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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 23, 1999.
Advanta Business Services Corp.
(Exact name of registrant as specified in its charter)
Delaware 333-79773, 333-79773-01, 23-2333786
(State or Other Jurisdiction of 333-79773-02 (IRS Employer
Incorporation) (Commission File Number) Identification Number)
1020 Laurel Oak Road
Voorhees, New Jersey 08043
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (609) 782-7300
N/A
(Former Name or Former Address, if Changed Since Last Report)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. Not Applicable.
Item 2. Not Applicable.
Item 3. Not Applicable.
Item 4. Not Applicable.
Item 5. Acquisition and Disposition of Assets.
On August 26, 1999, Advanta Leasing Receivables Corp. VIII ("ALRC
VIII") and Advanta Leasing Receivables Corp. IX ("ALRC IX" and, together with
ALRC VIII, the "Issuers") issued a series of asset-backed notes, entitled
Equipment Receivables Asset-Backed Notes, Series 1999-1 ("Series 1999-1"),
pursuant to the Master Facility Agreement, dated as of August 26, 1999 (attached
hereto as Exhibit 4.1) and the Series 1999-1 Supplement to the Master Facility
Agreement, dated as of August 26, 1999 (incorporated by reference to Exhibit 4.2
to the registrant's Current Report on Form 8-K (File No. 333-38575) filed with
the Securities and Exchange Commission on September 8, 1999), each among the
Issuers, Advanta Business Services and Bankers Trust Company, as trustee.
Series 1999-1 consists of four classes identified as the 5.76664% Class
A-1 Notes (the "Class A-1 Notes"), the 6.64% Class A-2 Notes (the "Class A-2
Notes"), the 6.90% Class A-3 Notes (the "Class A-3 Notes" and, together with the
Class A-1 Notes and the Class A-2 Notes, the "Class A Notes") and the 7.27%
Class B Notes (the "Class B Notes"). The Class A Notes were publicly offered, as
described in a Prospectus, dated August 20, 1999, pursuant to an Underwriting
Agreement (the "Underwriting Agreement") dated August 20, 1999 (attached hereto
as Exhibit 1.1), among the Issuers, Advanta Business Services Corp. and First
Union Capital Markets Corp., as representative of the underwriters. The Issuers
sold the Class B Notes pursuant to a purchase agreement dated August 20, 1999,
among the Issuers and First Union Capital Markets Corp. The Class A Notes have
an initial principal balance of $98,876,125. The Class B Notes have an initial
principal balance of $11,599,991.
Item 6. Not Applicable.
Item 7. Exhibits.
The following are filed as Exhibits to this Report under
Exhibit 1.1, Exhibit 4.1, Exhibit 4.3 and Exhibit 4.4.
Exhibit 1.1 Underwriting Agreement dated August 20, 1999
Exhibit 4.1 Master Facility Agreement dated August 26, 1999
Exhibit 4.3 Master Contribution and Sale Agreement dated August 26, 1999
Exhibit 4.4 Supplement to Master Contribution and Sale Agreement dated
August 26, 1999
Item 8. Not Applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ADVANTA BUSINESS SERVICES
CORP.
As Registrant
By: /s/ Mark Shapiro
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Name: Mark Shapiro
Title: Assistant Treasurer
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EXHIBIT INDEX
Exhibit Description
Exhibit 1.1 Underwriting Agreement dated August 20, 1999
Exhibit 4.1 Master Facility Agreement dated August 26, 1999
Exhibit 4.3 Master Contribution and Sale Agreement dated August 26, 1999
Exhibit 4.4 Supplement to Master Contribution and Sale Agreement dated
August 26, 1999
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Exhibit 1.1
$98,876,125
ADVANTA LEASING RECEIVABLES CORP. VIII
ADVANTA LEASING RECEIVABLES CORP. IX
(ISSUERS)
CLASS A-1
CLASS A-2
CLASS A-3
EQUIPMENT RECEIVABLES ASSET-BACKED NOTES, SERIES 1999-1
UNDERWRITING AGREEMENT
August 20, 1999
First Union Capital Markets Corp.,
as Representative of the
Underwriters named herein
301 South College Street, TW-9
Charlotte, North Carolina 28288-0610
Ladies and Gentlemen:
Advanta Leasing Receivables Corp. VIII ("ALRC VIII") and Advanta
Leasing Receivables Corp. IX ("ALRC IX" and, together with ALRC VIII, the
"Series Obligors") propose to issue the Equipment Receivables Asset-Backed
Notes, Series 1999-1, consisting of (i) Class A-1, Class A-2 and Class A-3 (the
"Class A Notes" or the "Offered Notes") and (ii) Class B (the "Class B Notes"
and, together with the Class A Notes, the "Notes"). The Notes are to be issued
pursuant to Advanta Business Receivables Master Facility Agreement, dated as of
August 26, 1999 (the "Master Agreement"), among the Series Obligors, as issuers,
Advanta Business Services Corp. ("ABS"), as servicer (in such capacity, the
"Servicer"), and Bankers Trust Company, as trustee (the "Trustee"), and the
Series 1999-1 Supplement thereto, dated as of August 26, 1999 (the "Series
1999-1 Supplement" and, together with the Master Agreement, the "Indenture"),
also among the Series Obligors, the Servicer, and the Trustee. Any capitalized
terms used herein but not defined shall have the meaning set forth in the
Indenture.
The Series Obligors and ABS hereby confirm their agreement through this
agreement (the "Underwriting Agreement"), with First Union Capital Markets Corp.
("FCMC" or the "Representative") on behalf of one or more underwriters listed on
Schedule B hereto (the "Underwriters") to sell the Notes to the Underwriters on
the terms and conditions hereof, in the amount set forth on opposite their names
on Schedule A. The Offered Notes are more fully described in the Registration
Statement (defined below) that the Series Obligors have furnished to the
Underwriters.
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Simultaneously with the execution of the Indenture, the Series Obligors
will enter into a master contribution and sale agreement (the "Master
Contribution and Sale Agreement") with Advanta Business Services Corp. (in such
capacity, the "Seller"), and the Series 1999-1 Contribution Agreement, dated as
of August 26, 1999, among the Seller and the Series Obligors, pursuant to which
the Seller will transfer to the Series Obligors all of its right, title and
interest in and to the Pledged Property as of the Cut-Off Date.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE SERIES OBLIGORS. The
Series Obligors and ABS, jointly and severally, represent and warrant to each
Underwriter that:
(a) The Series Obligors both have all requisite corporate power,
authority and legal right to own their property and conduct their business as
such properties are presently owned and such business is presently conducted,
and to execute, deliver and perform their obligations under this Underwriting
Agreement, the Notes, and each of the Master Agreement, the Series 1999-1
Supplement, the Master Contribution and Sale Agreement, and the Series 1999-1
Contribution Agreement Supplement (collectively, the "Transaction Agreements").
(b) The execution and delivery of the Underwriting Agreement, the Notes
and each of the Transaction Agreements, the incurrence of the obligations herein
and therein set forth and the consummation of the transactions contemplated
hereunder and thereunder have been duly authorized by the board of directors of
each of the Series Obligors and all other necessary action has been taken.
(c) The Underwriting Agreement has been duly authorized and validly
executed and delivered by both of the Series Obligors.
(d) Each of the Transaction Agreements will be executed and delivered
by both of the Series Obligors on or before the Closing Date, and when executed
and delivered by the other parties thereto, will constitute a valid and binding
agreement of both of the Series Obligors, enforceable against both of the Series
Obligors in accordance with their terms, except to the extent that (i) the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, receivership or other similar laws now or hereafter
in effect affecting the enforcement of creditors' or other obligees' rights in
general, (ii) the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought and (iii)
certain remedial provisions of the Indenture may be unenforceable in whole or in
part under the Uniform Commercial Code (the "UCC"), but the inclusion of such
provisions does not render the other provisions of the Indenture invalid and,
notwithstanding that such provisions may be unenforceable in whole or in part,
the Trustee, on behalf of the Noteholders, will be able to enforce the remedies
of a secured party under the UCC.
(e) The Notes will be issued pursuant to the terms of the Indenture
and, when executed by the Series Obligors and authenticated by the Trustee in
accordance with the Indenture and, with respect to the Offered Notes only,
delivered pursuant to the Underwriting
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Agreement, will be validly issued and outstanding and entitled to the benefits
of the Indenture. The Offered Notes will be in all material respects in the form
contemplated by the Indenture and will conform to the description thereof
contained in the Prospectus (as defined herein) and Registration Statement (as
defined herein), each as amended or supplemented.
(f) The Series Obligors are not in violation of any requirement of law
or in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed of
trust, lease or other instrument to which it is a party or by which it is bound
or to which any of its property is subject, which violations or defaults
separately or in the aggregate would have a material adverse effect on the
Series Obligors.
(g) Neither the issuance and sale of the Offered Notes, nor the
execution and delivery by the Series Obligors of the Underwriting Agreement, the
Notes or the Transaction Agreements, nor the incurrence by the Series Obligors
of the obligations herein and therein set forth, nor the consummation of the
transactions contemplated hereunder or thereunder, nor the fulfillment of the
terms hereof or thereof does or will (i) violate any requirement of law
presently in effect, applicable to it or its properties or by which it or its
properties are or may be bound or affected, (ii) conflict with, or result in a
breach of, or constitute a default under, any indenture, contract, agreement,
deed, lease, mortgage or instrument to which it is a party or by which it or its
properties are bound, or (iii) result in the creation or imposition of any Lien
(as defined herein) upon any of its property or assets, except for those
encumbrances created under the Indenture.
(h) All consents, approvals, authorizations, orders, filings,
registrations or qualifications of or with any court or any other governmental
agency, board, commission, authority, official or body required in connection
with the execution and delivery by the Series Obligors of the Underwriting
Agreement, the Notes or the Transaction Agreements, or to the consummation of
the transactions contemplated hereunder and thereunder, or to the fulfillment of
the terms hereof and thereof have been or will have been obtained on or before
the Closing Date.
(i) All actions required to be taken by the Series Obligors as a
condition to the offer and sale of the Offered Notes as described herein or the
consummation of any of the transactions described in the Prospectus, the
Registration Statement and the Transaction Agreements have been or, prior to the
Closing Date, will be taken.
(j) The representations and warranties made by the Series Obligors in
the Transaction Agreements and made in any Officer's Certificate of the Series
Obligors delivered pursuant to the Transaction Agreements will be true and
correct at the time made and on and as of the Closing Date as if set forth
herein.
(k) The Series Obligors agree that they have not granted, assigned,
pledged or transferred and shall not grant, assign, pledge or transfer to any
Person a security interest in, or any other right, title or interest in, the
Pledged Property except as provided in the Indenture, and agree to take all
action required by the Indenture in order to maintain the security interest in
the Pledged Property granted pursuant to the Indenture.
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(l) The Series Obligors possess all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now conducted by
them and as described in the Prospectus, and the Series Obligors have not
received notice of any proceedings relating to the revocation or modification of
any such license, certificate, authority or permit that if decided adversely to
the Series Obligors would, singly or in the aggregate, materially and adversely
affect the conduct of their business, operations or financial condition.
(m) There are no actions, proceedings or investigations pending before
or, to the knowledge of the Series Obligors, threatened by any court,
administrative agency or other tribunal to which the Series Obligors are a party
or of which any of their properties are the subject (i) that if determined
adversely to the Series Obligors would have a material adverse effect on the
business or financial condition of the Series Obligors, (ii) asserting the
invalidity of this Underwriting Agreement, the Notes or any Transaction
Agreement, (iii) seeking to prevent the issuance of the Notes or the
consummation by the Series Obligors of any of the transactions contemplated by
any Transaction Agreement or this Underwriting Agreement, as the case may be, or
(iv) that might materially and adversely affect the performance by the Series
Obligors under, or the validity or enforceability of, any Transaction Agreement,
this Underwriting Agreement or the Notes.
(n) The Series Obligors have prepared and filed with the United States
Securities and Exchange Commission (the "Commission") in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Securities Act"), a
registration statement on Form S-1 (registration numbers 333-79773, 333-79773-01
and 333-79773-02), including a form of preliminary prospectus, relating to the
Offered Notes. The registration statement, and any post-effective amendment
thereto, each in the form heretofore delivered to you and, excluding exhibits
thereto, have been declared effective by the Commission. As used in this
Underwriting Agreement, "Effective Time" means the date and the time as of which
such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission and "Effective Date"
means the date of the Effective Time. The Series Obligors have furnished to the
Representative copies of one or more preliminary prospectuses (each, a
"Preliminary Prospectus") relating to the Offered Notes. Except where the
context otherwise requires, the Registration Statement, as amended at the
Effective Time, including all documents filed as a part thereof, and including
any information contained in a prospectus subsequently filed with the Commission
pursuant to Rule 424(b) under the Act and deemed to be part of the registration
statement as of the Effective Time pursuant to Rule 430A under the Securities
Act, is herein called the "Registration Statement", and the prospectus, in the
form filed by the Series Obligors with the Commission pursuant to Rule 424(b)
under the Securities Act or, if no such filing is required, the form of final
prospectus included in the Registration Statement at the time it became
effective, is hereinafter called the "Prospectus". There are no contracts or
documents of the Series Obligors that are required to be described in the
Prospectus, or filed as exhibits to the Registration Statement pursuant to the
Securities Act or the Rules and Regulations that have not been so described,
filed or incorporated by reference therein on or prior to the Closing Date. The
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conditions for use of Form S-1, as set forth in the General Instructions
thereto, have been satisfied.
(o) The Registration Statement relating to the Offered Notes has been
filed with the Commission and such Registration Statement has become effective.
No stop order suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been instituted or, to the
knowledge of the Series Obligors or ABS, threatened by the Commission.
(p) The Registration Statement conforms, and any amendments or
supplements thereto and the Prospectus will conform, in all material respects to
the requirements of the Securities Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and does not and will not, as of the
Effective Date as to the Registration Statement and any amendment thereto, as of
the applicable filing date as to the Prospectus and any amendment or supplement
thereto, and as of the Closing Date, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to (i) that part of the Registration
Statement that shall constitute the Statement of Eligibility and Qualification
(Form T-1) of the Trustee under the Trust Indenture Act or (ii) any Underwriter
Information (as defined in Section 10(d) hereof) contained therein. The
Indenture conforms in all respects to the requirements of the Trust Indenture
Act and the rules and regulations of the Commission thereunder.
