1
EXHIBIT 4.1
EXECUTION COPY
- --------------------------------------------------------------------------------
ADVANTA NATIONAL BANK
Seller and Servicer
and
BANKERS TRUST COMPANY
Trustee
on behalf of the Series 1998-A Certificateholders
SERIES 1998-A SUPPLEMENT
Dated as of February 6, 1998
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1993,
as Amended and Restated on May 23, 1994
ADVANTA CREDIT CARD MASTER TRUST II
SERIES 1998-A
- --------------------------------------------------------------------------------
2
2
SERIES 1998-A SUPPLEMENT, dated as of February 6, 1998 (the
"Supplement"), between ADVANTA NATIONAL BANK, a national banking association,
as Seller and Servicer, and its successors and assigns and BANKERS TRUST
COMPANY, a New York banking corporation, as Trustee.
Pursuant to the Amended and Restated Pooling and Servicing
Agreement dated as of December 1, 1993, as Amended and Restated on May 23, 1994
(as amended and supplemented, including by the terms of this Supplement, the
"Agreement"), among Advanta National Bank (formerly known as Advanta National
Bank USA and prior to that known as Colonial National Bank USA and successor in
interest to the former Advanta National Bank) ("ANB"), as Seller and Servicer,
and the Trustee, the Seller has created the ADVANTA Credit Card Master Trust II
(the "Trust"). Section 6.03 of the Agreement provides that the Sellers may
from time to time direct the Trustee to authenticate one or more new Series of
Investor Certificates representing fractional undivided interests in the Trust.
The Principal Terms of any new Series are to be set forth in a Supplement to
the Agreement.
Pursuant to this Supplement, the Seller and the Trustee shall
create a new Series of Investor Certificates and specify the Principal Terms
thereof.
ARTICLE I
Creation of the Series 1998-A Certificates
Section 1.1. Designation. (a) There is hereby created a
Series of Investor Certificates to be issued pursuant to the Agreement and this
Supplement to be known as "ADVANTA Credit Card Master Trust II, Series 1998-A."
The Series 1998-A Certificates shall be issued in two Classes. The first Class
shall be known as the "Class A Floating Rate Asset Backed Certificates, Series
1998-A" and the second Class shall be known as the "Class B Floating Rate Asset
Backed Certificates, Series 1998-A." In addition, there is hereby created a
third Class of interests in the Trust which, except as expressly provided
herein, shall be deemed to be "Investor Certificates" for all purposes under
the Agreement and this Supplement and shall be in uncertificated form and which
shall be known as the "Collateral Interest, Series 1998-A." Solely for the
purposes of Section 9.02(a) of the Agreement, the holders of interests in the
Collateral Interest and the Cash Collateral Account shall each be deemed to be
a separate Class. The Collateral Interest Holder shall be the Series Enhancer
for Series 1998-A. Notwithstanding anything to the contrary in the Agreement,
the institution making the initial deposit to the Cash Collateral Account shall
not be deemed to be a Series Enhancer for Series 1998-A.
(b) Series 1998-A shall be included in Group One. Series
1998-A shall be a Principal Sharing Series with respect to Group One only.
Series 1998-A shall not be subordinated to any other Series. Notwithstanding
any provision in the Agreement or in this Supplement to the contrary, the first
Distribution Date with respect to Series 1998-A shall be the April 1998
Distribution Date, and references herein to the Monthly Period relating to the
April 1998 Distribution Date shall mean the period from the Closing Date
through the end of March 1998.
1
3
(c) In the event that any term or provision contained
herein shall conflict with or be inconsistent with any term or provision
contained in the Agreement, the terms and provisions of this Supplement shall
govern.
(d) The Collateral Interest Holder, as holder of an
"Investor Certificate" under the Agreement, shall be entitled to the benefits
of the Agreement and this Supplement. Notwithstanding the foregoing, except as
expressly provided herein, the provisions of Article VI and Article XII of the
Agreement relating to the registration, authentication, delivery, presentation,
cancellation and surrender of Registered Certificates and clauses (a) and (c)
of the definition of "Tax Opinion" in Section 1.01 of the Agreement shall not
be applicable to the Collateral Interest.
ARTICLE II
Definitions
Section 2.1. Definitions.
(a) Whenever used in this Supplement, 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 the masculine as well as the feminine and neuter genders of such terms.
"Accumulation Date" shall mean the close of business on March
31, 2000.
"Accumulation Period" shall mean the Class A Accumulation
Period and the Class B Accumulation Period.
"Additional Interest" shall mean, at any time of
determination, the Class A Additional Interest, the Class B Additional Interest
and the Collateral Additional Interest.
"ANB" (i) prior to the Transaction Date shall mean Advanta
National Bank, a national banking association formerly known as Advanta
National Bank USA and prior to that known as Colonial National Bank USA, and
successor in interest to the former Advanta National Bank and (ii) on and after
the Transaction Date, if it occurs, the Fleet Entity to which Advanta National
Bank has assigned its rights and interests and delegated its obligations and
liabilities as Seller and Servicer under the Agreement.
"Available Cash Collateral Amount" shall mean, with respect to
any Distribution Date, the lesser of (a) the amount on deposit in the Cash
Collateral Account on such date (before giving effect to any deposit to, or
withdrawal from, the Cash Collateral Account to be made with respect to such
date) and (b) the lesser of the Required Enhancement Amount and the Invested
Amount as of such date.
"Available Enhancement Amount" shall mean, for any date of
determination, the
2
4
sum of (a) the Collateral Investor Amount and (b) the aggregate amount of funds
on deposit in the Cash Collateral Account, in each case on such date.
"Available Investor Principal Collections" shall mean, with
respect to any Monthly Period, an amount equal to the sum of (a) (i) an amount
equal to the Investor Principal Collections minus (ii) the amount of
Reallocated Principal Collections with respect to such Monthly Period which
pursuant to Section 4.8(a) are required to fund any deficiency in the amount to
be distributed pursuant to Sections 4.5(a)(i), (ii) and (iii) for the related
Distribution Date (excluding Reallocated Principal Collections that have
resulted in a reduction of the Collateral Invested Amount pursuant to Section
4.6(c)), plus (b) any Shared Principal Collections with respect to other Series
in Group One that are allocated to Series 1998-A in accordance with Section
4.04 of the Agreement and Section 4.10 hereof, plus (c) any other amounts which
pursuant to subsection 4.5(a)(iii) (including any amounts allocated with
respect thereto pursuant to subsection 4.7(a)) and subsections 4.7(b), (d) and
(e) hereof are to be treated as Available Investor Principal Collections with
respect to the related Distribution Date, plus (d) the excess, if any, of
Collateral Principal Collections over Collateral Monthly Principal with respect
to the related Distribution Date.
"Average Principal Balance" shall mean, (i) for any Monthly
Period during the Funding Period, the weighted average of the sum of the
Principal Receivables in the Trust and the principal amount on deposit in the
Excess Funding Account at the end of the day on the last day of the prior
Monthly Period and on the end of the day on each Tuesday in such Monthly Period
immediately preceding each Wednesday on which the Invested Amount is increased
pursuant to Section 4.17 weighted, respectively, by a fraction, the numerator
of which is the number of days from and including each such day to but
excluding the next such day, or in the case of the last such day, to but
excluding the last day of such Monthly Period, and the denominator of which is
the number of days in such Monthly Period, and (ii) for any Monthly Period in
which an Addition Date occurs, the weighted average of the sum of the Principal
Receivables in the Trust and the principal amount on deposit in the Excess
Funding Account at the end of the day on the last day of the prior Monthly
Period and the sum of the Principal Receivables in the Trust and the principal
amount on deposit in the Excess Funding Account at the end of the day on the
related Addition Date, weighted, respectively, by a fraction, the numerator of
which is the number of days from and including the first day of such Monthly
Period, to but excluding the related Addition Date, and the denominator of
which is the number of days in such Monthly Period, and by a fraction, the
numerator of which is the number of days from and including the related
Addition Date to and including the last day of such Monthly Period, and the
denominator of which is the number of days in such Monthly Period.
"Base Rate" shall mean, with respect to any Monthly Period,
the annualized percentage equivalent of a fraction, the numerator of which is
equal to the sum of the Class A Monthly Interest, the Class B Monthly Interest,
the Collateral Monthly Interest and the Monthly Servicing Fee with respect to
the related Distribution Date and the denominator of which is the Investor
Amount as of the last day of the preceding Monthly Period.
"Cash Collateral Account" shall have the meaning specified in
subsection 4.12(a).
3
5
"Cash Collateral Account Investments" shall mean Eligible
Investments.
"Cash Enhancement Surplus" shall mean, as of any date of
determination, the excess, if any, of (a) the amount on deposit in the Cash
Collateral Account over (b) the Required Cash Collateral Amount. Any Cash
Enhancement Surplus shall be applied in accordance with the Loan Agreement.
"Class A Accumulation Period" shall mean, unless a Pay Out
Event with respect to Series 1998-A shall have occurred prior thereto, the
period commencing on the Accumulation Date or such later date as is determined
in accordance with Section 4.14 and ending on the first to occur of (a) the
commencement of the Rapid Amortization Period, (b) the payment in full to the
Class A Certificateholders of the Class A Investor Amount or (c) the Series
Termination Date.
"Class A Accumulation Period Length" shall have the meaning
specified in Section 4.14.
"Class A Additional Interest" shall have the meaning specified
in subsection 4.2(a).
"Class A Available Funds" shall mean, with respect to any
Monthly Period, an amount equal to the sum of (a) the Class A Floating
Percentage of the Collections of Finance Charge Receivables allocated to Series
1998-A (including any investment earnings on amounts on deposit in the
Pre-Funding Account and any other amounts that are to be treated as Collections
of Finance Charge Receivables in accordance with the Agreement), (b) the amount
of Principal Funding Investment Proceeds, if any, with respect to such
Distribution Date and (c) the amount of funds, if any, to be withdrawn from the
Reserve Account which, pursuant to Section 4.15, are required to be included in
Class A Available Funds with respect to such Distribution Date.
"Class A Certificate Rate" shall mean, for any Interest Period
with respect to the Class A Certificates, a per annum rate equal to LIBOR as of
the LIBOR Determination Date applicable to such Interest Period plus the Class
A Certificate Rate Spread.
"Class A Certificate Rate Spread" shall mean .04% per annum.
"Class A Certificateholder" shall mean the Person in whose
name a Class A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any one of the Certificates
executed by the Seller and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-1.
"Class A Expected Final Distribution Date" shall mean the
January 2001 Distribution Date.
"Class A Floating Percentage" shall mean, with respect to any
Monthly Period,
4
6
the percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is equal to the Class A Invested Amount as of
the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Invested Amount as of such day; provided,
however, that with respect to the first Monthly Period, the Class A Floating
Percentage shall mean the percentage equivalent of a fraction, the numerator of
which is the Class A Initial Invested Amount and the denominator of which is
the Initial Invested Amount.
"Class A Initial Invested Amount" shall mean $724,500,000.
"Class A Initial Investor Amount" shall mean the aggregate
initial principal balance of the Class A Certificates, which is $966,000,000.
"Class A Interest Shortfall" shall have the meaning specified
in subsection 4.2(a).
"Class A Invested Amount" shall mean, on any date of
determination, an amount equal to (a) the Class A Initial Invested Amount, plus
(b) the amount of any increases in the Class A Invested Amount during the
Funding Period pursuant to Section 4.17 on or prior to such date, minus (c) the
aggregate amount of principal payments (other than principal payments made from
amounts on deposit in the Pre-Funding Account on the first Distribution Date
following the end of the Funding Period) made to the Class A Certificateholders
on or prior to such date, minus (d) the excess, if any, of the aggregate amount
of Class A Investor Charge-Offs for all prior Distribution Dates over the
aggregate amount of Class A Investor Charge-Offs reimbursed pursuant to
subsection 4.6(a) prior to such date minus (e) the Principal Funding Account
Balance.
"Class A Investor Amount" shall mean, on any date of
determination, an amount equal to the sum of (a) the Class A Invested Amount,
(b) the Class A Floating Percentage of the Pre-Funded Amount and (c) the
Principal Funding Account Balance.
"Class A Investor Charge-Off" shall have the meaning specified
in subsection 4.6(a).
"Class A Investor Default Amount" shall mean, with respect to
each Distribution Date, an amount equal to the product of (i) the Investor
Default Amount for the related Monthly Period and (ii) the Class A Floating
Percentage for such Monthly Period.
"Class A Monthly Interest" shall have the meaning specified in
subsection 4.2(a).
"Class A Monthly Principal" shall have the meaning specified
in subsection 4.3(a).
"Class A Penalty Rate" shall mean the sum of the Class A
Certificate Rate and 2.0% per annum.
"Class A Principal Percentage" shall mean, with respect to any
Monthly Period (i)
5
7
during the Revolving Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the Class A
Invested Amount as of the last day of the immediately preceding Monthly Period
and the denominator of which is the Invested Amount as of such day and (ii)
during the Accumulation Period or the Rapid Amortization Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is the Class A Invested Amount as of the last day of the
Revolving Period, and the denominator of which is the Invested Amount as of
such last day; provided, however, that with respect to the first Monthly
Period, the Class A Principal Percentage shall mean the percentage equivalent
of a fraction, the numerator of which is the Class A Initial Invested Amount
and the denominator of which is the Initial Invested Amount.
"Class A Required Amount" shall have the meaning specified in
Section 4.4(a).
"Class A Servicing Fee" shall have the meaning specified in
Section 3.1.
"Class B Accumulation Period" shall mean, unless a Pay Out
Event with respect to Series 1998-A shall have occurred prior thereto, the
period commencing on the first day of the Monthly Period immediately preceding
the Class B Principal Commencement Date and ending on the first to occur
thereafter of (a) the commencement of the Rapid Amortization Period, (b) the
payment in full to the Class B Certificateholders of the Class B Invested
Amount or (c) the Series Termination Date.
"Class B Additional Interest" shall have the meaning specified
in Section 4.2(b).
"Class B Available Funds" shall mean, with respect to any
Monthly Period, an amount equal to the Class B Floating Percentage of the
Collections of Finance Charge Receivables allocated to Series 1998-A (including
any investment earnings on amounts on deposit in the Pre-Funding Account and
any other amounts that are to be treated as Collections of Finance Receivables
in accordance with the Agreement).
"Class B Certificate Rate" shall mean, for any Interest Period
with respect to the Class B Certificates, a per annum rate equal to LIBOR as of
the LIBOR Determination Date for such Interest Period plus the Class B
Certificate Rate Spread.
"Class B Certificate Rate Spread" shall mean 0.24% per annum.
"Class B Certificateholder" shall mean the Person in whose
name a Class B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any one of the Certificates
executed by the Seller and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-2.
"Class B Expected Final Distribution Date" shall mean the
February 2001 Distribution Date.
6
8
"Class B Floating Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is equal to the Class B Invested
Amount as of the close of business on the last day of the preceding Monthly
Period and the denominator of which is equal to the Invested Amount as of such
day; provided, however, that with respect to the first Monthly Period, the
Class B Floating Percentage shall mean the percentage equivalent of a fraction,
the numerator of which is the Class B Initial Invested Amount and the
denominator of which is the Initial Invested Amount.
"Class B Initial Invested Amount" shall mean $64,687,500.
"Class B Initial Investor Amount" shall mean the aggregate
initial principal balance of the Class B Certificates, which is $86,250,000.
"Class B Interest Shortfall" shall have the meaning specified
in Section 4.2(b).
"Class B Invested Amount" shall mean, on any date of
determination, an amount equal to (a) the Class B Initial Invested Amount, plus
(b) the amount of any increases in the Class B Invested Amount during the
Funding Period pursuant to Section 4.17 on or prior to such date, minus (c) the
aggregate amount of principal payments (other than principal payments made from
amounts on deposit in the Pre-Funding Account on the first Distribution Date
following the end of the Funding Period) made to the Class B Certificateholders
prior to such date minus (d) the excess, if any, of the aggregate amount of
Class B Investor Charge-Offs for all prior Distribution Dates over the
aggregate amount of any reimbursement of Class B Investor Charge-Offs pursuant
to subsection 4.6(b) for all Distribution Dates preceding such date, minus (e)
the amount of Reallocated Principal Collections allocated on all prior
Distribution Dates pursuant to subsection 4.8(a) (excluding any Reallocated
Principal Collections that have resulted in a reduction in the Collateral
Invested Amount pursuant to subsection 4.6(c)), minus (f) an amount equal to
the amount by which the Class B Invested Amount has been reduced on all prior
Distribution Dates pursuant to subsection 4.6(a) and plus (g) the amount of
Excess Spread and Excess Finance Charges allocated and available on all prior
Distribution Dates pursuant to subsection 4.7(e) for the purpose of reimbursing
amounts deducted pursuant to the foregoing clauses (d), (e) and (f); provided,
however, that the Class B Invested Amount may not be reduced below zero.
"Class B Investor Amount" shall mean, for any date of
determination, an amount equal to the sum of (a) the Class B Invested Amount
and (b) the Class B Floating Percentage of the Pre-Funded Amount.
"Class B Investor Charge-Off" shall have the meaning specified
in subsection 4.6(b).
"Class B Investor Default Amount" shall mean, with respect to
each Distribution Date, an amount equal to the product of (i) the Investor
Default Amount for the related Monthly Period and (ii) the Class B Floating
Percentage for such Monthly Period.
7
9
"Class B Monthly Interest" shall have the meaning specified in
subsection 4.2(b).
"Class B Monthly Principal" shall have the meaning specified
in subsection 4.3(b).
"Class B Penalty Rate" shall mean the sum of the Class B
Certificate Rate and 2.0% per annum.
"Class B Principal Commencement Date" shall mean the
Distribution Date on which the Class A Investor Amount is paid in full or on
which the Principal Funding Account Balance is equal to the Class A Investor
Amount; provided, that if the Class A Investor Amount is paid in full on the
Class A Expected Final Distribution Date and the Rapid Amortization Period has
not commenced, the Class B Principal Commencement Date shall mean the Class B
Expected Final Distribution Date.
"Class B Principal Percentage" shall mean, with respect to any
Monthly Period (i) during the Revolving Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of
which is the Class B Invested Amount as of the last day of the immediately
preceding Monthly Period and the denominator of which is the Invested Amount as
of such day and (ii) during the Accumulation Period or the Rapid Amortization
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Class B Invested Amount as of the
last day of the Revolving Period, and the denominator of which is the Invested
Amount as of such last day; provided, however, that with respect to the first
Monthly Period, the Class B Principal Percentage shall mean the percentage
equivalent of a fraction, the numerator of which is the Class B Initial
Invested Amount and the denominator of which is the Initial Invested Amount.
"Class B Required Amount" shall have the meaning specified in
subsection 4.4(b).
"Class B Servicing Fee" shall have the meaning specified in
Section 3.1.
"Closing Date" shall mean February 6, 1998.
"Collateral Additional Interest" shall have the meaning
specified in subsection 4.2(c).
"Collateral Available Funds" shall mean, with respect to any
Monthly Period, an amount equal to the Collateral Floating Percentage of the
Collections of Finance Charge Receivables allocated to Series 1998-A (including
any investment earnings on amounts on deposit in the Pre-Funding Account and
any other amounts that are to be treated as Collections of Finance Charge
Receivables in accordance with the Agreement).
"Collateral Default Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the Investor Default
Amount for the related Monthly Period and (ii) the Collateral Floating
Percentage for such Monthly Period.
8
10
"Collateral Floating Percentage" shall mean, with respect to
any Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Collateral Invested
Amount as of the close of business on the last day of the preceding Monthly
Period and the denominator of which is equal to the Invested Amount as of such
day; provided, however, that with respect to the first Monthly Period, the
Collateral Floating Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Collateral Initial Invested Amount and
the denominator of which is the Initial Invested Amount.
"Collateral Initial Invested Amount" shall mean $73,312,500.
"Collateral Initial Investor Amount" shall mean the aggregate
initial principal balance of the Collateral Interest, which is $97,750,000.
"Collateral Interest" shall mean a fractional undivided
interest in the Trust which shall consist of the right to receive, to the
extent necessary to make the required payments to the Collateral Interest
Holder under this Supplement, the portion of Collections allocable thereto
under the Agreement and this Supplement, funds on deposit in the Collection
Account allocable thereto pursuant to the Agreement and this Supplement and,
subject to the rights of the Investor Certificateholders with respect thereto,
funds on deposit in the Pre-Funding Account.
"Collateral Interest Holder" shall mean the entity so
designated in the Loan Agreement.
"Collateral Interest Shortfall" shall have the meaning
specified in subsection 4.2(c).
"Collateral Invested Amount" shall mean, for any date of
determination, an amount equal to (a) the Collateral Initial Invested Amount,
plus (b) the amount of any increases in the Collateral Invested Amount during
the Funding Period pursuant to Section 4.17 on or prior to such date, minus (c)
an amount equal to the amount by which the Collateral Invested Amount has been
reduced on all prior Distribution Dates pursuant to Section 4.6, minus (d) the
aggregate amount paid pursuant to subsections 4.5(e)(i), 4.5(f)(iii) and
4.5(g)(i) prior to such date, and plus (e) the aggregate amount of Excess
Finance Charges and Excess Spread allocated and available on all prior
Distribution Dates pursuant to subsection 4.7(i) for the purpose of reimbursing
amounts deducted pursuant to the foregoing clause (c); provided, however, that
the Collateral Invested Amount may not be reduced below zero.
"Collateral Investor Amount" shall mean, for any date of
determination, an amount equal to the sum of (a) the Collateral Invested Amount
and (b) the Collateral Floating Percentage of the Pre-Funded Amount.
"Collateral Monthly Interest" shall have the meaning specified
in subsection 4.2(c).
9
11
"Collateral Monthly Principal" shall have the meaning
specified in subsection 4.3(c).
"Collateral Principal Collections" shall mean, with respect to
any Monthly Period, an amount equal to (a) the Invested Principal Collections
with respect to such Monthly Period, minus (b) the amount of Investor Principal
Collections with respect to such date, plus (c) the amount, if any, of Excess
Spread and Excess Finance Charges to be distributed pursuant to subsections
4.7(h) and (i) on the related Distribution Date and minus (d) the amount of
Reallocated Principal Collections with respect to such Monthly Period which,
pursuant to Section 4.8, are required to fund any deficiency in the amounts to
be distributed pursuant to subsections 4.5(a)(i), (ii) and (iii) and 4.5(b)(i)
and (ii) and subsection 4.7(d) for the related Distribution Date (excluding
Reallocated Principal Collections which have been allocated to reduce the Class
B Invested Amount).
"Collateral Principal Shortfall" shall mean, for any
Distribution Date during the Accumulation Period or the Rapid Amortization
Period, the excess of Collateral Monthly Principal for such Distribution Date
over the amount of Collateral Principal Collections available on such date
pursuant to subsection 4.5(g).
"Collateral Rate" shall mean the rate designated as such in
the Loan Agreement; provided, that for purposes of this Supplement, the
Collateral Rate shall not exceed LIBOR plus 1% per annum.
