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EXHIBIT 4.2
ADVANTA BUSINESS SERVICES CORP.,
Individually, and as the Servicer,
ADVANTA LEASING RECEIVABLES IV,
as a Series Obligor
ADVANTA LEASING RECEIVABLES V,
as a Series Obligor
together with
ADVANTA LEASING RECEIVABLES CORP. III,
as Obligors' Agent,
and
THE CHASE MANHATTAN BANK
as Trustee,
SERIES 1998-1 SUPPLEMENT
Dated as of February 1, 1998
to the
MASTER BUSINESS RECEIVABLES ASSET-BACKED FINANCING FACILITY AGREEMENT
Dated as of May 1, 1997
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TABLE OF CONTENTS
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ARTICLE I. CREATION OF THE SERIES 1998-1 NOTES .................................. 1
SECTION 1.01 DESIGNATION .................................................... 1
SECTION 1.02 PLEDGE OF SERIES 1998-1 TRUST ESTATE ........................... 1
SECTION 1.03 PLEDGES OF ADDITIONAL PROPERTY ................................. 2
SECTION 1.04 CUSTODY OF THE SERIES 1998-1 TRUST ESTATE ..................... 3
SECTION 1.05 CONDITIONS TO ISSUANCE ......................................... 3
SECTION 1.06 ACCEPTANCE BY TRUSTEE .......................................... 4
SECTION 1.07 LIABILITIES OF THE TRUSTEE AND PARTIES TO THE MASTER AGREEMENT,
THIS SERIES 1998-1 SUPPLEMENT AND THE SERIES 1998-1
NOTES; LIMITATIONS THEREON ..................................... 4
ARTICLE II. DEFINITIONS ......................................................... 6
SECTION 2.01 DEFINITIONS .................................................... 6
ARTICLE III. SERIES ACCOUNTS; DISTRIBUTIONS AND STATEMENTS TO
SERIES 1998-1 NOTEHOLDERS; SERIES SPECIFIC COVENANTS ............... 27
SECTION 3.01 SERIES 1998-1 FACILITY ACCOUNT ................................. 27
SECTION 3.02 ADDITIONAL PROPERTY FUNDING ACCOUNT, RESERVE ACCOUNT AND
RESIDUAL ACCOUNT ............................................... 27
SECTION 3.03 INVESTMENT OF MONIES HELD IN THE ACCOUNTS; SUBACCOUNTS ......... 30
SECTION 3.04 INTEREST-ONLY PROPERTY FUNDING ACCOUNT ......................... 30
SECTION 3.05 FLOW OF FUNDS .................................................. 30
SECTION 3.06 STATEMENTS TO NOTEHOLDERS ...................................... 34
SECTION 3.07 COMPLIANCE WITH WITHHOLDING REQUIREMENTS ....................... 36
SECTION 3.08 SERVICER ADVANCES .............................................. 37
SECTION 3.09 SUBSTITUTIONS AND MODIFICATIONS ................................ 37
SECTION 3.10 SERVICER TO ACT AS CUSTODIAN ................................... 38
ARTICLE IV. SERIES EVENTS OF DEFAULT ............................................ 39
SECTION 4.01 EVENTS OF DEFAULT .............................................. 39
SECTION 4.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT ............. 40
SECTION 4.03 REMEDIES ....................................................... 41
SECTION 4.04 TRUSTEE SHALL FILE PROOFS OF CLAIM ............................. 42
SECTION 4.05 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SERIES 1998-1
NOTES .......................................................... 42
SECTION 4.06 APPLICATION OF MONEY COLLECTED ................................. 43
SECTION 4.07 LIMITATION ON SUITS ............................................ 44
SECTION 4.08 UNCONDITIONAL RIGHT OF SERIES 1998-1 NOTEHOLDERS TO RECEIVE
PRINCIPAL AND INTEREST ......................................... 45
SECTION 4.09 RESTORATION OF RIGHTS AND REMEDIES ............................. 45
SECTION 4.10 RIGHTS AND REMEDIES CUMULATIVE ................................. 45
SECTION 4.11 DELAY OR OMISSION NOT WAIVER ................................... 45
SECTION 4.12 CONTROL BY SERIES 1998-1 NOTEHOLDERS ........................... 45
SECTION 4.13 WAIVER OF EVENTS OF DEFAULT .................................... 46
SECTION 4.14 UNDERTAKING FOR COSTS .......................................... 46
SECTION 4.15 WAIVER OF STAY OR EXTENSION LAWS ............................... 47
SECTION 4.16 SALE OF SERIES 1998-1 TRUST ESTATE ............................ 47
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ARTICLE V. PREPAYMENT AND REDEMPTION ............................................ 48
SECTION 5.01 OPTIONAL REDEMPTION OF SERIES 1998-1 NOTES; FINAL DISPOSITION OF
FUNDS .......................................................... 48
ARTICLE VI. MISCELLANEOUS ....................................................... 49
SECTION 6.01 RATIFICATION OF MASTER AGREEMENT ............................... 49
SECTION 6.02 COUNTERPARTS ................................................... 49
SECTION 6.03 GOVERNING LAW .................................................. 50
SECTION 6.04 AMENDMENTS AND WAIVERS ......................................... 50
SECTION 6.05 NON-PETITION CLAUSE ............................................ 50
SECTION 6.06 OFFICERS' CERTIFICATE AND OPINION OF COUNSEL AS TO CONDITIONS
PRECEDENT ...................................................... 50
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This Series 1998-1 Supplement, dated as of February 1, 1998 (the
"Series 1998-1 Supplement"), supplements the Master Facility Agreement (as
described herein) and is by and among Advanta Business Services Corp., a
Delaware corporation, individually ("ABS"), as the contributor under the
Contribution Agreement (as described herein) (in such capacity, the
"Contributor"), and as initial servicer (in such capacity, the "Servicer"),
Advanta Leasing Receivables IV, a Nevada corporation ("ALRC IV"), as a series
obligor (in such capacity, a "Series Obligor"), Advanta Leasing Receivables
Corp. V, a Nevada corporation ("ALRC V"), as a series obligor (in such capacity,
a "Series Obligor" and together with ALRC IV, the "Series Obligors"), Advanta
Leasing Receivables Corp. III, as obligors' agent (in such capacity, the
"Obligors' Agent") and The Chase Manhattan Bank, a New York banking corporation,
as trustee (in such capacity, the "Trustee") for the Noteholders.
RECITALS
This Series 1998-1 Supplement is being executed and delivered by the
parties hereto pursuant to Section 13.02 of the Master Business Receivables
Asset-Backed Financing Facility Agreement, dated as of May 1, 1997 (the "Master
Agreement"), among such parties. In the event that any term or provision
contained herein shall conflict with or be inconsistent with any term or
provision contained in the Master Agreement, the terms and provisions of this
Series 1998-1 Supplement shall govern with respect to Series 1998-1. Capitalized
terms used herein, but not defined herein, shall have the meaning as set forth
in the Master Agreement.
ARTICLE I.
CREATION OF THE SERIES 1998-1 NOTES
SECTION 1.01 Designation. There is hereby created a Series of Notes
to be issued pursuant to the Master Agreement and this Series 1998-1 Supplement
to be known as "Advanta Equipment Receivables Asset-Backed Notes, Series 1998-1"
(the "Series 1998-1 Notes"). The Series Obligors with respect to the Series
1998-1 Notes are ALRC IV and ALRC V, jointly and severally.
SECTION 1.02 Pledge of Series 1998-1 Trust Estate. The Series
Obligors hereby pledge to the Trustee for the benefit of the Series 1998-1
Noteholders, and the Trustee hereby accepts the pledge of, all of the Series
Obligors' now owned and existing and hereafter acquired or arising right, title
and interest in and to (1) each and every Contract (including Additional
Contracts) now or hereafter listed on each Pledge Notice delivered to the
Trustee in connection with this Series 1998-1 Supplement (each such Contract, a
"Series 1998-1 Contract"), (2) all Collections received after the related
Cut-Off Date, and all Related Security associated therewith, (3) all balances,
instruments, monies and other securities and investments from time to time in
the Series 1998-1 Facility Account, to the extent the same represent Collections
or proceeds of Series 1998-1 Contracts or earnings with respect thereto,
together with the Reserve Account, the Residual Account and the Additional
Property Funding Account (4) each Series 1998-1
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Contribution Agreement Supplement and all of their rights (directly or through
the Obligors' Agent) to enforce the provisions of, and to benefit from the
representations, warranties and covenants made in each Series 1998-1
Contribution Agreement Supplement and in the Contribution Agreement, but only
insofar as such rights relate to the Series 1998-1 Trust Estate, (5) all
security interests of the Series Obligors in the Equipment not owned by the
Series Obligors, and all Equipment owned by the Series Obligors, in each case
associated with the Series 1998-1 Contracts, (6) any Crossover Amounts allocated
to the Series 1998-1 Trust Estate from another Series and (7) all proceeds of
each of the foregoing, but excluding any obligations of the Series Obligors, if
any, under each Series 1998-1 Contribution Agreement Supplement and excluding
any Insurance Premiums, taxes, late charge fees, Initial Unpaid Amounts and
Security Deposits, all in accordance with, and for the purposes set forth in,
this Series 1998-1 Supplement (such property, the "Series 1998-1 Trust Estate").
It is the intention of the Series Obligors, which intention is
acknowledged by the Trustee, that this Series 1998-1 Supplement, together with
the Master Agreement, shall be deemed to be a security agreement within the
meaning of Article 8 and Article 9 of the Uniform Commercial Code as in effect
in the States of New York, Nevada and Delaware and the pledge provided for
herein shall be deemed to be a grant by the Series Obligors to the Trustee for
the benefit of the Series 1998-1 Noteholders of (A) a valid first priority
perfected security interest in all of the Series Obligors' right, title and
interest in and to the Series 1998-1 Trust Estate, except for the Equipment not
owned by the Series Obligors, and (B) a valid assignment of their security
interests in the Equipment not owned by the Series Obligors. The Series Obligors
hereby grant such a security interest and assign such security interest, in each
case to the Trustee to secure the obligations of the Series Obligors to the
Trustee and the Series 1998-1 Noteholders hereunder.
In the case of any Series 1998-1 Contract which has been prepaid in
full during the period from the related Cut-Off Date to the related Pledge Date,
the Series Obligors shall, on the related Pledge Date, deposit the Prepayment
Amount therefor in the Series 1998-1 Facility Account in lieu of pledging such
Series 1998-1 Contract to the Trustee.
SECTION 1.03 Pledges of Additional Property. (a) During the
Interest-Only Period, the Series Obligors shall, to the extent necessary, such
that the Additional Properly Funding Requirement is zero at the close of each
Payment Date during the Interest Only Period, upon providing a Pledge Notice not
less than three (3) Business Days' prior to the proposed Pledge Date, pledge
additional property to the Trustee to be held in trust as part of the Series
1998-1 Trust Estate. Each Pledge Notice shall specify:
(i) the proposed Pledge Date, which shall be a Payment Date,
and
(ii) the related List of Contracts.
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(b) ABS will use its reasonable best efforts to originate, and each
Series Obligor will use its reasonable best efforts to acquire from ABS,
during the Interest-Only Period, a sufficient volume of Eligible Contracts
such that a Required Amortization Event of the type described in paragraph
(ii) of the definition thereof does not occur.
SECTION 1.04 Custody of the Series 1998-1 Trust Estate. For the
avoidance of doubt, the parties agree that notwithstanding the use of the terms
"deposit", "deposited", "transfer" and "transferred" in this Series 1998-1
Supplement, the Trustee will not take physical possession of any of the Series
1998-1 Trust Estate (other than the amounts on deposit in the Series 1998-1
Accounts) pursuant to the terms hereof. Instead, the Servicer will hold the
Series 1998-1 Trust Estate (other than the amounts on deposit in the Series
1998-1 Accounts) as custodian on behalf of the Trustee.
SECTION 1.05 Conditions to Issuance. As conditions to the execution
by the Obligors' Agent, and authentication and delivery by the Trustee of the
Series 1998-1 Notes at the written direction of the Obligors' Agent and the sale
of the Series 1998-1 Notes by the Series Obligors (by issuance thereof by the
Obligors' Agent and authentication by the Trustee upon the Obligors' Agent's
instructions) on the Closing Date, (i) the Series Obligors shall have received
by wire transfer the net proceeds of sale of the Series 1998-1 Notes, together
with the Residual Interest and (ii) the Trustee shall have received the
following on or before the Closing Date:
(a) The List of Initial Contracts, certified on behalf of the
Contributor by the President, any Senior Vice President, any Vice
President or any Assistant Vice President of the Contributor;
(b) Copies of resolutions of the board of directors of each of ALRC
IV and ALRC V approving the execution, delivery and performance of this
Series 1998-1 Supplement and the transactions contemplated hereby,
certified by a Secretary or an Assistant Secretary of ALRC IV and ALRC V,
as the case may be, and copies of resolutions of the board of directors of
each of the Contributor and the Servicer approving the execution, delivery
and performance of the Series 1998-1 Supplement and the transactions
contemplated hereby, certified by a Secretary or an Assistant Secretary of
the Contributor and Servicer, as the case may be;
(c) A copy of an officially certified document, dated not more than
30 days prior to the Closing Date and evidencing the due organization and
good standing of each of the Series Obligors and of the Contributor and
the Servicer in their respective states of organization ;
(d) Copies of the Certificate of Incorporation and By-Laws of each
of ALRC IV and ALRC V and each of the Contributor and the Servicer
certified by the Secretary or an Assistant Secretary of an Officer of ALRC
IV, ALRC V, the Contributor and the Servicer, as the case may be;
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(e) Delivery of the executed UCC-1 financing statements, prepared by
the Servicer for filing (i) with the Secretary of State of New Jersey,
naming the Contributor as the debtor and the Series Obligors as secured
parties, and (ii) with the Secretary of State of each state other than
_________, and in the following countries: ______________, naming the
Series Obligors as the debtors and the Trustee as secured party;
(f) A certificate listing the Servicing Officers of the
Servicer as of the Closing Date;
(g) An executed copy of the Contribution Agreement and the
Series 1998-1 Contribution Agreement Supplement relating to the
Initial Series 1998-1 Contracts;
(h) Copies of resolutions of the board of directors of the
Contributor and the Servicer approving the execution, delivery and
performance of the Master Agreement, this Series 1998-1 Supplement, the
Contribution Agreement and the transactions contemplated hereby and
thereby, certified on behalf of such entity by a Secretary or an Assistant
Secretary of such entity; and
(i) executed copies of releases from any applicable Noteholders of
prior Series, the Series Trust Estates with respect to which are intended
to be included in the Series 1998-1 Trust Estate.
