Collection
Account, to the Class A Noteholders, the Class A Note Interest for the
related Interest Accrual Period, pari passu with respect to the Class A-1
Notes, the Class A-2 Notes and the Class A-3 Notes;
(iv) from the Available Funds then remaining in the Collection
Account, to the Class B Noteholders, the Class B Note Interest for the
related Interest Accrual Period;
(v) from Available Funds then remaining in the Collection Account,
until the Class A-1 Principal Balance has been reduced to zero, to the
Class A-1 Noteholders, the Class A Principal Payment Amount; after the
Class A-1 Principal Balance has been reduced to zero, then until the Class
A-2 Principal Balance has been reduced to zero, to the Class A-2
Noteholders, the Class A Principal Payment Amount; after the Class A-1
Principal Balance and the Class A-2 Principal Balance have been reduced to
zero, then until the Class A-3 Principal Balance has been reduced to zero,
the Class A-3 Noteholders, the Class A Principal Payment Amount;
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(vi) until the Class B Principal Balance has been reduced to zero,
to the Class B Noteholders, from the Available Funds then remaining in the
Collection Account, the Class B Principal Payment Amount;
(vii) if on such date the Class B Floor is greater than the Class B
Target Investor Principal Amount, an amount equal to the Additional
Principal for such date shall be to the extent thereof, shall be paid
sequentially to the Class A-2 Noteholders, Class A-3 Noteholders and Class
B Noteholders, in that order, until the principal amount of such Class has
been reduced to zero;
(viii) from the Available Funds then remaining in the Collection
Account, to the Reserve Account, the amount needed to increase the amount
on deposit in the Reserve Account to the Required Reserve Amount for such
Payment Date;
(ix) upon the occurrence and continuance of a Residual Event, the
lesser of (A) the remaining Available Funds and (B) the aggregate amount
of Residual Receipts originally included in Available Funds for such
Payment Date will be deposited to the Residual Account;
(x) to the Obligors, in the proportions set forth in the Servicer's
Certificate delivered on the related Determination Date as specified in
Section 3.05 hereof, as the holders of the Obligors' Interest, any
remaining Available Funds on deposit in the Collection Account.
(b) All payments to Series 1999-1 Noteholders shall be made on each
Payment Date to each Series 1999-1 Noteholder of record on the related Record
Date by check, or, if requested 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-1 Initial Principal Balance, Class A-2 Initial Principal
Balance, Class A-3 Initial Principal Balance and Class B Initial Principal
Balance (as the case may be) as to (i) and (ii) below):
(i) The amount of such payment allocable to the Class A-1 Principal
Payment Amount, Class A-2 Principal Payment Amount, Class A-3 Principal
Payment Amount or Class B Principal Payment Amount, as applicable;
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(ii) The amount of such payment allocable to such Class A-1 Note
Interest, Class A-2 Note Interest, Class A-3 Note Interest or Class B Note
Interest, as applicable;
(iii) The aggregate amount of fees and compensation received by the
Servicer for the related Collection Period;
(iv) The aggregate Class A-1 Principal Balance, Class A-2 Principal
Balance, Class A-3 Principal Balance and Class B Principal Balance, as
applicable, and the Class A-1 Note Factor, Class A-2 Note Factor, Class
A-3 Note Factor, or Class B Note Factor, as applicable, after taking into
account all distributions made on such Payment Date, the Aggregate
Contract Principal Balance and the Collateral Factor;
(v) The total unreimbursed Servicer Advances with respect to the
related Collection Period;
(vi) The aggregate Contract Principal Balance for all Series 1999-1
Contracts that became Defaulted Contracts during the related Collection
Period, calculated immediately prior to the time such Contracts became
Defaulted Contracts;
(vii) The amount on deposit in the Reserve Account and the Residual
Account;
(viii) 31-60, 61-90 and greater than 90 days delinquencies as of the
end of the related Collections Period; and
(ix) Prepayment Amounts received during the related Collection
Period;
provided, however, the Trustee may deliver a copy of the Servicer's
Certificate to each Series 1999-1 Noteholder and Rating Agency in
satisfaction of the requirement set forth in this Section.
(b) By January 31 of each calendar year, commencing January 31, 2000, or
as otherwise required by applicable law, the Trustee shall 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.