(q) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Securities Exchange Act of 1934 (the "Exchange Act"), as applicable, and the
rules and regulations of the Commission thereunder, and none of such documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and any further documents so filed and incorporated by reference
in the Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and will not contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(r) Since the respective dates as of which information is given in the
Prospectus, there has not been any material adverse change in the general
affairs, management, financial condition, or results of operations of the Series
Obligors, otherwise than as set forth or contemplated in the Prospectus as
supplemented or amended as of the Closing Date.
(s) All the outstanding shares of capital stock of the Series Obligors
have been duly authorized and validly issued, are fully paid and nonassessable
and, except to the extent set forth in the Registration Statement, are owned by
ABS directly or indirectly through one or more
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wholly-owned subsidiaries, free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer or any other claim of any
third party.
(t) Arthur Anderson LLP are independent public accountants with respect
to the Series Obligors as required by the Securities Act.
(u) At the time of execution and delivery of the Indenture, the Series
Obligors will: (i) have good title to the interest in the Pledged Property
conveyed by ABS, free and clear of any lien, mortgage, pledge, charge,
encumbrance, adverse claim or other security interest (collectively, "Liens");
(ii) not have assigned to any person (other than the Trustee) any of its right,
title or interest in the Pledged Property, or the Transaction Agreements; and
(iii) have the power and authority to pledge its interest in the Pledged
Property to the Trustee and to sell the Offered Notes to the Underwriters. Upon
execution and delivery of the Indenture by the Trustee and any related
instruments of pledge, transfer or assignment by the Series Obligors (except as
permitted in the Indenture), the Trustee will have a valid security interest in
all of the Series Obligors' right, title and interest in and to the Pledged
Property. Upon delivery to the Underwriters of the Offered Notes, the
Underwriters will have good title to the Offered Notes free of any Liens.
(v) As of the Cut-Off Date, the Contracts will meet the eligibility
criteria described in the Prospectus and will conform to the descriptions
thereof contained in the Prospectus.
(w) Any taxes, fees and other governmental charges in connection with
the execution, delivery and issuance of this Underwriting Agreement, the
Transaction Agreements and the Notes have been paid or will be paid at or prior
to the Closing Date.
(x) All ABS-Provided Information was true and correct in all material
respects as of the date it was provided to the Underwriters. The term
"ABS-Provided Information" means the information contained on any computer tape
furnished to the Underwriters or provided by other written means by the Series
Obligors or ABS concerning the assets comprising the Series Trust Estate; and
(y) Neither the Series Trust Estate nor the Series Obligors are
required to be registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), and the rules and regulations of the Commission thereunder.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF ABS. ABS represents and
warrants to each Underwriter that:
(a) The execution and delivery of the Underwriting Agreement, the Notes
and each of the Transaction Agreements, the incurrence of the obligations herein
and therein set forth and the consummation of the transactions contemplated
hereunder and thereunder have been duly authorized by the board of directors of
ABS and all other necessary action has been taken.
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(b) The Underwriting Agreement has been duly authorized and validly
executed and delivered by ABS.
(c) Each of the Transaction Agreements will be executed and delivered
by ABS on or before the Closing Date, and when executed and delivered by the
other parties thereto, will constitute a valid and binding agreement of ABS,
enforceable against ABS in accordance with their terms, except to the extent
that (i) the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, receivership or other similar laws now
or hereafter in effect affecting the enforcement of creditors' or other
obligees' rights in general, (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought and (iii) certain remedial provisions of the Indenture may be
unenforceable in whole or in part under the UCC, but the inclusion of such
provisions does not render the other provisions of the Indenture invalid and,
notwithstanding that such provisions may be unenforceable in whole or in part,
the Trustee, on behalf of the Noteholders, will be able to enforce the remedies
of a secured party under the UCC.
(d) The representations and warranties made by ABS in the Transaction
Agreements and made in any Officer's Certificate of ABS delivered pursuant to
the Transaction Agreements will be true and correct at the time made and on and
as of the Closing Date as if set forth herein.
(e) ABS possesses all material licenses, certificates, authorities or
permits issued by the appropriate state, federal or foreign regulatory agencies
or bodies necessary to conduct the business now conducted by it and as described
in the Prospectus, and has not received notice of any proceedings relating to
the revocation or modification of any such license, certificate, authority or
permit that if decided adversely to ABS would, singly or in the aggregate,
materially and adversely affect the conduct of their business, operations or
financial condition.
(f) ABS has been duly incorporated and is validly existing as
corporation in good standing under the law of its jurisdictions of
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its businesses requires such qualification, and has
all power and authority necessary to own or hold properties and to conduct the
businesses in which engaged, except where the failure to so qualify or have such
power or authority could not have, individually or in the aggregate, a material
adverse effect on the condition (financial or otherwise), results of operations,
business or prospects of ABS taken as a whole, and to execute, deliver and
perform its obligations under the Underwriting Agreement, the Notes, and the
Transaction Agreements.
(g) There are no legal or governmental proceedings pending to which ABS
is a party or of which any property or assets of ABS are the subject that,
individually or in the aggregate, if determined adversely to ABS, are reasonably
likely to have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of ABS and, to ABS'
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
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(h) ABS (i) is not in violation of its charter or by-laws, (ii) is not
in default in any material respect, and no event has occurred that, with notice
or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to which any of
its property or assets is subject or (iii) is not in violation in any respect of
any law, ordinance, governmental rule, regulation or court decree to which it or
its property or assets may be subject, except any violation or default that
could not have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of ABS.
SECTION 3. REPRESENTATION AND WARRANTY OF THE UNDERWRITER. Each
Underwriter represents and warrants to the Series Obligors, on its own behalf,
that it has provided each investor to whom it provided a copy of the Preliminary
Prospectus in electronic form, a physical copy of the Preliminary Prospectus as
well.
SECTION 4. PURCHASE AND SALE. Subject to the terms and conditions and
in reliance upon the covenants, representations and warranties herein set forth,
the Series Obligors agree to sell to each Underwriter, and each Underwriter
agrees, jointly and not severally, to purchase from the Series Obligors, the
principal amount of Notes set forth Schedule A hereto. The purchase price for
the Notes shall be as set forth in Schedule A hereto.
SECTION 5. DELIVERY AND PAYMENT. The Series Obligors will deliver the
Offered Notes to the Representative against payment of the purchase price in
immediately available funds, paid at the direction of the Series Obligors, at
the office of Orrick, Herrington & Sutcliffe LLP, 3050 K Street, Washington,
D.C. 20007 at 10:00 a.m., New York City time, on August 26, 1999, or at such
other time not later than seven (7) full business days thereafter as the
Representative and the Series Obligors determine, such time being herein
referred to as the "Closing Date." Each of the Offered Notes to be so delivered
shall be represented by one or more definitive Offered Notes registered in the
name of Cede & Co., as nominee for The Depository Trust Company ("DTC").
Definitive Notes evidencing the Offered Notes will be available only under the
limited circumstances specified in the Indenture (other than such Notes issued
in the name of Cede & Co. as nominee for of DTC). The Series Obligors shall make
such definitive Offered Notes representing the Offered Notes available for
inspection by the Representative at the office at which the Offered Notes are to
be delivered no later than five hours before the close of business in New York
City on the business day prior to the Closing Date.
SECTION 6. OFFERING BY UNDERWRITERS. It is understood that the
Underwriters propose to offer the Offered Notes for sale to the public, which
may include selected dealers, as set forth in the Prospectus.
SECTION 7. COVENANTS OF THE SERIES OBLIGOR. The Series Obligors and
ABS, jointly and severally, covenant and agree with each of the Underwriters as
follows:
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(a) The Series Obligors will prepare the Prospectus in a form approved
by the Representative, as representative of the Underwriters, and will file such
Prospectus pursuant to Rule 424(b) under the Securities Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Underwriting Agreement or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the Securities Act.
(b) During the period that a prospectus relating to the Offered Notes
is required to be delivered under the Securities Act in connection with sales of
such Notes (such period being hereinafter sometimes referred to as the
"prospectus delivery period"), before filing any amendment or supplement to the
Registration Statement or the Prospectus, the Series Obligors will furnish to
the Representative, as representative of the Underwriters, a copy of the
proposed amendment or supplement for review and will not file any such proposed
amendment or supplement to which the Representative reasonably objects.
(c) During the prospectus delivery period, the Series Obligors will
advise the Representative, as representative of the Underwriters, promptly after
they receive notice thereof, (i) when any amendment to the Registration
Statement shall have become effective; (ii) of any request by the Commission for
any amendment or supplement to the Registration Statement or the Prospectus or
for any additional information; (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
initiation or threatening of any proceeding for that purpose, (iv) of the
issuance by the Commission of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or the initiation or threatening of any
proceedings for that purpose and (v) of any notification with respect to any
suspension of the qualification of the Offered Notes for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and will use their best efforts to prevent the issuance of any such
stop order or suspension and, if any is issued, will promptly use their best
efforts to obtain the withdrawal thereof.
(d) If, at any time during the prospectus delivery period, any event
occurs as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the Securities Act, the Series
Obligors will promptly prepare and file with the Commission an amendment or a
supplement that will correct such statement or omission or effect such
compliance.
(e) The Series Obligors will endeavor to qualify the Offered Notes for
offer and sale under the securities or Blue Sky laws of such jurisdictions as
the Underwriters shall reasonably request and will continue such qualification
in effect so long as reasonably required for distribution of the Offered Notes;
provided, however, that the Underwriters shall not be obligated to qualify to do
business in any jurisdiction in which they currently are not so qualified; and
provided, further, that Series Obligor shall be required to qualify to do
business in any jurisdiction where it is not now qualified or to take any action
that would subject it to general service of process in any jurisdiction where it
is not now subject to service of process.
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(f) The Series Obligors will furnish to the Representative, as
representative of the Underwriters, without charge, two copies of the
Registration Statement (including exhibits thereto), one of which will be signed
and, to each Underwriter, conformed copies of the Registration Statement
(without exhibits thereto) and during the prospectus delivery period, as many
copies of the Prospectus and any supplement thereto as the Underwriters may
reasonably request.
(g) For a period from the date of this Underwriting Agreement until the
retirement of the Offered Notes, or until such time as the Underwriters shall
cease to maintain a secondary market in the Offered Notes, whichever first
occurs, the Series Obligors will deliver to the Representative, as
representative of the Underwriters, (i) the annual statements of compliance,
(ii) the annual independent certified public accountants' reports furnished to
the Trustee, (iii) all documents required to be distributed to the Noteholders,
(iv) all documents filed with the Commission pursuant to the Exchange Act or any
order of the Commission thereunder, in each case as provided to the Trustee or
filed with the Commission, as soon as such statements and reports are furnished
to the Trustee or filed or as soon thereafter as practicable, (v) any order of
the Commission under the Securities Act or the Exchange Act in regard to the
Series Obligors or to ABS, or pursuant to a "no action" letter obtained from the
staff of the commission by the Series Obligors or ABS and affecting the Series
Obligors or ABS and (vi) from time to time, such other information concerning
the Series Obligors as the Representative, as representative of the
Underwriters, may reasonably request.
(h) To the extent, if any, that the rating provided with respect to the
Offered Notes by the rating agency or agencies that initially rate the Offered
Notes is conditional upon the furnishing of documents or the taking of any other
actions by the Series Obligors, the Series Obligors shall furnish such documents
and take any such other actions.
(i) The Series Obligors will cause the Trustee to make generally
available to Noteholders and to the Representative, as representative of the
Underwriters, as soon as practicable an earnings statement covering a period of
at least twelve months beginning with the first fiscal quarter occurring after
the Effective Date of the Registration Statement, which shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder.
SECTION 8. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations
of the Underwriters hereunder are subject, to the accuracy, when made and on the
Closing Date, of the representations and warranties of the Series Obligors and
ABS contained herein, to the accuracy of the statements of the Series Obligors
and ABS made in any certificates pursuant to the provisions hereof, to the
performance by the Series Obligors and ABS of their respective obligations
hereunder and to each of the following additional terms and conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424 in the manner and within the applicable time period prescribed for
such filing by the rules and regulations of the Commission under the Securities
Act and in accordance with Section 7(a) of this Underwriting Agreement, and the
Representative shall have received confirmation of the
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<PAGE> 11
effectiveness of the Registration Statement; and, prior to the Closing Date, no
stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceedings for such purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information from the Commission with respect to the Registration
Statement shall have been complied with to the reasonable satisfaction of the
Representative, as representative of the Underwriters, .
(b) The Representative, as representative of the Underwriters, shall
have received evidence satisfactory to it that the Class A-1 Notes shall be
rated "P-1" by Moody's and "F1+/AAA" by Fitch, the Class A-2 Notes shall be
rated no lower than "Aaa" by Moody's and "AAA" by Fitch, and the Class A-3 Notes
shall be rated no lower than "Aaa" by Moody's and "AAA" by Fitch.
(c) (i) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Underwriting Agreement, the
Transaction Agreements, the Offered Notes, the Registration Statement, the
Preliminary Prospectus and the Prospectus, and all other legal matters relating
to such agreements and the transactions contemplated hereby and thereby shall be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Series Obligors shall have furnished to such counsel all
documents and information that they may reasonably request to enable them to
pass upon such matters and (ii) prior to or contemporaneously with the purchase
of Offered Notes hereunder, all transactions contemplated to be consummated
under such Transaction Agreements on the Closing Date (including, without
limitation, the issuance and placement of any subordinated, privately-placed
securities) shall have been so consummated to the reasonable satisfaction of the
Underwriters.