SECTION 1.06 Acceptance by Trustee. The Trustee acknowledges its
acceptance, simultaneously with the execution and delivery of this Series 1998-1
Supplement, of the pledge of and security interest in all right, title and
interest in and to the Series 1998-1 Trust Estate and declares that the Trustee
holds and will hold the pledge of and security interest in such right, title and
interest upon the trusts herein set forth for the benefit of all present and
future Series 1998-1 Noteholders for the use and purpose and subject to the
terms and provisions of this Series 1998-1 Supplement. The Series Obligors
hereby (x) appoint the Trustee as the Series Obligors' attorney-in-fact with all
power independently to enforce all of the Series Obligors' rights against the
Contributor and the Servicer under the Contribution Agreement and (y) direct the
Trustee to enforce such rights. The Trustee hereby accepts such appointment and
agrees to enforce such rights.
SECTION 1.07 Liabilities of the Trustee and Parties to the Master
Agreement, this Series 1998-1 Supplement and the Series 1998-1 Notes;
Limitations Thereon. The obligations evidenced by the Series 1998-1 Notes
provide recourse only to the Series 1998-1 Trust Estate and provide no recourse
against either of the Series Obligors generally, the Contributor, the Servicer,
the Trustee, or any other Person.
(a) The Series Obligors, the Servicer and the Contributor shall not
be liable to the Trustee except as expressly provided herein, and, with
respect to the Contributor, as provided in the Contribution Agreement. The
Series Obligors, the Contributor and the Servicer shall not be liable to
the Noteholders except, with
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respect to the Series Obligors and the Servicer, for the non-performance
of obligations expressly undertaken by them pursuant hereto, and, with
respect to the Contributor, as expressly provided in the Contribution
Agreement. Without limiting the generality of the foregoing, if any User
fails to pay any Scheduled Payment, Final Contract Payment, exercised
Purchase Option Payment or other amounts due under a Series 1998-1
Contract, then neither the Trustee nor the Noteholders will have any
recourse against the Series Obligors, the Contributor or the Servicer for
such Scheduled Payment, Final Contract Payment, exercised Purchase Option
Payment, other amounts due under the Series 1998-1 Contract or any losses,
damages, claims, liabilities or expenses incurred by the Trustee or any
Series 1998-1 Noteholder as a direct or indirect result thereof.
(b) The Trustee agrees that in the event of a default by a User
under the terms of a Series 1998-1 Contract, which default is not cured
within any applicable cure period set forth in such Series 1998-1
Contract, the Trustee and the Series 1998-1 Noteholders shall be expressly
limited to the sources of payment specified herein. In addition, the
Trustee shall have the right to exercise the rights of the Contributor
(which rights have been assigned to the Series Obligors and then to the
Trustee) under the Series 1998-1 Contracts, the Insurance Policies, any
document in any Contract File and any Related Document in the name of the
Trustee and the Series 1998-1 Noteholders, either directly or through the
Servicer as agent, and the Trustee is hereby directed by the Series
Obligors to exercise such rights; provided, however, that the Trustee
shall not be required to take any action pursuant to this Section 1.07
except upon written instructions from the Servicer and to the extent it is
fully indemnified to its reasonable satisfaction therefor.
(c) A carbon, photographic or other reproduction of the Master
Agreement, this Series 1998-1 Supplement or any financing statement is
sufficient as a financing statement in any State.
The receipt of the Series 1998-1 Trust Estate by the Trustee (through possession
thereof by the Servicer acting as custodian) does not constitute and is not
intended to result in an assumption by the Trustee or any Series 1998-1
Noteholder of any obligation (except for the obligation not to disturb a User's
right of quiet enjoyment) of the Contributor, either Series Obligor or the
Servicer to any User or other Person in connection with the Equipment, the
Series 1998-1 Contracts, the Insurance Policies, any document in the Contract
Files or any Related Document.
ARTICLE II.
DEFINITIONS
SECTION 2.01 Definitions. (a) Whenever used in this Series 1998-1
Supplement and when used in the Master Agreement with respect to the Series
1998-1 Notes, the following words and phrases shall have the following meanings,
and the definitions of such
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terms are applicable to the singular as well as the plural forms of such terms
and to the masculine as well as to the feminine and neuter genders of such
terms. Unless otherwise defined in this Series 1998-1 Supplement, terms defined
in the Master Agreement are used herein as therein defined.
Additional Contracts: Those Contracts listed on the Schedule of
Additional Contracts attached to the related Series 1998-1 Contribution
Agreement Supplement.
Additional Equipment: The Equipment underlying a related Additional
Contract.
Additional Principal: With respect to each Payment Date, an amount
equal to (a) the difference between (i).the Aggregate Contract Balance as of the
previous Calculation Date and (ii) the Aggregate Contract Balance as of the
related Calculation Date, less (b) the Class Principal Payment, the Class B
Principal Payment and Class C Principal Payment to be paid on such Payment Date.
Additional Property: The property pledged by the Series Obligors to
the Trustee pursuant to Section 3.02(b) hereof or Section 3.04 hereof (with
respect to Interest-Only Contracts).
Additional Property Funding Account: The account established and
maintained pursuant to Section 3.02 hereof.
Additional Property Funding Requirement: With respect to or, Payment
Date during the Interest on, Period, the sum of (i) the excess of the Aggregate
Contract Principal Balance as of the second preceding Calculation Date over the
Aggregate Contract Principal Balance as of the preceding Calculation Date plus
(ii) the amount on deposit in the Additional Property Funding Account of the
opening of business on such Payment Date.
Aggregate Contract Balance Remaining: With respect to any Payment
Date, the sum of the Contract Balances Remaining of all Series 1998-1 Contracts
(other than Charged-Off Contracts) in the Series 1998-1 Trust Estate as of the
related Calculation Date.
Aggregate Contract Principal Balance: As of any date of
determination, the aggregate of the Contract Principal Balances of all Series
1998-1 contracts as of the immediate, preceding Calculation Date.
Amortization Date: The earlier to occur of (i) the Stated
Amortization Date and (ii) in the event that a Required Amortization Event
occurs on a Payment Date, such Payment Date, or (iii) otherwise, on the Payment
Date which immediately follows the occurrence of a Required Amortization Event.
Amortization Period: The period commencing with the Amortization
Date.
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Ancillary Servicing Income: Certain miscellaneous amounts which
revert to the Servicer in consideration of the servicing function performed by
the Servicer, such as late fees, insufficient funds charges, and the like.
Applicable Discount Rate: ___%
Available Funds: With respect to a Payment Date, (i) all amounts
held in the Series 1998-1 Facility Account on the related Determination Date
(including, without limitation, Scheduled Payments, Final Contract Payments,
Defaulted Residual Receipts, Residual Receipts, Purchase Option Payments,
Prepayment Amounts, and investment earnings on each of the Series 1998-1
Accounts), plus (ii) amounts transferred from the Reserve Account and/or the
Residual Account with respect to such Payment Date and deposited in the Series
1998-1 Facility Account.
Available Reserve Amount: As of any date of determination, the
amount on deposit in the Reserve Account on such date.
Available Residual Amount: As of any date of determination, the
amount on deposit in the Residual Account on such date.
Beginning Period: The Collection Period during which the
Amortization Date occurs.
Charged-Off Contract: Any Series 1998-1 Contract (a)(i) that is a
Delinquent Contract with respect to which a User is contractually delinquent for
121 days or more (without regard to any Servicer Advances or the application of
any Security Deposit) or (ii) as to which the Servicer has determined in
accordance with its customary servicing practices that eventual payment of the
remaining Scheduled Payments thereunder is unlikely or (iii) that has been
rejected by or on behalf of the User in a bankruptcy proceeding and (b) as to
which a Release Event has not occurred.
Charge-Off Ratio: With respect to or, Collection Period, the
percentage equivalent of a fraction, the numeration of which is twelve times the
aggregate Contract Principal Balances of all Series 1998-1 Contracts which
became charged-off Contracts during such Collection Period Calculated
immediately, prior to the time on, such Series 1998-1 Contract so became a
Charged-Off Contract, and the denominator of which is the Aggregate Contract
Principal Balance as of the beginning of such Collection Period.
Class A Note Interest: With respect to any Payment Date, the sum of
the Class A-1 Note Interest, the Class A-2 Note Interest, the Class A-3 Note
Interest and the Class A-4 Note Interest.
Class A Notes: The Class A-1 Notes, Class A-2 Notes, Class A-3 Notes
and Class A-4 Notes.
Class A Overdue Interest: With respect to any Payment Date, the sum
of the Class A-1 Overdue Interest, the Class A-2 Overdue Interest, the Class A-3
Overdue Interest and the Class A-4 Overdue Interest.
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Class A Overdue Principal: As of any Payment Date, the sum of the
Class A-1 Overdue Principal, Class A-2 Overdue Principal, Class A-3 Overdue
Principal and the Class A-4 Overdue Principal.
Class A Percentage: ___%.
Class A Principal Balance: As of any date of determination, the sum
of the Class A-1 Principal Balance, the Class A-2 Principal Balance, the Class
A-3 Principal Balance and the Class A-4 Principal Balance in each case as of
such date.
Class A Principal Payment: As to any Payment Date the amount
necessary to reduce the Class A Principal Balance to the Class A Target Investor
Principal Amount for such Payment Date.
Class A Target Investor Principal Amount: With respect to each
Payment Date, an amount equal to the product of (i) the Class A Percentage and
(ii) the Aggregate Contract Principal Balance as of the related Calculation
Date.
Class A-1 Initial Principal Balance: $_____________.
Class A-1 Interest Rate: ___% per annum.
Class A-1 Maturity Date: __________.
Class A-1 Note Factor: The seven digit decimal number that the
Servicer will compute or cause to be computed for each Collection Period and
will make available on the related Determination Date representing the ratio of
(i) the Class A-1 Principal Balance which will be outstanding on the next
Payment Date (after taking into account all distributions to be made on such
Payment Date) to (ii) the Class A-1 Initial Principal Balance.
Class A-1 Note Interest: With respect to any Payment Date, the sum
of (i) product of (A) the Class A-1 Principal Balance immediately prior to such
Payment Date and (B) the one-twelfth of the Class A-1 Interest Rate and (ii) the
Class A-1 Overdue Interest from the preceding Payment Date.
Class A-1 Notes: The Advanta Equipment Receivables Asset-Backed
Notes, Series 1998-1, Class A-1.
Class A-1 Overdue Interest: With respect to any Payment Date, the
sum of:
(a) the excess, if any, of any Class A-1 Note Interest due on
such Payment Date over the Class A-1 Note Interest paid on such
Payment Date; and
(b) the product of (i) the amount of Class A-1 Overdue
Interest due on the immediately preceding Payment Date and not paid
on such
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immediately preceding Payment Date and (ii) one-twelfth of the Class
A-1 Interest Rate.
Class A-1 Overdue Principal: With respect to any Payment Date, the
positive difference, if any, between (i) the aggregate of the Class A-1
Principal Payments due on all prior Payment Dates and (ii) the aggregate amount
of the principal (from whatever source) actually distributed to the Class A-1
Noteholders on all prior Payment Dates.
Class A-1 Principal Balance: As of any Payment Date, an amount equal
to the Class A-1 Initial Principal Balance less (i) any Class A-1 Principal
Payments previously made on the Class A-1 Notes and (ii) all Class A-1 Allocated
Loss Amounts previously allocated to the Class A-1 Notes.
Class A-1 Principal Payment: As to any Payment Date, that portion,
if any, of the Class A Principal Payment for such Payment Date which the Class
A-1 Notes are entitled to receive on such Payment Date.
Class A-2 Initial Principal Balance: $__________.
Class A-2 Interest Rate: __________% per annum.
Class A-2 Maturity Date: ____.
Class A-2 Note Factor: The seven digit decimal number that the
Servicer will compute or cause to be computed for each Collection Period and
will make available on the related Determination Date representing the ratio of
(i) the Class A-2 Principal Balance which will be outstanding on the next
Payment Date (after taking into account all distributions to be made on such
Payment Date) to (ii) the Class A-2 Initial Principal Balance.