"Collateral Servicing Fee" shall have the meaning specified in
Section 3.1.
"Controlled Accumulation Amount" shall mean (a) for any
Distribution Date with respect to the Class A Accumulation Period, the maximum
Class A Invested Amount during the Revolving Period divided by nine; provided,
however, that, if the Class A Accumulation Period is modified pursuant to
Section 4.14, (i) the Controlled Accumulation Amount for each Distribution Date
with respect to the Class A Accumulation Period shall mean the amount
determined in accordance with Section 4.14 on the date on which the Class A
Accumulation Period has most recently been modified and (ii) the sum of the
Controlled Accumulation Amounts for all Distribution Dates with respect to the
modified Class A Accumulation Period shall not be less than the maximum Class A
Invested Amount during the Revolving Period and (b) for any Distribution Date
with respect to the Class B Accumulation Period, the maximum Class B Invested
Amount during the Revolving Period.
"Controlled Deposit Amount" shall mean, for any Distribution
Date with respect to the Accumulation Period, an amount equal to the sum of the
Controlled Accumulation Amount for such Distribution Date and any Deficit
Controlled Accumulation Amount for the immediately preceding Distribution Date.
"Covered Amount" shall mean for any Distribution Date with
respect to the Class A Accumulation Period or the first Special Payment Date,
if such Special Payment Date occurs prior to the Class B Principal Commencement
Date, an amount equal to the product of (i) (A) a fraction, the numerator of
which is the actual number of days in the period from and including
10
12
the preceding Distribution Date to but excluding such Distribution Date and the
denominator of which is 360, times (B) the Class A Certificate Rate and (ii)
the Principal Funding Account Balance, if any, as of the preceding Distribution
Date.
"Deficit Controlled Accumulation Amount" shall mean (a) on the
first Distribution Date with respect to the Class A Accumulation Period or the
Class B Accumulation Period, the excess, if any, of the Controlled Accumulation
Amount for such Distribution Date over the amount distributed from the
Collection Account as Class A Monthly Principal or Class B Monthly Principal,
as the case may be, for such Distribution Date and (b) on each subsequent
Distribution Date with respect to the Class A Accumulation Period or the Class
B Accumulation Period, the excess, if any, of the Controlled Deposit Amount for
such subsequent Distribution Date over the amount distributed from the
Collection Account as the case may be, for such subsequent Distribution Date.
"Designated Maturity" shall mean, for the initial LIBOR
Determination Date, two months, and for each LIBOR Determination Date
thereafter, one month.
"Distribution Date" shall have the meaning assigned thereto in
the Agreement, except that, with respect to the Series 1998-A Certificates, the
first Distribution Date shall be April 15, 1998.
"Enhancement Investor Amount" shall mean the Collateral
Invested Amount.
"Enhancement Surplus" shall mean, with respect to any
Distribution Date, the excess, if any, of (a) the amount on deposit in the Cash
Collateral Account plus the Collateral Investor Amount over (b) the Required
Enhancement Amount.
"Excess Finance Charges" shall have the meaning specified in
Section 4.9.
"Excess Spread" shall mean, with respect to any Distribution
Date, the sum of the amounts, if any, specified pursuant to subsections
4.5(a)(iv), 4.5(b)(iii) and 4.5(c)(ii) with respect to such Distribution Date.
"Finance Charge Shortfall" shall have the meaning specified in
Section 4.9.
"Fitch" shall mean Fitch IBCA, Inc., or its successors.
"Fleet Entity" shall mean a bank which is affiliated with
Fleet Financial Group, Inc., a Rhode Island corporation, or any successor to
Fleet Financial Group, Inc.
"Floating Allocation Percentage" shall mean, with respect to
any Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Invested Amount as of
the last day of the preceding Monthly Period (or with respect to the first
Monthly Period, the Initial Invested Amount) and the denominator of which is
the greater of (1) the sum of (x) the total amount of Principal Receivables in
the Trust at the end of the day on such date (or with respect to the first
Monthly Period, at the end of the day
11
13
on the Closing Date) and (y) the principal amount on deposit in the Excess
Funding Account as of the end of the day on such date and (2) the sum of the
numerators used to calculate the Series Percentages (as such term is defined in
the Agreement) with respect to Finance Charge Receivables or Defaulted
Receivables, as applicable, for all Series then outstanding; provided, however,
that, with respect to any Monthly Period in which an Addition Date occurs and
the Servicer need not make daily deposits of Collections into the Collection
Account, the denominator in (x) above shall be the Average Principal Balance;
provided further, however, that with respect to any Monthly Period in which an
Addition Date occurs and the Servicer is required to make daily deposits of
Collections into the Collection Account, the denominator in (x) above shall be
(1) for the period from and including the first day of such Monthly Period to
but excluding the related Addition Date, the aggregate amount of Principal
Receivables in the Trust at the end of the day on the last day of the prior
Monthly Period and (2) for the period from and including the related Addition
Date to and including the last day of such Monthly Period, the aggregate amount
of Principal Receivables in the Trust at the end of the day on the related
Addition Date and provided further, however, that with respect to any Monthly
Period during the Funding Period, the Floating Allocation Percentage shall be
calculated as the percentage equivalent to a fraction, the numerator of which
is the average Invested Amount on each day of the Monthly Period and the
denominator of which is the Average Principal Balance.
"Funding Period" shall mean the period commencing on the
Closing Date and ending upon the first to occur of (x) the commencement of the
Rapid Amortization Period, (y) the date on which the Invested Amount shall
first equal the Initial Investor Amount and (z) April 30, 1998.
"Group One" shall mean Series 1994-B, Series 1994-D, Series
1995-A, Series 1995-B, Series 1995-C, Series 1995-D, Euro Series 1995-E, Series
1995-F, Series 1995-G, Series 1996-A, Series 1996-B, Series 1996-C, Series
1996-D, Series 1996-E, Series 1998-A and each other Series hereafter specified
in the related Supplement to be included in Group One.
"Initial Invested Amount" shall mean the sum of the Class A
Initial Invested Amount, the Class B Initial Invested Amount and the Collateral
Initial Invested Amount.
"Initial Investor Amount" shall mean the sum of the Class A
Initial Investor Amount, the Class B Initial Investor Amount and the Collateral
Initial Investor Amount.
"Initial Pre-Funded Amount" shall mean $287,500,000.
"Initial Servicing Fee" shall have the meaning specified in
Section 3.1.
"Interchange" shall mean, with respect to Series 1998-A and
with respect to each Distribution Date, an amount of Interchange (as defined in
the Agreement) equal to one-twelfth of 1.25% of the outstanding balance of the
Principal Receivables allocable to Series 1998-A on the last day of the
preceding Monthly Period.
"Interest Period" shall mean, with respect to any Distribution
Date, the period from and including the Distribution Date immediately preceding
such Distribution Date (or, in
12
14
the case of the first Distribution Date, from and including the Closing Date)
to but excluding such Distribution Date.
"Invested Amount" shall mean, as of any date of determination,
an amount equal to the sum of (a) the Class A Invested Amount as of such date,
(b) the Class B Invested Amount as of such date and (c) the Collateral Invested
Amount as of such date.
"Invested Principal Collections" shall mean, with respect to
any Monthly Period, an amount equal to the Principal Allocation Percentage of
all Collections in respect of Principal Receivables received during such
Monthly Period.
"Investor Amount" shall mean, as of any date of determination,
an amount equal to the sum of (a) the Invested Amount, (b) the Pre-Funded
Amount and (c) the Principal Funding Account Balance.
"Investor Charge-Offs" shall mean Class A Investor Charge-Offs
and Class B Investor Charge-Offs.
"Investor Default Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the Defaulted Amount
for the related Monthly Period and (b) the Floating Allocation Percentage for
such Monthly Period.
"Investor Principal Collections" shall mean, with respect to
any Monthly Period, an amount equal to the product of (i) Invested Principal
Collections with respect to such Monthly Period and (ii) the sum of the Class A
Principal Percentage and the Class B Principal Percentage with respect to such
Monthly Period.
"LIBOR" shall mean an interest rate per annum determined by
the Trustee for each Interest Period in accordance with the provisions of
Section 4.11.
"LIBOR Determination Date" shall mean February 4, 1998 with
respect to the period from the Closing Date through April 14, 1998; and, with
respect to each Interest Period thereafter, the second London Business Day
prior to every Distribution Date on which such Interest Period begins
commencing with the April 1998 Distribution Date.
"Loan Agreement" shall mean the Loan Agreement among the
Seller, the Servicer, the Trustee and the Collateral Interest Holder, dated the
date hereof, as amended, supplemented or otherwise modified from time to time
in accordance with its terms.
"London Business Day" shall mean a Business Day on which
dealings in deposits in United States dollars are transacted in the London
interbank market.
"Monthly Interest" means, with respect to any Distribution
Date, the Class A Monthly Interest, the Class B Monthly Interest and Collateral
Monthly Interest for such Distribution Date.
13
15
"Monthly Servicing Fee" shall have the meaning specified in
Section 3.1.
"Net Portfolio Yield" shall mean, with respect to any Monthly
Period, the annualized percentage equivalent of a fraction, the numerator of
which is equal to (a) an amount equal to the product obtained by multiplying
the Floating Allocation Percentage with respect to such Monthly Period and the
amount of Collections of Finance Charge Receivables with respect to such
Monthly Period (including any other amounts that are to be treated as
Collections of Finance Charge Receivables in accordance with the Agreement)
plus (b) any investment earnings on amounts on deposit in the Pre-Funding
Account, plus (c) the amount of any Principal Funding Investment Proceeds for
the related Distribution Date, plus (d) the amount of funds, if any, to be
withdrawn from the Reserve Account which, pursuant to Section 4.15, are
required to be included in Class A Available Funds with respect to such
Distribution Date, minus (e) the Investor Default Amount for the Distribution
Date with respect to such Monthly Period, and the denominator of which is the
Investor Amount as of the last day of the preceding Monthly Period.
"Percentage Allocation" shall have the meaning specified in
subsection 4.1(b)(ii).
"Pre-Funded Amount" shall mean, as of any date of
determination, the amount on deposit in the Pre-Funding Account (net of all
interest and other investment income).
"Pre-Funding Account" shall have the meaning set forth in
subsection 4.16(a).
"Principal Allocation Percentage" shall mean, with respect to
any Monthly Period:
(a) during the Revolving Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is the Invested Amount as of the last day of the immediately
preceding Monthly Period (or, in the case of the first Monthly Period, the
Closing Date) and the denominator of which is the greater of (i) the sum of (A)
the total amount of Principal Receivables in the Trust as of the last day of
the immediately preceding Monthly Period and (B) the principal amount on
deposit in the Excess Funding Account as of such last day (or, in the case of
the first Monthly Period, the Closing Date) and (ii) the sum of the numerators
used to calculate the Series Percentages applicable to Principal Receivables
for all Series outstanding as of the date as to which such determination is
being made;
(b) during the Accumulation Period or the Rapid
Amortization Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Invested Amount as of
the last day of the Revolving Period or, if the numerator has been reduced as
described in the first proviso below during an Accumulation Period and a Rapid
Amortization Period commences, as the last day of the Accumulation Period, and
the denominator of which is the greater of (i) the sum of (A) the total amount
of Principal Receivables in the Trust as of the last day of the immediately
preceding Monthly Period and (B) the principal amount on deposit in the Excess
Funding Account as of such last day and (ii) the sum of the numerators used to
calculate the Series Percentages applicable to Principal Receivables for all
Series outstanding as of the date as to which such determination is being made;
provided, however, that during the Accumulation Period, on any date, at the
option of the
14
16
Servicer, the numerator of the Principal Allocation Percentage may be reduced
below the numerator used in the previous Monthly Period, to an amount not less
than the greater of (x) the Invested Amount as of the last day of the
immediately preceding Monthly Period (less the amount of any distributions of
principal made to Series 1998-A Certificateholders since the last day of the
immediately preceding Monthly Period) and (y) an amount that, if used as the
numerator of the Principal Allocation Percentage for the remainder of the
Accumulation Period, assuming for this purpose that (1) the payment rate with
respect to Collections of Principal Receivables remains constant at the level
of the immediately preceding Monthly Period, (2) the total amount of Principal
Receivables in the Trust (and the principal amount on deposit in the Excess
Funding Account, if any) remains constant at the level on the date of such
reduction, (3) no Pay Out Event with respect to any Series will subsequently
occur and (4) no additional Series (other than any Series being issued on the
date of such reduction) will be subsequently issued, would assure that
Available Investor Principal Collections for Series 1998-A would equal at least
125% of the Controlled Accumulation Amount for each Monthly Period for so long
as the Invested Amount is greater than zero; provided further, however, that
any such reduction of the numerator of the Principal Allocation Percentage
shall be subject to the receipt by the Trustee of an Officer's Certificate of
the Servicer to the effect that the Servicer does not expect that the Available
Investor Principal Collections for any Monthly Period would be less than the
Controlled Accumulation Amount; provided further, however, that with respect to
any Monthly Period in which an Addition Date occurs and the Servicer need not
make daily deposits of Collections into the Collection Account, the amount in
clause (i) of paragraphs (a) and (b) above shall be the Average Principal
Balance; provided further, however, that with respect to any Monthly Period in
which an Addition Date occurs and the Servicer is required to make daily
deposits of Collections into the Collection Account, the amount in clause (i)
of paragraphs (a) and (b) above shall be (1) for the period from and including
the first day of such Monthly Period to but excluding the related Addition
Date, the sum of (x) the aggregate amount of Principal Receivables in the Trust
at the end of the day on the last day of the prior Monthly Period and (y) the
principal amount on deposit in the Excess Funding Account as of such last day
and (2) for the period from and including the related Addition Date to and
including the last day of such Monthly Period, the sum of (x) the aggregate
amount of Principal Receivables in the Trust at the end of the day on the
related Addition Date and (y) the principal amount on deposit in the Excess
Funding Account at the end of the day on the related Addition Date; and
provided further, however, that with respect to any Monthly Period during the
Funding Period, the Principal Allocation Percentage shall be calculated as the
percentage equivalent of a fraction, the numerator of which is the average
Invested Amount on each day of the Monthly Period and the denominator of which
is the Average Principal Balance.
"Principal Funding Account" shall have the meaning set forth
in subsection 4.13(a)(i).
"Principal Funding Account Balance" shall mean, with respect
to any date of determination during the Accumulation Period, the principal
amount, if any, on deposit in the Principal Funding Account on such date of
determination.
"Principal Funding Investment Proceeds" shall have the meaning
specified in subsection 4.13(a)(ii).
15
17
"Principal Shortfall" shall have the meaning specified in
Section 4.10.
"Rapid Amortization Period" shall mean, (a) if on the day on
which a Trust Pay Out Event or a Series 1998-A Pay Out Event is deemed to have
occurred the Servicer need not make daily deposits into or withdrawals from the
Collection Account pursuant to subsection 4.03(a) of the Agreement, the period
commencing at the close of business on the Business Day immediately preceding
the first day of the Monthly Period in which such Trust Pay Out Event or Series
1998-A Pay Out Event is deemed to have occurred or (b) otherwise, the period
commencing at the close of business on the Business Day immediately preceding
the day on which a Trust Pay Out Event or a Series 1998-A Pay Out Event is
deemed to have occurred, and ending on the first to occur of (i) the payment in
full to the Class A Certificateholders and the Class B Certificateholders of
the Class A Investor Amount and the Class B Invested Amount, respectively, and
the payment in full to the Collateral Interest Holder of the Collateral
Invested Amount, if any, or (ii) the Series Termination Date.
"Reallocated Principal Collections" shall mean, with respect
to any Monthly Period, the product of (a) the Principal Allocation Percentage
with respect to such Monthly Period, (b) the aggregate amount of Collections in
respect of Principal Receivables for such Monthly Period and (c) the sum of the
Class B Floating Percentage and the Collateral Floating Percentage with respect
to such Monthly Period.
"Reassignment Amount" shall mean, with respect to any
Distribution Date, after giving effect to any deposits and distributions
otherwise to be made on such Distribution Date, the sum of (i) the Invested
Amount on such Distribution Date, plus (ii) Monthly Interest for such
Distribution Date and any Monthly Interest previously due but not distributed
to the Series 1998-A Certificateholders or the Collateral Interest Holder on a
prior Distribution Date, plus (iii) the amount of Additional Interest, if any,
for such Distribution Date and any Additional Interest previously due but not
distributed to the Series 1998-A Certificateholders or the Collateral Interest
Holder on a prior Distribution Date.
"Reference Banks" shall mean Barclays Bank plc, National
Westminster Bank PLC and Bankers Trust Company or such other major banks in the
London interbank market selected by the Servicer from time to time.
"Required Cash Collateral Amount" shall mean, with respect to
any date of determination, the Required Enhancement Amount less the Collateral
Investor Amount; provided, that for the first two Distribution Dates with
respect to Series 1998-A following the Closing Date, the Required Cash
Collateral Amount shall not exceed the product of (I) 2.5% and (II) the sum of
the Invested Amont and the Pre-Funded Amount.
"Required Draw Amount" shall have the meaning specified in
subsection 4.12(c).
"Required Enhancement Amount" shall mean, with respect to any
Distribution Date, the greater of (i) the product of (a) the sum of (I) the sum
of the Class A Invested Amount and the Class A Floating Percentage of the
Pre-Funded Amount and (II) the sum of the Class B
16
18
Invested Amount and the Class B Floating Percentage of the Pre-Funded Amount,
each as of such Distribution Date after taking into account all distributions
made on such Distribution Date, minus the amount of funds on deposit in the
Cash Collateral Account, after taking into account all deposits and withdrawals
on such Distribution Date, and (b) a fraction, the numerator of which is 11%
and the denominator of which is the excess of 100% over 11% and (ii) the sum of
(A) the product of (I) $1,150,000,000, (II) 1.0% and (III) a fraction the
numerator of which is equal to the Available Cash Collateral Amount as of the
immediately preceding Distribution Date and the denominator of which is the
Total Enhancement for such Distribution Date and (B) the product of (I)
$1,150,000,000 (II) 3.0% and (III) a fraction the numerator of which is equal
to the Collateral Invested Amount as of the immediately preceding Distribution
Date and the denominator of which is the Total Enhancement for such
Distribution Date; provided, however, that (i) if there are any withdrawals
from the Cash Collateral Account pursuant to subsection 4.12(c) or any
reductions in the Collateral Invested Amount pursuant to clause (b) of the
definition of such amount, or a Pay Out Event occurs with respect to Series
1998-A, then the Required Enhancement Amount for any Distribution Date shall
equal the Required Enhancement Amount on the Distribution Date immediately
preceding such reduction or Pay Out Event, (ii) in no event shall the Required
Enhancement Amount exceed the sum of the Class A Invested Amount and the Class
B Invested Amount on any such date, and (iii) the Required Enhancement Amount
may be reduced without the consent of the Series 1998-A Certificateholders or
the Collateral Interest Holder, if the Seller shall have received written
notice from each Rating Agency (with a copy delivered to the Trustee) that such
reduction will not result in the reduction or withdrawal of the then current
rating of the Series 1998-A Certificates and the Seller shall have delivered to
the Trustee an Officer's Certificate to the effect that, based on the facts
known to such officer at such time, in the reasonable belief of the Seller,
such reduction will not cause a Pay Out Event or an event that, after the
giving of notice or the lapse of time, would constitute a Pay Out Event, to
occur with respect to Series 1998-A.
"Required Reserve Account Amount" shall mean, with respect to
any Distribution Date prior to the Reserve Account Funding Date, $0, and on or
after the Reserve Account Funding Date, an amount equal to (a) the product of
(i) .5% of the Class A Investor Amount as of the preceding Distribution Date
(after giving effect to all changes therein on such date) and (ii) a fraction,
the numerator of which is the number of Monthly Periods scheduled to be
included in the Class A Accumulation Period as of such date and the denominator
of which is nine (except that if such numerator is one, the Required Reserve
Account Amount determined pursuant to this clause (a) shall be $0) or (b) any
other amount designated by the Seller, provided that, if such designation is of
a lesser amount, the Seller (i) shall have received written notice from each
Rating Agency that such designation will not result in the reduction or
withdrawal of the rating of the Series 1998-A Certificates and shall have
delivered copies of each such written notice to the Servicer and the Trustee,
and (ii) shall have delivered to the Trustee a certificate of an authorized
officer to the effect that, based on the facts known to such officer at such
time, in the reasonable belief of the Seller, such designation will not cause a
Pay Out Event or an event that, after the giving of notice or the lapse of
time, would cause a Pay Out Event, to occur with respect to Series 1998-A.
"Reserve Account" shall have the meaning specified in
subsection 4.15(a).
17
19
"Reserve Account Funding Date" shall mean the Distribution
Date with respect to the Monthly Period which commences three months prior to
the Monthly Period in which, as of the related Determination Date, the
Accumulation Period is scheduled to commence.
"Reserve Account Surplus" shall mean, as of any date of
determination, the amount, if any, by which the amount on deposit in the
Reserve Account exceeds the Required Reserve Account Amount.
"Reserve Draw Amount" shall have the meaning specified in
subsection 4.15(c).
"Revolving Period" shall mean the period beginning on the
Closing Date and ending on the earlier of (a) the close of business on the day
preceding the commencement of the Accumulation Period and (b) the close of
business on the day preceding the commencement of the Rapid Amortization
Period.
"Series Invested Amount" shall mean the Invested Amount.
"Series Investor Amount" shall mean, as of any date of
determination, an amount equal to the numerator of the Principal Allocation
Percentage on such date.
"Series 1998-A" shall mean the Series of Investor
Certificates, the terms of which are specified in this Supplement, and shall
include the Class A Certificates, the Class B Certificates and the Collateral
Interest.
"Series 1998-A Certificateholder" shall mean a Class A
Certificateholder or a Class B Certificateholder.
"Series 1998-A Certificate" shall mean a Class A Certificate
or a Class B Certificate.
"Series 1998-A Pay Out Event" shall have the meaning specified
in Section 6.1.
"Series Percentage" shall mean with respect to Finance Charge
Receivables and Defaulted Receivables, the Floating Allocation Percentage, and
with respect to Principal Receivables, the Principal Allocation Percentage.
"Series Termination Date" shall mean the earlier to occur of
(i) the July 2003 Distribution Date and (ii) the termination of the Trust
pursuant to Section 12.01 of the Agreement.
"Servicing Base Amount" shall have the meaning specified in
Section 3.1.
"Servicing Fee Rate" shall mean 2.0%.
"Special Payment Date" shall mean each Distribution Date with
respect to the Rapid Amortization Period.
18
20
"Subordinate Principal Collections" shall have the meaning
specified in subsection 4.1(a)(ii).
"Telerate Page 3750" shall mean the display page currently so
designated on the Dow Jones Telerate Service (or such other page as may replace
such page on such service for the purpose of displaying comparable rates or
prices).