(d) Orrick, Herrington & Sutcliffe LLP shall have furnished to the
Representative, as representative of the Underwriters, their written opinion, as
counsel to the Series Obligors and ABS, addressed to the Underwriters and dated
the Closing Date, in form and substance reasonably satisfactory to the
Representative to the effect that:
(i) This Underwriting Agreement and each of the Transaction
Agreements, assuming the due authorization, execution and delivery of
such agreements by the parties thereto, constitute the valid and
binding agreements of the Series Obligors and ABS, as applicable,
enforceable against the Series Obligors and ABS, as applicable, in
accordance with their terms, subject as to enforceability to (A)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally, (B) the qualification that the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion, with respect to
such remedies, of the court before which any proceedings with respect
thereto may be brought, and (C) with respect to rights of indemnity
under this Underwriting Agreement and each of the Transaction
Agreements, limitations of public policy under applicable securities
laws.
(ii) The Notes, when executed and authenticated in accordance
with the terms of the Master Agreement and the Series Supplement and
delivered to and paid for in accordance
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<PAGE> 12
with the Underwriting Agreement, will be duly and validly issued and
outstanding and will be entitled to the benefits of the Master
Agreement and the Series Supplement.
(iii) The conditions to the use by the Series Obligors of a
registration statement on Form S-1 under the Securities Act, as set
forth in the General Instructions to Form S-1, have been satisfied with
respect to the Registration Statement and the Prospectus.
(iv) The Registration Statement and any amendments thereto
have become effective under the Securities Act; to the best of such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and not withdrawn and no
proceedings for that purpose have been instituted or threatened and not
terminated; and the Registration Statement, the Prospectus and each
amendment or supplement thereto, as of their respective effective or
issue dates (other than the financial and statistical information
contained therein, as to which such counsel need express no opinion),
complied as to form in all material respects with the applicable
requirements of the Securities Act.
(v) To the best of such counsel's knowledge, there are no
material contracts, indentures or other documents of a character
required to be described or referred to in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration
Statement other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
(vi) The statements in the Prospectus under the headings
"Prospectus Summary Federal Income Tax Status" and "-- ERISA
Considerations" and "Legal Matters," "ERISA Considerations," "Federal
Income Tax Consequences," and "State Tax Consequences" to the extent
that they constitute matters of federal law or legal conclusions with
respect thereto, have been reviewed by such counsel and are correct in
all material respects with respects to those consequences or aspects
that are discussed.
(vii) The Indenture and the Offered Notes conform in all
material respects to the description thereof contained in the
Prospectus.
(viii) Neither the Series Obligors nor the Series Trust Estate
are an "investment company" or under the control of an "investment
company" as such terms are defined in the 1940 Act.
Such counsel shall also have furnished to the Representative, as
representative of the Underwriters, a written statement addressed to the
Underwriters and dated the Closing Date, in form and substance satisfactory to
the Representative to the effect that no facts have come to the attention of
such counsel that lead them to believe that: (A) the Registration Statement
(other than (1) the exhibits thereto, (2) the documents incorporated therein by
reference (including, without limitation, any Structural Term Sheets, Collateral
Term Sheets and Computational Materials) and (3) the financial and statistical
information contained therein, as to which no opinion shall be given at the time
it became effective, or at the date of such opinion) contained or
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<PAGE> 13
contains an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (B) the Prospectus (other than (1) the information
incorporated therein by reference (including, without limitation, any Structural
Term Sheets, Collateral Term Sheets and Computational Materials) and (2) the
financial, statistical and numerical information contained therein, as to which
no opinion shall be expressed) contains an untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(e) Wolf, Block, Schorr and Solis-Cohen shall have furnished its
opinion to the Representative, as representative of the Underwriters, their
written opinion, as counsel to ABS, addressed to the Underwriters and dated the
Closing Date, in form and substance reasonably satisfactory to the rating
agencies (all of whom may be entitled to rely on such opinion as if an
addressee) and the Representative to the effect that:
(i) ABS is validly existing and in good standing as a Delaware
corporation.
(ii) ABS has full corporate power and authority to enter into
and fulfill its obligations under the Underwriting Agreement and the
Transaction Agreements and to transfer the Pledged Property to the
Series Obligors as contemplated in the Contribution Agreement.
(iii) The Underwriting Agreement and the Transaction
Agreements have been duly authorized, executed and delivered by ABS.
(iv) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body
having jurisdiction over ABS is required for the consummation by ABS of
the transactions contemplated by the Transaction Agreements, except
such consents, approvals, authorizations, registrations and
qualifications as have been obtained.
(v) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body of
the United States is required for the issuance of the Notes, and the
sale of the Offered Notes to the Underwriters, or the consummation by
the Series Obligors of the other transactions contemplated by this
Underwriting Agreement, the Transaction Agreements, except such
consents, approvals, authorizations, registrations or qualifications as
may be required under the Securities Act or state securities or Blue
Sky laws in connection with the purchase and distribution of the
Offered Notes by the Underwriters or as have been previously obtained.
(vi) This Underwriting Agreement, and the Transaction
Agreements have been duly executed and delivered by the Series
Obligors.
(vii) The execution, delivery and performance of this
Underwriting Agreement, the Indenture and the Contribution Agreement by
the Series Obligors and ABS, the consummation of the transactions
contemplated hereby and thereby, and the issuance and
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<PAGE> 14
delivery of the Notes do not and will not conflict with or result in a
material breach or violation of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Series Obligors or ABS are parties or by which the Series Obligors or
ABS are bound or to which any of the property or assets of the Series
Obligors or ABS or any of their subsidiaries is subject, nor will such
actions result in any violation of the provisions of the articles of
incorporation or bylaws of the Series Obligors or ABS or any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Series Obligors or ABS or any of
their properties or assets.
(viii) There are no actions, proceedings or investigations
pending before or, to the best knowledge of such counsel, threatened by
any court, administrative agency or other tribunal to which the Series
Obligors or ABS are a party or of which any of their properties are the
subject: (A) that if determined adversely to the Series Obligors or ABS
would have a material adverse effect on the business, results of
operations or financial condition of the Series Obligors or ABS; (B)
asserting the invalidity of the Indenture, the Contribution Agreement
or the Notes; (C) seeking to prevent the issuance of the Notes or the
consummation by the Series Obligors or ABS of any of the transactions
contemplated by the Indenture, the Contribution Agreement, or this
Underwriting Agreement, as the case may be; or (D) that might
materially and adversely affect the performance by the Series Obligors
or ABS of their obligations under, or the validity or enforceability
of, the Indenture, the Contribution Agreement, this Underwriting
Agreement or the Notes.
(f) Woodburn & Wedge shall have furnished to the Representative, as
representative of the Underwriters, their written opinion, as counsel to the
Series Obligors, addressed to the Underwriters and dated the Closing Date, in
form and substance reasonably satisfactory to the rating agencies (all of whom
may be entitled to rely on such opinion as if an addressee) and the
Representative to the effect that:
(i) The Series Obligors have been incorporated and are validly
existing as corporations under the laws of their jurisdiction of
incorporation, are qualified to do business and are in good standing,
and have all power and authority necessary to own or hold their own
properties and to conduct the business in which they are engaged and to
enter into and perform their obligations under this Underwriting
Agreement, and the Transaction Agreements, and to cause the Notes to be
issued.
(ii) The execution of the underwriting agreement and the
transaction documents has been duly authorized by the Series Obligors.
(iii) The direction by the Series Obligors to the Trustee to
authenticate and deliver the Notes has been duly authorized by the
Series Obligors.
(g) Orrick, Herrington & Sutcliffe LLP shall have furnished to the
Representative, as representative to the Underwriters, their written opinion(s),
as counsel to the Series Obligors and ABS, addressed to the Underwriters and
dated the Closing Date, in form and substance
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<PAGE> 15
reasonably satisfactory to the Representative, with respect to the (i)
characterization of the transfer of the Pledged Property by ABS to the Series
Obligors pursuant to the Contribution Agreement as a sale and the
non-consolidation of the Series Obligors and ABS, (ii) the perfection of the
security interests, as contemplated in the Prospectus and the Transaction
Agreements and (iii) such other opinions agreed to by the Series Obligors, ABS
and the Underwriters.
(h) The Representative, as representative of the Underwriters, shall
have received from Moore & Van Allen, PLLC, counsel for the Underwriters, such
opinion or opinions, dated the Closing Date, with respect to such matters as the
Representative may require, and the Series Obligors shall have furnished to such
counsel such documents as they reasonably request for enabling them to pass upon
such matters.
(i) The Representative, as representative of the Underwriters, shall
have received the favorable opinion of counsel to the Trustee, dated the Closing
Date, addressed to the Underwriters and in form and scope reasonably
satisfactory to counsel to the Representative.
(j) Each of the Series Obligors and ABS shall have furnished to the
Representative, as representative of the Underwriters, a certificate, dated the
Closing Date, of any of its Chairman of the Board, President or Vice President
and its chief financial officer stating that (i) such officers have carefully
examined the Registration Statement and the Prospectus, (ii) the Prospectus does
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (provided that each of the Series Obligors and ABS may exclude the
Underwriters' Information (as defined in Section 10(d) herein) from such
representation), (iii) the representations and warranties of ABS or the Series
Obligors, as the case may be, contained in this Underwriting Agreement and the
Transaction Agreements are true and correct in all material respects on and as
of the Closing Date, (iv) ABS or the Series Obligors, as the case may be, have
complied in all material respects with all agreements and satisfied in all
material respects all conditions on its part to be performed or satisfied
hereunder and under such agreements at or prior to the Closing Date, (v) no stop
order suspending the effectiveness of the Registration Statement has been issued
and is outstanding and no proceedings for that purpose have been instituted and
not terminated or, to the best of his or her knowledge, are contemplated by the
Commission, and (vi) since the date of its most recent financial statements,
there has been no material adverse change in the financial position or results
of operations of ABS or the Series Obligors, as applicable, or any development
including a prospective change, in or affecting the condition (financial or
otherwise), results of operations or business of ABS or the Series Obligors
except as set forth in or contemplated by the Registration Statement and the
Prospectus.
(k) The Trustee shall have furnished to the Representative, as
representative of the Underwriters, a certificate of the Trustee, signed by one
or more duly authorized officers of the Trustee, dated the Closing Date, as to
the due authorization, execution and delivery of the Indenture by the Trustee
and the acceptance by the Trustee of the Series Trust Estate and such other
matters as the Representative, as representative of the Underwriters, shall
reasonably request.
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<PAGE> 16
(l) Subsequent to the date of this Underwriting Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting particularly the business or properties of the Series
Obligors or ABS that materially impairs the investment quality of the Notes;
(ii) trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the over-the-counter market shall have been suspended
or limited, or minimum prices shall have been established on either of such
exchanges or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, or trading in
securities of the Series Obligors or ABS on any exchange or in the
over-the-counter market shall have been suspended; (iii) a general moratorium on
commercial banking activities shall have been declared by Federal or New York
State authorities; or (iv) an outbreak or escalation of hostilities or a
declaration by the United States of a national emergency or war or such a
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of the
Representative, as representative of the Underwriters, impracticable or
inadvisable to proceed with the public offering or the delivery of the Notes on
the terms and in the manner contemplated in the Prospectus.
(m) With respect to the letter of Arthur Andersen LLP, delivered to the
Representative, as representative of the Underwriters, concurrently with the
execution of this Underwriting Agreement (the "initial letter"), the Series
Obligors shall have furnished to the Representative, as representative of the
Underwriters, a letter (the "bring-down letter") of such accountants, addressed
to the Underwriters and dated the Closing Date (i) confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualifications of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the date of the bring-down letter (or with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more than
five days prior to the date of such bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by its initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in its initial letter.
(n) The Representative, as representative of the Underwriters, shall
receive evidence satisfactory to it that, on or before the Closing Date, UCC-l
financing statements have been or are being filed in each office in each
jurisdiction in which such financing statements are required (i) to perfect the
first priority security interests created by the Contribution Agreement
reflecting the interest of the Series Obligors in the Contracts and the proceeds
thereof, (ii) to perfect their interest, if any, in the Equipment, related to
Contracts representing not less than 85% of the Statistical Aggregate Contract
Principal Balance (for such purpose, Statistical Aggregate Contract Principal
Balance means the aggregate of the Contract Principal Balances of the related
Contracts, calculated as of the Statistical Calculation Date using the
Statistical Discount Rate (all as defined or described in the Prospectus dated
August 20, 1999 and relating to the Notes) and (iv) to perfect the first
priority security interest created by the Indenture, reflecting the interest of
the Trustee in the Pledged Property and the proceeds thereof as described in the
Prospectus.
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<PAGE> 17
(o) Subsequent to the execution and delivery of this Underwriting
Agreement, (i) no downgrade, withdrawal or qualification shall have occurred
with respect to the rating accorded the Offered Notes or any of the Series
Obligors' other debt securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of Rule
436(g)(2) of the Securities Act and (ii) no such organization shall have
publicly announced that it has under surveillance or review (other than an
announcement with positive implications of a possible upgrading), its rating of
the Offered Notes or any of ABS's or the Series Obligors' other debt securities.
If any condition specified in this Section 8 shall not have been
fulfilled when and as required to be fulfilled, this Underwriting Agreement may
be terminated by the Underwriters by notice to the Series Obligors at any time
at or prior to the Closing Date, and such termination shall be without liability
of any party to any other party except as provided in Section 11.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Underwriting Agreement shall be deemed to be in compliance
with the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
SECTION 9. PAYMENT AND EXPENSES. If (i) the Series Obligors shall fail
to tender the Notes for delivery to the Underwriters for any reason permitted
under this Underwriting Agreement or (ii) the Underwriters shall decline to
purchase the Notes for any reason permitted under this Underwriting Agreement,
the Series Obligors shall reimburse the Underwriters for the fees and expenses
of its counsel and for such other out-of-pocket expenses as shall have been
reasonably incurred by them in connection with this Underwriting Agreement and
the proposed purchase of the Offered Notes, and upon demand the Series Obligors
shall pay the full amount thereof to the Underwriters.