Class A-2 Note Interest: With respect to any Payment Date, the sum
of (i) product of (A) the Class A-2 Principal Balance immediately prior to such
Payment Date and (B) the one-twelfth of the Class A-2 Interest Rate and (ii) the
Class A-2 Overdue Interest from the preceding Payment Date.
Class A-2 Notes: The Advanta Equipment Receivables Asset-Backed
Notes, Series 1998-1, Class A-2.
Class A-2 Overdue Interest: With respect to any Payment Date, the
sum of:
(i) the excess, if any, of any Class A-2 Note Interest due on such
Payment Date over the Class A-2 Note Interest paid on such Payment Date;
and
(ii) the product of (a) the amount of Class A-2 Overdue Interest due
on the immediately preceding Payment Date and not paid on such immediately
preceding Payment Date and (b) one-twelfth of the Class A-2 Interest Rate.
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Class A-2 Overdue Principal: With respect to any Payment Date, the
positive difference, if any, between (i) the aggregate of the Class A-2
Principal Payments due on all prior Payment Dates and (ii) the aggregate amount
of the principal (from whatever source) actually distributed to the Class A-2
Noteholders on all prior Payment Dates.
Class A-2 Principal Balance: As of any date, an amount equal to the
Class A-2 Initial Principal Balance less (i) any Class A-2 Principal Payments
previously made on the Class A-2 Notes and (ii) all Class A-2 Allocated Loss
Amounts previously allocated to the Class A-2 Notes.
Class A-2 Principal Payment: As to any Payment Date, that portion,
if any, of the Class A Principal Payment for such Payment Date which the Class
A-2 Notes are entitled to receive on such Payment Date.
Class A-3 Initial Principal Balance: $__________.
Class A-3 Interest Rate: ___% per annum.
Class A-3 Maturity Date: ____.
Class A-3 Note Factor: The seven digit decimal number that the
Servicer will compute or cause to be computed for each Collection Period and
will make available on the related Determination Date representing the ratio of
(i) the Class A-3 Principal Balance which will be outstanding on the next
Payment Date (after taking into account all distributions to be made on such
Payment Date) to (ii) the Class A-3 Initial Principal Balance.
Class A-3 Note Interest: With respect to any Payment Date, the sum
of (i) product of (A) the Class A-3 Principal Balance immediately prior to such
Payment Date and (B) the one-twelfth of the Class A-3 Interest Rate and (ii) the
Class A-3 Overdue Interest from the preceding Payment Date.
Class A-3 Notes: The Advanta Equipment Receivables Asset-Backed
Notes, Series 1998-1, Class A-3.
Class A-3 Overdue Interest: With respect to any Payment Date, the
sum of:
(i) the excess, if any, of any Class A-3 Note Interest due on such
Payment Date over the Class A-3 Note Interest paid on such Payment
Date; and
(ii) the product of (a) the amount of Class A-3 Overdue Interest due on
the immediately preceding Payment Date and not paid on such
immediately preceding Payment Date and (b) one-twelfth of the Class
A-3 Interest Rate.
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Class A-3 Overdue Principal: With respect to any Payment Date, the
positive difference, if any, between (i) the aggregate of the Class A-3
Principal Payments due on all prior Payment Dates and (ii) the aggregate amount
of the principal (from whatever source) actually distributed to the Class A-3
Noteholders on all prior Payment Dates.
Class A-3 Principal Balance: As of any date, an amount equal to the
Class A-1 Initial Principal Balance less (i) any Class A-3 Principal Payments
previously made on the A-3 Notes and (ii) all Class A-3 Allocated Loss Amounts
previously allocated to the Class A-3 Notes.
Class A-3 Principal Payment: As to any Payment Date, that portion,
if any, of the Class A Principal Payment for such Payment Date which the Class
A-3 Notes are entitled to receive on such Payment Date.
Class A-4 Initial Principal Balance: $__________.
Class A-4 Interest Rate: ___% per annum.
Class A-4 Maturity Date: ____.
Class A-4 Note Factor: The seven digit decimal number that the
Servicer will compute or cause to be computed for each Collection Period and
will make available on the related Determination Date representing the ratio of
(i) the Class A-4 Principal Balance which will be outstanding on the next
Payment Date (after taking into account all distributions to be made on such
Payment Date) to (ii) the Class A-4 Initial Principal Balance.
Class A-4 Note Interest: With respect to any Payment Date, the sum
of (i) product of (A) the Class A-4 Principal Balance immediately prior to such
Payment Date and (B) the one-twelfth of the Class A-4 Interest Rate and (ii) the
Class A-4 Overdue Interest from the preceding Payment Date.
Class A-4 Notes: The Advanta Equipment Receivables Asset-Backed
Notes, Series 1998-1, Class A-4.
Class A-4 Overdue Interest: With respect to any Payment Date, the
sum of:
(a) the excess, if any, of any Class A-4 Note Interest due on such
Payment Date over the Class A-4 Note Interest paid on such Payment
Date; and
(b) the product of (i) the amount of Class A-4 Overdue Interest due on
the immediately preceding Payment Date and not paid on such
immediately preceding Payment Date and (ii) one-twelfth of the Class
A-4 Interest Rate.
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Class A-4 Overdue Principal: With respect to any Payment Date, the
positive difference, if any, between (i) the aggregate of the Class A-4
Principal Payments due on all prior Payment Dates and (ii) the aggregate amount
of the principal (from whatever source) actually distributed to the Class A-4
Noteholders on all prior Payment Dates.
Class A-4 Principal Balance: As of any date, an amount equal to the
Class A-4 Initial Principal Balance less (i) any Class A Principal Payments
previously made on the A-4 Notes and (ii) all Class A-4 Allocated Loss Amount
previously allocated to the Class A-4 Notes.
Class A-4 Principal Payment: As to any Payment Date, that portion,
if any, of the Class A Principal Payment for such Payment Date which the Class
A-4 Notes are entitled to receive on such Payment Date.
Class B Initial Principal Balance: $__________.
Class B Interest Rate: ___% per annum.
Class B Note Factor: The seven digit decimal number that the
Servicer will compute or cause to be computed for each Collection Period and
will make available on the related Determination Date representing the ratio of
(i) the Class B Principal Balance which will be outstanding on the next Payment
Date (after taking into account all distributions to be made on such Payment
Date) to (ii) the Class B Initial Principal Balance.
Class B Note Interest: With respect to any Payment Date, the sum of
(i) product of (A) the Class B Principal Balance immediately prior to such
Payment Date and (B) the one-twelfth of the Class B Interest Rate and (ii) the
Class B Overdue Interest from the preceding Payment Date.
Class B Notes: The Advanta Equipment Receivables Asset-Backed Notes,
Series 1998-1, Class B.
Class B Overdue Interest: With respect to any Payment Date, the sum
of:
(i) the excess, if any, of any Class B Note Interest due on such
Payment Date over the Class B Note Interest paid on such Payment Date; and
(ii) the product of (a) the amount of Class B Overdue Interest due
on the immediately preceding Payment Date and not paid on such immediately
preceding Payment Date and (b) one-twelfth of the Class B Interest Rate.
Class B Overdue Principal: With respect to any Payment Date, the
positive difference, if any, between (i) the aggregate of the Class B Principal
Payments due on all prior Payment Dates and (ii) the aggregate amount of the
principal (from whatever source) actually distributed to the Class B Noteholders
on all prior Payment Dates.
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Class B Percentage: ___%.
Class B Principal Balance: As of any date, an amount equal to the
Class B Initial Principal Balance less (i) any Class B Principal Payments
previously made on the Class B Notes and (ii) less all Class B Allocated Loss
Amounts previously allocated to the Class B Notes.
Class B Principal Payment: As to any Payment Date, the amount
necessary to reduce the Class B Principal Balance to the Class B Target Investor
Principal Amount for such Payment Date.
Class B Target Investor Principal Amount: With respect to each
Payment Date is an amount equal to the product of (i) the Class B Percentage and
(ii) the Aggregate Contract Principal Balance as of the related Calculation
Date.
Class C Initial Principal Balance: $__________.
Class C Interest Rate: ___% per annum.
Class C Maturity Date: ______________.
Class C Note Factor: The seven digit decimal number that the
Servicer will compute or cause to be computed for each Collection Period and
will make available on the related Determination Date representing the ratio of
(i) the Class C Principal Balance which will be outstanding on the next Payment
Date (after taking into account all distributions to be made on such Payment
Date) to (ii) the Class C Initial Principal Balance.
Class C Noteholder: The Person in whose name a Class C Note is
registered in the Note Register.
Class C Note Interest: With respect to any Payment Date, the sum of
(i) product of (A) the Class C Principal Balance immediately prior to such
Payment Date and (B) the one-twelfth of the Class C Interest Rate and (ii) the
Class C Overdue Interest from the preceding Payment Date.
Class C Notes: The Advanta Equipment Receivables Asset-Backed Notes,
Series 1998-1, Class C.
Class C Overdue Interest: With respect to any Payment Date, the sum
of:
(i) the excess, if any, of any Class C Note Interest due on such
Payment Date over the Class C Note Interest paid on such Payment Date and;
(ii) the product of (a) the amount of Class C Overdue Interest due
on the immediately preceding Payment Date and not paid on such immediately
preceding Payment Date and (b) one-twelfth of the Class C Interest Rate.
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Class C Overdue Principal: With respect to any Payment Date, the
positive difference, if any, between (i) the aggregate of the Class C Principal
Payments due on all prior Payment Dates and (ii) the aggregate amount of the
principal (from whatever source) actually distributed to the Class C Noteholders
on all prior Payment Dates.
Class C Percentage: ___%.
Class C Principal Balance: As of any date, an amount equal to the
Class C Initial Principal Balance less (i) any Class C Principal Payments
previously made on the Class C Notes and (ii) less all Class C Allocated Loss
Amounts previously allocated to the Class C Notes.
Class C Target Investor Principal Amount: With respect to each
Payment Date is an amount equal to the product of (i) the Class C Percentage and
(ii) the Aggregate Contract Principal Balance as of the related Calculation
Date.
Class D Floor: With respect to each Payment Date, (i) ____% of the
Original Aggregate Contract Principal Balance, plus (ii) the Cumulative Loss
Amount with respect to such Payment Date, minus (iii) the sum, as of such
Payment Date, of the Outstanding Residual Interest Principal Balance and the
Available Reserve Amount after giving effect to withdrawals, if any, from the
Reserve Account to be made on such Payment Date.
Class D Initial Principal Balance: $__________.
Class D Interest Rate: ___% per annum.
Class D Maturity Date: ______________.
Class D Note Factor: The seven digit decimal number that the
Servicer will compute or cause to be computed for each Collection Period and
will make available on the related Determination Date representing the ratio of
(i) the Class D Principal Balance which will be outstanding on the next Payment
Date (after taking into account all distributions to be made on such Payment
Date) to (ii) the Class D Initial Principal Balance.
Class D Noteholder: The Person in whose name a Class D Note is
registered in the Note Register.
Class D Note Interest: With respect to any Payment Date, the sum of
(i) product of (A) the Class D Principal Balance immediately prior to such
Payment Date and (B) the one-twelfth of the Class D Interest Rate and (ii) the
Class D Overdue Interest from the preceding Payment Date.
Class D Notes: The Advanta Equipment Receivables Asset-Backed Notes,
Series 1998-1, Class D.
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Class D Overdue Interest: With respect to any Payment Date, the sum
of:
(i) the excess, if any, of any Class D Note Interest due on such
Payment Date over the Class D Note Interest paid on such Payment Date and;
(ii) the product of (a) the amount of Class D Overdue Interest due
on the immediately preceding Payment Date and not paid on such immediately
preceding Payment Date and (b) one-twelfth of the Class D Interest Rate.
Class D Overdue Principal: With respect to any Payment Date, the
positive difference, if any, between (i) the aggregate of the Class D Principal
Payments due on all prior Payment Dates and (ii) the aggregate amount of the
principal (from whatever source) actually distributed to the Class D Noteholders
on all prior Payment Dates.
Class D Percentage: ___%.
Class D Principal Balance: As of any date, an amount equal to the
Class D Initial Principal Balance less any Class D Principal Payments previously
made on the Class D Notes.
Class D Principal Payment: As to any Payment Date, the amount
necessary to reduce the Class D Principal Balance to the greater of (i) the
Class D Target Investor Principal Amount and (ii) the Class D Floor, in each
case for such Payment Date.
Class D Target Investor Principal Amount: With respect to each
Payment Date is an amount equal to the product of (i) the Class D Percentage and
(ii) the Aggregate Contract Principal Balance as of the related Calculation
Date.
Closing Date: March ___, 1998.
Collateral Factor: The seven digit decimal number that the Servicer
will compute or cause to be computed for each Collection Period and will make
available on the related Determination Date representing the ratio of (i) the
Aggregate Contract Principal Balance as of the immediately preceding Calculation
Date to (ii) the Original Aggregate Contract Principal Balance.
Crossover Amounts: As defined in the Master Facility Agreement.
Cumulative Loss Amount: With respect to each Payment Date, an amount
equal to the excess, if any, of (i) the Contract Principal Balance of all Series
1998-1 Contracts which have become Charged-Off Contracts since the Closing Date
over (ii) Defaulted Residual Receipts.