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(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
(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
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Series 1999-1 Noteholders be required for any withholding.
SECTION 3.07 Servicer Advances. No later than one Business Day preceding
each Payment Date, the Servicer may, but is not required, to make a Servicer
Advance for each Series 1999-1 Contract which is a Delinquent Contract with
respect to each overdue Scheduled Payment as of the related Calculation Date in
an amount equal to the Scheduled Payments, or portion thereof, which were due
but not received during the related Collection Period (and not previously
covered by an unreimbursed Servicer Advance). On each Determination Date, the
Servicer shall deliver to the Trustee the Servicer's Certificate listing the
aggregate amount of Scheduled Payments not received for the immediately prior
Collection Period as of the related Calculation Date, together with a listing of
which such unpaid Scheduled Payments will not be the subject of a corresponding
Servicer Advance. The Servicer shall remit any Servicer Advances to the
Collection Account.
SECTION 3.08 Modifications of Contracts and Purchase of Contracts.
(a) The Servicer may allow modifications and prepayments of Contracts as
provided in Sections 6.01, 6.02 and 6.03 of the Master Agreement.
(b) The Obligors may, at their option remove Defaulted Contracts from the
Series 1999-1 Trust Estate. The aggregate amount of Defaulted Contracts which
the Obligors may remove from the Series 1999-1 Trust Estate shall not, however,
exceed 5% of the Initial Aggregate Contract Principal Balance. In determining
the amount of a Defaulted Contract which is removed, the amount of such Contract
shall be equal to the Contract Principal Balance of such Contract calculated as
if it were not a Defaulted Contract.
(c) The Obligors shall remove from the Series 1999-1 Trust Estate those
contracts described in Section 6.15 of the Master Agreement and such removal
shall occur as provided in such Section 6.15.
(d) Upon removal of a Contract from the Series 1999-1 Trust Estate under
(b) or (c) above, the appropriate Obligor shall pay the Prepayment Amount to the
Servicer for deposit into the Collection Account.
SECTION 3.09 Servicer to Act as Custodian.
(a) The Servicer shall hold and acknowledges that it is holding the Series
1999-1 Contracts hereunder as custodian for the Trustee.
(b) The Servicer shall promptly report to the Trustee any failure by it to
hold the Series 1999-1 Contracts as herein provided and shall promptly take
appropriate action to remedy any 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:
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(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 Series 1999-1 Note when such payment becomes due and payable and
continuation of such default for five calendar days;
(b) the outstanding principal balance of a Class of Series 1999-1 Notes is
not reduced to zero by that Class's Stated Maturity Date;
(c) default in the performance, or breach, by either Obligor of the
provisions of its related organizational documents relating to corporate
separateness;
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(d) default in the performance, or breach, of any covenant of either
Obligor in the Master Agreement, or herein, and continuance of such default or
breach for a period of 30 days after the earliest of (i) any officer of either
Obligor first acquiring the knowledge thereof, (ii) the Trustee's giving written
notice thereof to the applicable Obligor or (iii) the holders of a majority of
the then Outstanding Principal Balance giving written notice thereof to the
Obligors and the Trustee;
(e) if any representation or warranty of either Obligor made in the Master
Agreement, this Series 1999-1 Supplement or any other writing provided to the
Series 1999-1 Noteholders proves to be incorrect in any material respect as of
the time when the same has been made; provided, however, that the breach of any
representation or warranty made by either Obligor will be deemed to be
"material" only if it negatively affects the Series 1999-1 Noteholders, the
enforceability of the Master Agreement, this Series 1999-1 Supplement or the
Series 1999-1 Notes; or
(f) the commencement by either or both of the Obligors of a voluntary or
involuntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law, or the consent by either or
both of the Obligors to the entry of a decree or order for relief in respect of
either or both of the Obligors in an involuntary case or proceeding under any
applicable federal or state bankruptcy or insolvency case or proceeding against
either or both of the Obligors, or the filing by either or both of the Obligors
of a petition or answer or consent seeking reorganization or relief under any
applicable federal or state law, or the consent by it to the filing of such
petition or to the appointment of or taking possession of any substantial part
of the property of either or both of the Obligors by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of either or
both of the Obligors, or the making by either or both of the Obligors of an
assignment for the benefit of creditors, or the failure by either or both of the
Obligors to pay their debts generally as they become due, or the taking of
corporate action by either or both of the Obligors in furtherance of any such
action.