"Total Enhancement" shall mean, for purposes of determining
the Required Enhancement Amount with respect to any Distribution Date, an
amount equal to the sum of (i) the Available Cash Collateral Amount as of the
immediately preceding Distribution Date, and (ii) the Collateral Investor
Amount as of the immediately preceding Distribution Date.
"Transaction Date" shall mean the date on which Advanta
National Bank, as part of a transaction involving Fleet Financial Group, Inc.
and certain of its affiliates and Advanta Corp. and certain of its affiliates,
assigns its rights and interests and delegates its obligations and liabilities
as Seller and Servicer to a Fleet Entity.
(b) Notwithstanding anything to the contrary in this
Supplement or the Agreement, the term "Rating Agency" shall mean, whenever used
in this Supplement or the Agreement with respect to Series 1998-A, Moody's,
Standard & Poor's and Fitch; provided, however, that references to "Rating
Agency" in the definition of "Eligible Investments" shall be deemed to not
include Fitch to the extent that an investment is rated by Moody's and Standard
& Poor's, but not by Fitch. Reference to rating categories of Moody's and
Standard & Poor's in the Agreement shall be deemed to be references to the
equivalent rating categories of Fitch.
(c) All capitalized terms used herein and not otherwise
defined herein have the meanings ascribed to them in the Agreement.
(d) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Supplement shall refer to this
Supplement as a whole and not to any particular provision of this Supplement;
references to any Article, Section or Exhibit are references to Articles,
Sections and Exhibits in or to this Supplement unless otherwise specified; and
the term "including" means "including without limitation."
(e) Unless the context otherwise requires, references in
this Supplement to the "Seller" or the "Sellers" shall mean ANB in its capacity
as Seller and any successors or assigns of ANB as Seller; and from and after
the date any Additional Seller is designated pursuant to subsection 2.08(e) of
the Agreement, such references shall mean ANB or its successors or assigns as
Seller and any such Additional Seller(s).
19
21
ARTICLE III
Servicer and Trustee
Section 3.1. Servicing Compensation.
The share of the Servicing Fee allocable to the Series 1998-A
Certificateholders and the Collateral Interest Holder with respect to any
Distribution Date (the "Monthly Servicing Fee"), shall be equal to one-twelfth
the product of (i) the Servicing Fee Rate and (ii) the Invested Amount, if any,
as of the last day of the Monthly Period preceding such Distribution Date (the
amount calculated pursuant to this clause (ii) is referred to as the "Servicing
Base Amount"); provided, however, with respect to the April 1998 Distribution
Date, the Monthly Servicing Fee (the "Initial Servicing Fee") shall be
$1,725,000.
The share of the Monthly Servicing Fee allocable to the Class
A Certificateholders with respect to any Distribution Date (the "Class A
Servicing Fee"), shall be equal to one-twelfth of the product of (a) the Class
A Floating Percentage, (b) the Servicing Fee Rate and (c) the Servicing Base
Amount; provided, however, that with respect to the April 1998 Distribution
Date, the Class A Servicing Fee shall be $1,449,000. The share of the Monthly
Servicing Fee allocable to the Class B Certificateholders with respect to any
Distribution Date (the "Class B Servicing Fee"), shall be equal to one-twelfth
of the product of (a) the Class B Floating Percentage, (b) the Servicing Fee
Rate and (c) the Servicing Base Amount; provided, however, that with respect to
the April 1998 Distribution Date, the Class B Servicing Fee shall be $129,375.
The share of the Monthly Servicing Fee allocable to the Collateral Interest
Holder with respect to any Distribution Date (the "Collateral Servicing Fee"),
shall be equal to one-twelfth of the product of (a) the Collateral Floating
Percentage, (b) the Servicing Fee Rate and (c) the Servicing Base Amount;
provided, however, that with respect to the April 1998 Distribution Date, the
Collateral Servicing Fee shall be $146,625. The remainder of the Servicing Fee
shall be paid by the Holders of the Seller Certificates or the
Certificateholders of other Series (as provided in the related Supplements) and
in no event shall the Trust, the Trustee, the Series 1998-A Certificateholders
or the Collateral Interest Holder be liable for the share of the Servicing Fee
to be paid by the Holders of the Seller Certificates or the Certificateholders
of any other Series. The Class A Servicing Fee shall be payable to the
Servicer solely to the extent amounts are available for distribution in respect
thereof pursuant to subsection 4.5(a)(ii), 4.7(a), 4.8(a) or 4.12(c); the Class
B Servicing Fee shall be payable solely to the extent amounts are available for
distribution in respect thereof pursuant to subsection 4.5(b)(ii), 4.7(c),
4.8(b) or 4.12(c); and the Collateral Servicing Fee shall be payable solely to
the extent amounts are available for distribution in respect thereof pursuant
to subsection 4.5(c)(i), 4.7(g) or 4.12(c).
20
22
ARTICLE IV
Rights of Series 1998-A Certificateholders and Collateral Interest
Holder and Allocation and Application of Collections
Section 4.1. Collections and Allocations. The Servicer will
apply, or will instruct the Trustee to apply, all collections and other funds
on deposit in the Collection Account that are allocated to the Series 1998-A
Certificates and the Collateral Interest as follows:
(a) Allocations During the Revolving Period. During the
Revolving Period, the Servicer shall, on or prior to the close of business on
the second Business Day following any Date of Processing, allocate the
following amounts as set forth below:
(i) Allocate to the Series 1998-A
Certificateholders and the Collateral Interest Holder the
product of (x) the Floating Allocation Percentage on such Date
of Processing and (y) the aggregate amount of Collections of
Finance Charge Receivables on such Date of Processing, and of
that allocation, deposit and retain in the Collection Account
(A) prior to the LIBOR Determination Date occurring in such
Monthly Period, an amount equal to the product of (v) the
Floating Allocation Percentage on such Date of Processing and
(w) the aggregate amount of Collections of Finance Charge
Receivables on such Date of Processing and (B) on and after
such LIBOR Determination Date, the difference between (1)
Monthly Interest for the related Distribution Date (plus, if
ANB is not the Servicer, the Monthly Servicing Fee for such
Monthly Period) and (2) the amounts previously deposited in
the Collection Account with respect to such Monthly Period
pursuant to this subsection (a)(i);
(ii) Allocate to the Series 1998-A
Certificateholders and the Collateral Interest Holder an
amount equal to the product of (A) the Principal Allocation
Percentage on such Date of Processing and (B) the aggregate
amount of Collections of Principal Receivables on such Date of
Processing, which amount shall be first, if any other
Principal Sharing Series in Group One is outstanding and in
its Amortization Period or Accumulation Period (as such terms
are defined in the Agreement), retained in the Collection
Account for application, to the extent necessary, as Shared
Principal Collections in accordance with Section 4.04 of the
Agreement to other Series in Group One on the related
Distribution Date, and second paid to the Holders of the
Seller Certificates; provided however, that the amount to be
paid to the Holders of the Seller Certificates pursuant to
this subsection 4.1(a)(ii) on any Date of Processing shall be
paid to such Holders only if the Seller Amount on such Date of
Processing is greater than the Required Seller Amount (after
giving effect to all Principal Receivables transferred to the
Trust on such day and any amounts deposited in the Excess
Funding Account on such day) and otherwise shall be deposited
in the Excess Funding Account until the Seller Amount is
greater than the Required Seller Amount and applied in
accordance with Section 4.02 of the Agreement and the
remainder shall be paid to the Holders of the Seller
Certificates; provided further, however, that if and for so
21
23
long as the Total Enhancement is less than the Required
Enhancement Amount during a Monthly Period, an amount equal to
the sum of (x) the Collateral Floating Percentage of the
product of the Principal Allocation Percentage and the
aggregate amount of Collections of Principal Receivables and
(y) the Class B Principal Percentage of the product of the
Principal Allocation Percentage and the aggregate amount of
Collections of Principal Receivables ("Subordinate Principal
Collections") on each Date of Processing with respect to such
Monthly Period shall be deposited and retained in the
Collection Account during such Monthly Period.
(b) Allocations During the Accumulation Period. During
the Accumulation Period, the Servicer shall, prior to the close of business on
the second Business Day following any Date of Processing, allocate the
following amounts as set forth below:
(i) Allocate to the Series 1998-A
Certificateholders and the Collateral Interest Holder and
deposit and retain in the Collection Account an amount equal
to the product of (A) the Floating Allocation Percentage on
such Date of Processing and (B) the aggregate amount of
Collections of Finance Charge Receivables on such Date of
Processing.
(ii) Allocate to the Series 1998-A
Certificateholders and the Collateral Interest Holder and
deposit and retain in the Collection Account an amount equal
to the product of (x) the Principal Allocation Percentage on
such Date of Processing and (y) the aggregate amount of
Collections of Principal Receivables on such Date of
Processing (for any such date, a "Percentage Allocation");
provided, however, that if the sum of such Percentage
Allocations with respect to the same Monthly Period exceeds
the Controlled Deposit Amount for the related Distribution
Date, then such excess shall not be treated as a Percentage
Allocation and shall be first, if any other Principal Sharing
Series in Group One is outstanding and in its Amortization
Period or Accumulation Period (as such terms are defined in
the Agreement), retained in the Collection Account for
application, to the extent necessary, as Shared Principal
Collections in accordance with Section 4.04 of the Agreement
to other Series in Group One on the related Distribution Date,
and second paid to the Holders of the Seller Certificates only
if the Seller Amount on such Date of Processing is greater
than the Required Seller Amount (after giving effect to all
Principal Receivables transferred to the Trust on such day and
any amounts deposited in the Excess Funding Account on such
day) and otherwise shall be deposited in the Excess Funding
Account until the Seller Amount is greater than the Required
Seller Amount and applied in accordance with Section 4.02 of
the Agreement and the remainder shall be paid to the Holders
of the Seller Certificates; provided further, however, that if
and for so long as the Total Enhancement is less than the
Required Enhancement Amount during a Monthly Period,
Subordinate Principal Collections with respect to each Date of
Processing with respect to such Monthly Period shall be
retained in the Collection Account during such Monthly Period.
22
24
(c) Allocations During the Rapid Amortization Period.
During the Rapid Amortization Period, the Servicer shall, prior to the close of
business on the second Business Day following any Date of Processing, allocate
the following amounts as set forth below:
(i) Allocate to the Series 1998-A
Certificateholders and the Collateral Interest Holder and
deposit and retain in the Collection Account an amount equal
to the product of (A) the Floating Allocation Percentage on
such Date of Processing and (B) the aggregate amount of
Collections of Finance Charge Receivables on such Date of
Processing.
(ii) Allocate to the Series 1998-A
Certificateholders and the Collateral Interest Holder and
deposit and retain in the Collection Account an amount equal
to the product of (A) the Principal Allocation Percentage on
such Date of Processing and (B) the aggregate amount of
Collections of Principal Receivables on such Date of
Processing; provided, however, that after the date on which an
amount of such Collections equal to the Investor Amount has
been deposited into the Collection Account and allocated to
the Series 1998-A Certificateholders and the Collateral
Interest Holder, the amount determined in accordance with this
subparagraph (ii) in excess thereof shall be first, if any
other Principal Sharing Series in Group One is outstanding and
in its Amortization Period or Accumulation Period (as such
terms are defined in the Agreement), retained in the
Collection Account for application, to the extent necessary,
as Shared Principal Collections in accordance with Section
4.04 of the Agreement to other Series in Group One on the
related Distribution Date, and second paid to the Holders of
the Seller Certificates only if the Seller Amount on such Date
of Processing is greater than the Required Seller Amount
(after giving effect to all Principal Receivables transferred
to the Trust on such day and any amounts deposited in the
Excess Funding Account on such day) and otherwise shall be
deposited in the Excess Funding Account until the Seller
Amount is greater than the Required Seller Amount and applied
in accordance with Section 4.02 of the Agreement and the
remainder shall be paid to the Holders of the Seller
Certificates.
(d) Notwithstanding anything to the contrary in this
Section 4.1, if on any Date of Processing the aggregate amount of Principal
Receivables is less than the sum of the Series Investor Amounts for all Series
outstanding, all Collections of Principal Receivables on such date that are
otherwise payable to the Holders of the Seller Certificates shall, unless such
Collections are to be retained in the Collection Account, be deposited in the
Excess Funding Account and applied in accordance with Section 4.02 of the
Agreement.
(e) Notwithstanding the foregoing, the Servicer need not
make daily deposits of Collections into the Collection Account at any time when
the requirements of Section 4.03 of the Agreement are satisfied.
Section 4.2. Determination of Monthly Interest.
23
25
(a) The amount of monthly interest ("Class A Monthly
Interest") distributable from the Collection Account with respect to the Class
A Certificates on each Distribution Date shall be an amount equal to the
product of (i) (A) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, times
(B) the Class A Certificate Rate and (ii) the outstanding principal amount of
the Class A Certificates as of the close of business on the preceding Record
Date; provided, however, with respect to the April 1998 Distribution Date,
Class A Monthly Interest shall be equal to the interest accrued on the Class A
Initial Investor Amount at the applicable Class A Certificate Rate for the
period from the Closing Date to but excluding April 15, 1998.
On the Determination Date preceding each Distribution Date,
the Servicer shall determine the excess, if any (the "Class A Interest
Shortfall"), of (x) the Class A Monthly Interest for such Distribution Date
over (y) the aggregate amount of funds allocated and available to pay such
Class A Monthly Interest on such Distribution Date (after giving effect to any
withdrawal from the Cash Collateral Account with respect to such Distribution
Date). If the Class A Interest Shortfall with respect to any Distribution Date
is greater than zero, an additional amount ("Class A Additional Interest")
equal to the product of (i) (A) a fraction, the numerator of which is the
actual number of days from and including the preceding Distribution Date to but
excluding such Distribution Date and the denominator of which is 360, times (B)
the Class A Penalty Rate and (ii) such Class A Interest Shortfall (or the
portion thereof which has not been paid to the Class A Certificateholders)
shall be payable as provided herein with respect to the Class A Certificates on
each Distribution Date following such Distribution Date to and including the
Distribution Date on which such Class A Interest Shortfall is paid to the Class
A Certificateholders. Notwithstanding anything to the contrary herein, Class A
Additional Interest shall be payable or distributed to Class A
Certificateholders only to the extent permitted by applicable law.
(b) The amount of monthly interest ("Class B Monthly
Interest") distributable from the Collection Account with respect to the Class
B Certificates on each Distribution Date shall be an amount equal to the
product of (i) (A) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, times
(B) the Class B Certificate Rate and (ii) the outstanding principal amount of
the Class B Certificates as of the close of business on the preceding Record
Date; provided, however, with respect to the April 1998 Distribution Date,
Class B Monthly Interest shall be equal to the interest accrued on the Class B
Initial Investor Amount at the applicable Class B Certificate Rate for the
period from the Closing Date to but excluding April 15, 1998.
On the Determination Date preceding each Distribution Date,
the Servicer shall determine the excess, if any (the "Class B Interest
Shortfall"), of (x) the Class B Monthly Interest for such Distribution Date
over (y) the aggregate amount of funds allocated and available to pay such
Class B Monthly Interest on such Distribution Date (after giving effect to any
withdrawal from the Cash Collateral Account with respect to such Distribution
Date). If the Class B Interest Shortfall with respect to any Distribution Date
is greater than zero, an additional amount ("Class B Additional Interest")
equal to the product of (i) (A) a fraction, the numerator of which is the
actual number of days in the period from and including the preceding
Distribution Date to but excluding such Distribution Date and the denominator
of which is 360, times (B) the Class B
24
26
Penalty Rate and (ii) such Class B Interest Shortfall (or the portion thereof
which has not been paid to the Class B Certificateholders) shall be payable as
provided herein with respect to the Class B Certificates on each Distribution
Date following such Distribution Date to and including the Distribution Date on
which such Class B Interest Shortfall is paid to the Class B
Certificateholders. Notwithstanding anything to the contrary herein, Class B
Additional Interest shall be payable or distributed to Class B
Certificateholders only to the extent permitted by applicable law.
(c) The amount of monthly interest ("Collateral Monthly
Interest") distributable from the Collection Account with respect to the
Collateral Interest on each Distribution Date shall be an amount equal to the
product of (i) (A) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, times
(B) the Collateral Rate and (ii) the Collateral Investor Amount as of the close
of business on the preceding Record Date; provided, however, with respect to
the April 1998 Distribution Date, Collateral Monthly Interest shall be equal to
the interest accrued on the Collateral Initial Investor Amount at the
applicable Collateral Rate for the periods from the Closing Date to but
excluding April 15, 1998.
On the Determination Date preceding each Distribution Date,
the Servicer shall determine the excess, if any (the "Collateral Interest
Shortfall"), of (x) the Collateral Monthly Interest for such Distribution Date
over (y) the aggregate amount of funds allocated and available to pay such
Collateral Monthly Interest on such Distribution Date pursuant to subsection
4.7(f) or pursuant to the Loan Agreement. If the Collateral Interest Shortfall
with respect to any Distribution Date is greater than zero, an additional
amount ("Collateral Additional Interest") equal to the product of (i) (A) a
fraction, the numerator of which is the actual number of days in the period
from and including the preceding Distribution Date to but excluding such
Distribution Date and the denominator of which is 360, times (B) the Collateral
Rate and (ii) such Collateral Interest Shortfall (or the portion thereof which
has not been paid to the Collateral Interest Holder) shall be payable as
provided herein with respect to the Collateral Interest on each Distribution
Date following such Distribution Date to and including the Distribution Date on
which such Collateral Interest Shortfall is paid to the Collateral Interest
Holder. Notwithstanding anything to the contrary herein, Collateral Additional
Interest shall be payable or distributed to the Collateral Interest Holder only
to the extent permitted by applicable law.
Section 4.3. Determination of Monthly Principal.
(a) The amount of monthly principal ("Class A Monthly
Principal") distributable from the Collection Account with respect to the Class
A Certificates on each Distribution Date, beginning with the first Distribution
Date with respect to the Accumulation Period or the Rapid Amortization Period,
shall be equal to the least of (x) the Available Investor Principal Collections
on deposit in the Collection Account with respect to such Distribution Date,
(y) for each Distribution Date with respect to the Class A Accumulation Period
(and on or prior to the Class A Expected Final Distribution Date), the
Controlled Deposit Amount for such Distribution Date and (z) the Class A
Invested Amount on such Distribution Date.
(b) The amount of monthly principal ("Class B Monthly
Principal")
25
27
distributable from the Collection Account with respect to the Class B
Certificates on each Distribution Date, beginning with the Class B Principal
Commencement Date, shall be equal to the least of (x) the Available Investor
Principal Collections on deposit in the Collection Account with respect to such
Distribution Date (minus the portion of such Available Investor Principal
Collections applied to Class A Monthly Principal on such Distribution Date),
(y) for each Distribution Date with respect to the Class B Accumulation Period
on or prior to the Class B Expected Final Distribution Date, the Controlled
Deposit Amount for such Distribution Date and (z) the Class B Invested Amount
on such Distribution Date.
(c) The amount, if any, of monthly principal ("Collateral
Monthly Principal") distributable with respect to the Collateral Invested
Amount on each Distribution Date shall equal the following amounts:
(i) on any Distribution Date prior to the
Distribution Date on which the Class B Invested Amount is paid
in full, shall be an amount equal to the lesser of (A) (x)
Collateral Principal Collections with respect to such
Distribution Date plus (y) Available Investor Principal
Collections (not including any amounts specified in clause (d)
of the definition of "Available Investor Principal
Collections") not applied to Class A Monthly Principal or
Class B Monthly Principal on such Distribution Date and (B)
the Enhancement Surplus on such Distribution Date, if any;
(ii) for each Distribution Date beginning on the
Distribution Date on which the Class B Invested Amount is paid
in full, shall be an amount equal to the sum of the Available
Investor Principal Collections (not including any amounts
specified in clause (d) of the definition of "Available
Investor Principal Collections") with respect to such
Distribution Date (minus the portion of such Available
Investor Principal Collections applied to Class A Monthly
Principal and Class B Monthly Principal on such Distribution
Date) and the Collateral Principal Collections with respect to
such Distribution Date; and
(iii) on any Distribution Date, in addition to the
amounts, if any, set forth in items (i) and (ii) above, at the
option of the Seller (as evidenced by written instructions to
the Servicer and the Trustee with a copy to the Collateral
Interest Holder), and after receipt by the Servicer and the
Trustee of a written determination by each Rating Agency that
such action will not result in a reduction or withdrawal of
the then current ratings of the Class A Certificates or the
Class B Certificates, shall be an amount established by the
Seller and consistent with any restrictions set forth in the
determination of the Rating Agency;
provided, however, with respect to any Distribution Date, Collateral Monthly
Principal shall not exceed the Collateral Invested Amount and, with respect to
any Distribution Date with respect to the Revolving Period and the Accumulation
Period, Collateral Monthly Principal shall be zero except to the extent
otherwise specified in, or pursuant to, clauses (i), (ii) and (iii) above.
26
28
Section 4.4. Required Amount.
(a) With respect to each Distribution Date, on the
related Determination Date, the Servicer shall determine the amount (the "Class
A Required Amount"), if any, by which (a) the sum of (i) Class A Monthly
Interest for such Distribution Date, (ii) any Class A Monthly Interest
previously due but not paid to the Class A Certificateholders on a prior
Distribution Date, (iii) any Class A Additional Interest for such Distribution
Date and any Class A Additional Interest previously due but not paid to the
Class A Certificateholders on a prior Distribution Date, (iv) the Class A
Servicing Fee for such Distribution Date, (v) any Class A Servicing Fee
previously due but not paid to the Servicer and (vi) the Class A Investor
Default Amount, if any, for such Distribution Date exceeds (b) the Class A
Available Funds. In the event that the Class A Required Amount for such
Distribution Date is greater than zero, the Servicer shall give written notice
to the Trustee of such positive Class A Required Amount on the date of
computation and all or a portion of the Excess Spread and the Excess Finance
Charges allocable to Series 1998-A with respect to the related Monthly Period
in an amount equal to the Class A Required Amount for such Distribution Date
shall be distributed from the Collection Account on such Distribution Date
pursuant to Section 4.7(a). In the event that the Class A Required Amount for
such Distribution Date exceeds the amount of Excess Spread and the amount of
Excess Finance Charges allocable to Series 1998-A with respect to the related
Monthly Period, all or a portion of the Available Cash Collateral Amount with
respect to such Distribution Date in an amount equal to such excess shall be
applied to fund the Class A Required Amount. In the event that the Class A
Required Amount for such Distribution Date exceeds the amount of Excess Spread,
the Excess Finance Charges allocated to Series 1998-A with respect to the
related Monthly Period and the Available Cash Collateral Amount with respect to
such Distribution Date, all or a portion of the Reallocated Principal
Collections with respect to such Monthly Period in an amount equal to such
excess shall be distributed from the Collection Account on such Distribution
Date pursuant to Section 4.8(a).