Cumulative Net Loss Percentage: With respect to any date of
determination occurring after the end of the Beginning Period, the percentage
equivalent of fraction, the numerator of which is the excess of (x) the
aggregate, cumulative amount
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of the Contract Principal Balances of all Series 1998-1 contracts which became
Charged-Off Contracts during each prior Collection Period commencing with the
Beginning Period over (y) the aggregate, cumulative amount of all Defaulted
Residual Receipts collected by the Servicer with respect to all prior Collection
Periods commencing with the Beginning Period and the denominator of which is
$__________.
Cut-Off Date: With respect to the Initial Contracts, the close of
business on January 31, 1998. With respect to any Additional Contract or
Substitute Contract pledged to the Trustee, the date specified in the related
Pledge Notice.
Defaulted Residual Receipts: With respect to any Series 1998-1
Contract which has previously become a Charged-Off Contract (and is not a
Reinstated Contract), all proceeds of the sale of the Equipment, all Insurance
Proceeds and any amounts collected related to the failure of a User to pay any
required amounts under the related Series 1998-1 Contract or to return the
Equipment, in each case as reduced by (i) any unreimbursed Servicer Advances
with respect to such Series 1998-1 Contract or such Equipment and (ii) any
reasonably incurred out-of-pocket expenses incurred by the Servicer in enforcing
such Series 1998-1 Contract or in liquidating such Equipment.
Delinquent Contract: As of any date, any Series 1998-1 Contract (i)
as to which less than 90% of any Scheduled Payment was received by the Servicer
when due as of the close of business on the Calculation Date immediately
preceding such date and (ii) which is not a Charged-Off Contract.
Eligible Contracts: Means, at the time of pledge, a Series 1998-1
Contract with respect to which:
(i) (a) is with a User whose billing address is in the United States
or its territories and possessions and requires all payments under such
Contract to be made in United States dollars and (b) is with a User who,
if a natural person, is a resident of the United States or its territories
and possessions with legal capacity to contract or, if a corporation or
other business organization, is organized under the laws of the United
States, its territories or any political subdivision thereof and has its
chief executive office in the United States or its territories,
(ii) has not had any of its terms, conditions or provisions modified
or waived other than in compliance with the Credit and Collection Policy
and has not been restructured at any time when such Contract was a
Delinquent Contract,
(iii) constitutes "chattel paper" within the meaning of Section
9-105(b) of the UCC of all applicable jurisdictions (other than a Contract
which is a loan in form and does not purport to evidence a security
interest in goods within the meaning of Section 9-105(h) OF the UCC of all
applicable jurisdictions) and for which there is only one original of such
Contract that constitutes "chattel paper" for purposes of the UCC,
(iv) does not contravene any applicable federal, state and local
laws, and regulations thereunder (including, without limitation, any law,
rule and
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regulation relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no part of such Contract thereto is in
violation of any applicable law, rule or regulation,
(v) satisfies in all material respects all applicable requirements
of the Credit and Collection Policy,
(vi) if a municipal contract, does not have a Contract Principal
Balance that, when aggregated with the Contract Principal Balances of all
other municipal contracts included as Series 1998-1 Contracts, exceeds __%
of the Aggregate Contract Principal Balance at that time,
(vii) as of the related Pledge Date, is not more than [60] days
delinquent; [provided, that, with respect to the Initial Contracts, up to
$______________ in Aggregate Contract Principal Balance as of the related
Cut-Off Date may be represented by Delinquent Contracts,]
(viii) as of the related Pledge Date (other than a Contract which is
a loan in form), (a) contains "hell or high water" provisions requiring
the related User to assume all risk of loss or malfunction of the related
Equipment, and (b) makes the related User absolutely and unconditionally
liable for all payments required to be made thereunder, without any right
of set-off, counterclaim, or other defense (other than the discharge in
bankruptcy of such related User) and without any right to prepay the
Contract or any contingencies tied to the Series Obligors,
(ix) when aggregated with the sum of the Contract Principal Balances
of all other Series 1988-1 Contracts relating to a single User, shall not
be greater than the product of (a) ___% and (b) the Aggregate Contract
Principal Balance at that time,
(x) creates a valid and enforceable security or ownership interest
in favor of the Contributor in the related Equipment, if any,
(xi) is free and clear of any Adverse Claims, other than the claims
arising pursuant to the Master Agreement, this Series 1998-1 Supplement
and the Related Documents; provided, however, that nothing in this clause
(xi) shall prevent or be deemed to prohibit the Contributor from suffering
to exist upon such Series 1998-1 Contract any Adverse Claim for federal,
state, municipal or other local taxes if such taxes shall not at the time
be due and payable or if the Contributor shall concurrently be contesting
the validity thereof in good faith by appropriate proceedings that have
stayed enforcement thereof and shall have set aside on its books adequate
reserves with respect thereto,
(xii) is in full force and effect in accordance with its terms and
contains enforceable provisions such that the right and remedies of the
holder thereof shall be adequate for realization against the Equipment, if
any, thereunder and of the benefits of any security granted thereunder;
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(xiii) does not provide for the substitution, exchange, or addition
of any other items of Equipment pursuant to such Contract which would
result in any reduction or extension of payments due thereunder;
(xiv) by its terms is due and payable on or within ____ months of
the applicable Pledge Date and, in either event, has not had its payment
terms extended other than in compliance with the Credit and Collection
Policy;
(xv) is in substantially the form of one of the form contracts set
forth in Exhibit __ hereto, subject to no offset, counterclaim or other
defense (other than the discharge in bankruptcy of such User);
(xvi) (a) does not preclude the pledge, transfer or assignment
thereof, (b) does not require the consent of the User to the pledge,
assignment or transfer thereof, and (c) does not contain a confidentiality
provision that purports to restrict the ability of the Trustee (or any
prior pledgor or owner thereof) to exercise its rights under the Related
Documents with respect thereto, including, without limitation, its right
to review the Series 1998-1 Contract; and
(xvii) was (a) originated or purchased by the Contributor in the
ordinary course of its business and (b) approved and purchased or funded
in the ordinary course of the Contributor's business; and
(xviii) either (a) is an account receivable representing all or part
of the sales price of merchandise, insurance and/or services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940, as
amended, or (b) represents a financial asset that converts to cash within
a finite period of time within the meaning of Rule 3a-7 promulgated under
the Investment Company Act of 1940, as amended.
Final Contract Payment: With respect to any Series 1998-1 Contract,
any specified amount or minimum specified amount set forth in such Series 1998-1
Contract and required to be paid by the related User at the maturity of such
Series 1998-1 Contract.
Included Residual Receipts: With respect to any Payment Date, the
aggregate, cumulative amount of Residual Receipts included as part of the Month,
Remittance Amount on such Payment Date and all prior Payment Dates.
Initial Contracts: The Series 1998-1 Contracts pledged to the
Trustee on the Closing Date, as identified on the List of Initial Contracts.
Initial Equipment: The Equipment pledged to the Trustee on the
Closing Date pursuant to Section 1.02 hereto.
Initial Period: The period from the Closing Date to the end of the
Collection Period relating to the Payment Date immediately preceding the
Amortization Date.
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Initial Property: The property pledged and assigned by the Series
Obligors to the Trustee pursuant to Section 1.02 hereof.
Interest Accrual Period: With respect to any Payment Date, the
period commencing on and including the prior Payment Date (or on the Closing
Date with respect to the initial Payment Date) and ending on and including the
day immediately preceding such Payment Date.
Interest-Only Period: The period from the Closing Date to the end of
the Collection Period which immediately precedes the Amortization Date.
Monthly Remittance Amount: With respect to any Payment Date (x)
occurring on or prior to the Residual Cap Date, the aggregate amount of
Collections received by the Servicer during the prior Collection Period with
respect to the Series 1998-1 Trust Estate (other than Collections representing
Advance Payments until such Advance Payments are applied as Collections),
together with all Servicing Advances paid by the Servicer with respect to such
Payment Date and (y) occurring after the Residual Cap Date, the amount described
in clause (x) preceding less any Residual Receipts with respect to the related
Collection Period. With respect to the Payment Date which is the Residual Cap
Date, Residual Receipts with respect to the related Collection Period will only
be included in the Monthly Remittance to the extent that such inclusion would
not result in Included Residual Receipts exceeding $_____________.
Nonrecoverable Advances: With respect to any Delinquent Contract, a
Servicer Advance which the Servicer has determined that it will be unable to
recover, in whole or in part, with respect to such Delinquent Contract.
Noteholder or Holder: The Person in whose name a Note is registered
in the Note Register.
Original Aggregate Contract Principal Balance: The Aggregate
Contract Balance of the Initial Contracts as of the Cut-off Date which is an
amount equal to $___________.
Outstanding Note Principal Balance: As of any date of determination,
the sum of the Class A-1 Principal Balance, the Class A-2 Principal Balance, the
Class A-3 Principal Balance, the Class B Principal Balance, the Class C
Principal Balance and the Class D Principal Balance.
Outstanding Residual Interest Principal Balance: As of any Payment
Date, the excess, if any, of (x) the Aggregate Contract Principal Balances of
all Series 1998-1 Contracts as of the related Calculation Date plus the
Available Additional Property Funding Amount at the end of such Payment Date
over (y) the Outstanding Note Principal Balance at the end of such Payment Date.
Payment Date: The _____ day of each month, or, if such day is not a
Business Day, the next succeeding Business Day.
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Pledge Notice: As defined in the Master Facility Agreement.
Predecessor Contract: A Series 1998-1 Contract which is substituted
for by a Substitute Contract.
Rating Agencies: Moody's, S&P and Fitch IBCA, Inc.
Record Date: With respect to any Payment Date, the Business Day
preceding such Payment Date.
Related Documents: The Master Agreement, the Series 1998-1
Supplement, the Contribution Agreement, each Series 1998-1 Contribution
Agreement Supplement, each Pledge Notice and all amendments and supplement
thereto.
Release Event: With respect to any Series 1998-1 Contract, a payment
in full of such Series 1998-1 Contract or a removal of such Series 1998-1
Contract from the Series 1998-1 Trust Estate following the deposit of the
related Prepayment Amount in the Series 1998-1 Facility Account.
Required Amortization Event: The earliest to occur of any of the
following: (i) the occurrence of an Event of Servicing Termination or an Event
of Default, (ii) the amount on deposit in the Additional Property Funding
Account is more than $3,000,000, (iii) the bankruptcy of the Servicer or of
either Series Obligor, (iv) as of any Calculation Date, the three-month average
ratio of the aggregate Contract Balance Remaining of Series 1998-1 Contracts
which are 31 or more days delinquent with respect to 90% or more of any
Scheduled Payment to the Aggregate Contract Balance Remaining, exceeds 11.50%,
(v) as of any Payment Date, the average over the related and two prior
Collection periods of the Charge-Off Ratio exceeds 3.75%, (vi) the amount on
deposit in the Reserve Account falls below $_________ and (vii) the percentage
equivalent of a fraction, the numerator of which is Outstanding Principal
Balances of the Class A Notes, the Class B Notes and the Class C Notes (after
taking into account all payments of principal to be made on such Payment Date,
but prior to taking into account any allocation of the Allocated Loss Amount, if
any, for such Payment Date and the denominator of which is the sum of the
Aggregate Contract Principal Balance as of the related Calculation Date plus the
Available Reserve Amount at the end of such Payment Date plus the amount on
deposit in the Additional Property Funding Account at the end of such Payment
Date exceeds 96%.
Required Reserve Amount: An amount equal to the lesser of (i) ___%
of the Original Aggregate Contract Principal Balance and (ii) the Outstanding
Note Principal Balance.
Reserve Account: The account or accounts by that name established
and maintained by the Trustee pursuant to Section 3.02 hereof.
Residual Account: The account or accounts by that name established
and maintained by the Trustee pursuant to Section 3.02 hereof.
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Residual Amount Cap: An amount equal to ____________.
Residual Event: means the occurrence of one or more if the
following: (a) ABS is no longer the Servicer, (b) with respect to the March,
1998 Collection Period and each Collection Period thereafter, the Three-Month
Servicer Realization Percentage calculated on any Calculation Date is less that
100%; or (c) with respect to the March, 1998 Collection Period and each
Collection Period thereafter, the Three-Month Delinquency Percentage is greater
than 10.50%; or (d) the Cumulative New Loss Percentage as of or, Calculation
Date occurring during the following periods exceeds the "Loss Trigger Level
Percentage" set forth below:
Period Loss Trigger
Level Percentage
Beginning Period through 12th 4.0%
Collection Period thereafter
13th Collection Period following 5.5%
Beginning Period through 24th
Collection Period thereafter
25th Collection Period following 7.0%
Beginning Period and thereafter
Notwithstanding the foregoing: (i) the Residual Event referred to in
clause (b) may be cured if the Three-Month Residual Realization Percentage is
greater than or equal to 100% for three consecutive month thereafter i (vi) the
Residual Event referenced in clause (c) may be cured if the Three-Month
Delinquency Percentage for any Due Period thereafter is less than or equal to
10.50%; and (iii) the Residual Event referenced in clause (d) may be cured if
the Cumulative Net Loss Percentage, although it exceeds the "Loss Trigger Level
Percentage" in a prior period, is less than the "Loss Trigger Level Percentage"
in a subsequent period.