(g) either or both of the Obligors becomes an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
The Trustee shall give the Series 1999-1 Noteholders notice of all uncured
defaults 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
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together with all accrued and unpaid interest thereon, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by the
Obligors. If an Event of Default (other than an Event of Default of the kind
described in subsection 4.01(f)) occurs and is continuing, then and in every
such case the Trustee may, or if so directed by the holders of Series 1999-1
Notes evidencing 66-2/3% of the then Outstanding Principal Balance, shall
declare the unpaid principal amount of all the Series 1999-1 Notes to be due and
payable immediately, by a notice in writing to the Obligors (and to the Trustee
if given by Series 1999-1 Noteholders), and upon any such declaration such
principal amount shall become immediately due and payable together with all
accrued and unpaid interest thereon, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Obligors. 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 Principal Balance of the Series 1999-1 Notes unless directed to do
so by the holders of 66-2/3% of the then Outstanding 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 Principal Balance, by
written notice to the Obligors and the Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Obligors have paid or deposited with the Trustee a sum
sufficient to pay:
(A) all principal on any Class A Notes and Class B Notes which has
become due otherwise than by such declaration of acceleration and interest
thereon from the date when the same first became due until the date of
payment or deposit at the Class A-1 Interest Rate, Class A-2 Interest
Rate, Class A-3 Interest Rate and the Class B Interest Rate, as
applicable;
(B) all interest due with respect to any Class A Notes or Class B
Notes and, to the extent that payment of such interest is lawful, interest
upon overdue interest from the date when the same first became due until
the date of payment or deposit at a rate per annum equal to the Class A-1
Interest Rate, Class A-2 Interest Rate, Class A-3 Interest Rate, or Class
B Interest Rate, as applicable; and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements, and advances of the
Trustee, its agents and counsel;
and
(ii) all Events of Default, other than the non-payment of the
Outstanding Principal Balance which has become due solely by such
declaration of acceleration, have been cured or waived.
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No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon.
SECTION 4.03 Remedies.
(a) If an Event of Default occurs and is continuing of which a Responsible
Officer has actual knowledge, the Trustee shall immediately give notice to each
Series 1999-1 Noteholder and shall solicit the Series 1999-1 Noteholders for
advice. The Trustee shall then take such action as the Trustee shall deem
appropriate provided that, if the Trustee is directed to take action by the
holders of Series 1999-1 Notes evidencing 66-2/3% of the then Outstanding
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,
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disbursements and advances of the Trustee, its agents and counsel) and of
the Series 1999-1 Noteholders allowed in such judicial proceeding, and
(ii) collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Series 1999-1 Noteholder to make such payments to the Trustee 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 the
Servicer;
third first, pro rata, to the payment of all accrued and unpaid
interest on the Class A-1 Principal Balance, Class A-2 Principal Balance
and Class A-3 Principal Balance, respectively, to the date of payment
thereof, including (to the extent permitted by applicable law) interest on
any overdue installment of interest and principal from the
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maturity of such installment to the date of payment thereof at the rate
per annum equal to the Class A-1 Interest Rate, Class A-2 Interest Rate
and the Class A-3 Interest Rate, respectively; second, to the payment of
all accrued and unpaid interest on the Class B Principal Balance to the
date of payment thereof, including (to the extent permitted by applicable
law) interest on any overdue installment of interest and principal from
the maturity of such installment to the date of payment thereof at the
rate per annum equal to the Class B Interest Rate; third, to the payment
to zero of the Class A Principal Balance; and fourth, to the payment to
zero of the Class B Principal Balance; 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; and
fifth to the Obligors or any other Person legally entitled thereto.