(b) With respect to each Distribution Date on the related
Determination Date, the Servicer shall determine the amount (the "Class B
Required Amount") equal to the sum of (I) the amount, if any, by which (a) the
sum of (i) Class B Monthly Interest for such Distribution Date, (ii) any Class
B Monthly Interest previously due but not paid to the Class B
Certificateholders on a prior Distribution Date, (iii) any Class B Additional
Interest for such Distribution Date and any Class B Additional Interest
previously due but not paid to the Class B Certificateholders on a prior
Distribution Date, (iv) the Class B Servicing Fee for such Distribution Date,
and (v) any Class B Servicing Fee previously due but not paid to the Servicer
exceeds (b) the Class B Available Funds plus (II) the Class B Investor Default
Amount for such Distribution Date. In the event that the Class B Required
Amount for such Distribution Date is greater than zero, all or a portion of
Excess Spread and the Excess Finance Charges allocable to Series 1998-A (other
than Excess Spread and Excess Finance Charges applied pursuant to subsection
4.7(a) and (b) with respect to such Distribution Date) with respect to the
related Monthly Period shall be applied to fund the Class B Required Amount.
In the event that the Class B Required Amount for such Distribution Date
exceeds the amount of Excess Spread and Excess Finance Charges allocable to
Series 1998-A with respect to such Monthly Period and available to fund the
Class B Required Amount as provided in the preceding sentence, all or a portion
of the Available Cash Collateral Amount (other than that portion of the
Available Cash
27
29
Collateral Amount applied to fund the Class A Required Amount with respect to
such Distribution Date) in an amount equal to such excess shall be applied to
fund the Class B Required Amount. In the event that the Class B Required
Amount for such Distribution Date exceeds the portion of Excess Spread and
Excess Finance Charges allocated to Series 1998-A with respect to the related
Monthly Period and available to fund the Class B Required Amount, as provided
in the preceding sentence, and the portion of the Available Cash Collateral
Amount with respect to such Distribution Date withdrawn from the Cash
Collateral Account to fund the Class B Required Amount, all or a portion of the
Reallocated Principal Collections allocable to the Collateral Invested Amount
and available therefor with respect to such Monthly Period in an amount equal
to such excess shall be distributed from the Collection Account on such
Distribution Date pursuant to subsection 4.8(b).
Section 4.5. Application of Class A Available Funds, Class B
Available Funds, Collateral Available Funds, Available Investor Principal
Collections and Collateral Principal Collections. The Servicer shall apply or
shall cause the Trustee to apply, on each Distribution Date, Class A Available
Funds, Class B Available Funds, Collateral Available Funds, Available Investor
Principal Collections and Collateral Principal Collections for the Monthly
Period with respect to such Distribution Date to make the following
distributions:
(a) On each Distribution Date, an amount equal to the
Class A Available Funds with respect to such Distribution Date will be
distributed in the following priority:
(i) an amount equal to Class A Monthly Interest
for such Distribution Date, plus the amount of any Class A
Monthly Interest previously due but not distributed to the
Class A Certificateholders on a prior Distribution Date, plus
the amount of any Class A Additional Interest for such
Distribution Date and any Class A Additional Interest
previously due but not distributed to the Class A
Certificateholders on a prior Distribution Date, shall be
distributed to the Paying Agent for payment to the Class A
Certificateholders;
(ii) an amount equal to the Class A Servicing Fee
for such Distribution Date, plus the amount of any Class A
Servicing Fee previously due but not distributed to the
Servicer on a prior Distribution Date, shall be distributed to
the Servicer;
(iii) an amount equal to the Class A Investor
Default Amount for such Distribution Date shall be treated as
a portion of Available Investor Principal Collections for such
Distribution Date; and
(iv) the balance, if any, shall constitute Excess
Spread and shall be allocated and distributed as set forth in
Section 4.7.
(b) On each Distribution Date, an amount equal to the
Class B Available Funds with respect to such Distribution Date will be
distributed in the following priority:
(i) an amount equal to Class B Monthly Interest
for such Distribution
28
30
Date, plus the amount of any Class B Monthly Interest
previously due but not distributed to the Class B
Certificateholders on a prior Distribution Date, plus the
amount of any Class B Additional Interest for such
Distribution Date and any Class B Additional Interest
previously due but not distributed to the Class B
Certificateholders on a prior Distribution Date, shall be
distributed to the Paying Agent for payment to the Class B
Certificateholders;
(ii) an amount equal to the Class B Servicing Fee
for such Distribution Date, plus the amount of any Class B
Servicing Fee previously due but not distributed to the
Servicer on a prior Distribution Date, shall be distributed to
the Servicer; and
(iii) the balance, if any, shall constitute Excess
Spread and shall be allocated and distributed as set forth in
Section 4.7.
(c) On each Distribution Date, an amount equal to the
Collateral Available Funds with respect to such Distribution Date will be
distributed in the following priority:
(i) if ANB or the Trustee is no longer the
Servicer, an amount equal to the Collateral Servicing Fee for
such Distribution Date, plus the amount of any Collateral
Servicing Fee previously due but not distributed to the
Servicer on a prior Distribution Date, shall be distributed to
the Servicer; and
(ii) the balance, if any, shall constitute Excess
Spread and shall be allocated and distributed as set forth in
Section 4.7.
(d) On each Distribution Date with respect to the
Revolving Period, an amount equal to the Available Investor Principal
Collections for the related Monthly Period, to the extent not allocated in
accordance with subsection 4.3(c)(i) or (iii), shall be treated as Shared
Principal Collections and applied in accordance with Section 4.04 of the
Agreement to other Series in Group One or the Holders of the Seller
Certificates.
(e) On each Distribution Date with respect to the
Revolving Period, an amount equal to the Collateral Principal Collections plus
any Available Investor Principal Collections allocated to Collateral Monthly
Principal for the related Monthly Period will be distributed in the following
order of priority:
(i) an amount equal to Collateral Monthly
Principal for such Distribution Date, up to the Collateral
Invested Amount on such Distribution Date, shall be applied in
accordance with the Loan Agreement; and
(ii) the balance, if any, shall be treated as a
portion of Available Investor Principal Collections for such
Distribution Date.
(f) On each Distribution Date with respect to the
Accumulation Period or the Rapid Amortization Period, an amount equal to the
Available Investor Principal Collections for
29
31
the related Monthly Period will be distributed in the following priority:
(i) an amount equal to Class A Monthly Principal
for such Distribution Date, up to the Class A Invested Amount,
on such Distribution Date, shall be deposited in the Principal
Funding Account for payment to the Class A Certificateholders
by the Paying Agent on the earlier to occur of the Class A
Expected Final Distribution Date or the first Special Payment
Date;
(ii) for each Distribution Date beginning on the
Class B Principal Commencement Date, an amount equal to Class
B Monthly Principal for such Distribution Date, up to the
Class B Invested Amount on such Distribution Date, shall be
distributed to the Paying Agent for payment to the Class B
Certificateholders;
(iii) the balance, if any, of such Available
Investor Principal Collections shall be allocated to
Collateral Monthly Principal to the extent specified in
subsection 4.3(c) and applied in accordance with subsection
4.5(g); and
(iv) for each Distribution Date, after giving
effect to paragraphs (i), (ii) and (iii) above, an amount
equal to the balance, if any, of such Available Investor
Principal Collections then on deposit in the Collection
Account shall be treated as Shared Principal Collections and
applied in accordance with Section 4.04 of the Agreement to
other Series in Group One or to the Holders of the Seller
Certificates.
(g) On each Distribution Date with respect to the
Accumulation Period or the Rapid Amortization Period, an amount equal to
Collateral Principal Collections and the portion of Available Investor
Principal Collections allocated to Collateral Monthly Principal deposited in
the Collection Account for the related Monthly Period will be distributed in
the following order of priority:
(i) an amount equal to Collateral Monthly
Principal for such Distribution Date, up to the Collateral
Invested Amount, shall be applied in accordance with the Loan
Agreement; and
(ii) the balance, if any, of such Collateral
Principal Collections then on deposit in the Collection
Account shall be treated as a portion of Available Investor
Principal Collections for such Distribution Date.
Section 4.6. Default Amounts; Investor Charge-Offs.
(a) On each Determination Date commencing with the
Determination Date relating to the April 1998 Distribution Date, the Servicer
shall calculate the Class A Investor Default Amount, if any, for the related
Distribution Date. If, on any Distribution Date, the Class A Required Amount
for the related Monthly Period exceeds the sum of (x) the amount of
30
32
Reallocated Principal Collections with respect to such Monthly Period, (y) the
amount of Excess Spread and the Excess Finance Charges allocable to Series
1998-A with respect to such Distribution Date and (z) the Available Cash
Collateral Amount with respect to such Distribution Date, the Collateral
Invested Amount shall be reduced by the amount of such excess, but not by more
than the excess of the Class A Investor Default Amount for such Distribution
Date over the amount of Reallocated Principal Collections, Excess Spread and
Excess Finance Charges and the amount withdrawn from the Cash Collateral
Account used to fund the Class A Investor Default Amount for such Distribution
Date. In the event that such reduction would cause the Collateral Invested
Amount to be a negative number, the Collateral Invested Amount shall be reduced
to zero and the Class B Invested Amount shall be reduced by the amount by which
the Collateral Invested Amount would have been reduced below zero, but not by
more than the excess, if any, of the Class A Investor Default Amount for such
Distribution Date over the amount of such reduction, if any, of the Collateral
Invested Amount with respect to such Distribution Date and the amount of
Reallocated Principal Collections, Excess Spread and Excess Finance Charges and
the amount withdrawn from the Cash Collateral Account used to fund the Class A
Investor Default Amount for such Distribution Date. In the event that such
reduction would cause the Class B Invested Amount to be a negative number, the
Class B Invested Amount shall be reduced to zero, and the Class A Invested
Amount shall be reduced by the amount by which the Class B Invested Amount
would have been reduced below zero, but not by more than the excess, if any, of
the Class A Investor Default Amount for such Distribution Date over the
aggregate amount of the reductions, if any, of the Collateral Invested Amount
and the Class B Invested Amount for such Distribution Date and the amount of
Reallocated Principal Collections, Excess Spread and Excess Finance Charges and
the amount withdrawn from the Cash Collateral Account used to fund the Class A
Investor Default Amount for such Distribution Date (a "Class A Investor
Charge-Off"). Class A Investor Charge-Offs shall thereafter be reimbursed and
the Class A Invested Amount increased (but not by an amount in excess of the
aggregate unreimbursed Class A Investor Charge-Offs) on any Distribution Date
by the amount of Excess Spread and Excess Finance Charges allocated and
available for that purpose pursuant to subsection 4.7(b).
(b) On each Determination Date, the Servicer shall
calculate the Class B Required Amount, if any, for the related Distribution
Date. If, on any Distribution Date, the Class B Required Amount for such
Distribution Date exceeds the sum of (x) the amount of Excess Spread and Excess
Finance Charges allocated to Series 1998-A with respect to the related Monthly
Period which are not used to fund the Class A Required Amount and Class A
Investor Charge-Offs on the related Distribution Date, (y) the portion, if any,
of the Available Cash Collateral Amount to be withdrawn from the Cash
Collateral Account pursuant to subsection 4.12(c) which is remaining after
applying such amounts to fund any deficiency of amounts payable pursuant to
subsection 4.7(a) with respect to such Distribution Date and (z) the amount of
Reallocated Principal Collections which are available to fund the Class B
Required Amount on such Distribution Date pursuant to subsection 4.8(b), then
the Collateral Invested Amount shall be reduced by the amount of such excess,
but not by more than the excess of the Class B Investor Default Amount for such
Distribution Date over the amount of Reallocated Principal Collections, Excess
Spread and Excess Finance Charges and the amount withdrawn from the Cash
Collateral Account used to fund the Class B Investor Default Amount for such
Distribution Date. In the event that such reduction would cause the Collateral
Invested Amount to be a
31
33
negative number, the Collateral Invested Amount shall be reduced to zero, and
the Class B Invested Amount shall be reduced by the amount by which the
Collateral Invested Amount would have been reduced below zero, but not by more
than the excess, if any, of the Class B Investor Default Amount for such
Distribution Date over the amount of such reduction, if any, of the Collateral
Invested Amount with respect to such Distribution Date and the amount of
Reallocated Principal Collections, Excess Spread and Excess Finance Charges and
the amount withdrawn from the Cash Collateral Account used to fund the Class B
Investor Default Amount for such Distribution Date (a "Class B Investor
Charge-Off"). Class B Investor Charge-Offs shall thereafter be reimbursed and
the Class B Invested Amount increased (but not by an amount in excess of the
aggregate unreimbursed Class B Investor Charge-Offs) on any Distribution Date
by the amount of Excess Spread and Excess Finance Charges allocated and
available for that purpose pursuant to subsection 4.7(e).
(c) If, on any Distribution Date, Reallocated Principal
Collections for such Distribution Date are applied pursuant to subsection
4.8(a) or (b), the Collateral Invested Amount shall be reduced by the amount of
such Reallocated Principal Collections. In the event that such reduction would
cause the Collateral Invested Amount to be a negative number, the Collateral
Invested Amount shall be reduced to zero, and the Class B Invested Amount shall
be reduced by the amount by which the Collateral Invested Amount would have
been reduced below zero.
(d) If, on any Distribution Date, the Collateral Default
Amount exceeds the amount of Excess Spread and Excess Finance Charges available
to fund the Collateral Default Amount pursuant to subsection 4.7(h) on such
Distribution Date, then the Collateral Invested Amount shall be reduced by the
amount of such excess.
Section 4.7. Excess Spread; Excess Finance Charges. The
Servicer shall apply or shall cause the Trustee to apply, on each Distribution
Date, Excess Spread and Excess Finance Charges allocated to Series 1998-A with
respect to the related Monthly Period, to make the following distributions in
the following priority:
(a) an amount equal to the Class A Required Amount, if
any, with respect to such Distribution Date shall be distributed by the Trustee
to fund any deficiency pursuant to subsections 4.5(a)(i), (ii) and (iii), in
that order of priority;
(b) an amount equal to the aggregate amount of Class A
Investor Charge-Offs which have not been previously reimbursed as provided in
subsection 4.6(a) (after giving effect to the allocation on such Distribution
Date of any amount for that purpose pursuant to subsection 4.6(a)) shall be
treated as a portion of Available Investor Principal Collections for such
Distribution Date;
(c) an amount up to the Class B Required Amount, if any,
with respect to such Distribution Date shall be distributed by the Trustee to
fund any deficiency pursuant to subsections 4.5(b)(i) and (ii), in that order
of priority;
(d) an amount equal to the Class B Investor Default
Amount for such
32
34
Distribution Date shall be treated as a portion of Available Investor Principal
Collections for such Distribution Date;
(e) an amount equal to the aggregate amount by which the
Class B Invested Amount has been reduced pursuant to clauses (d), (e) and (f)
of the definition of "Class B Invested Amount" in Section 2.1 of this
Supplement (but not in excess of the aggregate amount of such reductions which
have not been previously reimbursed) shall be treated as a portion of Available
Investor Principal Collections for such Distribution Date;
(f) an amount equal to the Collateral Monthly Interest
for such Distribution Date, plus the amount of any Collateral Monthly Interest
previously due but not distributed to the Collateral Interest Holder on a prior
Distribution Date pursuant to this subsection or pursuant to the Loan Agreement
plus the amount of any Collateral Additional Interest for such Distribution
Date and any Collateral Additional Interest previously due but not distributed
to the Collateral Interest Holder on a prior Distribution Date shall be paid to
the Collateral Interest Holder for application in accordance with the Loan
Agreement;
(g) an amount equal to the Collateral Servicing Fee for
such Distribution Date (or if ANB or the Trustee is no longer the Servicer, the
portion of the Collateral Servicing Fee for such Distribution Date not paid
pursuant to subsection 4.5(c)(i)), plus the amount of any Collateral Servicing
Fee previously due but not distributed to the Servicer on a prior Distribution
Date, shall be distributed to the Servicer;
(h) an amount equal to the Collateral Default Amount for
such Distribution Date shall be treated as a portion of Collateral Principal
Collections with respect to such Distribution Date;
(i) an amount equal to the aggregate amount by which the
Collateral Invested Amount has been reduced pursuant to clause (c) of the
definition of "Collateral Invested Amount" (but not in excess of the aggregate
amount of such reductions which have not been previously reimbursed) shall be
treated as a portion of Collateral Principal Collections with respect to such
Distribution Date;
(j) an amount up to the excess, if any, of the Required
Cash Collateral Amount over the remaining Available Cash Collateral Amount
(without giving effect to any deposit made on such date hereunder) shall be
deposited into the Cash Collateral Account;
(k) an amount up to the excess, if any, of the Required
Reserve Account Amount over the amount on deposit therein, shall be deposited
into the Reserve Account;
(l) (1) an amount equal to the aggregate of any other
amounts then owed pursuant to the Loan Agreement (excluding amounts required to
be deposited in the Spread Account under and as defined in the Loan Agreement)
shall be applied in accordance with the Loan Agreement and (2) amounts required
to be deposited in the Spread Account under and as defined in the Loan
Agreement shall be so deposited therein; and
33
35
(m) the balance, if any, shall constitute a portion of
"Excess Finance Charges" available for allocation to other Series in Group One
or to the Holders of the Seller Certificates for such Distribution Date as
described in Section 4.9.
Section 4.8. Reallocated Principal Collections. The Servicer
shall apply or shall cause the Trustee to apply on each Distribution Date,
Reallocated Principal Collections (applying all such Collections with respect
to the Collateral Invested Amount prior to applying any such Collections with
respect to the Class B Invested Amount and applying no such Collections with
respect to the Class B Invested Amount pursuant to clause (b) below) with
respect to such Distribution Date, to make the following distributions in the
following priority:
(a) an amount equal to the excess, if any, of (i) the
Class A Required Amount, if any, with respect to such Distribution Date over
(ii) the sum of (x) the amount of Excess Spread and Excess Finance Charges
allocated to Series 1998-A with respect to the related Monthly Period and (y)
the Available Cash Collateral Amount with the respect to such Distribution Date
shall be distributed by the Trustee to fund any deficiency pursuant to
subsections 4.5(a)(i), (ii) and (iii), in that order of priority;
(b) an amount equal to the excess, if any, of (i) the
Class B Required Amount, if any, with respect to such Distribution Date over
(ii) the sum of (x) the amount of Excess Spread and Excess Finance Charges
allocated and available to the Class B Certificates pursuant to subsections
4.7(c) and (d) on such Distribution Date and (y) the amount withdrawn from the
Cash Collateral Account pursuant to subsection 4.12(c) which is remaining after
application pursuant to subsection 4.7(a) with respect to such Distribution
Date shall be distributed by the Trustee to fund any deficiency pursuant to
subsections 4.5(b)(i) and (ii) and subsection 4.7(d), in that order of
priority; and
(c) the balance, if any, of such Reallocated Principal
Collections allocable to the Class B Invested Amount shall be treated as a
portion of Available Investor Principal Collections to be applied in accordance
with subsections 4.5(d) and (f), and the balance, if any, of such Reallocated
Principal Collections allocable to the Collateral Invested Amount shall be
treated as a portion of Collateral Principal Collections to be applied in
accordance with subsections 4.5(e) and (g).
Section 4.9. Excess Finance Charges. On each Distribution
Date, (a) the Servicer shall allocate the aggregate amount of all outstanding
Series in Group One that the related Supplements specify are to be treated as a
portion of Excess Finance Charges for such Distribution Date (collectively,
"Excess Finance Charges") as specified in the Supplements for each Series in
Group One and (b) the Servicer shall withdraw (or shall instruct the Trustee in
writing to withdraw) from the Collection Account and pay to the Holders of the
Seller Certificates an amount equal to the excess, if any, of (x) the Excess
Finance Charges for such Distribution Date over (y) the aggregate amount for
all Series in Group One that the related Supplements specify are Finance Charge
Shortfalls (as defined in the related Supplements) for such Distribution Date.
Excess Finance Charges for any Distribution Date will be allocated to Series
1998-A in an amount equal to the product of (x) the aggregate amount of Excess
Finance Charges for such Distribution Date and (y) a fraction, the numerator of
which is the Finance
34
36
Charge Shortfall for Series 1998-A for such Distribution Date and the
denominator of which is the aggregate amount of Finance Charge Shortfalls (as
defined in the related Supplements) for all the Series in Group One for such
Distribution Date. The "Finance Charge Shortfall" for Series 1998-A for any
Distribution Date shall be equal to the excess, if any, of (a) the full amount
required to be paid, without duplication, pursuant to subsections 4.5(a),
4.5(b), 4.5(c) and 4.7 (except for subsection 4.7(l)(2)) on such Distribution
Date over (b) the sum of Class A Available Funds, Class B Available Funds and
Collateral Available Funds with respect to the related Monthly Period.
Section 4.10 Shared Principal Collections. Subject to
Section 4.04 of the Agreement, Shared Principal Collections for any
Distribution Date will be allocated to Series 1998-A in an amount equal to the
product of (x) the aggregate amount of Shared Principal Collections with
respect to all Series in Group One for such Distribution Date and (y) a
fraction, the numerator of which is the Principal Shortfall for Series 1998-A
for such Distribution Date and the denominator of which is the aggregate amount
of Principal Shortfalls for all the Series which are Principal Sharing Series
in Group One for such Distribution Date. The "Principal Shortfall" for Series
1998-A shall be equal to (a) for any Distribution Date with respect to the
Revolving Period and the Rapid Amortization Period, zero, (b) for any
Distribution Date with respect to the Accumulation Period (on or prior to the
Class B Expected Final Distribution Date), the excess, if any, of the
Controlled Deposit Amount with respect to such Distribution Date over the
amount of Available Investor Principal Collections for such Distribution Date
(excluding any portion thereof attributable to Shared Principal Collections)
and (c) for each Distribution Date with respect to the Accumulation Period
after the Class B Expected Final Distribution Date, the excess, if any, of the
Invested Amount over the amount of Available Investor Principal Collections and
Collateral Principal Collections for such Distribution Date (excluding any
portion thereof attributable to Shared Principal Collections).
Section 4.11. Determination of LIBOR.
(a) On each LIBOR Determination Date, the Trustee shall
determine LIBOR based on the rate for deposits in United States dollars for a
period of the Designated Maturity which appears on Telerate Page 3750 as of
11:00 A.M. (London Time) on such date.
(b) If such rate does not appear on Telerate Page 3750,
the Trustee will determine LIBOR on the basis of quotations of the offered
rates for deposits in United States dollars provided by the Reference Banks at
approximately 11:00 A.M. (London time) on such LIBOR Determination Date to
prime banks in the London interbank market for a period of the Designated
Maturity. If at least two such quotations are provided, LIBOR will be the
arithmetic mean of such quotations.
(c) If, on the LIBOR Determination Date, such rate does
not appear on Telerate Page 3750 and only one or none of the Reference Banks
provides such offered quotations, LIBOR will be the rate per annum that the
Trustee determines to be the arithmetic mean of the offered quotations that
three major banks in The City of New York selected by the Servicer are quoting
at approximately 11:00 A.M. (New York City time) on that day for loans in
United States dollars to leading European banks for a period of the Designated
Maturity.