SECTION 10. INDEMNIFICATION. (a) ABS and the Series Obligors shall,
jointly and severally, indemnify and hold harmless the Underwriters and each
person, if any, who controls the Underwriters within the meaning of Section 15
of the Securities Act against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Underwriters may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment thereof or
supplement thereto, or in any Preliminary Prospectus or the Prospectus or in any
amendment thereof or supplement thereto or (ii) the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse the Underwriters
for any legal or other expenses reasonably incurred by the Underwriters in
connection with investigating or preparing to defend or defending against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the foregoing indemnity shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) from whom the
person asserting any such losses, claims, damages or liabilities purchased
Offered Notes if such untrue statement or omission or alleged untrue
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<PAGE> 18
statement or omission made in the Preliminary Prospectus is eliminated or
remedied in the prospectus (as amended or supplemented if the Series Obligors
and ABS shall have furnished any amendments or supplements thereto) and, if
required by law, a copy of the Prospectus (as so amended or supplemented) shall
not have been furnished to such person at or prior to the written confirmation
of the sale of such Offered Notes to such person; provided further, however that
neither ABS nor the Series Obligors shall be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any Registration Statement as originally filed or in any
amendment thereof or supplement thereto, or in any Preliminary Prospectus or the
Prospectus or in any amendment thereof or supplement thereto in reliance upon
and in conformity with the Underwriters' Information (as defined in Section
10(d) herein).
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless ABS and the Series Obligors, against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which ABS and
the Series Obligors or any one or more thereof may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement as
originally filed or in any amendment thereof or supplement thereto, or in any
Preliminary Prospectus or the Prospectus or in any amendment thereof or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with the Underwriters' Information (as
defined in Section 9(d) herein), and shall reimburse ABS and the Series Obligors
for any legal or other expenses reasonably incurred by ABS or any of the Series
Obligors directly in connection with investigating or preparing to defend or
defending against or appearing as third party witness in connection with any
such loss, claim, damage or liability (or any action in respect thereof) as such
expenses are incurred.
(c) Promptly after receipt by any indemnified party under this Section
10 of notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 10, except to the extent it has
been materially prejudiced by such failure; and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified
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<PAGE> 19
party under this Section 10 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) the named parties to any such action, suit
or proceeding (including any impleaded parties) include both the indemnified
party and the indemnifying party and such indemnified party shall have been
advised by its counsel that representation of such indemnified party and the
indemnifying party by the representation by the same counsel would be
inappropriate due to actual or potential differing interest between them or
(iii) the indemnifying party has failed to assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party, in which case,
if such indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Underwriters, if the indemnified
parties under this Section 10 consist of the Underwriters or any of its
directors and controlling persons, or by ABS or the Series Obligors, if the
indemnified parties under this Section 10 consist of ABS or the Series Obligors
or any of the Series Obligors' or ABS' directors, officers or controlling
persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 10(a) and (b), shall use its best efforts to cooperate with
the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) The Underwriters confirm that the Underwriter's Information, as
defined herein, contained in the Prospectus is correct and constitutes the only
information furnished in writing to the Series Obligors and ABS by or on behalf
of the Underwriters specifically for inclusion in the Registration Statement and
the Prospectus. The "Underwriters Information" includes the following: (A) under
the caption "Underwriting" (i) the charts listing the Underwriters of the Class
A-1 Notes, the Underwriters of the Class A-2 Notes and the Underwriters of the
Class A-3 Notes, (ii) the paragraph immediately following the charts described
in (i), (iii) the chart listing the Underwriters' Discounts and Commissions and
(iv) the last two paragraphs under such caption, except the first sentence of
the second to the last paragraph under such caption and (B) on the cover of the
Prospectus, the information under the headings "Price to Public per Note,"
19
<PAGE> 20
"Underwriting Discount per Note," and Proceeds to Issuer per note and the
information in the paragraph immediately below the chart.
(e) The obligations of ABS, the Series Obligors and the Underwriters in
this Section 10 are in addition to any other liability that ABS, the Series
Obligors or the Underwriters, as the case may be, may otherwise have.
SECTION 11. CONTRIBUTION. If the indemnification provided for in
Section 10 is unavailable or insufficient to hold harmless an indemnified party
under Section 10(a) or (b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
any action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by ABS and the Series Obligors on the one
hand and the Underwriters on the other from the offering of the Offered Notes or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
ABS and the Series Obligors on the one hand and the Underwriters on the other
with respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or any action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by ABS and the
Series Obligors on the one hand and the Underwriters on the other with respect
to such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Offered Notes purchased hereunder (before
deducting expenses) received by the Series Obligors bear to the total
underwriting discounts and commissions received by the Underwriters with respect
to the Offered Notes purchased hereunder, in each case as set forth in the table
under the caption "Underwriting" in the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by ABS or the Series Obligors on
the one hand or the Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. ABS, the Series Obligors and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 11 were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability referred to above in
this Section 11 shall be deemed to include for purposes of this Section 11, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such claim or any action.
Notwithstanding the provisions of this Section 11, each Underwriter shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Notes underwritten by it and distributed to the
public were offered to the public less the amount of any damages that each
Underwriter has otherwise paid or become liable to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
20
<PAGE> 21
SECTION 12. TERMINATION OF AGREEMENT. The Representative, as
representative of the Underwriters, may terminate this Underwriting Agreement
immediately upon notice to ABS and the Series Obligor, at any time at or prior
to the Closing Date if any of the events or conditions described in Section 8(k)
of this Underwriting Agreement shall occur and be continuing. In the event of
any such termination, the covenants set forth in Section 7, the provisions of
Section 9, the indemnity agreement set forth in Section 10 and the provisions of
Sections 11 and this Section 12 shall remain in effect.
SECTION 13. DEFAULT BY ONE OF THE UNDERWRITERS. If any of the
Underwriters shall fail on the Closing Date to purchase the Notes which it is
obligated to purchase hereunder (the "Defaulted Notes"), the remaining
Underwriters (the "Non-Defaulting Underwriters") shall have the right, but not
the obligation, within three (3) Business Days thereafter, to make arrangements
to purchase all, but not less than all, of the Defaulted Notes upon the terms
herein set forth; if, however, the Non-Defaulting Underwriters shall have not
completed such arrangements within such three (3) Business Days period, then
this Underwriting Agreement shall terminate without liability on the part of the
Non-Defaulting Underwriters.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Underwriting Agreement, either the Non-Defaulting Underwriters or the
Series Obligors shall have the right to postpone the Closing Date for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
SECTION 14. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Underwriting
Agreement shall inure to the benefit of and be binding upon the Underwriters,
the Series Obligors, ABS, and their respective successors. Nothing expressed or
mentioned in this Underwriting Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters, the Series
Obligors and ABS and their respective successors and the controlling persons and
officers and directors, and their heirs and legal assigns, any legal or
equitable right, remedy or claim under or in respect of this Underwriting
Agreement or any provision contained herein.
SECTION 15. EXPENSES. The Series Obligors and ABS, jointly and
severally, agree with the Underwriters to pay (i) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Offered Notes and
any taxes payable in that connection; (ii) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement and any amendments and exhibits thereto; (iii) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), any Preliminary Prospectus and the Prospectus, all as provided in
this Underwriting Agreement; (iv) the costs of reproducing and distributing this
Underwriting Agreement and any other underwriting and selling group documents by
mail, telex
21
<PAGE> 22
or other means of communications; (v) the fees and expenses of qualifying the
Notes under the securities laws of the several jurisdictions as provided in
Section 7(e) and of preparing, printing and distributing Blue Sky Memoranda and
Legal Investment Surveys (including the related reasonable and documented fees
and expenses of counsel to the Underwriters); (vi) any fees charged by rating
agencies for rating the Offered Notes; (vii) all fees and expenses of the
Trustee and its counsel; (viii) any fees, costs and expenses of the Underwriters
and their counsel; (ix) any transfer taxes payable in connection with its sale
of the Offered Notes pursuant to this Underwriting Agreement; and (x) all other
costs and expenses incident to the performance of the obligations of the Series
Obligors and ABS under this Underwriting Agreement. By way of clarification, the
provisions of this Section set forth the determination as between ABS and the
Series Obligors on the one hand and the Underwriters on the other as to which
party will be responsible for the fees and expenses described in this section,
but shall not inure to the benefit of other entities to which ABS or the Series
Obligors are obligated and shall not be read to be an agreement on the part of
ABS or the Series Obligors to make payments to any entity in excess of the
amounts agreed with such parties.
SECTION 16. SURVIVAL. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Series Obligors,
ABS and the Underwriters contained in this Underwriting Agreement or made by or
on their behalf, respectively, pursuant to this Underwriting Agreement, shall
survive the delivery of and payment for the Offered Notes and shall remain in
full force and effect, regardless of any termination or cancellation of this
Underwriting Agreement or any investigation made by or on behalf of any of them
or any person controlling any of them.
SECTION 17. NOTICES. All communication hereunder shall be in writing
and, (i) if sent to the Representative or FCMC will be mailed, delivered or
telecopied and confirmed to them at First Union Capital Markets Corp., Asset
Securitization Division, 301 South College Street, TW-9, Charlotte, North
Carolina, 28288-0610, Telecopy Number: (704) 374-3254; if sent to the Series
Obligors, will be mailed, delivered or telecopied and confirmed to them at the
addresses of the Series Obligors set forth in the Registration Statement,
Attention: Treasurer; and (iii) if sent to ABS, will be mailed, delivered or
telecopied and confirmed to them at the address of ABS set forth in the
Registration Statement, Attention: Chief Financial Officer. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof. The Series Obligors and ABS shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the
Underwriters.
SECTION 18. GOVERNING LAW. THIS UNDERWRITING AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 19. FINANCIAL SERVICES ACT. Each Underwriter represents and
warrants to, and agrees with, the Series Obligors and ABS that (i) it has not
offered or sold, and prior to the expiry of six months from the Closing Date,
will not offer or sell any Offered Notes to persons in the United Kingdom,
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for purposes of
their business, or otherwise in circumstances which have not resulted and will
not result in an offer to
22
<PAGE> 23
the public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Offered Notes in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Offered Notes to a person of a kind described
in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements)(Exemptions) Order 1996 or persons to whom such document may
otherwise lawfully be issued, distributed or passed on.
SECTION 20. NONPETITION COVENANT. Each Underwriter agrees that it will
not, prior to the date which is one year and one day after the date on which all
of the Notes are paid in full, acquiesce, petition or otherwise invoke or cause
either of the Series Obligors to invoke the process of any Governmental
Authority for the purpose of commencing or sustaining a case against either of
the Series Obligors under any federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of either Series Obligor or any
substantial part of its property or ordering the winding-up or liquidation of
the affairs of either of the Series Obligors. The term "Governmental Authority"
as used herein shall mean the United States of America, any state or other
political subdivision of the United States of America or any state and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
SECTION 21. COUNTERPARTS. This Underwriting Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall, together constitute one and the same
instrument.
SECTION 22. HEADINGS. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Underwriting Agreement.
SECTION 23. EFFECTIVENESS. This Underwriting Agreement shall become
effective upon execution and delivery.
23
<PAGE> 24
If you are in agreement with the foregoing, please sign the counterpart
hereof and return it to the Series Obligors, whereupon this letter and your
acceptance shall become a binding agreement among the Series Obligors, ABS, the
Representative and the Underwriters.
Very truly yours,
ADVANTA LEASING RECEIVABLES
CORP. VIII
By: /s/ Michael Coco
-----------------------
Name: Michael Coco
-----------------------
Title: Vice President
-----------------------
ADVANTA LEASING RECEIVABLES
CORP. IX
By: /s/ Michael Coco
-----------------------
Name: Michael Coco
-----------------------
Title: Vice President
-----------------------
ADVANTA BUSINESS SERVICES CORP.
By: /s/ Michael Coco
-----------------------
Name: Michael Coco
-----------------------
Title: Vice President
-----------------------
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date hereof.
FIRST UNION CAPITAL MARKETS CORP.,
as Representative of the Underwriters
By: /s/ F. Blake O'Connor
------------------------
Name: F. Blake O'Connor
------------------------
Title: Vice President
------------------------
24
<PAGE> 25
SCHEDULE A
Date of Underwriting Agreement: August 20, 1999
Underwriter: First Union Capital Markets
Corp., as Representative of
the Underwriters
Underwriter Address: First Union Capital Markets
Corp.
One First Union Center,
TW-9
301 South College Street
Charlotte, NC 28288-0610
Title, Purchase Price and Description of Notes:
Class A-1 Notes
Title: $50,929,490 5.76664% Class
A-1 Equipment Receivables
Asset Backed Notes, Series
1999-1
Price to public: $50,929,490.00
Purchase price: $50,814,898.65
Underwriting discount: $114,591.35
Distribution Dates: The 15th calendar day of
each month (if such day is
not a Business Day, then
next succeeding Business
Day), commencing September
15, 1999
Maturity: September 15, 2000
Distribution Date
Redemption provisions: Notes remaining outstanding
may be redeemed in whole,
but not in part, on any
Distribution Date at
the Servicer's option if
the Aggregate Contract
Principal Balance at such
time is less than 10% of
the initial Aggregate
Contract Principal Balance
as of the Cutoff Date.
Class A-2 Notes
Title: $38,500,927 6.64% Class A-2
Equipment Receivables Asset
Backed Notes, Series 1999-1
Price to public: $38,499,213.71
Purchase price: $38,354,835.23
Underwriting discount: $144,378.48
Distribution Dates: The 15th calendar day of
each month (if such day is
not a Business Day, then
next succeeding Business
Day), commencing September
15, 1999
Maturity: September 16, 2002
Distribution Date
Redemption provisions: Notes remaining outstanding
may be redeemed in whole,
but not in part, on any
Distribution Date at
25
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the Servicer's option if
the Aggregate Contract
Principal Balance at such
time is less than 10% of
the initial Aggregate
Contract Principal Balance
as of the Cutoff Date.
Class A-3 Notes
Title: $9,445,708 6.90% Class A-3
Equipment Receivables Asset
Backed Notes, Series 1999-1
Price to public: $9,444,233.52
Purchase price: $9,406,734.06
Underwriting discount: $37,499.46
Distribution Dates: The 15th calendar day of
each month (if such day is
not a Business Day, then
next succeeding Business
Day), commencing September
15, 1999
Maturity: November 17, 2003
Distribution Date
Redemption provisions: Notes remaining outstanding
may be redeemed in whole,
but not in part, on any
Distribution Date at the
Servicer's option if the
Aggregate Contract
Principal Balance at such
time is less than 10% of
the initial Aggregate
Contract Principal Balance
as of the Cutoff Date.