Residual Interest: The Series Obligors' reversionary rights to the
Series 1998-1 Trust Estate and the proceeds thereof to the extent such proceeds
are not needed to make payments on the Series 1998-1 Notes.
Series Obligors: Advanta Leasing Receivables IV, a Nevada
corporation, and Advanta Leasing Receivables Corp. V, a Nevada corporation.
Series 1998-1 Accounts: The Series 1998-1 Facility Account, the
Interest-Only Property Funding Account and the Reserve Account.
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Series 1998-1 Contracts: Shall have the meaning as defined in
Section 1.02 hereof.
Series 1998-1 Facility Account: The account by that name established
and maintained by the Trustee pursuant to Section 3.01(a) hereof.
Series 1998-1 Contribution Agreement Supplement: Each Contribution
Agreement Supplement delivered with respect to the Series 1998-1 Trust Estate.
Series 1998-1 Notes: Shall have the meaning as defined in Section
1.01 hereof.
Series 1998-1 Trust Estate: As defined in Section 1.02 hereof.
Servicer: The Person performing the duties of the Servicer
hereunder, initially Advanta Business Services Corp., a Delaware corporation.
Servicer Fee Rate: 1.00%.
Servicer's Certificate: A written informational statement,
substantially in the form of Exhibit ___ hereto, to be provided by the Servicer
in accordance with Section 6.06 of the Master Agreement and signed by a
Servicing Officer and furnished to the Trustee and each Rating Agency by the
Servicer.
Servicing Fee: The fee payable to the Servicer on each Payment Date
in consideration for the Servicer's performance of its duties pursuant to
Section 3.05 hereof in an amount equal to the product of (a) one-twelfth of the
Servicer Fee Rate and (b) the Aggregate Contract Principal Balance as of the
prior Calculation Date.
Stated Amortization Date: The Payment Date occurring in November,
1998.
Stated Maturity Date: _________________.
Substitute Contract: As defined in Section 3.10 hereof.
ARTICLE III.
SERIES ACCOUNTS; DISTRIBUTIONS AND STATEMENTS TO
SERIES 1998-1 NOTEHOLDERS; SERIES SPECIFIC COVENANTS
SECTION 3.01 Series 1998-1 Facility Account. (a) The Trustee, for
the benefit of the Series 1998-1 Noteholders, shall establish and maintain an
account (the "Series 1998-1 Facility Account") as a segregated trust account in
the Trustee's corporate trust department, identified as the "Facility Account
for Advanta Master Asset-Backed Facility Agreement, in trust for the Series
1998-1 Noteholders." The Trustee shall make or permit withdrawals from the
Series 1998-1 Facility Account only as provided in this Series 1998-1
Supplement.
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(b) On each Payment Date, (i) the Trustee shall transfer the Monthly
Remittance Amount with respect to such Payment Date from the Master
Facility Account to the Series 1998-1 Facility Account, and (ii) on each
Payment Date occurring after the Residual Cap Date, the Trustee shall pay
to the Series Obligors all Residual Receipts with respect to the Series
1998-1 Contracts and with respect tot he related Collection Period. On the
Payment Date which is the Residual Cap Date, or, excess of the Residual
Receipts with respect to the Series 1998-1 Contracts and with respect to
the related Collection Period over such Residual Receipts as are included
in the Monthly Remittance Amount on such Payment Date shall be paid to the
Series Obligors by the Trustee.
The Trustee shall deposit all net investment earnings on each Series
1998-1 Account, as earned, to the Series 1998-1 Facility Account;
SECTION 3.02 Additional Property Funding Account, Reserve Account
and Residual Account. (a) The Trustee shall establish and maintain an account
(the "Additional Property Funding Account") as one or more non-interest bearing,
segregated trust accounts in the Trustee's corporate trust department, in the
name of "Advanta Equipment Receivables Asset-Backed Notes Additional Property
Funding Account, in trust for the Series 1998-1 Noteholders." The Trustee shall
make or permit withdrawals from the Interest-Only Property Funding Account only
as provided in this Series 1998-1 Supplement.
(b) (i) The Trustee shall establish and maintain an account (the
"Reserve Account") as one or more segregated trust accounts in the
Trustee's corporate trust department in the name of "Advanta Equipment
Receivables Asset-Backed Notes 1998-1 Reserve Account, in trust for the
Series 1998-1 Noteholders." The Trustee shall make or permit withdrawals
from the Reserve Account only as provided in this Series 1998-1
Supplement.
(ii) If:
(A) on any Payment Date prior to the Amortization Date, (x)
the amounts described in clauses (a)(iii), (a)(iv) and (a)(v) of
Section 3.05 hereof together with the Aggregate Contract Principal
Balances of all Contracts which become Charged-Off Contracts during
the prior Collection Period exceed (y) the Available Funds
(exclusive of any Reserve Account transfers, but inclusive of any
Residual Account transfers, as provided in paragraph (c) below) in
the Series 1998-1 Facility Account after taking into account the
payment of amounts described in clauses (a)(i) and (a)(ii) of
Section 3.05 on such Payment Date; or
(B) on any Payment Date during the Amortization Period, (x)
the amounts described in clauses (b)(iii), (b)(iv), (b)(v), (b)(vi),
(b)(vii), and (b)(viii) of Section 3.05 hereof exceed (y) the
Available Funds (exclusive of any Reserve Account transfers, but
inclusive of any Residual Account transfers pursuant to paragraph
(c) below) in the Series 1998-1 Facility
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Account after taking into account the payment of amounts described
in clauses (b)(i) and (b)(ii) of Section 3.05 on such Payment Date;
then, to the extent of the Available Reserve Amount on deposit in
the Reserve Account, the Trustee shall transfer, prior to making payments to the
Series 1998-1 Noteholders on such Payment Date, from the Reserve Account to the
Series 1998-1 Facility Account such amount as shall be necessary to fund any
such shortfall.
(iii) In the event that after giving effect to all the
disbursements required to be made on any Payment Date, the Available
Reserve Amount exceeds the Required Reserve Amount, the Trustee shall
transfer, not later than the end of business on such Payment Date, an
amount equal to such excess to the Series Obligors, as the holders of the
Residual Interest.
(iv) Upon payment in full of the Series 1998-1 Notes, any
balance remaining in the Reserve Account, after all obligations to the
Noteholders hereunder have been fully satisfied, shall be paid to
reimburse the Trustee for any amounts owing to it arising from the
performance of its obligations under the Master Agreement and this Series
1998-1 Supplement and, then, to the Series Obligors, as the holders of the
Residual Interest.
(c) (i) The Trustee shall establish and maintain an account (the
"Residual Account") as one or more segregated trust accounts in the
Trustee's corporate trust department, in the name of "Advanta Equipment
Receivables Asset-Backed Notes 1998-1 Reserve Account, in trust for the
Series 1998-1 Noteholders." The Trustee shall make or permit withdrawals
from the Residual Account only as provided in this Series 1998-1
Supplement.
(ii) If, on any Payment Date, a Residual Event is in
effect (i.e., has occurred and not been cured) the Trustee shall deposit
to the Residual Account the amounts described in Section 3.05(a)(ix)
(during the Interest-Only Period) or Section 3.05(b)(xii) (during the
Amortization Period).
(iii) If:
(A) on any Payment Date prior to the Amortization Date, (x)
the amounts described in clauses (a)(iii), (a)(iv) and (a)(v) of
Section 3.05 hereof together with the Aggregate Contract Principal
Balances of all Contracts which become Charged-Off Contracts during
the prior Collection Period exceed (y) the Available Funds
(exclusive of any Reserve Account and Residual Account transfers) in
the Series 1998-1 Facility Account after taking into account the
payment of amounts described in clauses (a)(i) and (a)(ii) of
Section 3.05 on such Payment Date; or
(B) on any Payment Date during the Amortization Period, (x)
the amounts described in clauses (b)(iii), (b)(iv), (b)(v), (b)(vi),
(b)(vii), (b)(viii) and (b)(ix) of Section 3.05 hereof exceed (y)
the Available Funds
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(exclusive of any Reserve Account or Residual Account transfers) in
the Series 1998-1 Facility Account after taking into account the
payment of amounts described in clauses (b)(i) and (b)(ii) of
Section 3.05 on such Payment Date;
then, to the extent of the Available Residual Amount on deposit in
the Residual Account, the Trustee shall transfer, prior to making payments to
the Series 1998-1 Noteholders on such Payment Date or prior to making any
transfers from the Reserve Account on such Payment Date, from the Residual
Account to the Series 1998-1 Facility Account such amount as shall be necessary
to fund any such shortfall.
(iv) In the event that on any Payment Date the Trustee
Determines that a Residual Event which has previously occurred has been
cured, the Trustee, prior to making any other transfers or disbursements
from the Series 1998-1 Accounts on such Payment Date, shall pay the full
amount then on deposit in the Residual Account to the Series Obligors.
(v) Upon payment in full of the Series 1998-1 Notes, any
balance remaining in the Residual Account, after all obligations to the
Noteholders hereunder have been fully satisfied, shall be paid to
reimburse the Trustee for any amounts owing to it arising from the
performance of its obligations under the Master Agreement and this Series
1998-1 Supplement and, then, to the Series Obligors.
SECTION 3.03 Investment of Monies Held in the Accounts; Subaccounts.
(a) The Servicer shall direct the Trustee to invest the amounts in each Account
in Eligible Investments that mature not later than the Business Day immediately
preceding the next Payment Date following the investment of such amounts.
Eligible Investments shall not be sold or disposed of prior to their maturities.
Net investment earnings on amounts held in any Series 1998-1 Account shall be
deposited in the Series 1998-1 Facility Account as earned.
(b) The Trustee and the Servicer may, from time to time and in
connection with the administration of each Series 1998-1 Account,
establish and maintain with the Trustee one or more sub-accounts of any of
the Series 1998-1 Accounts, as the Trustee and/or the Servicer may
consider useful.
SECTION 3.04 Additional Property Funding Account. (a) (i) On each
Payment Date during the Interest-Only Period, and provided that no Required
Amortization Event has occurred, in consideration of the pledge of Additional
Contracts, if any, to be pledged to the Trustee on such Payment Date, the
Trustee shall pay to the Series Obligors the amounts described in Section
3.05(a)(vi) hereof.
(ii) If, on the Amortization Date, any amount is on
deposit in the Additional Property Funding Account, it shall be deposited
in the Series 1998-1 Facility Account prior to making any payments or
distributions on such
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Payment Date from the Series 1998-1 Facility Account and the Additional
Property Account shall be closed.
(b) If a Required Amortization Event occurs, then no further pledges
of Additional Contracts shall occur, and all amounts that would otherwise
have been disbursed in consideration of such pledges shall be retained in
the Series 1998-1 Facility Account and shall be distributed, as provided
in Section 3.05(b) below.
SECTION 3.05 Flow of Funds. (a) On each Payment Date prior to the
Amortization Date, the Trustee will be required to make the following payments
from the Available Funds (including amounts transferred from the Reserve Account
on such Payment Date) then on deposit in the Collection Account and, with
respect to paragraph (vi), from amounts on deposit in the Additional Property
Funding Account, in the following order of priority:
(i) from the Available Funds, to the Servicer, any
unrecoverable Servicer Advances;
(ii) from the Available Funds then remaining in the
Collection Account, to the Servicer, if ABS is not then the Servicer, the
Servicing Fee then due, together with certain miscellaneous amounts;
(iii) from the Available Funds then remaining in the
Collection Account, to the Class A Noteholders, the Class A Note Interest
and Class A Overdue Interest for the related Interest Accrual Period; pari
passu with respect to each Class of Class A Notes;
(iv) from the Available Funds then remaining in
Collection Account, to the Class B Noteholders, the Class B Note Interest
and the Class B Overdue Interest for the related Interest Period;
(v) from the Available Funds then remaining in
Collection Account, to the Class C Noteholders, the Class C Note Interest
and the Class C Overdue Interest for the related Interest Accrual Period;
(vi) from the sum of (x) the Available Funds then
remaining in the Collection Account, and (y) the amount then on deposit in
the Additional Property Funding Account (such sum, the "Available
Additional Property Funding Amount"), as follows:
(A) to the Issuers, an amount equal to the least of:
(i) the Available Additional Property Funding Amount,
(ii) the sum of (i) the excess of (x) the Aggregate Contract
Principal Balance as of the second preceding Calculation Date
over the Aggregate Contract Principal Balance as of the
preceding Calculation Date plus (ii) the amount on deposit in
the
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Additional Property Funding Account at the opening of business
on such Payment Date (such sum, the "Additional Property
Funding Requirement" for such Payment Date); and
(iii) the Aggregate Contract Principal Balances of all
Additional Contracts actually pledged to the Trustee on such
Payment Date; and
(B) to the Additional Property Funding Account, the lesser of:
(i) the excess, if any, (x) the Additional Property Funding
Requirement for such Payment Date over (y) the amount
described in clause (A)(iii) above; and
(ii) the remaining Available Additional Property Funding
Amount;
(vii) On and after each Payment Date after the Reserve
Account Funding Date, from the Available Funds then remaining in the
Collection Account, to the Servicer, if ABS is the Servicer, the Servicing
Fee then due, together with certain miscellaneous amounts;
(viii) from the Available Funds then remaining in
Collection Account to the Reserve Account, to the extent necessary to
increase the amount on deposit in the Reserve Account to the Required
Reserve Amount for such Payment Date;
(ix) upon the occurrence and continuance of a Residual
Event, the lesser of (A) the remaining Available Funds and (B) the
aggregate amount of Residual Receipts originally included in the Available
Funds for such Payment Date will be deposited to the Residual Account;
(x) from the Closing Date until the Reserve Account
Funding Date, the Servicing Fee otherwise payable to ABS shall be
deposited to the Reserve Account;
(xi) from the Available Funds then remaining in the
Collection Account, to the Class D Noteholders, the Class D Note Interest
and the Class D Overdue Interest for the related Interest Accrual Period;
(xii) to ABS, the amount of any Servicing Fee previously
due to it but deposited to the Reserve Account; and
(xiii) to the Issuers, as the holders of the Residual
Interest, any remaining Available Funds on deposit in the Collection
Account.