35
37
(d) The Class A Certificate Rate or Class B Certificate
Rate applicable to the then current and the immediately preceding Interest
Periods may be obtained by any Series 1998-A Certificateholder by telephoning
the Trustee at its Corporate Trust Office at (800) 735-7777.
Section 4.12. Cash Collateral Account.
(a) The Servicer shall establish and maintain, in the
name of the Trustee, on behalf of the Trust, for the benefit of the Series
1998-A Certificateholders and the Collateral Interest Holder, as their
interests appear herein, an Eligible Deposit Account (the "Cash Collateral
Account") bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Series 1998-A Certificateholders and
the Collateral Interest Holder. The Cash Collateral Account shall initially be
established with the Trustee. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Cash Collateral
Account and in all proceeds thereof. The Cash Collateral Account shall be
under the sole dominion and control of the Trustee for the benefit of the
Series 1998-A Certificateholders and the Collateral Interest Holder. The
interest of the Collateral Interest Holder in the Cash Collateral Account shall
be subordinated to the interests of the Series 1998-A Certificateholders as
provided herein and in the Loan Agreement. If at any time the Cash Collateral
Account ceases to be an Eligible Deposit Account, the Trustee (or the Servicer
on its behalf) shall within 10 Business Days (or such longer period, not to
exceed 30 calendar days, as to which each Rating Agency may consent) establish
a new Cash Collateral Account meeting the conditions specified above as an
Eligible Deposit Account, and shall transfer any cash and/or any investments to
such new Cash Collateral Account. The Trustee, at the direction of the
Servicer, shall make deposits to and withdrawals from the Cash Collateral
Account in the amounts and at the times set forth in this Supplement and the
Loan Agreement. All withdrawals from the Cash Collateral Account shall be made
in the priority set forth below. The Collateral Interest Holder shall not be
entitled to reimbursement from the Trust Assets for any withdrawals from the
Cash Collateral Account except as specifically provided in this Supplement and
the Loan Agreement.
(b) On the Closing Date, the Trustee shall deposit
$23,000,000 received by it in immediately available funds pursuant to the Loan
Agreement into the Cash Collateral Account. Funds on deposit in the Cash
Collateral Account shall be invested at the direction of the Servicer by the
Trustee in Cash Collateral Account Investments. Funds on deposit in the Cash
Collateral Account on any Transfer Date, after giving effect to any withdrawals
from the Cash Collateral Account on such Transfer Date, shall be invested in
such investments that will mature so that such funds will be available for
withdrawal on or prior to the following Transfer Date. No Eligible Investment
shall be disposed of prior to its maturity; provided, however, that the Trustee
may sell, liquidate or dispose of an Eligible Investment before its maturity,
if so directed by the Servicer, the Servicer having reasonably determined that
the interest of the Series 1998-A Certificateholders and the Collateral
Interest Holder may be adversely affected if such Eligible Investment is held
to its maturity. The proceeds of any such investments shall be invested in
such investments that will mature so that such funds will be available for
withdrawal on or prior to the Transfer Date immediately following the date of
such investment. The Trustee shall maintain for the benefit of the Series
1998-A Certificateholders and the Collateral Interest
36
38
Holder possession of the negotiable instruments or securities, if any,
evidencing the Cash Collateral Account Investments. On each Transfer Date, all
interest and earnings (net of losses and investment expenses) accrued since the
preceding Transfer Date on funds on deposit in the Cash Collateral Account
shall be applied in accordance with the Loan Agreement. For purposes of
determining the availability of funds or the balances in the Cash Collateral
Account for any reason under this Supplement, all investment earnings on such
funds shall be deemed not to be available or on deposit.
(c) On each Determination Date, the Servicer shall
calculate the amount (the "Required Draw Amount") by which the amounts
specified in clauses (a) through (e) and (g) of Section 4.7 with respect to the
related Distribution Date exceed the amount of Excess Spread and Excess Finance
Charges allocated to Series 1998-A with respect to the related Monthly Period.
In the event that for any Distribution Date the Required Draw Amount is greater
than zero, the Servicer shall give written notice to the Trustee and the
Collateral Interest Holder of such positive Required Draw Amount on the related
Determination Date. On the related Transfer Date, the Required Draw Amount, if
any, up to the Available Cash Collateral Amount, shall be withdrawn from the
Cash Collateral Account and distributed to fund any deficiency pursuant to
subsections 4.7(a) through (e) and (g) (in the order of priority set forth in
Section 4.7).
(d) In the event that the Cash Enhancement Surplus on any
Distribution Date, after giving effect to all deposits to and withdrawals from
the Cash Collateral Account with respect to such Distribution Date, and after
giving effect to any payment of Collateral Monthly Principal (or other
reduction of the Collateral Invested Amount) with respect to such Distribution
Date, is greater than zero, the Trustee, acting in accordance with the
instructions of the Servicer, shall withdraw from the Cash Collateral Account,
and apply in accordance with the Loan Agreement, an amount equal to such Cash
Enhancement Surplus.
Section 4.13. Principal Funding Account.
(a)(i) The Servicer, for the benefit of the Series 1998-A
Certificateholders, shall establish and maintain in the name of the
Trustee, on behalf of the Trust, an Eligible Deposit Account (the
"Principal Funding Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Series 1998-A Certificateholders. The Principal Funding Account shall
initially be established with the Trustee.
(ii) At the direction of the Servicer, funds on deposit in
the Principal Funding Account shall be invested by the Trustee in
Eligible Investments selected by the Servicer. All such Eligible
Investments shall be held by the Trustee for the benefit of the Series
1998-A Certificateholders; provided that on each Distribution Date all
interest and other investment income (net of losses and investment
expenses ) ("Principal Funding Investment Proceeds") on funds on
deposit therein shall be applied as set forth in paragraph (iii)
below. Funds on deposit in the Principal Funding Account shall be
invested in Eligible Investments that will mature so that such funds
will be available at the close of business on the Transfer Date
preceding the following Distribution Date. No Eligible Investment
shall be disposed of prior to its maturity; provided, however, that
the
37
39
Trustee may sell, liquidate or dispose of an Eligible Investment
before its maturity, if so directed in writing by the Servicer, the
Servicer having reasonably determined that the interest of the Series
1998-A Certificateholders may be adversely affected if such Eligible
Investment is held to its maturity. Unless the Servicer directs
otherwise, funds deposited in the Principal Funding Account on a
Transfer Date (which immediately precedes a Distribution Date) upon
the maturity of any Eligible Investments are not required to be
invested overnight.
(iii) On each Distribution Date, the Servicer shall direct
the Trustee to withdraw from the Principal Funding Account and deposit
into the Collection Account all Principal Funding Investment Proceeds
then on deposit in the Principal Funding Account, and such Principal
Funding Investment Proceeds shall be treated as a portion of Class A
Available Funds for such Distribution Date.
(iv) Reinvested interest and other investment income on
funds deposited in the Principal Funding Account shall not be
considered to be principal amounts on deposit therein for purposes of
this Supplement.
(b)(i) The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Principal
Funding Account and in all proceeds thereof. The Principal Funding
Account shall be under the sole dominion and control of the Trustee
for the benefit of the Series 1998-A Certificateholders. If, at any
time, the Principal Funding Account ceases to be an Eligible Deposit
Account, the Trustee shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency
may consent) establish a new Principal Funding Account meeting the
conditions specified in paragraph (a)(i) above as an Eligible Deposit
Account and shall transfer any cash and/or any investments to such new
Principal Funding Account.
(ii) Pursuant to the authority granted to the Servicer in
Section 3.01(b) of the Agreement, the Servicer shall have the power,
revocable by the Trustee, to make withdrawals and payments or to
instruct the Trustee to make withdrawals and payments from the
Principal Funding Account for the purposes of carrying out the
Servicer's or Trustee's duties hereunder. Pursuant to the authority
granted to the Paying Agent in Section 5.01 of this Supplement and
Section 6.07 of the Agreement, the Paying Agent shall have the power,
revocable by the Trustee, to withdraw funds from the Principal Funding
Account for the purpose of making distributions to the Series 1998-A
Certificateholders.
Section 4.14. Class A Accumulation Period. The Class A
Accumulation Period is scheduled to commence on the Accumulation Date;
provided, however, that if the Class A Accumulation Period Length on any
Determination Date (determined as described below) is less than nine months,
upon notice to the Trustee, the Sellers, each Rating Agency and the Collateral
Interest Holder, the Servicer, at its option, may elect to modify the date on
which the Class A Accumulation Period actually commences to the first day of
the month that is a number of months prior to the month in which the Class A
Expected Final Distribution Date occurs at least equal to the Class A
Accumulation Period Length (so that, as a result, the number of Monthly
38
40
Periods in the Class A Accumulation Period will at least equal the Class A
Accumulation Period Length); provided, however, that (i) the length of the
Class A Accumulation Period will not be less than one month; and (ii)
notwithstanding any other provision of this Supplement to the contrary, no
election to postpone the commencement of the Class A Accumulation Period shall
be made after a Pay Out Event (as defined in the related Supplement) shall have
occurred and is continuing with respect to any other Series. On each
Determination Date, the Servicer will determine the "Class A Accumulation
Period Length," which will mean a number of months such that the amount
available for distribution of principal on the Class A Certificates on the
Class A Expected Final Distribution Date will equal or exceed the Class A
Investor Amount, assuming for this purpose that (1) the payment rate with
respect to Collections of Principal Receivables remains constant at the lowest
level of such payment rate during the twelve preceding Monthly Periods (or such
lower payment rate as the Servicer may select), (2) the total amount of
Principal Receivables in the Trust (and the principal amount on deposit in the
Excess Funding Account, if any) remains constant at the level on such date of
determination, (3) no Pay Out Event with respect to any Series will
subsequently occur and (4) no additional Series (other than any Series being
issued on such date of determination) will be subsequently issued. Any notice
by the Servicer electing to modify the commencement of the Class A Accumulation
Period pursuant to this Section 4.14 shall specify (i) the Class A Accumulation
Period Length, (ii) the commencement date of the Class A Accumulation Period
and (iii) the Controlled Accumulation Amount with respect to each Monthly
Period during the Class A Accumulation Period.
Section 4.15. Reserve Account.
(a) The Servicer shall establish and maintain, in the
name of the Trustee, on behalf of the Trust, for the benefit of the Series
1998-A Certificateholders and the Collateral Interest Holder, an Eligible
Deposit Account (the "Reserve Account") bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Series 1998-A Certificateholders and the Collateral Interest Holder. The
Reserve Account shall initially be established with the Trustee. The Trustee
shall possess all right, title and interest in all funds on deposit from time
to time in the Reserve Account and in all proceeds thereof. The Reserve
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Series 1998-A Certificateholders and the Collateral Interest
Holder. If at any time the Reserve Account ceases to be an Eligible Deposit
Account, the Trustee (or the Servicer on its behalf) shall within 10 Business
Days (or such longer period, not to exceed 30 calendar days, as to which each
Rating Agency may consent) establish a new Reserve Account meeting the
conditions specified above as an Eligible Deposit Account, and shall transfer
any cash and/or any investments to such new Reserve Account. The Trustee, at
the direction of the Servicer, shall (i) make withdrawals from the Reserve
Account from time to time for the purposes set forth in this Supplement, and
(ii) on each Distribution Date (from and after the Reserve Account Funding
Date) prior to the termination of the Reserve Account make a deposit into the
Reserve Account in the amount specified in, and otherwise in accordance with,
subsection 4.7(l).
(b) Funds on deposit in the Reserve Account shall be
invested at the written direction of the Servicer by the Trustee in Eligible
Investments. Funds on deposit in the Reserve Account on any Transfer Date,
after giving effect to any withdrawals from the Reserve Account
39
41
on such Transfer Date, shall be invested in such investments that will mature
so that such funds will be available for withdrawal on or prior to the
immediately succeeding Transfer Date. The Trustee shall maintain for the
benefit of the Series 1998-A Certificateholders and the Collateral Interest
Holder possession of the negotiable instruments or securities, if any,
evidencing such Eligible Investments. No Eligible Investment shall be disposed
of prior to its maturity; provided, however, that the Trustee may sell,
liquidate or dispose of an Eligible Investment before its maturity, if so
directed by the Servicer in writing, the Servicer having reasonably determined
that the interest of the Series 1998-A Certificateholders may be adversely
affected if such Eligible Investment is held to its maturity. On each
Distribution Date, all interest and earnings (net of losses and investment
expenses) accrued since the preceding Distribution Date on funds on deposit in
the Reserve Account shall be retained in the Reserve Account (to the extent
that the amount on deposit in the Reserve Account is less than the Required
Reserve Account Amount) and the balance, if any, shall be deposited in the
Collection Account and treated as Collections of Finance Charge Receivables
allocable to Series 1998-A. For purposes of determining the availability of
funds or the balance in the Reserve Account for any reason under this
Supplement, except as otherwise provided in the preceding sentence, investment
earnings on such funds shall be deemed not to be available or on deposit.
(c) On the Determination Date preceding each Distribution
Date with respect to the Accumulation Period (prior to the Class B Expected
Final Distribution Date) and the first Special Payment Date, the Servicer shall
calculate the "Reserve Draw Amount" which shall be equal to the excess, if any,
of the Covered Amount with respect to such Distribution Date or Special Payment
Date over the Principal Funding Investment Proceeds with respect to such
Distribution Date or Special Payment Date; provided, that such amount will be
reduced to the extent that funds otherwise would be available for deposit in
the Reserve Account under subsection 4.7(l) with respect to such Distribution
Date.
(d) In the event that for any Distribution Date the
Reserve Draw Amount is greater than zero, the Reserve Draw Amount, up to the
amount on deposit in the Reserve Account, shall be withdrawn from the Reserve
Account on the related Transfer Date by the Trustee (acting in accordance with
the instructions of the Servicer), deposited into the Collection Account and
included in Class A Available Funds for such Distribution Date.
(e) In the event that the Reserve Account Surplus on any
Distribution Date, after giving effect to all deposits to and withdrawals from
the Reserve Account with respect to such Distribution Date, is greater than
zero, the Trustee, acting in accordance with the instructions of the Servicer,
shall withdraw from the Reserve Account, and pay to the Collateral Interest
Holder for application in accordance with the Loan Agreement, an amount equal
to such Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the termination of
the Trust pursuant to Article XII of the Agreement, (ii) the day on which the
Class A Investor Amount is paid in full to the Series 1998-A
Certificateholders, (iii) if the Accumulation Period has not commenced, the
occurrence of a Pay Out Event with respect to Series 1998-A and (iv) if the
Accumulation Period has commenced, the earlier of the first Special Payment
Date and the Class A Expected Final Distribution Date, the Trustee, acting in
accordance with the written instructions of the Servicer,
40
42
after the prior payment of all amounts owing to the Series 1998-A
Certificateholders which are payable from the Reserve Account as provided
herein, shall withdraw from the Reserve Account and pay to the Collateral
Interest Holder for application in accordance with the Loan Agreement, all
amounts, if any, on deposit in the Reserve Account and the Reserve Account
shall be deemed to have terminated for purposes of this Supplement.
Section 4.16. Pre-Funding Account.
(a) Establishment of the Pre-Funding Account. The
Servicer hereby directs the Trustee, for the benefit of the Series 1998-A
Certificateholders and the Collateral Interest Holder, to establish and
maintain or cause to be established and maintained in the name of the Trustee,
on behalf of the Series 1998-A Certificateholders and the Collateral Interest
Holder, an Eligible Deposit Account (the "Pre-Funding Account"), bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Series 1998-A Certificateholders and the Collateral Interest
Holder. The Seller does hereby transfer, assign, set over and otherwise convey
to the Trustee for the benefit of the Series 1998-A Certificateholders and the
Collateral Interest Holder, without recourse, all of its right, title and
interest in, to and under the Pre-Funding Account, any Eligible Investments on
deposit therein and any proceeds of the foregoing. The Pre-Funding Account
shall be under the sole dominion and control of the Trustee for the benefit of
the Series 1998-A Certificateholders and the Collateral Interest Holder. If,
at any time, the Pre-Funding Account ceases to be an Eligible Deposit Account,
the Servicer shall direct the Trustee to establish within ten Business Days a
new Pre-Funding Account meeting the conditions specified above, transfer any
cash and/or any investments from the old Pre-Funding Account to such new
Pre-Funding Account and from the date such new Pre-Funding Account is
established, it shall be the "Pre-Funding Account." In addition, after five
days' notice to the Trustee, the Servicer may direct the Trustee to establish a
new Pre-Funding Account meeting the conditions specified above, transfer any
cash and/or investments from the old Pre-Funding Account to such new
Pre-Funding Account and from the date such new Pre-Funding Account is
established, it shall be the "Pre-Funding Account." The Trustee, at the
direction of the Servicer, shall make withdrawals and payments from the
Pre-Funding Account from time to time for the purposes set forth in this
Supplement.
(b) Administration of Pre-Funding Account. The Trustee
shall on the Closing Date deposit into the Pre-Funding Account the Initial
Pre-Funded Amount from the proceeds of the sale of the Series 1998-A
Certificates and the Collateral Interest. On the Business Day preceding each
Transfer Date, the Trustee, acting in accordance with written instructions from
the Servicer, shall withdraw from the Pre-Funding Account and deposit into the
Collection Account all interest and other investment income on the Pre-Funded
Amount with respect to the prior Monthly Period. Such investment income shall
be deemed to be Collections of Finance Charge Receivables allocated to Series
1998-A. Interest (including reinvested interest) and other investment income
on funds on deposit in the Pre-Funding Account shall not be considered part of
the Pre-Funded Amount for purposes of this Supplement.
(c) Investment of Funds in Pre-Funding Account. Funds on
deposit in the Pre-Funding Account shall be invested in Eligible Investments by
the Trustee (or, at the direction of the Trustee, by the Servicer on behalf of
the Trustee) selected at the written direction of the
41
43
Servicer. Funds on deposit in the Pre-Funding Account on the Closing Date and
thereafter shall be invested in Eligible Investments that will mature so that
such funds will be available for withdrawal on the Business Day next succeeding
the next increase in the Invested Amount pursuant to Section 4.17 or, if
earlier, on the next succeeding Transfer Date.
(d) Principal Payments from Pre-Funding Account. In the
event that the Pre-Funded Amount exceeds zero at the end of the Funding Period,
on the first Distribution Date on or after the last day of the Funding Period
the Servicer shall apply or shall cause the Trustee to apply the Pre-Funded
Amount to the payment by the Paying Agent of principal on the Class A
Certificates, the Class B Certificates and the Collateral Interest on a pro
rata basis based on the Class A Invested Amount, the Class B Invested Amount
and the Collateral Invested Amount.
Section 4.17. Increases in Invested Amount. On each
Wednesday during the Funding Period, commencing February 11, 1998, the Invested
Amount shall increase to the extent that the Seller Amount on the preceding day
exceeds the product of (A) the sum of 0.50% and the Required Seller Percentage
on such date and (B) the sum of the aggregate amount of Principal Receivables
in the Trust and amounts on deposit in the Excess Funding Account on such
preceding day; provided, however, that the Invested Amount shall in no event
exceed $1,150,000,000 or increase pursuant to this Section 4.17 by an amount in
excess of the Pre-Funded Amount immediately prior to giving effect to such
increase. Such increase in the Invested Amount shall be allocated to the Class
A Certificates, the Class B Certificates and the Collateral Interest Holder on
a pro rata basis based on the Class A Invested Amount, the Class B Invested
Amount and the Collateral Invested Amount immediately prior to such increase.
Upon any increase in the Invested Amount pursuant to this Section 4.17, the
Servicer shall instruct the Trustee in writing to withdraw from the Pre-Funding
Account and pay to Holders of the Seller Certificates no later than the next
succeeding Business Day an amount equal to the amount of such increase in the
Invested Amount.
ARTICLE V
Distributions and Reports to Series 1998-A Certificateholders
Section 5.1. Distributions.
(a) On each Distribution Date, the Paying Agent shall
distribute to each Class A Certificateholder of record on the related Record
Date (other than as provided in Section 12.02 of the Agreement) such Class A
Certificateholder's pro rata share of the amounts that are allocated and
available on such Distribution Date to pay interest on the Class A Certificates
pursuant to this Supplement.
(b) On each Distribution Date, commencing with the first
to occur of the Class A Expected Final Payment Date and the first Special
Payment Date, the Paying Agent shall distribute to each Class A
Certificateholder of record on the related Record Date (other than as provided
in Section 12.02 of the Agreement) such Class A Certificateholder's pro rata
share of the amounts that are allocated and available on such date to pay
principal of the Class A
42
44
Certificates pursuant to this Supplement up to a maximum amount on any such
date equal to the Class A Investor Amount on such date (unless there has been
an optional repurchase of the Certificateholders' Interest pursuant to Section
10.01 of the Agreement, in which event the foregoing limitation will not
apply).
(c) On each Distribution Date, the Paying Agent shall
distribute to each Class B Certificateholder of record on the related Record
Date (other than as provided in Section 12.02 of the Agreement) such Class B
Certificateholder's pro rata share of the amounts that are allocated and
available on such Distribution Date to pay interest on the Class B Certificates
pursuant to this Supplement.
(d) On each Distribution Date, commencing with the Class
B Principal Commencement Date, the Paying Agent shall distribute to each Class
B Certificateholder of record on the related Record Date (other than as
provided in Section 12.02 of the Agreement) such Class B Certificateholder's
pro rata share of the amounts that are allocated and available on such date to
pay principal of the Class B Certificates pursuant to this Supplement up to a
maximum amount on any such date equal to the Class B Investor Amount on such
date (unless there has been an optional repurchase of the Certificateholders'
Interest pursuant to Section 10.01 of the Agreement, in which event the
foregoing limitation will not apply).
(e) The distributions to be made pursuant to this Section
5.1 are subject to the provisions of Sections 2.06, 9.02, 10.01 and 12.02 of
the Agreement and Sections 8.1 and 8.2 of this Supplement.
(f) Except as provided in Section 12.02 of the Agreement
with respect to a final distribution, distributions to Series 1998-A
Certificateholders hereunder shall be made by check mailed to each Series
1998-A Certificateholder at such Series 1998-A Certificateholder's address
appearing in the Certificate Register without presentation or surrender of any
Series 1998-A Certificate or the making of any notation thereon; provided,
however, that with respect to Series 1998-A Certificates registered in the name
of a Clearing Agency, such distributions shall be made to such Clearing Agency
in immediately available funds.
Section 5.2. Certificates and Statements.
(a) Not later than each Determination Date, the Servicer
shall deliver to the Trustee, the Paying Agent, each Rating Agency and the
Collateral Interest Holder, a certificate substantially in the form of Exhibit
B prepared by the Servicer.
(b) On each Distribution Date, the Paying Agent, on
behalf of the Trustee, shall forward to each Series 1998-A Certificateholder a
statement substantially in the form of Exhibit C prepared by the Servicer.