Closing Date, Time and Location:
Date: August 26, 1999
Time: 10:00 A.M.
Location: Orrick, Herrington &
Sutcliffe LLP
Washington Harbour
3050 K Street, N.W., Suite 200
Washington, D.C. 20007
26
<PAGE> 27
SCHEDULE B
FIRST UNION CAPITAL MARKETS CORP.
BARCLAYS CAPITAL
27
<PAGE> 1
EXHIBIT 4.1
EXECUTION COPY
MASTER FACILITY AGREEMENT
by and among
ADVANTA BUSINESS SERVICES CORP.,
as the Servicer,
ADVANTA LEASING RECEIVABLES CORP. VIII,
and
ADVANTA LEASING RECEIVABLES CORP. IX,
as the Obligors
And
Bankers Trust Company,
as Trustee
Dated as of August 26, 1999
<PAGE> 2
<TABLE>
<CAPTION>
ARTICLE I
DEFINITIONS
<S> <C> <C>
Section 1.01. Definitions................................................... 2
Section 1.02. Acts of Holders............................................... 17
Section 1.03. Notice to Holders: Waiver..................................... 18
Section 1.04. Alternate Payment and Notice Provisions....................... 18
Section 1.05. Conflict with Trust Indenture Act............................. 18
Section 1.06. Effect of Headings and Table of Contents...................... 19
Section 1.07. Successors and Assigns........................................ 19
Section 1.08. Benefits of Master Agreement.................................. 19
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. Representations, Warranties and Covenants of Obligors......... 19
Section 2.02. Representations, Warranties and Covenants of Servicer......... 22
ARTICLE III
PLEDGING THE TRUST ESTATE
Section 3.01. Series Trust Estates.......................................... 24
Section 3.02. Preservation of Series Collateral............................. 25
Section 3.03. Waiver of Stay or Extension Laws; Marshalling of Assets....... 25
Section 3.04. Noninterference, Etc.......................................... 25
Section 3.05. Obligor Changes............................................... 26
Section 3.06. Limited Recourse to Obligors.................................. 26
Section 3.07. Authorization of Actions to be Taken by the Trustee........... 26
Section 3.08. Termination of Security Interests............................. 27
Section 3.09. Filing; Maintenance of Contract Files......................... 27
Section 3.10. Costs and Expenses............................................ 27
ARTICLE IV
NOTE FORMS
Section 4.01. Forms Generally............................................... 27
Section 4.02. Form of Trustee's Certificate of Authentication............... 28
Section 4.03. Securities Legend............................................. 28
</TABLE>
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<TABLE>
<CAPTION>
ARTICLE V
THE NOTES
<S> <C> <C>
Section 5.01. Amount Limited; Issuable in Series............................ 28
Section 5.02. Execution, Authentication, Delivery and Dating................ 29
Section 5.03. Temporary Notes............................................... 30
Section 5.04. Registration, Registration of Transfer and Exchange,
Transfer Restrictions......................................... 30
Section 5.05. Mutilated, Destroyed, Lost and Stolen Notes................... 31
Section 5.06. Final Distribution............................................ 32
Section 5.07. Persons Deemed Owners......................................... 33
Section 5.08. Cancellation.................................................. 33
Section 5.09. Book-Entry Notes.............................................. 33
Section 5.10. Notices to Clearing Agency.................................... 34
Section 5.11. Definitive Notes.............................................. 34
Section 5.12. CUSIP Numbers................................................. 34
ARTICLE VI
ADMINISTRATION AND SERVICING OF
THE CONTRACTS AND EQUIPMENT
Section 6.01. Appointment of Servicer: Responsibilities of Servicer......... 35
Section 6.02. Standard of Care.............................................. 36
Section 6.03. Credit and Collection Policy.................................. 37
Section 6.04. Maintenance of Interest in the Trust Estate................... 37
Section 6.05. Servicing Compensation; Payment of Certain
Expenses by Servicer.......................................... 37
Section 6.06. Servicer's Certificate........................................ 38
Section 6.07. Annual Statement as to Compliance............................. 38
Section 6.08. Financial Statements.......................................... 38
Section 6.09. Access to Certain Documentation and Information
Regarding the Pledged Property................................ 38
Section 6.10. Other Necessary Data.......................................... 40
Section 6.11. Release of Contracts.......................................... 40
Section 6.12. Removal Related to Upgrades or Trade-Ins and
to Defaulted Contracts........................................ 41
Section 6.13. Notification to Noteholders of Defaults and Events of Default. 41
</TABLE>
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<TABLE>
<S> <C> <C>
Section 6.14. Security Deposits............................................. 42
Section 6.15. Removal of Nonconforming Pledged Property..................... 42
ARTICLE VII
ACCOUNTS
Section 7.01. Establishment of Series Accounts............................. 43
Section 7.02. Investment of Funds in the Series Accounts.................... 43
ARTICLE VIII
THE SERVICER AND THE OBLIGORS
Section 8.01. Liability of Servicer; Indemnities............................ 43
Section 8.02. Merger, Consolidation, or Assumption of the
Obligations of Servicer....................................... 44
Section 8.03. Limitation on Liability of Servicer and Others................ 45
Section 8.04. Servicer Not to Resign........................................ 45
Section 8.05. Reserved...................................................... 45
Section 8.06. Indemnities of the Obligors................................... 45
Section 8.07. Limitation on Liability of the Obligors....................... 46
ARTICLE IX
SERVICER TERMINATION
Section 9.01. Events of Servicer Termination................................ 47
Section 9.02. Trustee to Act; Appointment of Successor...................... 48
Section 9.03. Notification to Noteholders................................... 49
Section 9.04. Waiver of Past Events of Servicer Termination................. 49
Section 9.05. Effects of Termination of Servicer............................ 50
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.01. Events of Default............................................. 50
Section 10.02. Collection of Indebtedness and Suits for Enforcement
by Trustee: Authority of Controlling Party.................... 50
Section 10.03. Limitation on Suits........................................... 52
Section 10.04. Unconditional Right of Holders to Receive Principal
and Interest.................................................. 53
Section 10.05. Restoration of Rights and Remedies............................ 53
</TABLE>
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<TABLE>
<S> <C> <C>
Section 10.06. Rights and Remedies Cumulative................................ 54
Section 10.07. Delay or Omission Not Waiver.................................. 54
Section 10.08. Control by Holders............................................ 54
Section 10.09. Waiver of Past Defaults....................................... 54
Section 10.10. Undertaking for Costs......................................... 55
Section 10.11. Action on Notes............................................... 55
ARTICLE XI
THE TRUSTEE
Section 11.01. Certain Duties and Responsibilities........................... 55
Section 11.02. Notice of Defaults............................................ 57
Section 11.03. Certain Rights of Trustee..................................... 57
Section 11.04. Not Responsible for Recitals or Issuance of Notes............. 59
Section 11.05. May Hold Notes................................................ 59
Section 11.06. Compensation and Indemnity.................................... 59
Section 11.07. Disqualification; Conflicting Interests....................... 60
Section 11.08. Corporate Trustee Required; Eligibility....................... 60
Section 11.09. Resignation and Removal, Appointment of Successor............. 60
Section 11.10. Acceptance of Appointment by Successor........................ 62
Section 11.11. Merger, Conversion, Consolidation or Succession to Business... 62
Section 11.12. Preferential Collection of Claims Against Obligors............ 62
Section 11.13. Appointment of Authenticating Agent........................... 62
Section 11.14. Paying Agent.................................................. 64
Section 11.15. Appointment of Co-Trustee or Separate Trustee................. 65
Section 11.16. Representations and Warranties of the Trustee................. 66
ARTICLE XII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND OBLIGORS
Section 12.01. Obligors to Furnish Trustee Names and Addresses of Holders.... 66
Section 12.02. Preservation of Information; Communications to Holders........ 67
Section 12.03. Reports by Trustee............................................ 68
Section 12.04. Reports by Obligors........................................... 68
</TABLE>
iv
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<TABLE>
<CAPTION>
ARTICLE XIII
MASTER AGREEMENT SUPPLEMENTS
<S> <C> <C>
Section 13.01. Supplements Affecting All Series, or the
Master Agreement Generally.................................... 69
Section 13.02. Supplements Authorizing a Series of Notes..................... 71
Section 13.03. Execution of Master Agreement Supplements..................... 72
Section 13.04. Effect of Master Agreement Supplements........................ 72
Section 13.05. Reference in Notes to Master Agreement Supplements............ 72
ARTICLE XIV
COVENANTS
Section 14.01. Payment of Principal and Interest............................. 72
Section 14.03. Consolidation, Merger, Sale of Assets......................... 72
Section 14.04. Negative Covenants............................................ 74
Section 14.05. Performance of Obligations: Servicing of each
Series Trust Estate........................................... 75
Section 14.06. Money for Note Payments to Be Held in Trust................... 76
Section 14.07. Corporate Existence; Separate Corporate Existence............. 77
Section 14.08. Payment of Taxes and Other Claims............................. 79
Section 14.09. Amendment of Organizational Documents......................... 79
Section 14.10. Rule 144A Information......................................... 80
Section 14.11. Further Instruments and Acts.................................. 80
Section 14.12. Compliance with Laws.......................................... 80
Section 14.13. Income Tax Characterization................................... 80
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.01. Counterparts.................................................. 80
Section 15.02. Governing Law................................................. 80
Section 15.03. Notices....................................................... 81
Section 15.04. Severability of Provisions.................................... 81
Section 15.05. Binding Effect................................................ 81
Section 15.06. Exhibits...................................................... 81
Section 15.07. Calculations.................................................. 81
Section 15.08. Further Assurances............................................ 81
</TABLE>
v
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<TABLE>
<S> <C> <C>
Section 15.09. Nonpetition Covenant.......................................... 82
</TABLE>
vi
<PAGE> 8
This MASTER FACILITY AGREEMENT, dated as of August 26, 1999, by and
among Advanta Business Services Corp., a Delaware corporation, as Servicer,
Advanta Leasing Receivables Corp. VIII, a Nevada corporation, and Advanta
Leasing Receivables Corp. IX, a Nevada corporation, as the Obligors and Bankers
Trust Company, a New York banking corporation, as Trustee.
WITNESSETH:
In consideration of the mutual agreements herein contained and of other
good and valuable consideration the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Master Agreement, the
following words and phrases shall have the following meanings:
(i) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(ii) all other terms used herein which are defined in the
Trust Indenture Act (as hereinafter defined), either directly or by
reference therein, have the meanings assigned to them therein;
(iii) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of
such computation; and
(iv) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Master Agreement as a whole and
not to any particular Article, Section or other subdivision, "or" is
not exclusive and "including" means including without limitations
Act. When used with respect to any Holder, has the meaning specified in
Section 1.02.
Advance Payment. With respect to any Contract, any Scheduled Payment or
a portion thereof made by or on behalf of a User which does not become due until
a subsequent Collection Period. Advance Payments shall be applied as
"Collections" with respect to the Collection Period(s) to which such Advance
Payment relates. Advance Payments do not include Prepayment Amounts.
2
<PAGE> 9
Adverse Claim. A lien, security interest, charge or encumbrance, or
other right or claim in, of or on any Person's assets or properties in favor of
any other Person.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such specified Person. For the purposes of this definition, "control," when
used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Applicable Discount Rate. With respect to any Contract has the meaning
set forth in the related Series Supplement.
Authenticating Agent. Any Person authorized by the Trustee to act on
behalf of the Trustee to authenticate Notes.
Authorized Officer. With respect to any Obligor, any president, senior
vice president, vice president, treasurer or the chief financial officer of such
Obligor.
Bankruptcy Code. The Bankruptcy Code of 1978, as amended, as codified
under Title 11 of the United States Code, and the Bankruptcy Rules promulgated
thereunder, as the same may be in effect from time to time.
Book-Entry Notes. Notes registered in the name of a Clearing Agency, or
its nominee as described in Section 5.09.
Booked Residual Value. With respect to any Contract on any date of
determination, the residual value of the Equipment subject to such Contract, as
reflected in the Servicer's servicing system.
Broker. The Person (including any broker, vendor or other Person, but
excluding the Originator) that originally leases an item of Equipment to a User
pursuant to a Contract between the Originator and the User of such Equipment, or
any Person from whom the Originator purchased a Contract in respect of which the
Originator is not a party.
Broker Agreement. Any agreement between the Originator and a Broker
pursuant to which the Originator has acquired Contracts.
Business Day. Any day other than a Saturday, a Sunday or a day on which
banking institutions in New York, New York, Philadelphia, Pennsylvania,
Voorhees, New Jersey or Reno, Nevada are authorized or obligated by law,
executive order or governmental decree to be closed.
Calculation Date. The last day of a Collection Period. Amounts
calculated from Calculation Date balances shall be calculated from such balances
as of the close of business on the Calculation Date.
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Cedelbank. Cedelbank, societe anonyme, incorporated under the laws of
Luxembourg.
Class. With respect to any Series, any one of the classes of such Notes
as designated in the Series Supplement for such Series.
Clearing Agency. The Depository Trust Company, or any other
organization registered as a "clearing agency" pursuant to Section 17A of the
Exchange Act.
Clearing Agency Participant. A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book entry transfers and pledges of securities deposited with the Clearing
Agency.
Closing Date. August 26, 1999.
Code. The Internal Revenue Code of 1986, as amended from time to time,
and Treasury Regulations promulgated thereunder.
Collection Period. With respect to any Payment Date, the immediately
preceding calendar month; provided that if, with respect to any Series, the
Cut-Off Date applicable thereto is a day other than the first day of a calendar
month, then the initial Collection Period with respect to such Series shall be
the period commencing on such Cut-Off Date and ending, at the end of the
calendar month in which such Cut-Off Date occurs.