(b) On the Payment Date which is also the Amortization Date and on
each Payment Date thereafter (such period being the "Amortization
Period"), the
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Trustee will be required to make the following payments from the Available
Funds (including amounts transferred from the Reserve Account on such
Payment Date) then on deposit in the Collection Account, in the following
order of priority:
(i) from the Available Funds, to the Servicer, any
unrecoverable Servicer Advances;
(ii) from the Available Funds then remaining in the
Collection Account, to the Servicer, if ABS is not then the Servicer, the
Servicing Fee then due, together with certain miscellaneous amounts;
(iii) from the Available Funds then remaining in the
Collection Account, to the Class A Noteholders, the Class A Note Interest
and Class A Overdue Interest for the related Interest Accrual Period, pari
passu with respect to each Class of Class A Notes;
(iv) from the Available Funds then remaining in the
Collection Account, to the Class B Noteholders, the Class B Note Interest
and the Class B Overdue Interest for the related Interest Accrual Period;
(v) from the Available Funds then remaining in the
Collection Account, to the Class C Noteholders, the Class C Note Interest
and the Class C Overdue Interest for the related Interest Accrual Period;
(vi) until the Class A Principal Balance has been
reduced to zero, from the Available Funds then remaining in the Collection
Account (___% of such an amount to be paid in "sequential-pay" fashion
with respect to the Class A-1 Notes, the Class A-2 Notes and the Class A-4
Notes, in that order, and ___% of such amount to be paid with respect to
the Class A-3 Notes), the Class A Principal Payment and the Class A
Overdue Principal;
(vii) until the Class B Principal Balance has been
reduced to zero, to the Class B Noteholders, from the Available Funds then
remaining in the Collection Account, the Class B Principal Payment and the
Class B Overdue Principal;
(viii) until the Class C Principal Balance has been
reduced to zero, to the Class C Noteholders, from the Available Funds then
remaining in the Collection Account, the Class C Principal Payment and the
Class C Overdue Principal;
(ix) to pay the Additional Principal, if any, first to
the Class C Noteholders then receiving the Class C Principal Payment until
the Outstanding Principal Balance on all the Class C Notes has been
reduced to zero, then to the Class B Noteholders until the Outstanding
Principal Balance on the Class B Notes has been reduced to zero and
thereafter to the Class A Noteholders
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until the Outstanding Principal Balance, as provided in clause (vi) above,
on the Class A Notes has been reduced to zero;
(x) on each Payment Date after the Reserve Account
Funding Date from the Available Funds then remaining in the Collection
Account, to the Servicer, if ABS is then the Servicer, the Servicing Fee
then due, together with certain miscellaneous amounts;
(xi) from the Available Funds then remaining in the
Collection Account, to the Reserve Account, to the extent necessary to
increase the amount on deposit in the Reserve Account to the Required
Reserve Amount for such Payment Date;
(xii) upon the occurrence and continuance of a Residual
Event, the lesser of (A) the remaining Available Funds and (B) the
aggregate amount of Residual Receipts originally included in Available
Funds for such Payment Date will be deposited to the Residual Account;
(xiii) from the Closing Date until the Reserve Account
Funding Date, the Servicing Fee otherwise payable to ABS shall be
deposited to the Reserve Account;
(xiv) from the Available Funds then remaining in the
Collection Account, to the Class D Noteholders, the Class D Note Interest
and the Call D Overdue Interest for the related Interest Accrual Period;
(xv) from the Available Funds then remaining in the
Collection Account, to the Class D Noteholders, the Class D Principal
Payment and the Class D Overdue Principal;
(xvi) to ABS, the amount of any Servicing Fee previously
due to it but deposited to the Reserve Account; and
(xvii) to the Issuers, as the holder of the Residual
Interest, any remaining Available Funds on deposit in the Collection
Account.
(c) All payments to Noteholders shall be made on each Payment Date
to each Noteholder of record on the related Record Date by check, or, if
requested by such Noteholder, by wire transfer to the account designated
in writing delivered to the Trustee on or prior to the related
Determination Date, in immediately available funds, in amounts equal to
such Noteholder's pro rata share of such payment.
SECTION 3.06 Statements to Noteholders. (a) If the Servicer has
delivered the Servicer's Certificate on the preceding Determination Date, then
on each Payment Date the Trustee will forward it to each Rating Agency, and mail
to each Noteholder, a statement (which statement is based exclusively upon
information that the Servicer furnished to the Trustee in the Servicer's
Certificate delivered pursuant to
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Section 6.06 of the Master Agreement), not later than one Business Day prior to
such Payment Date, setting forth the following information (per $1,000 of
Initial Class A-1 Principal Balance, Class A-2 Principal Balance, Class A-3
Principal Balance, of Initial Class B Principal Balance or of Initial Class C
Principal Balance (as the case may be) as to (i) and (ii) below):
(i) The amount of such payment allocable to the Class
A-1 Principal Payment, Class A-2 Principal Payment, Class A-3 Principal
Payment, the Class B Principal Payment or the Class C Principal Payment,
as applicable, and Class A-1 Overdue Principal, Class A-2 Overdue
Principal, Class A-3 Overdue Principal, the Class B Overdue Principal or
Class C Overdue Principal, as applicable;
(ii) The amount of such payment allocable to such Class
A-1 Note Interest, Class A-2 Note Interest, Class A-3 Note Interest, Class
B Note Interest or Class C Note Interest, Class A-1 Overdue Interest,
Class A-2 Overdue Interest, Class B Overdue Interest or Class C Overdue
Interest, as applicable;
(iii) The aggregate amount of fees and compensation
received by the Servicer for the related Collection Period;
(iv) The aggregate Class A-1 Principal Balance, Class
A-2 Principal Balance, Class A-3 Principal Balance, Class B Principal
Balance, Class C Principal Balance the Class A-1 Note Factor, the Class
A-2 Note Factor, the Class A-3 Note Factor, the Class B Note Factor, the
Class C Note Factor, after taking into account all distributions made on
such Payment Date, the Aggregate Contract Principal Balance and the
Collateral Factor;
(v) The total unreimbursed Servicer Advances with
respect to the related Collection Period;
(vi) The aggregate Contract Principal Balance for all
Series 1998-1 Contracts that became Charged-Off Contracts during the
related Collection Period, and, in the case of the Initial Period,
continue to be Charged-Off Contracts, calculated immediately prior to the
time such Contracts became Charged-Off Contracts; and
(vii) The amount on deposit in the Reserve Account.
(b) By January 31 of each calendar year, commencing January 31,
1999, or as otherwise required by applicable law, the Trustee shall
furnish to each Person who at any time during the immediately preceding
calendar year was a Series 1998-1 Noteholder a statement containing the
applicable aggregate amounts of interest and principal paid to such
Noteholder for such calendar year or, in the event such Person was a
Noteholder during a portion of such calendar year, for the applicable
portion of such year, for the purposes of such Noteholder's preparation of
federal income tax returns. In addition to the foregoing the Trustee
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shall make available to Noteholders any other information provided to the
Trustee or otherwise in the Trustee's possession reasonably requested by
Noteholders in connection with tax matters, in accordance with the
directions of the Servicer.
(c) The Servicer and the Trustee shall furnish to each Series 1998-1
Noteholder, on request, such periodic, special or other reports or
information not specifically provided for herein, as shall be necessary,
reasonable or appropriate with respect to such Noteholder, all such
reports or information to be provided by and in accordance with such
applicable instructions and directions as the Series 1998-1 Noteholder may
reasonably require and as the Servicer and the Trustee may reasonably be
able to produce. A Series 1998-1 Noteholder may, by notice to the Trustee,
waive receipt of any reports. The Trustee's obligation under this Section
3.06(c) shall only pertain to information provided by the Servicer to the
Trustee or otherwise in the Trustee's possession.
(d) The Trustee shall promptly send to each Series 1998-1 Noteholder
and to each Rating Agency in writing:
(i) Notice of any breach by the Contributor, either
Series Obligor or the Servicer of any of their respective representations,
warranties and covenants made herein or in the Contribution Agreement;
(ii) A copy of each Servicer's Certificate received by
the Trustee;
(iii) A copy of each Servicer compliance statement
delivered to the Trustee pursuant to Section 6.07 of the Master Agreement;
(iv) A copy of each financial statement and Independent
Accountant's review delivered to the Trustee pursuant to Section 6.08 of
the Master Agreement;
(v) Notice of any failure of the Trustee to conform to
the eligibility requirements for the Trustee pursuant to Section 11.08 of
the Master Agreement;
(vi) Notice of the appointment of any co-trustee or
separate trustee pursuant to Section 11.15 of the Master Agreement;
(vii) Notice of the occurrence of any Required
Amortization Event; and
(viii) Notice of the occurrence of any Event of Servicer
Termination or of any Event of Default;
provided, however, that in each case the Trustee shall only be required to send
such notices and other items to the Series 1998-1 Noteholders to the extent that
the Trustee has itself received the related information and the Series 1998-1
Noteholders have not already
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received such notice or other items. Except as may be specifically provided
herein, the Trustee shall have no obligation to seek to obtain any such
information.
SECTION 3.07 Compliance With Withholding Requirements.
Notwithstanding any other provisions of the Master Agreement and this Series
1998-1 Supplement, the Trustee, as paying agent for and on behalf of, and at the
direction of the Servicer, shall comply with all federal withholding
requirements respecting payments (or advances thereof) to Series 1998-1
Noteholders as may be applicable to instruments constituting indebtedness for
federal income tax purposes. Any amounts so withheld shall be treated as having
been paid to the related Series 1998-1 Noteholder for all purposes of this
Series 1998-1 Supplement. In no event shall the consent of Noteholders be
required for any withholding.
SECTION 3.08 Servicer Advances. No later than one Business Day
preceding each Payment Date, the Servicer shall make a Servicer Advance for each
Series 1998-1 Contract which is a Delinquent Contract with respect to each
overdue payment as of the related Calculation Date in an amount equal to the
Scheduled Payments, or portion thereof, which were due but not received during
the related Collection Period (and not previously covered by an unreimbursed
Servicer Advance); provided, however, that the Servicer shall not be obligated
to make any Servicer Advance pursuant to this Section 3.08 which the Servicer
determines in its sole discretion and in accordance with its customary servicing
practices would be a Nonrecoverable Advance. On each Determination Date, the
Servicer shall deliver to the Trustee the Servicer's Certificate listing the
aggregate amount of Scheduled Payments not received for the immediately prior
Collection Period as of the related Calculation Date which it has determined, in
its sole discretion and in accordance with its customary servicing practices, is
likely to be recoverable from the related Users and in respect of which the
Servicer shall so make Servicer Advances. The Servicer shall remit any Servicer
Advances to the Series 1998-1 Facility Account.
SECTION 3.09 Substitutions and Modifications. In addition to any
right of substitution pursuant to Section 3.03 of the Contribution Agreement,
the Servicer has the right (but not the obligation) at any time to substitute
one or more Series 1998-1 Contracts (each a "Substitute Contract") for a Series
1998-1 Contract ("Predecessor Contract") if:
(i) the Predecessor Contract then meets the requirements
for being a "Charged-Off Contract," and
(ii) the aggregate Contract Principal Balance(s) of such
Substitute Contract or Contracts is at least equal to the aggregate
Contract Principal Balance(s) of such Predecessor Contract or Contracts,
each as of the Calculation Date immediately following the date of such
substitution and calculated, with respect to the Predecessor Contract, as
if such Predecessor Contract were not a Charged-Off Contract.
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(iii) the aggregate, cumulative Contract Principal
Balance of all Substitute Contracts does not exceed 10% of the Original
Aggregate Contract Principal Balance, exclusive of Substitute Contracts
relating to any breach of the representations or warranties as provided in
Section 3.01 of the Contribution Agreement.
SECTION 3.10 Servicer to Act as Custodian. (a) The Servicer shall
hold and acknowledges that it is holding the Series 1998-1 Trust Estate (other
than the Series 1998-1 Accounts), that it may from time to time receive
hereunder as custodian for the Trustee.