SECTION 4.07 Limitation on Suits. None of the Series 1999-1 Noteholders
shall have any right to institute any proceeding, judicial or otherwise, with
respect to the Master Agreement, this Series 1999-1 Supplement or the Series
1999-1 Notes, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Series 1999-1 Noteholder has previously given written
notice to the Trustee of a continuing Event of Default;
(ii) the holders of not less than 66-2/3% of the then Outstanding
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 Principal Balance of the Series 1999-1 Notes; it being
understood and intended that no one or more Series 1999-1 Noteholders
shall have any right in any manner whatever by virtue of, or by availing
of, any provision of the Master Agreement, this Series 1999-1 Supplement
or the Series 1999-1 Notes to affect, disturb, or prejudice the rights of
any other Series 1999-1 Noteholders, or to obtain or to seek to obtain
priority or preference over any other Series 1999-1 Noteholders or to
enforce any right under the Master Agreement, this Series 1999-1
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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 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.
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SECTION 4.12 Control by Series 1999-1 Noteholders. The Holders of a
majority of the then Outstanding Principal Balance shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Series 1999-1 Notes. Notwithstanding the foregoing:
(i) no such direction shall be in conflict with any rule of law or
with the Master Agreement, this Series 1999-1 Supplement or the Series
1999-1 Notes;
(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 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 assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit,
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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 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 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 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:
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(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 Servicer shall have the option to
cause the redemption of the Series 1999-1 Notes by depositing with the Trustee
the sum of (i) the Class A Principal Balance and the Class B Principal Balance
as of such Payment Date (after giving effect to the payment of any principal on
such Payment Date) and (ii) the Class A Note Interest and Class B Note Interest
due on such Payment Date. Upon receipt of such amounts and all amounts then owed
to the Trustee, the Trustee shall (x) make the final payment in full to the
Series 1999-1 Noteholders and (y) release any remaining Series 1999-1 Trust
Estate to the Obligors, as the holder of the Residual Interest.
SECTION 5.02 Class B Special Redemption. The Class B Notes may be redeemed
("Class B Special Redemption) on any Payment Date at the option of the Obligors
at a price equal to the sum of (i) the then Class B Principal Balance, accrued
and unpaid interest thereon and (ii) the Class B Special Redemption Premium.
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The Class B Special Redemption Premium will equal the excess, if any,
discounted as described below, of (i) the amount of interest that would accrue
on the aggregate outstanding principal balance of the Class B Notes at the Class
B Interest Rate during the period beginning on and including the Payment Date on
which such Class B Special Redemption Premium is required to be paid to the
Class B Noteholders to but excluding the Class B Maturity Date, over (ii) the
amount of interest that would have accrued on the aggregate outstanding Class B
Principal Balance over the same period at a per annum rate of interest equal to
the bond equivalent yield to maturity on the Determination Date preceding such
Payment Date of a United States Treasury security, which is trading in the
public securities market, maturing on a date closest to the date equal to the
remaining average life of the Class B Notes minus 0.5%. Such excess shall be
discounted to the present value to such Payment Date at the applicable yield
described in clause (ii) above. For purposes of this paragraph only, (i) the
Class B Principal Balance upon which interest will be deemed to accrue, and (ii)
the average weighted life of the Class B Notes, shall be determined based upon
the amortization of the Aggregate Contract Principal remaining at such Payment
Date at a rate of 6.0% conditional payment rate and no losses.
If the Class B Notes are redeemed pursuant to a Class B Special
Redemption, the Class B Notes will be deemed to have been repurchased by the
Obligors. In such an event, the Obligors will be entitled to receive payments of
principal and interest on the Class B Notes, and the Class B Principal Balance
will thereafter continue to amortize as provided in this Section.
SECTION 5.03 Notice of Redemption and Disposition of Funds.