Collections. With respect to a Series and any Collection Period, all
collections and proceeds of the Contracts and the Related Security, including
without limitation, Scheduled Payments, Prepayments, Offset Amounts, Recoveries,
Residual Receipts, Prepayment Amounts, Investment Earnings and Insurance
Proceeds received by the Servicer, the Trustee or the Obligors, in each case,
during such Collection Period; provided that "Collections" shall not include (i)
Advance Payments until (and then only to the extent of the amount due) the
Collection Period in which such payment was due, and (ii) Servicing Charges; and
provided further that any amounts paid under any Series Support in reduction of
the principal amount of any Note, any interest thereon or any other amount in
connection therewith shall not constitute Collections.
Commission. The Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at anytime after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
Computer Tape. Collectively, the computer tapes generated by the
Originator which provide information relating to the Contracts and which were,
or will be, used by the Originator in selecting the Contracts sold to the
Obligors pursuant to the Contribution Agreement and Contribution Agreement
Supplement.
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Contract. Each of the agreements conveyed by the Originator to an
Obligor pursuant to the Contribution Agreement and subsequently pledged by such
Obligor to the Trustee pursuant to this Master Agreement or a Series Supplement,
pursuant to which the applicable originator thereof leases specified Equipment
to, or makes loans to or otherwise finances equipment for a User and, with
respect to a Series, which are identified on the List of Contracts delivered to
the Servicer on or about the date of issuance of such Series.
Contract Balance Remaining. With respect to any Contract, as of any
date, the aggregate (undiscounted) amount of all unpaid Scheduled Payments due
under such Contract.
Contract File. With respect to each Contract, the following documents:
(i) The executed original counterparts of the Contract;
(ii) A copy of any related Broker Agreement;
(iii) Copies of all documents (which may be in microfiche form
or on the Servicer's computerized information system), if any, that the
Originator or the Servicer keeps on file for the benefit of the
Originator in accordance with the Originator's or Servicer's customary
procedures; and
(iv) Copies (together with all amendments, assignments, and
continuations thereof and including evidence of filings with the
appropriate office) of all UCC financing statements filed with respect
to the Contracts, identifying the User as debtor and the Originator as
secured party, if applicable.
Contract Principal Balance. As to each Series, the amount described in
the Series Supplement.
Contribution Agreement. Means the Master Sale and Contribution
Agreement dated as of August 26, 1999 by and among the Originator and the
Obligors.
Contribution Agreement Supplement. Each supplement to the Contribution
Agreement.
Corporate Trust Office. The principal office of the Trustee at which at
any particular time its corporate trust business shall be administered, which
office at the date of this Master Agreement is specified in Section 15.03
hereof.
Credit and Collection Policy. The credit and collection policies and
practices of the Servicer as the same may be modified from time to time in
accordance with the terms of this Master Agreement.
Cut-Off Date. With respect to any Series, the "Cut-Off Date" as set
forth in the related Series Supplement.
Default. Any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default.
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Defaulted Contract. Any 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.
Definitive Notes. Has the meaning specified in Section 5.09 hereof.
Delinquent Contract. A Contract as to which any payment, or part
thereof, remains unpaid more than 60 days after the original due date for such
payment.
Depository Agreement. Means, if applicable with respect to any Series,
the agreement among the Obligors, the Trustee and a Clearing Agency, or as
otherwise provided in the related Series Supplement.
Determination Date. With respect to any Series as set forth in the
related Series Supplement.
Dollars or $. The lawful money of the United States.
Eligible Contract. With respect to any Series, as defined in the
related Series Supplement.
Eligible Investments. Any instrument, security or security entitlement
evidencing any of the following:
(a) marketable obligations of the United States of America which are
backed by the full faith and credit of the United States of America;
(b) marketable obligations directly and fully guaranteed by the full
faith and credit of the United States of America;
(c) bankers' acceptances and certificates of deposit and other
interest-bearing obligations denominated in Dollars and issued by any bank with
capital, surplus and undivided profits aggregating at least $100,000,000, the
short-term securities of which are rated "A-1" by S&P, "P-1" by Moody's and "F1"
by Fitch (if rated by Fitch);
(d) repurchase obligations for underlying securities of the types
described in clauses (a), (b) and (c) above entered into with any bank of the
type described in clause (c) above;
(e) commercial paper rated at least "A-1+" by S&P, "P-1" by Moody's and
"F1" by Fitch (if rated by Fitch);
(f) freely redeemable shares in money market funds (including funds for
which the Trustee, any Noteholder or any affiliates of either of the foregoing
may act as sponsor or advisor
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<PAGE> 13
or for which any of the foregoing Persons may receive fee income) which money
market funds are rated at least "AAm" or "AAm-g" by S&P, "Aa1" by Moody's and
"AA" by Fitch (if rated by Fitch); and
(g) demand deposits, time deposits or certificates of deposit (having
original maturities of no more than 365 days) of depository institutions or
trust companies incorporated under the laws of the United States of America or
any state thereof (or domestic branches of any foreign bank) and subject to
supervision and examination by federal or state banking or depository
institution authorities; provided that at the time such investment, or the
commitment to make such investment, is entered into, the short-term debt rating
of such depository institution or trust company shall be at least "A-1" by S&P,
"P-1" by Moody's and "F1" by Fitch (if rated by Fitch).
Notwithstanding anything set forth in clauses (a) through (g) above,
any Eligible Investment must mature no later than the Business Day prior to the
next Payment Date.
Equipment. The equipment leased to or sold to a User or otherwise
financed pursuant to any Contract and any security interest in such equipment
and the Residual Interest therein or derived therefrom.
Euroclear Operator. Means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.
Event of Default. Has the meaning specified in Section 10.01.
Event of Servicer Termination. An event described in Section 9.01
hereof.
Exchange Act. Means the Securities Exchange Act of 1934, as amended.
Final Date. With respect to any Series, the date on which all amounts
due to the related Series Secured Parties have been indefeasibly paid in full.
Fitch. Means Fitch IBCA, Inc.
Governmental Authority. The United States of America, any State or
other political subdivision of either of the foregoing and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
Holder or Noteholder. Means (i), with respect to a Book-Entry Note, the
Person who is the owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency) and (ii) otherwise, the Registered Holder.
Increased Servicer Fee. Has the meaning ascribed to such term in
Section 9.02 hereof.
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Increased Servicer Fee Differential. Has the meaning ascribed to such
term in Section 9.02 hereof.
Indebtedness. Means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (excluding trade obligations and accrued
expenses incurred in the ordinary course of business); (b) obligations of such
Person as lessee under leases which should have been or should be, in accordance
with generally accepted accounting principles, recorded as capital leases; (c)
current liabilities of such Person in respect of unfunded vested benefits under
plans covered by Title IV of Employee Retirement Income Security Act of 1974, as
amended; (d) obligations issued for or liabilities incurred on the account of
such Person; (e) obligations or liabilities of such Person arising under
acceptance facilities, including obligations of such Person under any
guarantees, endorsements (other than for collection or deposit in the ordinary
course of business) and other contingent obligations to purchase, to provide
funds for payment, to supply funds to invest in any Person or otherwise to
assure a creditor against loss; (f) obligations of such Person secured by any
lien on property or assets of such Person, whether or not the obligations have
been assumed by such Person; or (g) obligations of such Person under any
interest rate or currency exchange agreement.
Indemnified Amounts. Has the meaning set forth in subsection 8.01(b)
hereof.
Indemnified Party. Has the meaning set forth in subsection 8.01(b)
hereof.
Independent Accountant. A firm of nationally recognized independent
certified public accountants with respect to Advanta Leasing Holding Corp.,
Advanta Corp., Advanta Business Services Corp., the Originator, the Servicer (if
other than Advanta Business Services Corp.), and/or the Obligors, as applicable,
within the meaning of the Securities Act.
Initial Unpaid Amounts. Means with respect to a Contract, the excess of
the aggregate amount of all Scheduled Payments due prior to the related Cut-Off
Date over the aggregate of all Scheduled Payments made prior to the related
Cut-Off Date with respect to such Contract.
Insolvency Event. Means, with respect to a specified Person, either of
the following events:
(i) the commencement of a petition seeking entry of a decree
or order for relief by a court having, jurisdiction in the premises
against such Person or any substantial part of such Person's assets in
an involuntary case under any applicable Federal or state bankruptcy,
insolvency, receivership, conservatorship or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of such Person or
for such Person or any substantial part of such Person's assets, or
ordering the winding-up or liquidation of such Person's affairs, and
such petition shall remain unstayed and in effect for a period of 60
consecutive days or immediately upon entry of such decree or order; or
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<PAGE> 15
(ii) the commencement by such Person of a voluntary case under
any applicable Federal or state bankruptcy, insolvency, receivership,
conservatorship or other similar law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to
the appointment or taking possession by a receiver, conservator,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of such Person for such Person or any substantial part of such
Person's assets, or the making, by such Person of any general
assignment for the benefit of creditors, or the failure by such Person
generally to pay its debts as such debts become due, or the admission
in writing by such Person of its inability generally to pay its debts
as they become due or the taking of action by such Person in
furtherance of any of the foregoing.
Insurance Policy. With respect to an item of Equipment and the related
Contract, any insurance policy or similar agreement required to be maintained by
the User pursuant to such Contract that covers physical damage to the Equipment
(including, policies procured by the Originator or the Servicer on behalf of the
User) or covering any liabilities arising from the Equipment or the use thereof
by the User.
Insurance Proceeds. With respect to an item of Equipment and the
related Contract, any amount received during a Collection Period pursuant to an
Insurance Policy issued with respect to such Equipment and the related Contract.
Investment Earnings. Any income or earnings received from the
investment of funds from time to time on deposit in or credited to any Series
Account in accordance with a Series Supplement, net of any investment expenses
and losses on any such investments.
Lien. Any security interest, mortgage, deed of trust, lien (statutory
or otherwise), charge, pledge, equity, hypothecation, assignment, deposit
arrangement, encumbrance, preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitations any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing, of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing.
List of Contracts. With respect to each Series the electronic or other
list of Contracts delivered to the Trustee and designating the Contracts pledged
to secure such Series. Each List of Contracts shall include for each Contract
listed thereon (a) a number identifying such Contract, (b) the Contract
Principal Balance, (c) the User, (d) the State in which the User's billing
address is located, (e) the scheduled maturity date of the Contract, (f) the
Scheduled Payment amount for such Contract, (g) the stated amount of the Booked
Residual Value if any, on such Contract, and (h) the Applicable Discount Rate.
Majority Control Parties. Means those Series Controlling Parties for
the outstanding Series, the Outstanding Amounts of which represent, in the
aggregate, 66-2/3% or more of the aggregate Outstanding Amounts for all
outstanding Series.
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Master Agreement. Means this Master Facility Agreement, as the same may
be amended, restated or otherwise modified from time to time.
Master Agreement Supplement. Means any Series Supplement or any other
document which amends or supplements this Master Agreement.
Maturity Date. When used with respect to any Note, means the date on
which the principal of such Note or an installment of principal becomes due and
payable as therein or herein provided, whether on the final scheduled Payment
Date or by declaration of acceleration, prepayment or otherwise.
Moody's. Moody's Investors Service, Inc.
Municipal Contract. Means a Contract under which the User is a state or
local Government or government agency.
Non-Monthly Payment Contracts. Means any Contract that does not require
the User to make regularly scheduled monthly payments.
Note Register and Note Registrar. Have the respective meanings
specified in Section 5.04.
Noteholders' Agent. Means any Person designated by one or more
Noteholders to be their "agent."
Notes. Any Note authenticated and delivered under this Master Agreement
and a Series Supplement.
Obligors. Means Advanta Leasing Receivables Corp. VIII and Advanta
Leasing Receivables Corp. IX, the Obligors under this Master Agreement.
Obligors' Order or Obligors' Request. With respect to an Obligor, a
written request or order signed by such Obligor and, with respect to more than
one Obligor, a written request or order signed by all such Obligors and, in each
case, delivered to the Trustee.
Officer's Certificate. Means a certificate signed by an Authorized
Officer or a Servicing Officer.
Offset Amount. The meaning ascribed to such term in Section 6.14
hereof.
Opinion of Counsel. A written opinion of counsel, who may be counsel
employed by the Servicer or the Originator or other counsel, in each case
acceptable to the named recipient thereof.
Organizational Documents. With respect to any Obligor, such Obligor's
articles of incorporation and bylaws.
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Original Issue Date. Means, for any Series the date of original issue
of such Series of Notes, as specified in the related Series Supplement.
Original Servicer Fee Rate. With respect to any Series, the rate at
which the Servicer Fee is calculated, as specified in the related Series
Supplement.
Originator. Means Advanta Business Services Corp., its successors and
assigns.
Outstanding. When used with respect to Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Master Agreement except,
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation; and
(ii) Notes for whose payment or prepayment money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent for the Holders of such Notes; and
(iii) Lost, destroyed or stolen notes in lieu of which other
Notes have been authenticated and delivered pursuant to Section 5.05
hereof, other than any such Notes in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Notes
are held by a bona fide purchaser in whose hands such Notes are valid
obligations of the Obligors;
provided, however, that any Notes which have been paid with proceeds of the
related Series Support shall continue to remain Outstanding for purposes of this
Master Agreement until the related Series Support Provider has been paid as
subrogee hereunder or reimbursed as evidenced by a written notice from the
related Series Support Provider delivered to the Trustee and the Servicer, and
the related Series Support Provider shall be deemed to be the Holder thereof to
the extent of any payments thereon made by the related Series Support Provider;
provided, further, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or under
any related document, Notes owned by the Obligors, the Servicer, the Originator
or any Affiliate of any of the foregoing shall be disregarded and deemed not to
be Outstanding, except that, in determining, whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Notes so owned that have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Notes and that the pledgee is not an Obligor, any other
obligor upon the Notes, the Originator or any Affiliate of any Obligor or of any
of the foregoing Persons.
Outstanding Amount. Means, with respect to any Series, the aggregate
principal amount of all Notes of such Series which are Outstanding at the date
of determination after giving effect to all distributions of principal on such
date of determination.
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<PAGE> 18
Overdue Payment. Any Scheduled Payment or portion thereof due on a
Contract and not received during the Collection Period in which such Scheduled
Payment was due.
Paying Agent. Means the Paying Agent appointed pursuant to Section
11.14 hereof.