(b) The Servicer shall promptly report to the Trustee any failure by
it to hold the complete Series 1998-1 Contracts as herein provided and
shall promptly take appropriate action to remedy any such failure but only
to the extent (i) any such failure is caused by the acts or omissions of
the Servicer and (ii) such remedial action is otherwise within its
capabilities or control. As custodian, the Servicer shall have and perform
the following powers and duties:
(A) hold the Series 1998-1 Contracts on behalf of the Trustee
for the benefit of the Series 1998-1 Noteholders, maintain accurate
records pertaining to each Series 1998-1 Contract to enable it to
comply with the terms and conditions of the Indenture, and
maintaining a current inventory thereof;
(B) implement policies and procedures in accordance with the
Servicer's normal business practices with respect to the handling
and custody of the Series 1998-1 Contracts so that the integrity and
physical possession of the Series 1998-1 Contracts will be
maintained; and
(C) attend to all details in connection with maintaining
custody of the Series 1998-1 Contracts on behalf of the Trustee on
behalf of the Series 1998-1 Noteholders.
(c) In acting as custodian of the Series 1998-1 Contracts, the
Servicer agrees further that it does not and will not have or assert any
beneficial ownership interest in such Series 1998-1 Contracts. The
Servicer on behalf of the Series 1998-1 Noteholders shall mark
conspicuously each original contractual document with a User, and its
master data processing records evidencing each Series 1998-1 Contract with
a legend, acceptable to the Trustee, evidencing that all right, title and
interest in the Series 1998-1 Contracts has been granted to the Trustee as
provided in this Series 1998-1 Supplement.
(d) The Servicer agrees to maintain the Series 1998-1 Contracts at
either its office in Voorhees, New Jersey or at such other location as
shall from time to time be identified by prior written notice to the
Trustee. Subject to the foregoing, the Servicer may temporarily move
individual Series 1998-1 Contracts or any
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portion thereof without notice as necessary to conduct collection and
other servicing activities.
ARTICLE IV.
SERIES EVENTS OF DEFAULT
SECTION 4.01 Events of Default. Events of Default and Notice
Thereof.
The following events constitute "Events of Default":
(a) default by the Series Obligors in making Interest Payments when
such payments become due and payable, or a default in reducing the
Outstanding Principal Balance of any Class of Notes to zero by such
Class's Stated Maturity Date (other than with respect to the Class D
Notes);
(b) default in the performance, or breach, by either Series Obligors
of the provisions of its related organizational documents relating to
corporate separateness;
(c) default in the performance, or breach, of any covenant of either
Series Obligors in the Master Agreement, or herein, and continuance of
such default or breach for a period of 30 days after the earliest of (i)
any officer of either Series Obligor first acquiring the knowledge
thereof, (ii) the Trustee's giving written notice thereof to the Series
Obligors or (iii) the holders of a majority of the then Outstanding Note
Principal Balance giving written notice thereof to the Series Obligors and
the Trustee;
(d) if any representation or warranty of either Series Obligors made
in the Master Agreement or any other writing provided to the holders of
the Series 1998-1 Notes, excluding the representations and warranties made
by the Series Obligors with respect to the Series 1998-1 Contracts, proves
to be incorrect in any material respect as of the time when the same has
been made; provided, however, that the breach of any representation or
warranty made by either Series Obligors will be deemed to be "material"
only if it negatively affects the Series 1998-1 Noteholders, the
enforceability of the Master Agreement, this Series 1998-1 Supplement or
of the Series 1998-1 Notes; or
(e) insolvency or bankruptcy events relating to either Series
Obligor.
The Trustee shall give the Series 1998-1 Noteholders notice of all
uncured defaults known to it.
If an Event of Default of the kind specified in clause (e) above
occurs, the unpaid principal amount of the Series 1998-1 Notes shall
automatically become due and payable together with all accrued and unpaid
interest thereon. If any other Event of Default occurs and is continuing, then
the Trustee will, if so directed by the holders of
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66-2/3% (33-1/3% in the case of a payment default pursuant to clause (a) above)
of the then Outstanding Note Principal Balance, or the holders of such
percentages of the then Outstanding Principal Balance of such Series 1998-1
Notes may declare the unpaid principal amount of all the Series 1998-1 Notes to
be due and payable immediately, together with all accrued and unpaid interest
thereon. The Trustee may, however, if the Event of Default involves other than
non-payment of principal or interest on the Series 1998-1 Notes, not sell the
Series 1998-1 Trust Estate unless such sale is for an amount greater than or
equal to the Outstanding Principal Balance of the Series 1998-1 Notes unless
directed to do so by the holders of 66-2/3% (33-1/3% in the case of a payment
default pursuant to clause (a) above) of the then Outstanding Note Principal
Balance.
The Series Obligors shall furnish annually to the Trustee, a
statement of certain officers of the Series Obligors to the effect that to the
best of their knowledge the Series Obligors is not in default in the performance
and observance of the terms of the Master Agreement, this Series 1998-1
Supplement or the Series 1998-1 Notes or, if the Series Obligors are in default,
specifying such default.
SECTION 4.02 Acceleration of Maturity; Rescission and Annulment.
(a) If an Event of Default of the kind specified in Section 4.01(e)
occurs, the unpaid principal amount of the Series 1998-1 Notes shall
automatically become due and payable at par together with all accrued and
unpaid interest thereon, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Series Obligors. If an
Event of Default (other than an Event of Default of the kind described in
Section 4.01(e)) occurs and is continuing, then and in every such case the
Trustee shall, if so directed by the holders of Series 1998-1 Notes
evidencing 66-2/3% of the then Outstanding Note Principal Balance may,
declare the unpaid principal amount of all the Series 1998-1 Notes to be
due and payable immediately, by a notice in writing to the Series Obligors
(and to the Trustee if given by Series 1998-1 Noteholders), and upon any
such declaration such principal amount shall become immediately due and
payable together with all accrued and unpaid interest thereon, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Series Obligors.
(b) At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the
holders of Series 1998-1 Notes evidencing 66-2/3% of the then Outstanding
Note Principal Balance, by written notice to the Obligors' Agent and the
Trustee, may rescind and annul such declaration and its consequences if:
(i) the Series Obligors have paid or deposited with the
Trustee a sum sufficient to pay:
(A) all principal on any Class A Notes, Class B Notes and
Class C Notes which has become due otherwise than by such
declaration of
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acceleration and interest thereon from the date when the same first
became due until the date of payment or deposit at the Class A-1
Interest Rate, the Class A-2 Interest Rate, the Class A-3 Interest
Rate, the Class B Interest Rate and the Class C Interest Rate, as
applicable.
(B) all interest due with respect to any Class A Notes, Class
B Notes and the Class C Notes and, to the extent that payment of
such interest is lawful, interest upon overdue interest from the
date when the same first became due until the date of payment or
deposit at a rate per annum equal to the appropriate Note Interest
Rates, and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements, and advances of
the Trustee, its agents and counsel;
and
(ii) all Events of Default, other than the non-payment of
the Outstanding Note Principal Balance which has become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 4.01.
No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon.
SECTION 4.03 Remedies. (a) If an Event of Default occurs and is
continuing of which a Responsible Officer has actual knowledge, the Trustee
shall immediately give notice to each Series 1998-1 Noteholder and shall solicit
the Series 1998-1 Noteholders for advice. The Trustee shall then take such
action as so directed by the holders of Series 1998-1 Notes evidencing 66-2/3%
of the then Outstanding Note Principal Balance).
(b) Following any acceleration of the Series 1998-1 Notes, the
Trustee shall have all of the rights, powers and remedies with respect to
the Series 1998-1 Trust Estate as are available to secured parties under
the UCC or other applicable law. Such rights, powers and remedies may be
exercised by the Trustee in its own name as trustee of an express trust.
(c) If an Event of Default specified in Section 4.01(a) occurs and
is continuing, the Trustee is authorized to recover judgment in its own
name and as trustee of an express trust against the Series Obligors for
the whole amount of principal and interest remaining unpaid.
(d) In exercising its rights and obligations under this Section
4.03, the Trustee may sell the Series 1998-1 Trust Estate in accordance
with Section 4.16 hereof; provided, that if the Event of Default involves
other than non-payment of principal or interest on the Series 1998-1
Notes, then such sale must be for an amount greater than or equal to
amounts due under clauses first through fourth in
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Section 4.06. Neither the Trustee nor any Series 1998-1 Noteholder shall
have any rights against the Series Obligors other than to enforce the Lien
against the Series 1998-1 Contracts and the Equipment and to sell the
Series 1998-1 Trust Estate.
SECTION 4.04 Trustee Shall File Proofs of Claim. (a) In case of the
tendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition, or other judicial
proceeding relative to the Series Obligors, the Contributor, the Servicer or any
other obligor upon the Series 1998-1 Notes or the other obligations secured
hereby or relating to the property of the Series Obligors, the Contributor, the
Servicer or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Series 1998-1 Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Series Obligors, the
Contributor or the Servicer for the payment of overdue principal or interest or
any such other obligation) shall by intervention in such proceeding or
otherwise,
(i) file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Series 1998-1
Notes and any other obligation secured hereby and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Series 1998-1 Noteholders allowed in such
judicial proceeding, and
(ii) collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Series 1998-1 Noteholder to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Series 1998-1 Noteholders to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee.
(b) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Series 1998-1 Notes or the rights of any holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Series 1998-1 Noteholder in any such proceeding.
SECTION 4.05 Trustee May Enforce Claims Without Possession of Series
1998-1 Notes. All rights of action and claims under the Master Agreement, this
Series 1998-1 Supplement or the Series 1998-1 Notes may be prosecuted and
enforced by the Trustee without the possession of any of the Series 1998-1 Notes
or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the
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Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Series 1998-1
Notes in respect of which such judgment has been recovered.
SECTION 4.06 Application of Money Collected. Any money collected by
the Trustee pursuant to this Article, and any moneys that may then be held or
thereafter received by the Trustee shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of the
entire amount due on account of principal or interest, upon presentation of the
Series 1998-1 Notes and surrender thereof:
first to the payment of all costs and expenses of collection
incurred by the Trustee and the Series 1997-1 Noteholders (including the
reasonable fees and expenses of any counsel to the Trustee and the Series
1998-1 Noteholders);
second if the person then acting as Servicer is not ABS or an
Affiliate of ABS, to the payment of all Servicing Fees then due to such
person;
third first, pro rata to the payment of all accrued and unpaid
interest on the Class A-1 Principal Balance, Class A-2 Principal Balance,
Class A-3 Principal Balance and Class A-4 Principal Balance, respectively,
to the date of payment thereof, including (to the extent permitted by
applicable law) interest on any overdue installment of interest and
principal from the maturity of such installment to the date of payment
thereof at the rate per annum equal to the Class A-1 Interest Rate, Class
A-2 Interest Rate, Class A-3 Interest Rate and Class A-4 Interest Rate,
respectively, second, to the payment of all accrued and unpaid interest on
the Class B Principal Balance to the date of payment thereof, including
(to the extent permitted by applicable law) interest on any overdue
installment of interest and principal from the maturity of such
installment to the date of payment thereof at the rate per annum equal to
the Class B Interest Rate, third, to the payment of all accrued and unpaid
interest on the Class C Principal Balance to the date of payment thereof,
including (to the extent permitted by applicable law) interest on any
overdue installment of interest and principal from the maturity of such
installment to the date of payment thereof at the rate per annum equal to
the Class C Interest Rate, fourth, to the payment of the Class A-1
Principal Balance, fifth, to the payment of the Class A-2 Principal
Balance, Class A-3 Principal Balance pro rata, sixth, to the payment of
the Class B Principal Balance and, seventh, to the payment of the Class C
Principal Balance; provided, that the Series 1998-1 Noteholders may
allocate such payments for interest, principal and premium at their own
discretion, except that no such allocation shall affect the allocation of
such amounts or future payments received by any other Series 1998-1
Noteholder;
fourth to the payment of amounts then due the Trustee
hereunder;
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fifth to the payment of the remainder, if any, to the Class D
Noteholders, to the Series Obligors or any other Person legally entitled
thereto.
SECTION 4.07 Limitation on Suits. None of the Series 1998-1
Noteholders shall have any right to institute any proceeding, judicial or
otherwise, with respect to the Master Agreement, this Series 1998-1 Supplement
or the Series 1998-1 Notes, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(i) such Series 1998-1 Noteholder has previously given
written notice to the Trustee of a continuing Event of Default;
(ii) the holders of not less than 66-2/3% of the then
Outstanding Note Principal Balance of the Series 1998-1 Notes shall have
made written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(iii) such Series 1998-1 Noteholder or Series 1998-1
Noteholders have offered to the Trustee adequate indemnity against the
costs, expenses and liabilities to be incurred in compliance with such
request;
(iv) the Trustee for 30 days after its receipt of such
notice, request and offer of indemnity failed to institute any such
proceeding; and
(v) so long as any of the Series 1998-1 Notes remain
Outstanding, no direction inconsistent with such written request has been
given to the Trustee during such 30-day period by the holders of a 66-2/3%
of the then Outstanding Note Principal Balance of the Series 1998-1 Notes;
it being understood and intended that no one or more Series 1998-1 Noteholders
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of the Master Agreement, this Series 1998-1 Supplement or the Series
1998-1 Notes to affect, disturb, or prejudice the rights of any other Series
1998-1 Noteholders, or to obtain or to seek to obtain priority or preference
over any other Series 1998-1 Noteholders or to enforce any right under the
Master Agreement, this Series 1998-1 Supplement or the Series 1998-1 Notes,
except in the manner herein provided and for the equal and ratable benefit of
all the Series 1998-1 Noteholders. It is further understood and intended that so
long as any portion of the Series 1998-1 Notes remains Outstanding, ABS shall
not have any right to institute any proceeding, judicial or otherwise, with
respect to the Series 1998-1 Notes or for the appointment of a receiver or
trustee (including, without limitation, a proceeding under the Bankruptcy Code),
or for any other remedy hereunder. Nothing in this Section 4.07 shall be
construed as limiting the rights of otherwise qualified Series 1998-1
Noteholders to petition a court for the removal of a Trustee pursuant to Section
11.09 of the Master Agreement.