(a) Notice of any termination pursuant to Section 5.01 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) Notice of any redemption of the Class B Notes pursuant to Section 5.02
shall be given to the Trustee by the Obligors, and then, promptly by the
Trustee, by letter to the Class B
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Noteholders mailed not earlier than the 10th day and not later than the 30th day
of the month immediately preceding the month of such redemption specifying (i)
the Payment Date upon which the redemption of the Class B Notes will occur, (ii)
the scheduled amount of such redemption, (iii) that with respect to the then
holders of the Class B Notes, interest shall cease to accrue on the Class B
Notes so called for redemption and (iv) at the option of the Trustee, the
address for presentation of the Class B Notes so called for redemption for final
payment. On such final Payment Date, the Trustee shall cause to be distributed
to the holders of the Class B Notes so called for redemption an amount equal to
the amount deposited by the Obligors for such purpose. After such Payment Date,
interest on the Class B Notes so redeemed shall accrue to the benefit of the
Obligors. Each Class B Noteholder with respect to Class B Notes which have been
called for redemption shall use reasonable efforts to present its redeemed Class
B Notes to the Trustee at the office, if any, specified in the notice described
in clause (iv) of this paragraph (b), or in any similar written notice, within
sixty (60) days of such Class B Noteholder's receipt of the final payment of its
Class B Note. Each Noteholder shall indemnify the Trustee for any damages
suffered by the Trustee as a result of the Noteholder's failure to present its
Class B Note on or after the stated redemption date therefor.
(c) In the event that any amount due to any Series 1999-1 Noteholder
remains unclaimed after the final Payment Date or redemption date, the Servicer
shall, at its expense, cause to be published once, in the eastern edition of The
Wall Street Journal, notice that such money remains unclaimed. If, within the
period then specified in the escheat laws of the State of New York after such
publication, such amount remains unclaimed, the Obligors shall be entitled to
all unclaimed funds and other assets which remain subject hereto, and the
Trustee upon transfer of such funds shall be discharged of any responsibility
for such funds and, the Series 1999-1 Noteholders shall look to the Obligors for
payment.
ARTICLE VI
MATTERS RELATING TO THE CLASS B NOTES.
SECTION 6.01. Transfer Restrictions.
The Class B Notes may not be offered or sold except to a Person whom the
transferor of the Class B Notes reasonably believes is a Qualified Institutional
Buyer ("QIB") purchasing for its own account in accordance with Rule 144A under
the Securities Act. Prospective investors in the Class B Notes are hereby
notified that transferors of the Class B Notes are relying on the exemption from
the provisions of the Securities Act provided by Rule 144A. Each Class B
Noteholder and each beneficial owner of Class B Notes, by its acceptance thereof
or of such beneficial interest, will be deemed to have represented and agreed as
follows: (i) such Holder or owner understands that the Class B Notes have not
been and will not be registered under the Securities Act or any state or other
applicable securities law and may not be offered, sold or otherwise transferred
unless registered pursuant to, or exempt from registration under, the Securities
Act and any other applicable securities laws, (ii) such Holder or owner will not
offer, sell, pledge or otherwise transfer such Class B Notes or any interest
therein at any time except to the Seller or to a Person whom such transferor of
the Class B Notes reasonably believes is a QIB purchasing for its own account in
accordance with Rule 144A to whom notice is given that the reoffer, resale,
pledge or other transfer is being made in reliance on Rule 144A, (iii) such
Holder or owner is a QIB
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purchasing for its own account in accordance with Rule 144A under the Securities
Act and has received notice that the reoffer, resale, pledge or other transfer
is being made in reliance on Rule 144A, and (iv) such Holder or owner
acknowledges that confirmations of the issuance and transfer of the Class B
Notes will bear a legend as set forth in Exhibit __ hereto.
SECTION 6.02. Rule 144A Information. In order to preserve the exemption
for resales and other transfers under Rule 144A under the Securities Act of
1933, as amended, the Obligors shall provide to any Class B Noteholder and any
prospective purchaser or transfer designated by a Class B Noteholder, upon
request of the Class B Noteholder or prospective purchaser or transferee, the
information required by Rule 144A to enable resales of such Class B Notes to be
made pursuant to Rule 144A.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Ratification of Master Agreement. As supplemented by this
Series 1999-1 Supplement, the Master Agreement is in all respects ratified and
confirmed and the Master Agreement, as so supplemented by this Series 1999-1
Supplement shall be read, taken and construed as one and the same instrument.
SECTION 7.02 Counterparts. This Series 1999-1 may be executed in one or
more counterparts, each of which so executed shall be deemed to be an original,
but all of which shall together constitute but one and the same instrument.
SECTION 7.03 GOVERNING LAW. THIS SERIES 1999-1 SUPPLEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT TAKING INTO ACCOUNT THE CONFLICT
OF LAWS PRINCIPLES OF ANY JURISDICTION.