(c) A copy of each statement or certificate provided
pursuant to paragraph (a) or (b) may be obtained by any Series 1998-A
Certificateholder or any Certificate Owner thereof by a request in writing to
the Servicer.
43
45
(d) On or before January 31 of each calendar year,
beginning with calendar year 1999, the Paying Agent, on behalf of the Trustee,
shall furnish or cause to be furnished to each Person who at any time during
the preceding calendar year was a Series 1998-A Certificateholder, a statement
prepared by the Servicer containing the information which is required to be
contained in the statement to Series 1998-A Certificateholders, as set forth in
paragraph (b) above, aggregated for such calendar year or the applicable
portion thereof during which such Person was a Series 1998-A Certificateholder,
together with other information as is required to be provided by an issuer of
indebtedness under the Internal Revenue Code. Such obligation of the Servicer
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Paying Agent pursuant to any
requirements of the Internal Revenue Code as from time to time in effect.
ARTICLE VI
Series 1998-A Pay Out Events
Section 6.1. Series 1998-A Pay Out Events. If any one of the
following events (each, a "Series 1998-A Pay Out Event") shall occur with
respect to Series 1998-A:
(a) failure on the part of the Seller (A) to make any
payment or deposit required by the terms of the Agreement on or before the date
occurring five Business Days after the date such payment or deposit is required
to be made herein or (B) duly to observe or perform in any material respect any
other covenants or agreements of the Seller set forth in the Agreement which
has a material adverse effect on the Series 1998-A Certificateholders (which
determination shall be made, for so long as the Collateral Invested Amount is
greater than zero, without reference to whether any funds are available
pursuant to Series Enhancement) and continues unremedied for a period of 60
days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Seller by the Trustee, or to the
Seller and the Trustee by Holders of Series 1998-A Certificates aggregating not
less than 50% of the outstanding principal balance of the Series 1998-A
Certificates;
44
46
(b) any representation or warranty made by the Seller in
the Agreement or any information contained in a computer file or microfiche
list required to be delivered by the Servicer on behalf of the Seller pursuant
to Section 2.01 or 2.08 of the Agreement (A) shall prove to have been incorrect
in any material respect when made or when delivered, which continues to be
incorrect in any material respect for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Seller by the Trustee, or to the Seller and the Trustee
by Holders of the Series 1998-A Certificates aggregating not less than 50% of
the outstanding principal balance of the Series 1998-A Certificates and (B) as
a result of which the interests of the Series 1998-A Certificateholders are
materially and adversely affected (which determination shall be made, for so
long as the Collateral Invested Amount is greater than zero, without reference
to whether any funds are available pursuant to any Series Enhancement);
provided, however, that a Series Pay Out Event pursuant to this subparagraph
(b) shall not be deemed to occur hereunder if the Seller has accepted
reassignment of the related Receivable, or all of such Receivables, if
applicable, during such period (or such longer period as the Trustee may
specify) in accordance with the provisions hereof and of the Agreement;
(c) (1) with respect to the last day of any prior Monthly
Period during which the Seller Amount is less than the Required Seller Amount,
the failure of the Seller to convey on or prior to the Required Designation
Date Receivables in Additional Accounts to the Trust such that the Seller
Amount shall be at least equal to the Required Seller Amount as of the close of
business on the applicable Addition Date; or (2) with respect to the last day
of any prior Monthly Period during which the aggregate amount of Principal
Receivables is less than the Required Principal Balance as of such day, the
failure of the Seller to convey on or prior to the Required Designation Date
Receivables in Additional Accounts to the Trust such that the aggregate amount
of the Principal Receivables shall be at least equal to the Required Principal
Balance as of the close of business on the applicable Addition Date;
(d) the Net Portfolio Yield averaged over three
consecutive Monthly Periods is less than the Base Rate averaged over such
period;
(e) any Servicer Default shall occur which would have a
material adverse effect on the Series 1998-A Certificateholders (which
determination shall be made, for so long as the Collateral Invested Amount is
greater than zero, without reference to whether any funds are available
pursuant to any Series Enhancement); or
(f) the Class A Investor Amount shall not be paid in full
on the Class A Expected Final Distribution Date or the Class B Invested Amount
shall not be paid in full on the Class B Expected Final Distribution Date;
then, in the case of any event described in subparagraph (a), (b) or (e), after
the applicable grace period, if any, set forth in such subparagraphs, either
the Trustee or the holders of Investor Certificates (including the Collateral
Interest Holder) of Series 1998-A evidencing more than 50% of the aggregate
unpaid principal amount of such Investor Certificates (including the Collateral
Interest) by notice then given in writing to the Sellers and the Servicer (and
to the Trustee if given by the Holders of Investor Certificates (including the
Collateral Interest Holder)
45
47
of Series 1998-A) may declare that a Pay Out Event has occurred with respect to
Series 1998-A as of the date of such notice, and, in the case of any event
described in subparagraph (c), (d) or (f) a Pay Out Event shall occur with
respect to Series 1998-A without any notice or other action on the part of the
Trustee or Holders of Investor Certificates (including the Collateral Interest
Holder) of Series 1998-A immediately upon the occurrence of such event.
ARTICLE VII
Optional Repurchase; Series Termination
Section 7.1. Optional Repurchase. On any day occurring on or
after the date on which the Investor Amount is reduced to 5% or less of the
maximum Invested Amount during the Revolving Period, the Sellers shall have the
option to purchase the interest of the holders of Investor Certificates
(including the Collateral Interest), at a purchase price equal to (i) if such
day is a Distribution Date, the Reassignment Amount for such Distribution Date
or (ii) if such day is not a Distribution Date, the Reassignment Amount for the
Distribution Date following such day.
Section 7.2. Series Termination.
(a) If, on the May 2003 Distribution Date, the Investor
Amount (after giving effect to all changes therein on such date) would be
greater than zero, the Servicer, on behalf of the Trustee, shall, within the
40-day period which begins on such Distribution Date, solicit bids for the sale
of Principal Receivables and the related Finance Charge Receivables (or
interests therein) in an amount equal to the Investor Amount and accrued and
unpaid interest thereon at the close of business on the last day of the Monthly
Period preceding the Series Termination Date (after giving effect to all
distributions required to be made on the Series Termination Date, except
pursuant to this Section 7.2; provided, however that in no event shall such
amount exceed the Series Percentage of Receivables on the Series Termination
Date). Such bids shall require that such sale shall (subject to Section
7.2(b)) occur on the Series Termination Date. The Seller and the Collateral
Interest Holder shall be entitled to participate in, and to receive from the
Trustee a copy of each other bid submitted in connection with, such bidding
process.
(b) The Servicer, on behalf of the Trustee, shall sell
such Receivables (or interests therein) on the Series Termination Date to the
bidder who made the highest cash purchase offer. The proceeds of any such sale
shall be treated as Collections on the Receivables allocated to the Series
1998-A Certificateholders and the Collateral Interest Holder pursuant to the
Agreement and this Supplement; provided, however, that the Servicer shall
determine conclusively the amount of such proceeds which are allocable to
Finance Charge Receivables and the amount of such proceeds which are allocable
to Principal Receivables. During the period from the May 2003 Distribution
Date to the Series Termination Date, the Servicer shall continue to collect
payments on the Receivables and allocate and deposit such collections in
accordance with the provisions of the Agreement and the Supplements.
46
48
ARTICLE VIII
Final Distributions
Section 8.1. Sale of Receivables or Certificateholders'
Interest Pursuant to Section 2.06 or 10.01 of the Agreement.
(a) Purchase Price. The amount to be paid with respect
to Series 1998-A in connection with (i) a reassignment of Receivables to the
Seller pursuant to Section 2.06 of the Agreement or (ii) a repurchase of the
Certificateholders' Interest pursuant to Section 10.01 of the Agreement shall
equal the Reassignment Amount for the first Distribution Date following the
Monthly Period in which the reassignment obligation arises under the Agreement.
(b) Distributions Pursuant to Section 7.01 or 7.02 of
this Supplement and Section 10.01 of the Agreement. With respect to the
Reassignment Amount deposited into the Collection Account pursuant to Section
7.1 or 8.1(a)(ii) or any amounts allocable to Series 1998-A deposited into the
Collection Account pursuant to Section 7.2, the Trustee shall, not later than
3:00 p.m. New York City time, on the related Distribution Date, make deposits
or distributions of the following amounts (in the priority set forth below and,
in each case, after giving effect to any deposits and distributions otherwise
to be made on such date) in immediately available funds: (i) (x) the Class A
Investor Amount on such Distribution Date will be distributed to the Paying
Agent for payment to the Class A Certificateholders and (y) an amount equal to
the sum of (A) Class A Monthly Interest for such Distribution Date, (B) any
Class A Monthly Interest previously due but not distributed to the Class A
Certificateholders on a prior Distribution Date and (C) the amount of Class A
Additional Interest, if any, for such Distribution Date and any Class A
Additional Interest previously due but not distributed to the Class A
Certificateholders on any prior Distribution Date, will be distributed to the
Paying Agent for payment to the Class A Certificateholders, (ii) (x) the Class
B Invested Amount on such Distribution Date will be distributed to the Paying
Agent for payment to the Class B Certificateholders and (y) an amount equal to
the sum of (A) Class B Monthly Interest for such Distribution Date, (B) any
Class B Monthly Interest previously due but not distributed to the Class B
Certificateholders on a prior Distribution Date and (C) the amount of Class B
Additional Interest, if any, for such Distribution Date and any Class B
Additional Interest previously due but not distributed to the Class B
Certificateholders on any prior Distribution Date, will be distributed to the
Paying Agent for payment to the Class B Certificateholders and (iii) the
Collateral Invested Amount on such date and the amount of accrued and unpaid
interest on the Collateral Invested Amount (including any unpaid Collateral
Additional Interest) will be distributed to the Collateral Interest Holder for
application in accordance with the Loan Agreement.
(c) Distributions Pursuant to Section 2.06 of the
Agreement. With respect to any amounts deposited into the Collection Account
pursuant to subsection 8.1(a)(i), the Trustee shall, not later than 3:00 p.m.,
New York City time, on the related Distribution Date, deposit the principal
portion of such amounts that are allocable to the Class A Certificates and the
Class B
47
49
Certificates into the Collection Account and the principal portion of such
amounts allocable to the Collateral Interest shall be distributed to the
Collateral Interest Holder for application in accordance with the Loan
Agreement.
(d) Notwithstanding anything to the contrary in this
Supplement or the Agreement, all amounts distributed to the Paying Agent
pursuant to subsection 8.1(b) for payment to the Series 1998-A
Certificateholders shall be deemed distributed in full to the Series 1998-A
Certificateholders on the date on which such funds are distributed to the
Paying Agent pursuant to this Section and shall be deemed to be a final
distribution pursuant to Section 12.02 of the Agreement.
Section 8.2. Distribution of Proceeds of Sale, Disposition or
Liquidation of the Receivables Pursuant to Section 9.02 of the Agreement.
(a) Not later than 12:00 noon, New York City time, on the
Distribution Date following the date on which the Insolvency Proceeds are
deposited into the Collection Account pursuant to subsection 9.02(b) of the
Agreement, the Trustee shall (in the following priority and, in each case,
after giving effect to any deposits and distributions otherwise to be made on
such Distribution Date) (i) deduct an amount equal to the Class A Invested
Amount on such Distribution Date from the portion of the Insolvency Proceeds
allocated to Collections of Principal Receivables and distribute such amount to
the Paying Agent for payment to the Class A Certificateholders, provided that
the amount of such distribution shall not exceed the product of (x) the portion
of the Insolvency Proceeds allocated to Collections of Principal Receivables
and (y) the Principal Allocation Percentage with respect to the related Monthly
Period, (ii) deduct an amount equal to the Class B Invested Amount on such
Distribution Date from the portion of the Insolvency Proceeds allocated to
Collections of Principal Receivables and distribute such amount to the Paying
Agent for payment to the Class B Certificateholders, provided that the amount
of such distribution shall not exceed (x) the product of (A) the portion of
such Insolvency Proceeds allocated to Collections of Principal Receivables and
(B) the Principal Allocation Percentage with respect to the related Monthly
Period minus (y) the amount distributed to the Paying Agent pursuant to clause
(i) of this sentence and (iii) deduct an amount equal to the Collateral
Invested Amount, if any, on such Distribution Date from the portion of the
Insolvency Proceeds allocated to Collections of Principal Receivables and
distribute such amount to the Collateral Interest Holder for application in
accordance with the Loan Agreement, provided that the amount of such
distribution shall not exceed (x) the product of (1) the portion of the
Insolvency Proceeds allocated to Collections of Principal Receivables and (2)
the Principal Allocation Percentage with respect to such Monthly Period minus
(y) the amounts distributed to the Paying Agent pursuant to clauses (i) and
(ii) of this sentence. To the extent that the product of (A) the portion of
the Insolvency Proceeds allocated to Collections of Principal Receivables and
(B) the Principal Allocation Percentage with respect to the related Monthly
Period exceeds the aggregate amounts distributed to the Paying Agent and the
Collateral Interest Holder pursuant to the preceding sentence, the excess shall
be allocated to the Sellers' Interest and shall be released to the Holders of
the Seller Certificates on such Distribution Date.
(b) Not later than 12:00 noon, New York City time, on
such Distribution Date, the Trustee shall (in the following priority and, in
each case, after giving effect to any
48
50
deposits and distributions otherwise to be made on such Distribution Date) (i)
deduct an amount equal to the sum of (w) Class A Monthly Interest for such
Distribution Date, (x) any Class A Monthly Interest previously due but not
distributed to the Class A Certificateholders on a prior Distribution Date and
(y) the amount of Class A Additional Interest, if any, for such Distribution
Date and any Class A Additional Interest previously due but not distributed to
the Class A Certificateholders on a prior Distribution Date from the portion of
the Insolvency Proceeds allocated to Collections of Finance Charge Receivables
and distribute such amount to the Paying Agent for payment to the Class A
Certificateholders, provided that the amount of such distribution shall not
exceed the product of (x) the portion of the Insolvency Proceeds allocated to
Collections of Finance Charge Receivables, (y) the Floating Allocation
Percentage with respect to the related Monthly Period and (z) the Class A
Floating Percentage with respect to such Monthly Period and (ii) deduct an
amount equal to the sum of (w) Class B Monthly Interest for such Distribution
Date, (x) Class B Monthly Interest previously due but not distributed to the
Class B Certificateholders and (y) the amount of Class B Additional Interest,
if any, for such Distribution Date and any Class B Additional Interest
previously due but not distributed to the Class B Certificateholders on a prior
Distribution Date from the portion of the Insolvency Proceeds allocated to
Collections of Finance Charge Receivables and distribute such amount to the
Paying Agent for payment to the Class B Certificateholders, provided that the
amount of such distribution shall not exceed the product of (x) the portion of
the Insolvency Proceeds allocated to Collections of Finance Charge Receivables,
(y) the Floating Allocation Percentage with respect to the related Monthly
Period and (z) the Class B Floating Percentage with respect to such Monthly
Period. To the extent that the product of (A) the portion of the Insolvency
Proceeds allocated to Collections of Finance Charge Receivables and (B) the
Floating Allocation Percentage with respect to the related Monthly Period
exceeds the aggregate amount distributed to the Paying Agent pursuant to the
preceding sentence, the excess shall be released to the Collateral Interest
Holder for application by the Collateral Interest Holder in accordance with the
Loan Agreement.
(c) Notwithstanding anything to the contrary in this
Supplement or the Agreement, all amounts distributed to the Paying Agent
pursuant to this Section for payment to the Series 1998-A Certificateholders
shall be distributed in full to the Series 1998-A Certificateholders on the
date on which funds are distributed to the Paying Agent pursuant to this
Section and shall be deemed to be a final distribution pursuant to Section
12.02 of the Agreement.
Section 8.3. Instructions Pursuant to Section 9.02(a) of the
Agreement. The Holders of Investor Certificates of Series 1998-A evidencing
more than 50% of the Investor Amount of each Class (including the Collateral
Interest) shall not be considered as having disapproved of any liquidation of
the Receivables and to continue transferring Principal Receivables to the Trust
pursuant to subsection 9.02(a) of the Agreement unless Holders of more than 50%
of the Investor Amount of each of the Class A Certificates, the Class B
Certificates and the Collateral Interest instruct the Trustee to such effect in
the manner required pursuant to subsection 9.02(a) of the Agreement.
49
51
ARTICLE IX
Certificates
Section 9.1. Book-Entry Certificates. The Class A
Certificates and the Class B Certificates shall be delivered as Book-Entry
Certificates. The Clearing Agency for the Class A Certificates and the Class B
Certificates shall be The Depository Trust Company, and the Class A
Certificates and the Class B Certificates shall be initially registered in the
name of Cede & Co., its nominee.
ARTICLE X
Miscellaneous Provisions
Section 10.1. Certain Matters Regarding the Collateral
Interest Holder. Amounts payable to the Collateral Interest Holder hereunder
shall be applied in accordance with the provisions of the Loan Agreement.
Section 10.2. Ratification of Agreement. As supplemented by
this Supplement, the Agreement is in all respects ratified and confirmed and
the Agreement as so supplemented by this Supplement shall be read, taken and
construed as one and the same instrument.
Section 10.3. Counterparts. This Supplement may be executed
in two or more counterparts, and by different parties on separate counterparts,
each of which shall be an original, but all of which shall constitute one and
the same instrument.
Section 10.4. Governing Law. THIS SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING THE
UCC AS IN EFFECT IN THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.5. Notices. All directions, notices and
instructions to the Trustee shall be in writing (which may be facsimile).
Section 10.6. Amendments. This Supplement may be amended by
the Seller without the consent of the Servicer, the Trustee or any Investor
Certificateholder if the Seller provides the Trustee with (i) an Opinion of
Counsel to the effect that such amendment or modification would reduce the risk
that the Trust would be treated as taxable as a publicly traded partnership
pursuant to Code section 7704 and (ii) an Officer's Certificate that such
amendment or modification would not materially and adversely affect any
Investor Certificateholder, provided that no such amendment shall be deemed
effective without (i) the Trustee's consent, if the Trustee's rights, duties
and obligations hereunder are thereby modified and (ii) the Trustee having
obtained written assurance that such amendment or modification will not, by
itself, lower
50
52
the then-current ratings on the Series 1998-A Certificates. The Seller shall
provide the Rating Agencies with prior written notice of any such amendment or
modification.
51
53
IN WITNESS WHEREOF, the undersigned have caused this
Supplement to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
ADVANTA NATIONAL BANK,
Seller and Servicer,
By:
------------------------
Name: Michael Coco
Title: Vice President
BANKERS TRUST COMPANY,
Trustee
By:
------------------------
Name:
Title:
[Signature Page for Series 1998-A Supplement]
52
54
TABLE OF CONTENTS
Page
----
ARTICLE I
Section 1.1. Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
Section 2.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III
Section 3.1 Servicing Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE IV
Section 4.1 Collections and Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.2 Determination of Monthly Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 4.3 Determination of Monthly Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.4. Required Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.5. Application of Class A Available Funds, Class B Available Funds, Collateral Available Funds,
Available Investor Principal Collections
and Collateral Principal Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.6. Default Amounts; Investor Charge-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.7. Excess Spread; Excess Finance Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 4.8. Reallocated Principal Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.9. Excess Finance Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.10. Shared Principal Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.11. Determination of LIBOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
i
55
Page
----
Section 4.12. Cash Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.13. Principal Funding Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 4.14. Class A Accumulation Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.15. Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.16. Pre-Funding Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.17. Increases in Invested Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE V
Section 5.1 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.2. Certificates and Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VI
Section 6.1. Series 1998-A Pay Out Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VII
Section 7.1. Optional Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 7.2. Series Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VIII
Section 8.1. Sale of Receivables or Certificateholders' Interest Pursuant to Section 2.06
or 10.01 of the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 8.2. Distribution of Proceeds of Sale, Disposition or Liquidation of the Receivables Pursuant to
Section 9.02 of the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 8.3 Instructions Pursuant to Section 9.02(a) of the Agreement . . . . . . . . . . . . . . . . . . . . . . 47
ii
56
Page
----
ARTICLE IX
Section 9.1. Book-Entry Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE X
Section 10.1. Certain Matters Regarding the Collateral Interest Holder . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.2. Ratification of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.3. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.4. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.5. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.6. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
EXHIBITS
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT B Form of Monthly Payment Instructions
EXHIBIT C Form of Monthly Certificateholders' Statement
iii
57
EXHIBIT A-1
TO SUPPLEMENT
REGISTERED
ADVANTA CREDIT CARD MASTER TRUST II
CLASS A FLOATING RATE ASSET-BACKED CERTIFICATE,
SERIES 1998-A
Unless this Class A Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the Issuer or its agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
Evidencing an undivided interest in a trust, the corpus of
which consists of receivables generated from time to time in the
ordinary course of business in a portfolio of revolving consumer
credit card accounts owned by Advanta National Bank (formerly known as
Advanta National Bank USA and prior to that known as Colonial National
Bank USA and successor in interest to the former Advanta National
Bank) (the "Bank") or any Additional Seller.
No. CUSIP NO.
----- -----------------
$
-----------------
(Not an interest in or obligation of Advanta National Bank or
any affiliate thereof, except to the limited extent described herein.)
This certifies that CEDE & CO. (the "Investor
Certificateholder") is the registered owner of an undivided interest in certain
assets of a trust (the "Trust"), created pursuant to the Amended and Restated
Pooling and Servicing Agreement, dated as of December 1, 1993, as amended and
restated as of May 23, 1994, and as amended by Amendment Number 1 dated as of
July 1, 1994, between the Bank, as seller (in such capacity, the "Seller") and
servicer (in such capacity, the "Servicer"), and Bankers Trust Company, as
trustee (the "Trustee"), as further amended by Amendment Number 2 dated as of
October 6, 1995 among the Bank, as seller and servicer, the former Advanta
National Bank, as a Seller, and the Trustee (as amended from time to time, the
"Amended and Restated Pooling and Servicing Agreement") as supplemented by the
Series 1998-A Supplement, dated as of February 6, 1998, by and between the
Bank, as Seller and Servicer, and the Trustee. The Amended and Restated
Pooling and Servicing Agreement, the Series 1998-A Supplement and any
amendments, exhibits and schedules thereto are collectively referred to herein
as the "Agreement." The corpus of the Trust consists of (i) a portfolio of
58
receivables (the "Receivables") arising under selected VISA and MasterCard*
consumer credit card accounts or other revolving consumer credit accounts (the
"Accounts") in portfolios of revolving consumer credit accounts owned by any of
the Bank or any Additional Seller, (ii) all monies due or to become due in
payment of the Receivables, all proceeds of the Receivables (other than
investment earnings related to such proceeds), (iii) the right to receive
certain Interchange attributed to cardholder charges for merchandise and
services in the Accounts, (iv) certain amounts recovered from Accounts in which
the Receivables have been written off as uncollectible, (v) proceeds of credit
insurance policies relating to the Receivables and (vi) all monies on deposit
in certain bank accounts of the Trust and the benefits of any type of
enhancement ("Series Enhancement") issued with respect to any Series (the
drawing on or payment of such Series Enhancement being available only to
Certificateholders of a specified Series or Class unless otherwise indicated in
the related Supplement). The Trust assets may also include participations
(including 100% participations) representing undivided interests in a pool of
assets primarily consisting of revolving credit card receivables or consumer
loan receivables (secured and unsecured), and any interests in both such types
of receivables, including securities representing or backed by both such types
of receivables, and other self-liquidating financial assets owned by the Seller
or any affiliate of the Seller and collections thereon. The Bank, as Seller,
conveyed to the Trust all Receivables existing under certain designated
Accounts at the time of the formation of the Trust and all Receivables arising
under such Accounts from time to time thereafter. In addition, the Seller has
conveyed and the Seller may convey in the future all Receivables existing under
certain designated Additional Accounts (including Automatic Additional
Accounts) and all Receivables thereafter arising in such Additional Accounts.