Payment Date. With respect to a Series, the date specified therefor in
the related Series Supplement.
Person. Any legal person, including any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, Governmental Authority or any other entity.
Pledge. Means with respect to each Series, the pledge by the Obligors
of the related Series Trust Estate to the Trustee for the benefit of the
Noteholders of such Series in accordance with Section 3.01 hereof.
Pledged Property. With respect to any Series, the property described as
Pledged Property in the related Series Supplement.
Predecessor Note. Means every previous Note evidencing all or a portion
of the same debt as that evidenced by a particular Note; and, for the purposes
of this definition, any Note authenticated and delivered under Section 5.05 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Note shall be
deemed to evidence the same debt as the mutilated, destroyed, lost or stolen
Note.
Prepayment. With respect to a Collection Period and a Contract (except
a Defaulted Contract), the payment by the related User of all remaining
Scheduled Payments to become due on such Contract if the User has designated
such payment as a prepayment and the Servicer has consented to such prepayment.
Advance Payments and Residual Receipts are not "Prepayments."
Prepayment Amount. With respect to any Contract: (a) the Contract
Principal Balance of such Contract (without any deduction for any security
deposit paid by the related User, unless such security deposit has been applied
to the Contract Principal Balance pursuant to the Credit and Collection Policy
and deposited into the appropriate Series Account) as of the date of
reconveyance of such Contract to the related Obligor by the Trustee, plus (b)
the product of (i) the Contract Principal Balance as of the date of reconveyance
and (ii) one-twelfth of the Applicable Discount Rate, plus (c) the Booked
Residual Value for such Contract.
Principal Terms. With respect to any Series, (i) the name or
designation; (ii) the initial Outstanding Amount, the maximum Outstanding Amount
(or method for calculating such amounts); (iii) the interest rate (or method for
the determination thereof); (iv) the Payment Date or dates and the date or dates
from which interest shall accrue; (v) the method for allocating Collections to
Noteholders of such Series; (vi) the designation of any Series Accounts and the
terms governing the operation of any such Series Accounts; (vii) the method of
calculating the
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Servicer Fee with respect thereto; (viii) the terms of any form of Series
Support with respect thereto; (ix) the Series Termination Date; (x) the number
of Classes of Notes of such Series and, if such Series consists of more than one
Class, the rights and priorities of each such Class; (xi) the priority of such
Series with respect to any other Series; and (xii) any other terms of such
Series.
Proceeding. Any suit in equity, action at law or other judicial or
administrative proceeding.
Property. Any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
Rating Agencies. Moody's and Fitch and any other nationally recognized
rating agencies specified with respect to a Series in the Series Supplement for
such Series.
Rating Agency Condition. The notification in writing by each Rating
Agency to the Servicer and the Trustee that a proposed action will not result in
such Rating Agency reducing or withdrawing its then existing rating of the Notes
of any Class with respect to which it is a Rating Agency.
Record Date. With respect to any Series, as specified in the related
Series Supplement.
Records. Means, with respect to any Contract, all Contracts and other
documents, books, records and other information (including, without limitation,
Contract Files, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Contract, any Related
Security therefor and the related User.
Recoveries. Means all amounts received in respect of a Defaulted
Contract, including, without limitation, amounts received in connection with the
sale or other disposition of the related Equipment, amounts received in
connection with the sale or other disposition of the Defaulted Contracts,
Insurance Proceeds with respect to the related Equipment, or any other payments
made by or on behalf of the related User, including any amounts paid from a
Security Deposit and applied by the Servicer as a Recovery and net of costs of
collection in connection with such Defaulted Contract. For purposes of
determining Recoveries, costs of collection shall include payment to the
Servicer of unreimbursed Servicer Advances made in connection with such
Defaulted Contract. Residual Receipts do not constitute Recoveries.
Registered Holder. Means the Person in whose name a Note is registered
on the Note Register on the applicable Record Date.
Registered Notes. Has the meaning set forth in Section 4.01 hereof.
Related Security. With respect to any Contract, all of Obligors'
rights, title and interest in, to and under:
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(i) the Contribution Agreement and the Contribution Agreement
Supplement (including without limitation, all rights, remedies, powers
and privileges thereunder), pursuant to which, among, other things, the
Contract, the Contract Files and ABS' interest in the related Equipment
have been transferred to the Obligors;
(ii) the related Equipment, the Residual Receipts and all
other property from time to time securing or purporting to secure
obligations under such Contract, whether pursuant to such Contract or
otherwise, together with all UCC Financing Statements covering any such
property filed by or otherwise filed in favor of the Originator and/or
such Obligors (and, in the case of those UCC financial statements filed
in favor of the Obligors, assigned to the Trustee);
(iii) all guarantees, letters of credit, indemnities,
warranties, insurance policies (including, without limitation, the
Insurance Policies), and proceeds and premium refunds thereof and other
agreements or arrangements of whatever character from time to time
supporting or securing a payment of such Contract whether pursuant to
the Contract or otherwise (including, without limitation, the Security
Deposits);
(iv) all Recoveries related to such Contract;
(v) the Contract Files and other instruments, documents,
agreements, Computer Tapes, books, and records relating to such
Contract; and
(vi) all proceeds of the foregoing.
Release Events. Has the meaning ascribed in Section 6.11 hereof.
Requirements of Law. Any law, treaty, rule or regulation, or final
determination of an arbitrator or Governmental Authority, and, when used with
respect to any Person, the certificate of incorporation and bylaws or other
organizational or governing, documents of such Person.
Residual Interest. The Residual Receipts including, without limitation,
the right to receive and retain Residual Receipts as owner thereof.
Residual Receipts. With respect to any Collection Period, all residual
proceeds received by the Servicer, including, without limitation, proceeds of
the sale or re-lease of the Equipment received by the Servicer in the event the
related User does not purchase the Equipment at the end of the related Contract,
any amounts collected by the Servicer as judgments against a User or others
related to the failure of such User to pay any required amounts under the
related Contract or to return the Equipment, including any amounts relating to a
Security Deposit applied by the Servicer as Residual Receipts, plus any other
amounts which are received by the Servicer and applied against the Booked
Residual Value of such Contract in accordance with the Servicer's servicing
standards during such Collection Period, in each case as reduced by any
reasonably incurred out-of-pocket expenses incurred by the Servicer in enforcing
such Contract or in liquidating such Equipment.
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Responsible Officer. When used with respect to the Trustee, any officer
assigned to the Corporate Trust Office (or any successor thereto), including any
Managing Director, Director, Associate, Assistant Vice President, any trust
officer or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and having a
direct responsibility for the administration of this Master Agreement, and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Rule 144A Information. Has the meaning specified in Section 14.10
hereof.
S&P. Standard & Poor's Ratings Services.
Scheduled Payments. With respect to any Contract, the stated periodic
payments (exclusive of any amounts in respect of insurance or taxes) set forth
in such Contract due from the User in the related Collection Period.
Securities Act. The Securities Act of 1933, as amended, and the
applicable published rules and regulations thereunder.
Security Deposit. Any amount paid to the Originator by a User as a
security deposit on a Contract, which has not previously been refunded to such
User.
Series. With respect to any Notes, means those Notes issued pursuant to
the same Series Supplement.
Series Accounts. Any deposit, trust, escrow, collateral, reserve or
similar account established and maintained by the Trustee for the benefit of the
Noteholders of any Series or Class as specified in any Series Supplement.
Series Closing Date. With respect to any Series, the date designated in
the related Series Supplement as the closing date for such Series.
Series Controlling Party. With respect to any Series on any date the
Person or Persons designated as such in the related Series Supplement.
Series Related Documents. With respect to a Series, has the meaning
specified therefor in the related Supplement.
Series Secured Obligations. Has the meaning specified therefor in the
related Series Supplement.
Series Secured Parties. Has the meaning specified in the related Series
Supplement.
Series Supplement. With respect to any Series, a Supplement to this
Master Agreement setting forth the terms of such Series and, executed and
delivered in connection with the original issuance of the Notes of such Series,
and all amendments thereof and supplements thereto.
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Series Support. The rights and benefits provided to the Trustee or the
Noteholders of any Series or Class pursuant to any letter of credit, surety
bond, cash collateral account, spread account, guaranteed rate agreement,
maturity liquidity facility, interest rate swap agreement, tax protection
agreement or other similar arrangement. The overcollateralization provided to
any Series and the subordination of any Series or Class to another Series or
Class shall be deemed to be Series Support. Notwithstanding that such Series
Support may be held by or in favor of the Trustee for the benefit of any Series
or Class, only those Series or Classes to which such Series Support relates
shall have any rights with respect thereto and all payments thereunder received
by the Trustee shall be distributed exclusively as prescribed in the Series
Supplement relating to such Series or Class.
Series Support Provider. The Person providing any Series Support, other
than the Noteholders of any Series or Class which is subordinated to another
Class or Series.
Series Termination Date. Has the meaning ascribed in the Series
Supplement.
Series Trust Estate. With respect to a Series, has the meaning,
specified therefor in the related Series Supplement.
Series Trustee-Secured Obligations. With respect to a Series, has the
meaning specified in the related Series Supplement.
Servicer. The Person performing the duties of the Servicer hereunder,
which shall initially be Advanta Business Services Corp. and may subsequently be
(i) any Person which is an Affiliate of Advanta Business Services Corp. and has
fulfilled the conditions set forth in Section 8.02 of this Master Agreement or
(ii) a successor Servicer appointed as provided in Section 9.02 of this Master
Agreement.
Servicer Advance. With respect to any Series, the amount, if any, which
the Servicer at its option advances with respect to Overdue Payments, in
accordance with the related Series Supplement.
Servicer Fee. With respect to each Series, the fee payable to the
Servicer on each Payment Date in consideration of the Servicer's performance of
its duties pursuant to Article VI with respect to the Series Trust Estate
related to such Series, payable as provided in the related Series Supplement.
Servicer Termination Notice. The notice described in subsection 9.01(a)
hereof.
Servicer's Certificate. With respect to each Series Trust Estate, a
written informational statement, substantially in the form prescribed by the
related Series Supplement, to be provided by the Servicer in accordance with the
related Series Supplement and signed by a Servicing Officer and furnished by the
Servicer to the Trustee and to any other Persons which are entitled to such
certificate under the terms of any Series Supplement.
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Servicing Charges. The sum of (i) any late payment charges paid by a
User if the Servicer has made Servicer Advances on such Contract and (ii) any
other incidental charges or fees received from a User, including taxes and
insurance premium payments.
Servicing Officer. Those officers of the Servicer involved in, or
responsible for, the administration and servicing of the Contracts, as
identified on the list of Servicing Officers furnished by the Servicer to the
Trustee and the Noteholders from time to time.
State. Any state of the United States of America, its territories and
possessions and the District of Columbia.
Supplement. Each supplement to amendment of this Master Agreement.
Support Default. With respect to a Series, those events specified in
the related Series Supplement.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended from
time to time.
Trustee. Means the Person named as the "Trustee" in the first paragraph
of this instrument unless a successor Trustee shall have become such pursuant to
the applicable provisions of this Master Agreement, and thereafter "Trustee"
shall mean or include the Person who is then the Trustee hereunder.
UCC. The Uniform Commercial Code as in effect in the applicable
jurisdiction.
Unregistered Note. Any Note which is not registered under the
Securities Act.
User. Any obligor, under any Contract, whose obligations thereunder
constitute the source of payments under such Contract, including any guarantor
of such obligations.
Section 1.02. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Master Agreement to be given or taken by
the Holders of the related Notes may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agents duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are, delivered to the Trustee and, where it is hereby expressly required, to the
Obligors. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing, appointing any such agent shall be sufficient for
any purpose of this Master Agreement and (subject to Section 11.01) conclusive
in favor of the Trustee and the Obligors, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Trustee deems
sufficient.
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(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Obligors in
reliance thereon, whether or not notation of such action is made upon such Note.
Section 1.03. Notice to Holders: Waiver. Where this Master Agreement or
any Series Supplement provides for notice to the Holders of the related Notes of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first class postage prepaid, to
each Holder affected by such event, at such Holder's address as it appears in
the Note Register, or if in writing and by facsimile, to the facsimile number
provided by a Holder to the Person giving such notice, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders, and any notice that is mailed in the manner herein provided shall
conclusively be presumed to have been duly given. Where this Master Agreement or
any Series Supplement provides for notice in any manner, such notice may be
waived in writing, by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Where any Series Supplement provides for notice to the Rating Agencies,
failure to give such notice shall not affect any rights or obligations created
hereunder and shall not under any circumstance constitute a Default or Event of
Default.
Section 1.04. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Master Agreement, any Series Supplement or any of the
Notes to the contrary, the Obligors may enter into any agreement with any Holder
of a Note providing for a method of payment, or notice by the Trustee or any
Paying Agent to such Holder, that is different from the methods provided for in
this Master Agreement or the related Series Supplement for such payments or
notices. The Obligors will furnish to the Trustee a copy of each such agreement
and the Trustee will cause payments to be made and notices to be given in
accordance with such agreements provided the Trustee is not adversely affected
thereby.
Section 1.05. Conflict with Trust Indenture Act. If this Master
Agreement is qualified under the Trust Indenture Act and any provision hereof
limits, qualifies or conflicts with another provision hereof that is deemed to
be included in and to govern this Master Agreement by any of the provisions of
the Trust Indenture Act, such provision deemed to be included herein shall
control.
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Section 1.06. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.07. Successors and Assigns. All covenants and agreements in
this Master Agreement or any Series Supplement by the Servicer shall bind the
successors and assigns of the Servicer and all covenants and agreements in this
Master Agreement or any Series Supplement by any Obligor shall bind the
successors and assigns of such Obligor, whether so expressed or not.
All agreements by the Trustee in this Master Agreement or any Series
Supplement shall bind its successors and assigns.