SECTION 7.04 Amendments and Waivers.
(a) Notwithstanding anything contained in the Master Agreement to the
contrary, no term or condition of this Series 1999-1 Supplement shall be
amended, modified, waived or terminated 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 7.05 Non-petition Clause. Notwithstanding anything contained in
Section 4.07
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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 7.06 Officer's 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;
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
SECTION 7.07 Restriction on Further Indebtedness. Neither Obligor shall
issue any indebtedness, including any new Series of Notes, or execute and
deliver any guaranties, unless the Obligors shall have previously received
confirmation of the ratings then assigned to the Series 1999-1 Notes by each of
Xxxxx'x and Xxxxx.
SECTION 7.08 Special Covenants and Acknowledgements. With respect to the
Series 1999-1 Notes, each Obligor does hereby represent and warrant, as of the
Closing Date:
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(i) "Pledged Property." The Pledged Property for Series 1999-1 is
the Series Trust Estate.
(ii) "Series Controlling Party." The parties hereto acknowledge that
the Trustee is the "Series Controlling Party" with respect to the Series
1999-1 Notes for purposes of the Master Agreement.
(iii) "Support Defaults." There are no "Support Default" events with
respect to the Series 1999-1 Notes.
(iv) "Series Trustee Secured Obligations." The "Series Trustee
Secured Obligations" and the "Series Secured Obligations" with respect to
the Series 1999-1 Notes shall mean, collectively (x) any amounts due to
the Series 1999-1 Noteholders hereunder, and (y) any fees and expenses due
to the Trustee with respect to the Series 1999-1 Notes.
(v) "Series Secured Parties." The "Series Secured Parties" with
respect to the Series 1999-1 Notes are the Trustee and the Series 1999-1
Noteholders.
(vi) "Original Servicer Fee Rate." The "Original Servicer Fee Rate"
with respect to the Series 1999-1 Notes is the Servicing Fee.
(vii) "Original Issue Date." The "Original Issue Date" with respect
to the Series 1999-1 Note is August __, 1999.
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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:
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TABLE OF CONTENTS
PAGE
ARTICLE I.
CREATION OF THE SERIES 1999-1 NOTES
SECTION 1.01 Designation 1
SECTION 1.02 Pledge of Series 1999-1 Trust Estate 1
SECTION 1.03 Custody of the Series 1999-1 Trust Estate 2
SECTION 1.04 Conditions to Issuance of the Series 1999-1 Notes 2
SECTION 1.05 Acceptance by Trustee 3
SECTION 1.06 Liabilities of the Trustee and Parties to the Master
Agreement, this Series 1999-1 Supplement and the Series
1999-1 Notes; Limitations Thereon 3
SECTION 1.07 Forms of Notes 4
ARTICLE II
DEFINITIONS
SECTION 2.01 Definitions 4
ARTICLE III
SERIES ACCOUNTS; DISTRIBUTIONS AND STATEMENTS TO
SERIES 1999-1 NOTEHOLDERS; SERIES 1999-1 SPECIFIC COVENANTS
SECTION 3.01 Collection Account 17
SECTION 3.02 Reserve Account and Residual Account 19
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 22
SECTION 3.06 Compliance With Withholding Requirements 24
SECTION 3.07 Servicer Advances 24
SECTION 3.08 Modifications of Contracts and Purchase of Contracts 25
SECTION 3.09 Servicer to Act as Custodian 25
ARTICLE IV
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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 28
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 32
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 33
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 Class B Special Redemption 35
SECTION 5.03 Notice of Redemption and Disposition of Funds 36
ARTICLE VI
MATTERS RELATING TO THE CLASS B NOTES
SECTION 6.01. Transfer Restrictions 37
SECTION 6.02. Rule 144A Information 37
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Ratification of Master Agreement 38
SECTION 7.02 Counterparts 38
SECTION 7.03 GOVERNING LAW 38
SECTION 7.04 Amendments and Waivers 38
SECTION 7.05 Non-petition Clause 38
SECTION 7.06 Officer's Certificate and Opinion of Counsel as to
Conditions Precedent 38
SECTION 7.07 Restriction on Further Indebtedness 39
SECTION 7.08 Special Covenants and Acknowledgements 39
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