Although a summary of certain provisions of the Agreement is
set forth below, this Class A Certificate does not purport to summarize the
Agreement, is qualified in its entirety by the terms and provisions of the
Agreement and reference is made to that Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby and the rights, duties and obligations of the Trustee. A copy of the
Agreement may be obtained from the Trustee by writing to the Trustee at Four
Albany Street, New York, New York 10006, Attention: Corporate Trust and Agency
Group/Structured Finance Group. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement.
This Class A Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement to which the Holder of this
Class A Certificate by virtue of the acceptance hereof assents and is bound.
It is the intent of the Seller and the Class A
Certificateholders that, for federal income taxes, state and local income and
franchise taxes and any other taxes imposed on or measured by income, the Class
A Certificates will be treated as indebtedness secured by the Receivables. The
Servicer by entering into the Agreement and the Seller, the Holder of the Bank
Certificate, each Holder of a Class A Certificate and each Holder of a Class B
Certificate, by acceptance of its Certificate, agrees to treat the Series
1998-A Certificates for purposes of federal
- -------------------------------
* VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
A-1-2
59
income taxes, state and local income and franchise taxes, and any other taxes
imposed on or measured by income, as indebtedness of the Seller.
Subject to the terms of the Agreement, payments of principal
of the Class A Certificates are limited to the unpaid Class A Investor Amount,
which may be less than the unpaid principal balance of the Class A
Certificates, pursuant to the terms of the Agreement. All principal of and
interest on the Class A Certificates is scheduled to be paid by the January
2001 Distribution Date but may be paid earlier. Subject to prior termination
as provided in the Agreement, the interest of the Series 1998-A
Certificateholders in the Trust will terminate following the earliest of (i)
the date on which the Investor Amount is paid in full, (ii) the July 2003
Distribution Date and (iii) the termination of the Trust pursuant to Section
12.01 of the Agreement.
The Receivables consist of Principal Receivables which arise
generally from the purchase of goods and services and cash advances and in
respect of Periodic Finance Charges, Overlimit Fees, Late Fees, annual
membership fees and annual service charges, if any, Cash Advance Fees,
transaction charges and all other fees and charges with respect to the Accounts
designated by the Seller to be included in Finance Charge Receivables. This
Certificate is one of a series of Certificates entitled "ADVANTA Credit Card
Master Trust II, Class A Floating Rate Asset Backed Certificates, Series
1998-A" (the "Class A Certificates"), each of which represents a fractional
undivided interest in certain assets of the Trust. The Trust's assets are
allocated in part to the Holders of the Class A Certificates, in part to the
Holders of the Class B Certificates, in part to the Collateral Interest Holder,
in part to the Holders of Investor Certificates of all other Series and in part
to the Seller as Holder of the Bank Certificate and the Holders of any
Supplemental Certificates outstanding from time to time. The Bank Certificate
and the Holders of any outstanding Supplemental Certificates represent the
Sellers' Interest in the Trust. The Bank Certificate and any outstanding
Supplemental Certificates represent the interest in the Principal Receivables
not represented by the Investor Certificates.
The aggregate interest represented by the Series 1998-A
Certificates at any time in the Principal Receivables in the Trust shall not
exceed an amount equal to the Principal Allocation Percentage thereof (as set
forth in the Agreement) at such time. The Initial Investor Amount is
$1,150,000,000. The Invested Amount for any date will equal the sum of the
Class A Invested Amount, the Class B Invested Amount and the Collateral
Invested Amount. The Class A Initial Invested Amount is $724,500,000. The
Class A Initial Investor Amount is $966,000,000. The Class A Invested Amount
for any date of determination will be an amount equal to (a) the Class A
Initial Invested Amount, plus (b) the amount of any increases in the Class A
Invested Amount during the Funding Period, minus (c) the aggregate amount of
principal payments (other than principal payments made from amounts on deposit
in the Pre-Funding Account on the first Distribution Date following the end of
the Funding Period) made to the Class A Certificateholders on or prior to such
date, minus (d) the excess, if any, of the aggregate amount of Class A Investor
Charge-offs for all prior Distribution Dates over the aggregate amount of Class
A Investor Charge-Offs reimbursed prior to such date, minus (e) the Principal
Funding Account Balance.
Interest will be distributed monthly on the 15th day of each
calendar month or, if such 15th day is not a Business Day, payment will be made
on the next succeeding Business Day (each, a "Distribution Date"), commencing
April 15, 1998, in an amount equal to the product of
A-1-3
60
(i) (a) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (b) the
Class A Certificate Rate, and (ii) the outstanding principal amount of the
Class A Certificates as of the preceding Record Date (or, in the case of the
first Distribution Date, as of the Closing Date).
The Class A Certificates will bear interest for each Interest
Period at the rate of 0.04% per annum above LIBOR determined as set forth below
(the "Class A Certificate Rate").
The Trustee will determine LIBOR on February 4, 1998 for the
period from the Closing Date through April 14, 1998 and for each Interest
Period thereafter, on the second London Business Day prior to the Distribution
Date on which such Interest Period commences (each, a "LIBOR Determination
Date"). A "London Business Day" is any day on which dealings in deposits in
United States dollars are transacted in the London interbank market. The Class
A Certificate Rate applicable to the then current and the immediately preceding
Interest Periods may be obtained by telephoning the Trustee at its Corporate
Trust Office at (800) 735-7777.
The determination of LIBOR will be made in accordance with the
following provisions:
(i) On each LIBOR Determination Date, the Trustee will
determine LIBOR based on the rate for deposits in United States
dollars for a period of the Designated Maturity which appears on
Telerate Page 3750 as of 11:00 A.M. (London time) on such date.
(ii) If such rate does not appear on Telerate Page 3750, the
Trustee will determine LIBOR on the basis of quotations of the offered
rates for deposits in United States dollars provided by the Reference
Banks at approximately 11:00 A.M. (London time) on such LIBOR
Determination Date to prime banks in the London interbank market for a
period of the Designated Maturity. If at least two such quotations
are provided, LIBOR will be the arithmetic mean of such quotations.
(iii) If, on the LIBOR Determination Date, such rate does not
appear on Telerate Page 3750 and only one or none of the Reference
Banks provides such offered quotations, LIBOR will be the rate per
annum that the Trustee determines to be the arithmetic mean of the
offered quotations that three major banks in The City of New York
selected by the Servicer are quoting at approximately 11:00 A.M. (New
York City time) on that day for loans in United States dollars to
leading European banks for a period of the Designated Maturity.
"Designated Maturity" as used in the preceding provisions
means, for the initial LIBOR Determination Date, two months, and for each LIBOR
Determination Date thereafter, one month.
On each Distribution Date with respect to the Class A
Accumulation Period, an amount equal to the least of (a) Available Investor
Principal Collections on deposit in the Collection Account with respect to such
Distribution Date, (b) the Controlled Deposit Amount for such Distribution Date
and (c) the Class A Invested Amount, will be deposited in the Principal Funding
Account for payment to the Class A Certificateholders on the Class A
A-1-4
61
Expected Final Distribution Date or on the first Distribution Date with respect
to the Rapid Amortization Period.
On each Distribution Date during the Rapid Amortization Period
until the Class A Investor Amount has been paid in full or the Series
Termination Date occurs, the Class A Certificateholders will be entitled to
receive Available Investor Principal Collections in an amount up to the Class A
Investor Amount.
On any Distribution Date occurring on or after the Investor
Amount is reduced to 5% or less of the maximum Invested Amount during the
Revolving Period the Seller will have the option (to be exercised in its sole
discretion) to repurchase the Certificates.
This Class A Certificate does not represent an obligation of,
or an interest in, Advanta Corp., the Bank, any Additional Seller, the Servicer
or any Affiliate of any of them. None of the Class A Certificates, the
Accounts nor the Receivables are deposits or insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental agency. This
Class A Certificate is limited in right of payment to certain Collections with
respect to the Receivables (and certain other amounts), all as more
specifically set forth herein and in the Agreement.
The Agreement may be amended under certain circumstances by
the Servicer, the Seller and the Trustee, without Certificateholder consent,
provided that (i) the Seller shall have delivered to the Trustee an Officer's
Certificate to the effect that the Seller reasonably believes that such
amendment will not result in the occurrence of a Pay Out Event or materially
adversely affect the amount or timing of distributions to be made to the
Investor Certificateholders of any Series or Class and (ii) written
confirmation from each Rating Agency that such amendment will not result in a
reduction or withdrawal of the rating of the Series 1998-A Certificates or the
rating of any other outstanding Series or Class with respect to which it is a
Rating Agency.
The Agreement may be amended by the Servicer, the Seller and
the Trustee, with the consent of the Holders of Investor Certificates
evidencing not less than 66-2/3% of the aggregate Investor Amount of the
Investor Certificates of all adversely affected Series, for the purpose of
adding any provisions to, changing in any manner or eliminating any of the
provisions of the Agreement or of modifying in any manner the rights of
Investor Certificateholders of any Series then issued and outstanding;
provided, however, that no such amendment shall (a) reduce in any manner the
amount of, or delay the timing of, distributions to Investor Certificateholders
or deposits of amounts to be so distributed or the amount available under any
Series Enhancement without the consent to any such amendment of each affected
Certificateholder, (b) change the definition of or the manner of calculating
the interest of any Investor Certificateholder without the consent of each
affected Investor Certificateholder, (c) reduce the aforesaid percentage
required to consent to any such amendment without the consent of each Investor
Certificateholder or (d) adversely affect the rating of any Series or Class by
each Rating Agency without the consent of the Holders of Investor Certificates
of such Series or Class evidencing not less than 66-2/3% of the aggregate
Investor Amount of the Investor Certificates of such Series or Class.
The Class A Certificates are issuable only in denominations of
$1,000 and integral multiples of $1,000 in excess thereof. The transfer of
this Class A Certificate shall be
A-1-5
62
registered in the Certificate Register upon surrender of this Class A
Certificate for registration of transfer at any office or agency maintained by
the Transfer Agent and Registrar accompanied by a written instrument of
transfer, in a form satisfactory to the Trustee and the Transfer Agent and
Registrar, duly executed by the Holder or his attorney and duly authorized in
writing, and thereupon one or more new Class A Certificates of authorized
denominations and for the same aggregate fractional undivided interest will be
issued to the designated transferee or transferees.
As provided in the Agreement and subject to certain
limitations therein set forth, this Class A Certificate is exchangeable for a
new Class A Certificate evidencing a like aggregate fractional undivided
interest, as requested by the Holder surrendering this Class A Certificate. No
service charge may be imposed for any such exchange, but the Transfer Agent and
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
Prior to due presentation of this Class A Certificate for
registration of transfer, the Transfer Agent and Registrar, the Paying Agent
and the Trustee and any agent of any of them may treat the person in whose name
this Class A Certificate is registered as the owner hereof for all purposes,
and neither the Trustee, the Paying Agent or the Transfer Agent and Registrar
nor any agent of any of them shall be affected by notice to the contrary except
in certain circumstances described in the Agreement.
This Class A Certificate shall be construed in accordance with
and governed by the laws of the State of New York, without reference to its
conflict of law provisions.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, or by an
authenticating agent appointed by the Trustee, this Class A Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any
purpose.
A-1-6
63
IN WITNESS WHEREOF, the Seller has caused this Class A
Certificate to be duly executed.
ADVANTA NATIONAL BANK
By:
------------------------
Vice President
This is one of the Class A Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY,
as Trustee,
By:
------------------------
Authorized Officer
Dated:
------------------
A-1-7
64
----------
ASSIGNMENT
----------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE(S)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- ------------------------------
: :
: :
: :
- ------------------------------ -----------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
____________________ the within certificate and all rights thereunder, and
hereby irrevocably constitutes and appoints ____________________ Attorney, with
full power of substitution in the premises, to transfer said certificate on the
books kept for registration thereof.
Dated:
------------------------
---------------------------------
Note: The signature(s) to this
Assignment must correspond with the
name(s) as written on the face of
the within certificate in every
particular, without alteration or
enlargement or any change whatever.
(1) An assignee which is not a
United States Person as
defined in the Internal
Revenue Code of 1986, as
amended (the "Code") must
certify to the Transfer Agent
and Registrar in writing as
to such status and such
further information as may be
required under the Code or
reasonably requested by the
Transfer Agent and Registrar.
A-1-8
65
EXHIBIT A-2
TO SUPPLEMENT
REGISTERED
ADVANTA CREDIT CARD MASTER TRUST II
CLASS B FLOATING RATE ASSET-BACKED CERTIFICATE,
SERIES 1998-A
THIS CLASS B CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE
ACCOUNT OF A BENEFIT PLAN.
Unless this Class B Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the Issuer or its agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
Evidencing an undivided interest in a trust, the corpus of
which consists of receivables generated from time to time in the
ordinary course of business in a portfolio of revolving consumer
credit card accounts owned by Advanta National Bank (formerly known as
Advanta National Bank USA and prior to that known as Colonial National
Bank USA and successor in interest to the former Advanta National
Bank) (the "Bank") or any Additional Seller.
No. CUSIP NO.
--- ------------------
$
------------------
(Not an interest in or obligation of Advanta National Bank, or
any affiliate thereof, except to the limited extent described herein.)
This certifies that CEDE & CO. (the "Investor
Certificateholder") is the registered owner of an undivided interest in certain
assets of a trust (the "Trust"), created pursuant to the Amended and Restated
Pooling and Servicing Agreement, dated as of December 1, 1993, and as amended
and restated on May 23, 1994, and as amended by Amendment Number 1 dated as of
July 1, 1994, between the Bank, as seller (in such capacity, the "Seller") and
servicer (in such capacity, the "Servicer"), and Bankers Trust Company, as
trustee (the "Trustee"), as further amended by Amendment Number 2 dated as of
October 6, 1995 among the Bank, as seller and servicer, the former Advanta
National Bank, as a Seller, and the Trustee (as amended from time to time, the
"Amended and Restated Pooling and Servicing Agreement") as supplemented by the
Series 1998-A Supplement, dated as of February 6, 1998, by and between the
Bank, as Seller and Servicer, and the Trustee. The Amended and Restated
Pooling and Servicing Agreement, the
66
Series 1998-A Supplement and any amendments, exhibits and schedules thereto are
collectively referred to herein as the "Agreement." The corpus of the Trust
consists of (i) a portfolio of receivables (the "Receivables") arising under
selected VISA and MasterCard* consumer credit card accounts or other revolving
consumer credit accounts (the "Accounts") in portfolios of revolving consumer
credit accounts owned by any of the Bank or any Additional Seller, (ii) all
monies due or to become due in payment of the Receivables, all proceeds of the
Receivables (other than investment earnings related to such proceeds), (iii)
the right to receive certain Interchange attributed to cardholder charges for
merchandise and services in the Accounts, (iv) certain amounts recovered from
Accounts in which the Receivables have been written off as uncollectible, (v)
proceeds of credit insurance policies relating to the Receivables and (vi) all
monies on deposit in certain bank accounts of the Trust and the benefits of any
type of enhancement ("Series Enhancement") issued with respect to any Series
(the drawing on or payment of such Series Enhancement being available only to
Certificateholders of a specified Series or Class unless otherwise indicated in
the related Supplement). The Trust assets may also include participations
(including 100% participations) representing undivided interests in a pool of
assets primarily consisting of revolving credit card receivables or consumer
loan receivables (secured and unsecured), and any interests in both such types
of receivables, including securities representing or backed by both such types
of receivables, and other self-liquidating financial assets owned by the Seller
or any affiliate of the Seller and collections thereon. The Bank, as Seller,
conveyed to the Trust all Receivables existing under certain designated
Accounts at the time of the formation of the Trust and all Receivables arising
under such Accounts from time to time thereafter. In addition, the Seller has
conveyed and the Seller may convey in the future all Receivables existing under
certain designated Additional Accounts (including Automatic Additional
Accounts) and all Receivables thereafter arising in such Additional Accounts.
Although a summary of certain provisions of the Agreement is
set forth below, this Class B Certificate does not purport to summarize the
Agreement, is qualified in its entirety by the terms and provisions of the
Agreement and reference is made to that Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby and the rights, duties and obligations of the Trustee. A copy of the
Agreement may be obtained from the Trustee by writing to the Trustee at Four
Albany Street, New York, New York 10006, Attention: Corporate Trust and Agency
Group/Structured Finance Group. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement.
This Class B Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement to which the Holder of this
Class B Certificate by virtue of the acceptance hereof assents and is bound.
It is the intent of the Seller and the Class B
Certificateholders that, for federal income taxes, state and local income and
franchise taxes and any other taxes imposed on or measured by income, the Class
B Certificates will be treated as indebtedness secured by the Receivables. The
Servicer by entering into the Agreement and the Seller, the Holder of the Bank
Certificate, each Holder of a Class B Certificate, and each Holder of a Class A
Certificate, by
- ------------------------------
* VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
A-2-2
67
acceptance of its Certificate, agrees to treat the Series 1998-A Certificates
for purposes of federal income taxes, state and local income and franchise
taxes, and any other taxes imposed on or measured by income, as indebtedness of
the Seller.
Subject to the terms of the Agreement, payments of principal
of the Class B Certificates are limited to the unpaid Class B Investor Amount,
which may be less than the unpaid principal balance of the Class B
Certificates, pursuant to the terms of the Agreement. Principal payments on
the Class B Certificates will not be made until the Class A Certificates have
been paid in full. All principal of and interest on the Class B Certificates
is scheduled to be paid by the February 2001 Distribution Date, but may be paid
earlier. Subject to prior termination as provided in the Agreement, the
interest of the Series 1998-A Certificateholders in the Trust will terminate
following the earliest of (i) the date on which the Investor Amount is paid in
full and (ii) the July 2003 Distribution Date and (iii) the termination of the
Trust pursuant to Section 12.01 of the Agreement.
The Receivables consist of Principal Receivables which arise
generally from the purchase of goods and services and cash advances and in
respect of Periodic Finance Charges, Overlimit Fees, Late Fees, annual
membership fees and annual service charges, if any, Cash Advance Fees,
transaction charges and all other fees and charges with respect to the Accounts
designated by the Seller to be included in Finance Charge Receivables. This
Certificate is one of a series of Certificates entitled "ADVANTA Credit Card
Master Trust II, Class B Floating Rate Asset Backed Certificates, Series
1998-A" (the "Class B Certificates"), each of which represents a fractional
undivided interest in certain assets of the Trust. The Trust's assets are
allocated in part to the Holders of the Class B Certificates and in part to the
Holders of the Class A Certificates, in part to the Collateral Interest Holder,
in part to the Holders of Investor Certificates of all other Series and in part
to the Seller as Holder of the Bank Certificate and the Holders of any
outstanding Supplemental Certificates outstanding from time to time. The Bank
Certificate and any outstanding Supplemental Certificates represent the
Sellers' Interest in the Trust. The Bank Certificate and any outstanding
Supplemental Certificates represent the interest in the Principal Receivables
not represented by the Investor Certificates.
THE CLASS B CERTIFICATES ARE SUBORDINATED TO THE CLASS A
CERTIFICATES TO THE EXTENT SET FORTH IN THE AGREEMENT.
The aggregate interest represented by the Series 1998-A
Certificates at any time in the Principal Receivables in the Trust shall not
exceed an amount equal to the Principal Allocation Percentage thereof (as set
forth in the Agreement) at such time. The Initial Investor Amount is
$1,150,000,000. The Invested Amount for any date will equal the sum of the
Class A Invested Amount, the Class B Invested Amount and the Collateral
Invested Amount. The Class B Initial Invested Amount is $64,687,500. The
Class B Initial Investor Amount is $86,250,000. The Class B Invested Amount
for any date will be an amount equal to (a) the Class B Initial Invested
Amount, plus (b) the amount of any increases in the Class B Invested Amount
during the Funding Period, minus (c) the aggregate amount of principal payments
(other than principal payments made from amounts on deposit in the Pre-Funding
Account on the first Distribution Date following the end of the Funding Period)
made to the Class B Certificateholders prior to such date, minus (d) the
excess, if any, of the aggregate amount of Class B Investor Charge-Offs for all
prior Distribution Dates over the aggregate amount of any reimbursement of
Class B Investor Charge-Offs for all Distribution Dates preceding such date,
minus (e) the amount of
A-2-3
68
Reallocated Principal Collections allocated on all prior Distribution Dates,
minus (f) an amount equal to the amount by which the Class B Invested Amount
has been reduced pursuant to subsection 4.6(a) of the Agreement on all prior
Distribution Dates and plus (g) the amount of Excess Spread and Excess Finance
Charges allocated and available on all prior Distribution Dates for the purpose
of reimbursing amounts deducted pursuant to the foregoing clauses (d), (e) and
(f); provided, however, that the Class B Invested Amount may not be reduced
below zero.
Interest will be distributed monthly on the 15th day of each
calendar month or, if such 15th day is not a Business Day, payment will be made
on the next succeeding Business Day (each, a "Distribution Date"), commencing
April 15, 1998, in an amount equal to the product of (i)(a) a fraction, the
numerator of which is the actual number of days in the related Interest Period
divided by 360, times (b) the Class B Certificate Rate, and (ii) the
outstanding principal amount of the Class B Certificates as of the preceding
Record Date (or, in the case of the first Distribution Date as of the Closing
Date).
The Class B Certificates will bear interest for each Interest
Period at the rate of 0.24% per annum above LIBOR determined as set forth below
(the "Class B Certificate Rate").
The Trustee will determine LIBOR on February 4, 1998 for the
period from the Closing Date through April 14, 1998 and for each Interest
Period thereafter, on the second London Business Day prior to the Distribution
Date on which such Interest Period commences (each, a "LIBOR Determination
Date"). A "London Business Day" is any day on which dealings in deposits in
United States dollars are transacted in the London interbank market. The Class
B Certificate Rate applicable to the then current and the immediately preceding
Interest Periods may be obtained by telephoning the Trustee at its Corporate
Trust Office at (800) 735-7777.