SECTION 4.08 Unconditional Right of Series 1998-1 Noteholders to
Receive Principal and Interest. Notwithstanding any other provision in the
Master Agreement, this Series 1998-1 Supplement or the Series 1998-1 Notes other
than the
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provisions hereof limiting the right to recover amounts due on the Series 1998-1
Notes to recoveries from the property of the Series 1998-1 Trust Estate, the
holder of any Series 1998-1 Note shall have the absolute and unconditional right
to receive payment of the principal of and interest on such Note on the related
stated maturity date thereof, and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the consent of such
Series 1998-1 Noteholder.
SECTION 4.09 Restoration of Rights and Remedies. If the Trustee or
any Series 1998-1 Noteholder has instituted any proceeding to enforce any right
or remedy under the Master Agreement, this Series 1998-1 Supplement or the
Series 1998-1 Notes and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Series
1998-1 Noteholder, then and in every such case, subject to any determination in
such proceeding, the Series obligors, the Trustee and the Series 1998-1
Noteholders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Series 1998-1 Noteholders continue as though no such proceeding had been
instituted.
SECTION 4.10 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost, or stolen Series 1998-1 Notes, no right or remedy herein conferred upon or
reserved to the Trustee or to the Series 1998-1 Noteholders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 4.11 Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Series 1998-1 Noteholders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Series 1997-1 Noteholders, as
the case may be.
SECTION 4.12 Control by Series 1998-1 Noteholders. The Holders of
66-2/3% of the then Outstanding Note Principal Balance shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Series 1998-1 Notes. Notwithstanding the foregoing:
(i) no such direction shall be in conflict with any rule
of law or with the Master Agreement, this Series 1998-1 Supplement or the
Series 1998-1 Notes;
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(ii) the Trustee shall not be required to follow any
such direction which the Trustee reasonably believes might result in any
personal liability on the part of the Trustee for which the Trustee is not
adequately indemnified; and
(iii) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with any such direction;
provided that the Trustee shall give notice of any such action to each
Noteholder.
SECTION 4.13 Waiver of Events of Default. (a) The Holders of 66-2/3%
of the then Outstanding Note Principal Balance may, by one or more instruments
in writing, waive any Event of Default hereunder and its consequences, except a
continuing Event of Default:
(i) in respect of the payment of the principal of or
premium or interest on any Series 1998-1 Note (which may only be waived by
the holder of such Note), or
(ii) in respect of a covenant or provision hereof which
cannot be modified or amended without the consent of the holder of each
Outstanding Series 1998-1 Note affected (which only may be waived by the
holders of all Outstanding Series 1998-1 Notes affected).
(b) A copy of each waiver pursuant to Section 4.13(a) shall be
furnished by the Obligors' Agent to the Trustee. Upon any such waiver,
such Event of Default shall cease to exist and shall be deemed to have
been cured, for every purpose of the Master Agreement, this Series 1998-1
Supplement or the Series 1998-1 Notes; but no such waiver shall extend to
any subsequent or other Event of Default or impair any right consequent
thereon.
SECTION 4.14 Undertaking for Costs. All parties hereto agree (and
each Holder of any Series 1998-1 Note by its acceptance thereof shall be deemed
to have agreed) that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under the Master Agreement, this Series
1998-1 Supplement or the Series 1998-1 Notes, or in any suit against the Trustee
for any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Series 1998-1
Noteholder, or group of Series 1998-1 Noteholders, holding in the aggregate more
than 10% of the then Outstanding Principal Balance of the Series 1998-1 Notes,
or to any suit instituted by any Series 1998-1 Noteholder for the enforcement of
the payment of the principal of or interest on any Series 1998-1 Note on or
after the maturity date for such payments.
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SECTION 4.15 Waiver of Stay or Extension Laws. The Series Obligors
covenant (to the extent that they may lawfully do so) that they will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of the Master Agreement, this Series 1998-1 Supplement or the Series 1998-1
Notes; and the Contributor (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 4.16 Sale of Series 1998-1 Trust Estate. (a) The power to
effect any sale of any portion of the Series 1998-1 Trust Estate pursuant to
Section 4.03 shall not be exhausted by any one or more sales as to any portion
of the Series 1998-1 Trust Estate remaining unsold, but shall continue
unimpaired until the entire Series 1998-1 Trust Estate shall have been sold or
all amounts payable on the Series 1998-1 Notes shall have been paid. The Trustee
may from time to time, upon directions in accordance with Section 4.12, postpone
any public sale by public announcement made at the time and place of such sale.
For any public sale of the Series 1998-1 Trust Estate, the Trustee shall have
provided each Series 1998-1 Noteholder with notice of such sale at least two
weeks in advance of such sale which notice shall specify the date, time and
location of such sale.
(b) To the extent permitted by applicable law, the Trustee shall not
in any private sale sell to a third party the Series 1998-1 Trust Estate,
or any portion thereof unless,
(i) the holders of 66-2/3% of the then Outstanding Note
Principal Balance consent to or direct the Trustee in writing to make such
sale; or
(ii) the proceeds of such sale would be not less than
the sum of all amounts due to the Trustee hereunder and the entire
Outstanding Note Principal Balance and interest due or to become due
thereon on the Payment Date next succeeding the date of such sale.
The foregoing provisions shall not preclude or limit the ability of the Trustee
to purchase all or any portion of the Series 1998-1 Trust Estate at a private
sale.
(c) In connection with a sale of all or any portion of the Series
1998-1 Trust Estate:
(i) any one or more Series 1998-1 Noteholders may bid
for and purchase the property offered for sale, and upon compliance with
the terms of sale may hold, retain, and possess and dispose of such
property, without further accountability, and any Series 1998-1 Noteholder
may, in paying the purchase money therefore, deliver in lieu of cash any
Outstanding Series 1998-1 Notes or claims for interest thereon for credit
in the amount that shall, upon
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distribution of the net proceeds of such sale, be payable thereon, and the
Series 1998-1 Notes, in case the amounts so payable thereon shall be less
than the amount due thereon, shall be returned to the Series 1998-1
Noteholders after being appropriately stamped to show such partial
payment;
(ii) the Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any
portion of the Series 1998-1 Trust Estate in connection with a sale
thereof;
(iii) the Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Contributor to transfer and convey its
interest in any portion of the Series 1998-1 Trust Estate in connection
with a sale thereof, and to take all action necessary to effect such sale;
and
(iv) no purchaser or transferee at such a sale shall be
bound to ascertain the Trustee's authority, inquire into the satisfaction
of any conditions precedent or see to the application of any moneys.
(d) The method, manner, time, place and terms of any sale of all or
any portion of the Series 1998-1 Trust Estate shall be commercially
reasonable.
ARTICLE V.
PREPAYMENT AND REDEMPTION
SECTION 5.01 Optional Redemption of Series 1998-1 Notes; Final
Disposition of Funds. (a) On any Payment Date following any Calculation Date as
of which the Aggregate Contract Principal Balance is less than ten percent
(10.00%) of the Original Aggregate Contract Principal Balance, the Series
Obligors shall have the option to cause the retirement of the Series 1998-1
Notes by depositing with the Trustee the sum of (i) the Class A Principal
Balance, the Class B Principal Balance and the Class C Principal Balance as of
such Payment Date (after giving effect to the payment of any principal on such
Payment Date), (ii) the Class A Note Interest, Class B Note Interest and Class C
Note Interest due on such Payment Date and (iii) the amount, if any, of all
Class A Overdue Principal, all Class B Overdue Principal and all Class C Overdue
Principal and all Class A Overdue Interest, all Class B Overdue Interest and all
Class C Overdue Interest. Upon receipt of such amounts and all amounts then owed
to the Trustee, the Trustee shall (x) make the final payment in full to the
Series 1998-1 Noteholders and (y) release any remaining Series 1998-1 Trust
Estate to the Series Obligors, as the holder of the Residual Interest.
(b) Notice of any termination pursuant to this Section 5.01 shall be
given promptly by the Trustee, by letter to Noteholders mailed not earlier than
the 10th day and not later than the 30th day of the month immediately preceding
the month of such final Payment Date specifying (i) the Payment Date upon which
final payment of the Series 1998-1 Notes will be made, (ii) the scheduled amount
of any such final payment, (iii) that interest shall cease to accrue on the
Class A, Class B and Class C
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Series 1998-1 Notes on such final Payment Date and (iv) at the option of the
Trustee, the address for presentation of the Series 1998-1 Notes for final
payment. On such final Payment Date, the Trustee shall cause to be distributed
to the Series 1998-1 Noteholders an amount equal to the amount deposited by the
Series Obligors pursuant to Section 5.01(a) above. After such Payment Date,
interest on the Class A, Class B and Class C Notes shall cease to accrue. Each
Series 1998-1 Noteholder shall use reasonable efforts to present its Series
1998-1 Note to the Trustee at the office, if any, specified in the notice
described in clause (iv) of this paragraph (b), or in any similar written
notice, within sixty (60) days of such Series 1998-1 Noteholder's receipt of the
final payment of its Series 1998-1 Note. Each Noteholder shall indemnify the
Trustee for any damages suffered by the Trustee as a result of the Noteholder's
failure to present its Series 1998-1 Note on or after the final Payment Date
thereof.
In the event that any amount due to any Series 1998-1 Noteholder
remains unclaimed, the Servicer shall, at its expense, cause to be published
once, in the eastern edition of The Wall Street Journal, notice that such money
remains unclaimed. If, within the period then specified in the escheat laws of
the State of New York after such publication, such amount remains unclaimed, the
Servicer shall be entitled to all unclaimed funds and other assets which remain
subject hereto, and the Trustee upon transfer of such funds shall be discharged
of any responsibility for such funds and, the Series 1998-1 Noteholders shall
look to the Servicer for payment.
[Add Class A-3 Special Redemption]
ARTICLE VI.
MISCELLANEOUS
SECTION 6.01 Ratification of Master Agreement. As supplemented by
this Series 1998-1 Supplement, the Master Agreement is in all respects ratified
and confirmed and the Master Agreement, as so supplemented by this Series 1998-1
Supplement shall be read, taken and construed as one and the same instrument.
SECTION 6.02 Counterparts. This Series 1998-1 may be executed in one
or more counterparts, each of which so executed shall be deemed to be an
original, but all of which shall together constitute but one and the same
instrument.
SECTION 6.03 GOVERNING LAW. THIS SERIES 1998-1 SUPPLEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT TAKING INTO ACCOUNT THE CONFLICT
OF LAWS PRINCIPLES OF ANY JURISDICTION.
SECTION 6.04 Amendments and Waivers. (a) Notwithstanding anything
contained in the Master Agreement to the contrary, no term or condition of this
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Series 1998-1 Supplement shall be amended, modified, waived or terminated
without the prior written consent of the Obligors' Agent, the Servicer and the
Trustee.
(b) No waiver with respect to any term or condition of the Master
Agreement or this Series 1998-1 Supplement shall extend to any subsequent or
other event, circumstance or default or impair any right consequent thereon
except to the extent expressly so waived.
SECTION 6.05 Non-petition Clause. The Trustee hereby, and by its
acceptance of the Series 1998-1 Note, each Series 1998-1 Noteholder shall be
deemed to have agreed that, prior to the date which is one year and one day
after the termination of the Master Agreement, such Person shall not acquiesce,
petition or otherwise invoke or cause either Series Obligor to invoke the
process of any Governmental Authority for the purpose of commencing or
sustaining a case against such Series Obligor under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of or for
such Series Obligor or any substantial part of its property or ordering the
winding-up or liquidation of the affairs of such Series Obligor.
SECTION 6.06 Officers' Certificate and Opinion of Counsel as to
Conditions Precedent. Upon any request or application by the Obligors' Agent to
the Trustee to take any action under the Master Agreement or Series 1998-1
Supplement, the Obligors' Agent shall
furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in
the Master Agreement or Series 1998-1 Supplement relating to the proposed
action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been complied
with.
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in the Master Agreement or
Series 1998-1 Supplement shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
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(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
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IN WITNESS WHEREOF, the Series Obligors, the Obligors' Agent, ABS,
in its individual capacity, as Contributor and as the Servicer and the Trustee
have caused this Series 1998-1 Supplement to be fully executed by their
respective officers as of the day and year first above written.
ADVANTA BUSINESS SERVICES CORP., in its
individual capacity and as Servicer and
Contributor
By _______________________________________
Name:
Title:
ADVANTA LEASING RECEIVABLES CORP. IV, as
a Series Obligor
By _______________________________________
Name:
Title:
ADVANTA LEASING RECEIVABLES CORP. V, as a
Series Obligor
By _______________________________________
Name:
Title:
ADVANTA LEASING RECEIVABLES CORP. III, as
the Obligors' Agent
By _______________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as Trustee
By _______________________________________
Name:
Title:
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