The determination of LIBOR will be made in accordance with the
following provisions:
(i) On each LIBOR Determination Date, the Trustee will
determine LIBOR based on the rate for deposits in United States
dollars for a period of the Designated Maturity which appears on
Telerate Page 3750 as of 11:00 A.M. (London time) on such date.
(ii) If such rate does not appear on Telerate Page 3750, the
Trustee will determine LIBOR on the basis of quotations of the offered
rates for deposits in United States dollars provided by the Reference
Banks at approximately 11:00 A.M. (London time) on such LIBOR
Determination Date to prime banks in the London interbank market for a
period of the Designated Maturity. If at least two such quotations
are provided, LIBOR will be the arithmetic mean of such quotations.
(iii) If, on the LIBOR Determination Date, such rate does not
appear on Telerate Page 3750 and only one or none of the Reference
Banks provides such offered quotations, LIBOR will be the rate per
annum that the Trustee determines to be the arithmetic mean of the
offered quotations that three major banks in The City of New York
selected by the Servicer are quoting at approximately 11:00 A.M. (New
York City time) on that day for loans in United States dollars to
leading European banks for a period of the Designated Maturity.
A-2-4
69
"Designated Maturity" shall mean, for the initial LIBOR
Determination Date, two months and for each LIBOR Determination Date
thereafter, one month.
After the Class A Investor Amount has been paid in full on
each Distribution Date with respect to the Class B Accumulation Period, amounts
equal to the least of (a) Available Investor Principal Collection on deposit in
the Collection Account with respect to such Distribution Date, (minus the
portion of such Available Investor Principal Collections applied to Class A
Monthly Principal on such Distribution Date), (b) the Controlled Deposit Amount
for such Distribution Date and (c) the Class B Invested Amount, will be
deposited in the Principal Funding Account for payment to the Class B
Certificateholders until the Class B Invested Amount is paid in full.
On each Distribution Date during the Rapid Amortization Period
(following the payment in full of the Class A Certificates) until the Class B
Invested Amount has been paid in full or the Series Termination Date occurs,
the Class B Certificateholders will be entitled to receive Available Investor
Principal Collections (minus the portion of Available Investor Principal
Collections applied to Class A Monthly Principal on such Distribution Date) in
an amount up to the Class B Invested Amount.
On any Distribution Date occurring on or after the Investor
Amount is reduced to 5% or less of the maximum Invested Amount during the
Revolving Period, the Seller will have the option (to be exercised in their
sole discretion) to repurchase the Certificates.
This Class B Certificate does not represent an obligation of,
or an interest in, Advanta Corp., the Bank, any Additional Seller, the Servicer
or any Affiliate of any of them. None of the Class B Certificates, the
Accounts nor the Receivables are deposits or insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental agency. This
Class B Certificate is limited in right of payment to certain Collections
respecting the Receivables (and certain other amounts), all as more
specifically set forth herein and in the Agreement.
The Agreement may be amended under certain circumstances by
the Servicer, the Seller and the Trustee, without Certificateholder consent,
provided that (i) the Seller shall have delivered to the Trustee an Officer's
Certificate to the effect that the Seller reasonably believes that such
amendment will not result in the occurrence of a Pay out Event or materially
adversely affect the amount or timing of distributions to be made to the
Investor Certificateholders of any Series or Class and (ii) written
confirmation from each Rating Agency that such amendment will not result in a
reduction or withdrawal of the rating of the Series 1998-A Certificates or the
rating of any other outstanding Series or Class with respect to which it is a
Rating Agency.
The Agreement may be amended by the Servicer, the Seller and
the Trustee, with the consent of the Holders of Investor Certificates
evidencing not less than 66-2/3% of the aggregate Investor Amount of the
Investor Certificates of all adversely affected Series, for the purpose of
adding any provisions to, changing in any manner or eliminating any of the
provisions of the Agreement or of modifying in any manner the rights of
Investor Certificateholders of any Series then issued and outstanding;
provided, however, that no such amendment shall (a) reduce in any manner the
amount of, or delay the timing of, distributions to
A-2-5
70
Investor Certificateholders or deposits of amounts to be so distributed or the
amount available under any Series Enhancement without the consent to any such
amendment of each affected Certificateholder, (b) change the definition of or
the manner of calculating the interest of any Investor Certificateholder
without the consent of each affected Investor Certificateholder, (c) reduce the
aforesaid percentage required to consent to any such amendment without the
consent of each Investor Certificateholder or (d) adversely affect the rating
of any Series or Class by each Rating Agency without the consent of the Holders
of Investor Certificates of such Series or Class evidencing not less than
66-2/3% of the aggregate Investor Amount of the Investor Certificates of such
Series or Class.
The Class B Certificates are issuable only in denominations of
$1,000 and integral multiples of $1,000 in excess thereof. The transfer of
this Class B Certificate shall be registered in the Certificate Register upon
surrender of this Class B Certificate for registration of transfer at any
office or agency maintained by the Transfer Agent and Registrar accompanied by
a written instrument of transfer, in a form satisfactory to the Trustee and the
Transfer Agent and Registrar, duly executed by the Holder or his attorney and
duly authorized in writing, and thereupon one or more new Class B Certificates
of authorized denominations and for the same aggregate fractional undivided
interest will be issued to the designated transferee or transferees.
As provided in the Agreement and subject to certain
limitations therein set forth, this Class B Certificate is exchangeable for a
new Class B Certificate evidencing a like aggregate fractional undivided
interest, as requested by the Holder surrendering this Class B Certificate. No
service charge may be imposed for any such exchange, but the Transfer Agent and
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
This Class B Certificate may not be acquired by or for the
account of any benefit plan, trust or account, including an individual
retirement account, that is subject to the Employee Retirement Income Security
Act of 1974, as amended, or that is described in Section 4975(e)(1) of the
Internal Revenue Code of 1986, as amended, or an entity whose underlying assets
include plan assets by reason of a plan's investment in such entity (a "Benefit
Plan"). By accepting and holding this Class B Certificate, the Holder hereof
shall be deemed to have represented and warranted that it is not a Benefit
Plan. By acquiring any interest in this Class B Certificate, the applicable
Certificate Owner or Owners shall be deemed to have represented and warranted
that it or they are not Benefit Plans.
Prior to due presentation of this Class B Certificate for
registration of transfer, the Transfer Agent and Registrar, the Paying Agent
and the Trustee and any agent of any of them may treat the person in whose name
this Class B Certificate is registered as the owner hereof for all purposes,
and neither the Trustee, the Paying Agent or the Transfer Agent and Registrar
nor any agent of any of them shall be affected by notice to the contrary except
in certain circumstances described in the Agreement.
This Class B Certificate shall be construed in accordance with
and governed by the laws of the State of New York, without reference to its
conflict of law provisions.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, or by an
authenticating agent appointed by the Trustee, this
A-2-6
71
Class B Certificate shall not be entitled to any benefit under the Agreement,
or be valid for any purpose.
A-2-7
72
IN WITNESS WHEREOF, the Seller has caused this Class B
Certificate to be duly executed.
ADVANTA NATIONAL BANK
By:
------------------------
Vice President
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
BANKER TRUST COMPANY,
as Trustee,
By:
------------------------
Authorized Officer
Dated:
-----------------
A-2-8
73
----------
ASSIGNMENT
----------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE(S)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- ---------------------------
: :
: :
: :
- --------------------------- -----------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
____________________ the within certificate and all rights thereunder, and
hereby irrevocably constitutes and appoints ____________________ Attorney, with
full power of substitution in the premises, to transfer said certificate on the
books kept for registration thereof.
Dated:
------------------------
---------------------------------------
Note: The signature(s) to this
Assignment must correspond with the
name(s) as written on the face of
the within certificate in every
particular, without alteration or
enlargement or any change whatever.
(1) An assignee which is not a United
States Person as defined in the
Internal Revenue Code of 1986, as
amended (the "Code") must certify
to the Transfer Agent and Registrar
in writing as to such status and
such further information as may be
required under the Code or
reasonably requested by the
Transfer Agent and Registrar.
A-2-9
74
EXHIBIT B
TO SUPPLEMENT
MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO THE TRUSTEE
ADVANTA NATIONAL BANK
------------------------------
ADVANTA CREDIT CARD MASTER TRUST II
Series 1998-A
------------------------------
The undersigned, a duly authorized representative of Advanta
National Bank (formerly known as Advanta National Bank USA and prior to that
known as Colonial National Bank USA and successor in interest to the former
Advanta National Bank), as Seller and Servicer pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of December 1, 1993, and as
amended and restated on May 23, 1994, and as amended by Amendment Number 1
dated as of July 1, 1994, between the Bank, as seller (in such capacity, the
"Seller") and servicer (in such capacity, the "Servicer"), and Bankers Trust
Company, as trustee (the "Trustee"), as further amended by Amendment Number 2
dated as of October 6, 1995 among the Bank, as seller and servicer, the former
Advanta National Bank, as a Seller, and the Trustee (as amended from time to
time, the "Amended and Restated Pooling and Servicing Agreement") as
supplemented by the Series 1998-A Supplement, dated as of February 6, 1998, by
and between the Bank, as Seller and Servicer, and the Trustee does hereby
certify as follows:
A) Capitalized terms used in this Certificate have their
respective meanings set forth in the Agreement. References herein to certain
sections are references to the respective sections of the Agreement.
B) The Bank is Servicer under the Agreement.
C) The undersigned is a Servicing Officer.
D) The date of this notice is a Determination Date under the
Agreement.
75
I. APPLICATION OF CLASS A AVAILABLE FUNDS, CLASS B AVAILABLE FUNDS,
COLLATERAL AVAILABLE FUNDS, AVAILABLE INVESTOR PRINCIPAL
COLLECTIONS, AND COLLATERAL PRINCIPAL COLLECTIONS.
Pursuant to the Supplement, the Servicer does hereby instruct the
Trustee (i) to make the following withdrawals from the Collection
Account with respect to the Distribution Date and (ii) to apply
the proceeds of such withdrawals in accordance with referenced
Sections of the Supplement:
A) Class A Available Funds (Section 4.5(a)):
----------------------------------------
(1) Class A Monthly
Interest . . . . . . . . . . . . . . . . . . . . $
----------
(2) Overdue Class A Monthly Interest . . . . . . . . $
----------
(3) Class A Additional
Interest . . . . . . . . . . . . . . . . . . . . $
----------
(4) Class A Servicing Fee . . . . . . . . . . . . . . $
----------
(5) Overdue Class A
Servicing Fee . . . . . . . . . . . . . . . . . . $
----------
(6) Class A Investor Default Amount (to be treated
as Available Investor Principal Collections) . . $
----------
(7) Excess Spread . . . . . . . . . . . . . . . . . . $
----------
B) Class B Available Funds (Section 4.5(b)):
----------------------------------------
(1) Class B Monthly Interest . . . . . . . . . . . . $
----------
(2) Overdue Class B Monthly Interest . . . . . . . . $
----------
(3) Class B Additional
Interest . . . . . . . . . . . . . . . . . . . . $
----------
(4) Class B Servicing Fee . . . . . . . . . . . . . . $
----------
(5) Overdue Class B
Servicing Fee . . . . . . . . . . . . . . . . . . $
----------
(6) Excess Spread . . . . . . . . . . . . . . . . . . $
----------
C) Collateral Available Funds (Section 4.5(c))
-------------------------------------------
(1) Collateral Servicing Fee, if any . . . . . . . . $
----------
(2) Overdue Collateral Servicing Fee, if any . . . . $
----------
(3) Excess Spread . . . . . . . . . . . . . . . . . . $
----------
B-2
76
D) Available Investor Principal Collections and Collateral Principal Collections
-----------------------------------------------------------------------------
(Sections 4.5(d), (e), (f) and (g)):
-----------------------------------
(1) Class A Monthly
Principal . . . . . . . . . . . . . . . . . . . . $
----------
(2) Class B Monthly
Principal . . . . . . . . . . . . . . . . . . . . $
----------
(3) Collateral Monthly
Principal . . . . . . . . . . . . . . . . . . . . $
----------
(4) Shared Principal Collections (available for
other Series in Group One) . . . . . . . . . . . $
----------
E) Excess Spread (Section 4.7):
----------------------------
(1) Class A Required Amount . . . . . . . . . . . . . $
----------
(2) Class A Investor Charge-Offs (to be treated as
Available Investor Principal Collections) . . . . $
----------
(3) Portion of Class B Required Amount payable in
respect of interest and servicing . . . . . . . . $
----------
(4) Class B Investor Default Amount (to be treated
as Available Investor Principal Collections) . . $
----------
(5) Reimbursement of prior reductions in Class B
Invested Amount (to be treated as Available
Investor Principal Collections) . . . . . . . . . $
----------
(6) Collateral Monthly Interest, Overdue Collateral
Monthly Interest and Collateral Additional
Interest . . . . . . . . . . . . . . . . . . . . $
----------
(7) Any Collateral Servicing Fee and any unpaid
Collateral Servicing Fee . . . . . . . . . . . . $
----------
(8) Collateral Default Amount (to be treated as
Available Investor Principal Collections) . . . . $
----------
(9) Reimbursement of prior reductions in Collateral
Invested Amount (to be treated as Collateral
Principal Collections) . . . . . . . . . . . . . $
----------
(10) Excess of Required Cash Collateral Amount over
Available Cash Collateral Amount . . . . . . . . $
----------
B-3
77
(11) Excess of Required Reserve Account Amount over
the amount or deposit in Reserve Account . . . . $
----------
(12) Amounts owed pursuant to Loan Agreement and
amounts required to be deposited into Spread
Accounts . . . . . . . . . . . . . . . . . . . . $
----------
(123) Excess Finance Charges (available for other
Series in Group One) . . . . . . . . . . . . . . $
----------
F) Reallocated Principal Collections (Section 4.8):
-----------------------------------------------
(1) Payable in respect of Class A Required Amount . . $
----------
(2) Payable in respect of Class B Required Amount . . $
----------
(3) Balance (to be treated as Available Investor
Principal Collections) . . . . . . . . . . . . . $
----------
G) Excess Finance Charges (Section 4.9):
------------------------------------
(1) Finance Charge Shortfall for Series 1998-A . . . $
----------
(2) Excess Finance Charges
from other Series in
Group One allocated to Series 1998-A . . . . . . $
----------
H) Shared Principal Collections (Section 4.10):
-------------------------------------------
(1) Principal Shortfall for Series 1998-A . . . . . . $
----------
(2) Shared Principal Collections from other Series
in Group One allocated to Series 1998-A . . . . . $
----------
II. PRE-FUNDING ACCOUNT
Pursuant to Section 4.16 of the Supplement, the Servicer hereby
instructs the Trustee (i) to make the following withdrawal from
the Pre-Funding Account and (ii) to apply the proceeds of such
withdrawal in accordance with Section 4.16 of the Supplement.
(1) Interest and other investment income on the
Pre-Funded Amount . . . . . . . . . . . . . . . . $
----------
(2) Pre-Funded Amount, if any, (to be applied to
payment of principal following Funding Period) . $
----------
B-4
78
III. NOTIFICATION OF WITHDRAWALS
FROM THE CASH COLLATERAL ACCOUNT
Pursuant to Section 4.12 of the Supplement, the Servicer hereby
instructs the Trustee (i) to make the following withdrawals from
the Cash Collateral Account with respect to the Distribution Date
and (ii) to apply the proceeds of such withdrawals in accordance
with Section 4.12 of the Supplement.
(1) Required Draw Amount . . . . . . . . . . . . . . $
----------
(2) Cash Enhancement Surplus . . . . . . . . . . . . $
----------
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate this ____ day of __________, ____.
ADVANTA NATIONAL BANK,
as Servicer
By:
------------------------
Servicing Officer
B-5
79
EXHIBIT C
TO SUPPLEMENT
FORM OF MONTHLY CERTIFICATEHOLDER'S STATEMENT
(To be delivered by the Paying Agent on behalf
of the Trustee on each Distribution Date
pursuant to Section 5.2(b) of the Supplement)
ADVANTA NATIONAL BANK
------------------------------
ADVANTA CREDIT CARD MASTER TRUST II
SERIES 1998-A
------------------------------
Under the Amended and Restated Pooling and Servicing Agreement
dated as of December 1, 1993, and as amended and restated on May 23, 1994, and
as amended by Amendment Number 1 dated as of July 1, 1994, between the Bank, as
seller (in such capacity, the "Seller") and servicer (in such capacity, the
"Servicer"), and Bankers Trust Company, as trustee (the "Trustee"), as further
amended by Amendment Number 2 dated as of October 6, 1995 among the Bank, as
seller and servicer, the former Advanta National Bank, as a Seller, and the
Trustee (as amended from time to time, the "Amended and Restated Pooling and
Servicing Agreement") as supplemented by the Series 1998-A Supplement, dated as
of February 6, 1998, by and between the Bank, as seller and servicer, and the
Trustee. The Bank, as Servicer, is required to prepare certain information
each month regarding current distributions to all Series 1998-A
Certificateholders. This statement relates to the Distribution Date (the
"Distribution Date") and the performance of the ADVANTA Credit Card Master
Trust II (the "Trust") during the prior Monthly Period (the "Monthly Period").
Certain of the information is presented on the basis of an original principal
amount of $1,000 per Series 1998-A Certificate. Certain other information is
presented based on the aggregate amounts for the Trust as a whole. All
capitalized terms used herein shall have the respective meanings set forth in
the Agreement.
1. The total amount of the distribution on the Distribution Date per
$1,000 original principal amount of the Class A Certificates . . . . $
----------
2. The total amount of the distribution on the Distribution Date per
$1,000 original principal amount of the Class B Certificates . . . . $
----------
80
3. The amount of the distribution set forth in paragraph 1 above in
respect of principal per $1,000 original principal amount of the
Class A Certificates . . . . . . . . . . . . . . . . . . . . . . . . $
----------
4. The amount of the distribution set forth in paragraph 2 above in
respect of principal per $1,000 original principal amount of the
Class B Certificates . . . . . . . . . . . . . . . . . . . . . . . . $
----------
5. The amount of the distribution set forth in paragraph 1 above in
respect of interest per $1,000 original principal amount of the Class
A Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
6. The amount of the distribution set forth in paragraph 2 above in
respect of interest per $1,000 original principal amount of the Class
B Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
7. The aggregate amount of Collections of Receivables processed for the
prior Monthly Period which were allocated
in respect of Series 1998-A . . . . . . . . . . . . . . . . . . . . . $
----------
8. The aggregate amount of Collections of Principal Receivables
processed during the prior Monthly Period and allocated in respect of
Series 1998-A $
----------
9. The aggregate amount of Reallocated Principal Collections with
respect to the prior Monthly Period . . . . . . . . . . . . . . . . . $
----------
10. The aggregate amount of Collections of Finance Charge Receivables
processed during the prior Monthly Period and allocated in respect of
the Class A Certificates . . . . . . . . . . . . . . . . . . . . . . $
----------
11. The aggregate amount of Collections of Finance Charge Receivables
processed during the prior Monthly Period and allocated in respect of
the Class B Certificates . . . . . . . . . . . . . . . . . . . . . . $
----------
12. The Principal Allocation Percentage(s) during the prior Monthly
Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . % [Dates]
----
% [Dates]
----
13. The Floating Allocation Percentage(s) during the prior Monthly Period % [Dates]
----
% [Dates]
----
14. The aggregate outstanding balance of Accounts which are 30, 60, 90, $
120, 150 and 180 or more days delinquent as of the end of the prior ----------
Monthly Period is . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
$
----------
$
----------
$
----------
$
----------
15. The Class A Investor Default Amount for the prior Monthly Period is . $
----------
C-2
81
16. The Class B Investor Default Amount for the prior Monthly Period is . $
----------
17. The Collateral Default Amount for the prior Monthly Period . . . . . $
----------
18. The aggregate amount of Class A Investor Charge-Offs for the prior
Monthly Period is . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
19. The aggregate amount of Class B Investor Charge-Offs for the prior
Monthly Period is . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
20. The aggregate amount of Collateral Charge-Offs for the prior Monthly
Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
21. The aggregate amount of Class A Investor Charge-Offs reimbursed on
the Distribution Date is . . . . . . . . . . . . . . . . . . . . . . $
----------
22. The aggregate amount of Class B Investor Charge-Offs reimbursed on
the Distribution Date is . . . . . . . . . . . . . . . . . . . . . . $
----------
23. The aggregate amount of Collateral Charge-Offs reimbursed on the
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
24. The amount of the Class A Servicing Fee for the prior Monthly Period
is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
25. The amount of the Class B Servicing Fee for the prior Monthly Period
is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
26. The amount of Collateral Servicing Fee for the prior Monthly Period
is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
27. The amount of Servicer Interchange for the prior Monthly Period . . . $
----------
28. The Class A Investor Amount after giving effect to any payments on
the Distribution Date is . . . . . . . . . . . . . . . . . . . . . . $
----------
29. The Class A Invested Amount after giving effect to any payments on
the Distribution Date is . . . . . . . . . . . . . . . . . . . . . . $
----------
30. The Class B Investor Amount after giving effect to any payments on
the Distribution Date is . . . . . . . . . . . . . . . . . . . . . . $
----------
31. The Class B Invested Amount after giving effect to any payments on
the Distribution Date is . . . . . . . . . . . . . . . . . . . . . . $
----------
32. The amount, if any, by which the outstanding principal balance of the
Class A Certificates exceeds the Class A Investor Amount after giving
effect to any activity on the Distribution Date is . . . . . . . . . $
----------
33. The amount, if any, by which the outstanding principal balance of the
Class B Certificates exceeds the Class B Investor Amount after giving
effect to any activity on the Distribution Date is . . . . . . . . . $
----------
C-3
82
34. The Available Cash Collateral Amount as of the close of business on
the Distribution Date is . . . . . . . . . . . . . . . . . . . . . . $
----------
35. The Collateral Interest as of the close of business on the
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------
36. The amount on deposit in the Cash Collateral Account as of the close
of business on the Distribution Date is . . . . . . . . . . . . . . . $
----------
37. The amount on deposit in the Principal Funding Account as of the
close of business on the Distribution Date is . . . . . . . . . . . $
----------
38. The amount on deposit in the Pre-Funding Account as of the close of
business on the Distribution Date is . . . . . . . . . . . . . . . . $
----------
39. The amount on deposit in the Reserve Account as of the close of
business on the Distribution Date is . . . . . . . . . . . . . . . . $
----------
40. The amount by which the Net Portfolio Yield for the prior Monthly
Period exceeds the Base Rate for such Monthly Period . . . . . . . . $
----------
41. The Net Portfolio Yield for the prior Monthly Period is . . . . . . . $
----------
42. The Base Rate for the Prior Monthly Period is . . . . . . . . . . . . $
----------
43. The amount of Interchange with respect to the prior Monthly Period is $
----------
44. The Deficit Controlled Amortization Amount (after giving effect to
any activity on the Distribution Date) . . . . . . . . . . . . . . . $
----------
ADVANTA NATIONAL BANK USA,
as Servicer
By:
-------------------------
Title:
C-4