Section 1.08. Benefits of Master Agreement. To the extent specified in
the related Series Supplement, the related Series Support Provider and its
successors and assigns shall be a third-party beneficiary to the provisions of
this Master Agreement and such Series Supplement, insofar as such provisions
apply to the related Notes, and shall be entitled to rely upon and directly to
enforce such provisions of this Master Agreement and such Series Supplement so
long as no Support Default shall have occurred and be continuing with respect to
such Series Support Provider. Except as aforesaid, nothing in this Master
Agreement or any Series Supplement or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders of the related Notes, and any other party secured hereunder, and
any other Person with an ownership interest in any part of the related Series
Trust Estate, any benefit or any equal or equitable right, remedy or claim under
this Master Agreement. The related Series Support Provider may disclaim any of
its rights and powers under this Master Agreement (in which case the Trustee may
exercise such right or power hereunder), but not its duties and obligations
under the related Series Support, upon delivery of a written notice to the
Trustee and to the Obligors.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. Representations, Warranties and Covenants of Obligors. By
its execution and delivery of this Master Agreement each Obligor hereby makes
each of the following representations, warranties and covenants to the Trustee
and the Noteholders of the related Series on which representations, warranties
and covenants the Trustee relies in accepting the related Series Trust Estate in
trust and on which the Noteholders of the related Series have relied in agreeing
to purchase the related Notes. Such representations, warranties and covenants
are deemed to be remade and reaffirmed on the Series Closing Date for each
Series, and shall survive the date of the making or remaking of such
representations and warranties. Each of the covenants of each Obligor with
respect to a Series shall continue until the Final Date of such Series.
(a) Each Obligor represents and warrants, as to itself, that:
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(i) Corporate Existence and Power. Such Obligor is a legal entity duly
organized, validly existing and in good standing under the laws of the State of
its formation and has all corporate power and all governmental licenses,
authorizations, consents and approvals required to carry on its business in each
jurisdiction in which its business is conducted.
(ii) No Conflict. The execution, delivery and performance by such
Obligor of this Master Agreement, the Contribution Agreement and the Series
Related Documents to which it is a party, are within its corporate powers, have
been duly authorized by all necessary corporate action, do not contravene or
violate (i) its Organizational Documents, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or by which it or any of its property is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any Adverse Claim on assets of such Obligor or its subsidiaries (except the
interest conveyed to the Trustee); and no transaction contemplated hereby
requires compliance with any bulk sales act or similar law. Each of the Series
Related Documents to which such Obligor is a party has been duly executed and
delivered by such Obligor.
(iii) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
such Obligor of this Master Agreement, the Contribution Agreement and the Series
Related Documents to which such Obligor is a party, except for such
authorizations, approvals, actions, notices and filings as have already been
obtained, taken or made in connection with Municipal Contracts.
(iv) Binding Effect. Each of this Master Agreement, the Contribution
Agreement and the Series Related Documents to which such Obligor is a party
constitutes the legal, valid and binding obligation of such Obligor, enforceable
against each Obligor, jointly and severally, in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally or general equitable principles.
(v) Accuracy of Information. All information furnished in writing by
such Obligor to the Trustee on or prior to the related Series Closing Date for
purposes of or in connection with the Series Related Documents or any Pledge is
true, accurate and complete in every material respect on the date such
information is stated or certified, and all such information hereafter furnished
by such Obligor to the Trustee will be, true, accurate and complete in every
material respect, on the date such information is stated or certified.
(vi) Use of Proceeds. No proceeds of any sale of the Notes will be used
(i) for a purpose which violates, or would be inconsistent with, Regulation T, U
or X promulgated by the Board of Governors of the Federal Reserve System from
time to time
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or (ii) to acquire any security in any transaction which is subject to Section
13 or Section 14 of the Securities Exchange Act of 1934, as amended.
(vii) Good Title; Perfection. Immediately prior to each Pledge
hereunder or under a Series Supplement, (i) such Obligor, if conveying Contracts
and such Obligor's right in the Related Security is the legal and beneficial
owner of the Contracts and the Related Security subject to such Pledge and is
taking or has taken all requisite steps to obtain on its behalf a first priority
perfected security interest in, the Equipment related to such contracts and the
Related Security with respect to such equipment (other than Equipment valued at
$25,000 or less on its acquisition date in which neither the Originator nor such
Obligor has reserved a perfected security interests) and the title and interest
of such Obligor is free and clear of any Adverse Claim except as created by this
Master Agreement, the Contribution Agreement and the Series Related Documents,
and such Obligor has the legal right to Pledge the Contracts and the associated
Collections and Related Security to the Trustee and (ii) such Obligor, if
conveying the Residual Interest in the Equipment, is the legal and beneficial
owner of such Residual Interest in each case, free and clear of any Adverse
Claim except as created by this Master Agreement, the Contribution Agreement and
the Series Related Documents, and such Obligor has the legal right to Pledge
such Residual Interest.
(viii) Places of Business. Except in accordance with Section 3.05(b),
such Obligor will not move its chief executive office to another location and/or
maintain any Records at any other locations.
(ix) No Proceedings. There are no proceedings or investigations pending
or, to the best knowledge of such Obligor, threatened before any Governmental
Authority (i) asserting, the invalidity of this Master Agreement, the
Contribution Agreement or the Series Related Documents, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this Master
Agreement, the Contribution Agreement or the Series Related Documents, (iii)
seeking any determination or ruling that, in the reasonable judgment of such
Obligor, would materially and adversely affect the performance by such Obligor
of its obligations under this Master Agreement, the Contribution Agreement or
the Series Related Documents and (iv) seeking any determination or ruling that
would materially and adversely affect the validity or enforceability of this
Master Agreement, the Contribution Agreement or the Series Related Documents.
(x) Selection Procedures. No procedures believed by it to be adverse to
the interests of Noteholders or the Series Trust Estate were utilized by the
Obligors in identifying and/or selecting the Contracts. In addition, each
Contract shall have been underwritten in accordance with and satisfy the
standards of any Credit and Collection Policy that has been established by the
Obligors or the Originator and is then in effect.
(xi) Taxes. It has filed or caused to be filed all tax returns that, to
its knowledge are required to be filed and has paid all taxes shown to be due
and payable on such returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental
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Authority (other than any amount of tax due, the validity of which is
currently being contested in good faith by appropriate proceedings and
with respect to which reserves in accordance with generally accepted
accounted principles have been provided on the books of the Obligors);
no tax lien has been filed and, to the Obligor's knowledge, no claim is
being asserted, with respect to any such tax, fee or other charge.
Section 2.02. Representations, Warranties and Covenants of Servicer.
The Servicer hereby makes the following representations, warranties and
covenants to the Trustee and the Noteholders of the related Series on which
representations, warranties and covenants the Trustee relies in accepting the
related Series Trust Estate in trust and in authenticating the related Notes and
on which the Noteholders of such Series have relied in purchasing their Notes.
Such representations, warranties and covenants shall be deemed to be made and
affirmed on each Series Closing Date and shall survive the date of the making or
remaking of such representations and warranties. Each of the Servicer's
covenants shall continue until the Final Date of the last outstanding Series.
(a) The Servicer represents and warrants, as to itself and its
responsibilities, that:
(i) Organization and Good Standing. The Servicer is a
corporation duly organized, validly existing, in good standing under
the laws of the State of Delaware (or, if other than Advanta Business
Services Corp., in the applicable state of its incorporation), has the
power to own its assets and to transact the business in which it is
presently engaged, and had at all relevant times and now has the power,
authority and legal right to service the related Series Trust Estate.
(ii) Due Qualification. The Servicer is qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification or in
which the failure to so qualify would have a material adverse effect on
its ability to perform its obligations hereunder.
(iii)Power and Authority. The Servicer has the power,
authority and legal right to execute, deliver and perform this Master
Agreement, the Contribution Agreement and the Series Related Documents
to which it is a party and the execution, delivery and performance of
this Master Agreement, the Contribution Agreement and the other Series
Related Documents to which it is a party have been duly authorized by
the Servicer by all necessary corporate action.
(iv) Binding Obligation. This Master Agreement, the
Contribution Agreement and the Series Related Documents to which the
Servicer is a party (assuming due authorization, execution and delivery
by each of the other parties hereto and thereto), constitute legal,
valid and binding obligations of the Servicer, enforceable against the
Servicer in accordance with their respective terms, except that (A)
such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws (whether statutory,
regulatory or decisional) now or hereafter in effect relating, to
creditors' rights generally and (B) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
certain equitable defenses and to the
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discretion of the court before which any proceeding therefor may be
brought, whether in a proceeding at law or in equity.
(v) No Violation. The consummation by the Servicer of the
transactions contemplated by this Master Agreement, the Contribution
Agreement and the Series Related Documents to which it is a party and
the fulfillment of the terms hereof and thereof will not conflict with,
result in any breach of any of the terms and provisions of, or
constitute (with or without notice, lapse of time or both) a default
under, the charter documents or bylaws of the Servicer, or any material
indenture, agreement, mortgage, deed of trust or other instrument to
which the Servicer is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its material properties
pursuant to the terms of any such indenture, agreement, mortgage, deed
of trust or other instrument, other than as contemplated by the
Contribution Agreement and this Master Agreement, or violate any law
or, to the best of the Servicer's knowledge, any order, rule or
regulation applicable to the Servicer of any court or other
Governmental Authority having a jurisdiction over the Servicer or any
of its properties.
(vi) No Proceedings. There are no proceedings or
investigations to which the Servicer, or any of the Servicer's
Affiliates, is a party pending or, to the best of the Servicer's
knowledge, threatened before any court or other Governmental Authority
(A) asserting the invalidity of this Master Agreement, the Contribution
Agreement or any of the Series Related Documents, (B) seeking to
prevent the consummation of any of the transactions contemplated by
this Master Agreement, the Contribution Agreement or any of the Series
Related Documents (C) seeking any determination or ruling, that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this Master
Agreement, the Contribution Agreement or any of the Series Related
Documents to which it is a party.
(vii) Approvals. All approvals, authorizations, consents,
orders or other actions of any Governmental Authority or any other
Person required to be obtained or taken by, or on the part of, the
Servicer in connection with the execution and delivery of this Master
Agreement, the Contribution Agreement or any of the Series Related
Documents to which it is a party have been or will be taken or obtained
on or prior to the date so required to be taken or obtained.
(viii) Information. Each certificate, information, exhibit,
financial statement, document, book or record or report furnished by
the Servicer to the Trustee, the Obligors, the Rating Agencies or any
Noteholder in connection with this Master Agreement, any Series
Supplement, any Series Related Document or the transactions
contemplated hereby is accurate in all material respects as of its
date, when considered as a whole with other such documents, and no such
document contains any material misstatement of fact or omits to state a
material fact or any fact necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
materially misleading as of its date.
(ix) Place of Business. The chief executive office of the
Servicer is at P.O. Box 1228, 1020 Laurel Oak Road, Voorhees, New
Jersey 08043. The Servicer shall give
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the Trustee and each Obligor at least 30 days' prior written notice of
any relocation of such chief executive office.
(x) Year 2000 Compliance. Any computer reprogramming required
by ABS to properly perform its obligations under this Master Agreement
and all Series Supplements on and after January 1, 2000 will be
completed prior to January 1, 2000.
(b) The Servicer covenants as to the Pledged Property comprising each
Series Trust Estate:
(i) Lien in Force. The Servicer shall not release or assign
any Lien in favor of the Trustee on any item of Equipment related to
any Contract in whole or in part, except as expressly permitted
hereunder.
(ii) Fulfill Obligation. The Servicer will duly fulfill and
comply, in all material respects, with all obligations on the part of
the "lessor" to be performed and fulfilled under or in connection with
each Contract and all of the Servicer's other obligations to be
fulfilled under or in connection with each Series Trust Estate. The
Servicer will not amend, rescind, cancel or modify any Contract or any
term or provision thereof, except as contemplated herein, or, with
respect to Contracts contained in a Series Trust Estate, as
contemplated in the related Series Supplement, and the Servicer will
not do anything, that would materially impair the rights of the
Noteholders with respect to any Series Trust Estate, except as
contemplated herein or in the related Series Supplement.
(iii) Books and Records. The Servicer (1) will (A) maintain
its books and records, as Servicer, separate from the books and records
of the Originator and of any Obligor, (B) maintain bank accounts
separate from those of the Originator and of any Obligor and (C)
conduct its business in an office separate from that of any Obligor and
(2) will not (X) take any action that would cause the dissolution or
liquidation of the Originator and of any Obligor, (Y) guarantee
(directly or indirectly), endorse or otherwise become contingently
liable (directly or indirectly) for the obligations of the Originator
or any Obligor (except as expressly permitted hereunder) including a
merger, consolidation or other transfer of assets and assumption of
obligations permitted by Section 8.02 hereof involving the Servicer and
the Originator) or (Z) institute against the Originator or any Obligor,
or join any other person in instituting against the Originator and of
any Obligor, any case, proceeding, or other action under any existing,
or future bankruptcy, insolvency or similar laws.
ARTICLE III
PLEDGING THE TRUST ESTATE
Section 3.01. Series Trust Estates. In order to secure the due and
punctual payment of the principal of and interest on the Notes of the related
Series and all other Series Secured Obligations of the related Series when and
as the same shall become due and payable, whether as
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scheduled, by declaration of acceleration, prepayment or otherwise, according to
the terms of this Master Agreement, the related Series Supplement and the
related Notes, the Obligors shall pledge the related Series Trust Estate to and
grant a security interest in the related Series Trust Estate to the Trustee for
the benefit of the Holders of the related Series and the other Series Secured
Parties.
Section 3.02. Preservation of Series Collateral. Subject to the rights,
powers and authorities granted to the Trustee and the related Series Controlling
Party specified in the Series Supplement, the Obligors shall take such action as
is necessary and proper with respect to the Series Trust Estate in order to
preserve and maintain such Series Trust Estate. The Obligors will do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, such instruments of transfer or take such other steps or actions as
may be necessary, or required by the Servicer or the Trustee to perfect the
security interests granted hereunder in the Series Trust Estate, to ensure that
such security interests rank prior to all other Liens and to preserve the
priority of such security interests and the validity and enforceability thereof.
Upon the delivery of any portion of any Series Trust Estate to the Trustee, the
Obligors shall be obligated to execute such documents and perform such actions
as are necessary to create in the Trustee for the benefit of the related Series
Secured Parties a valid first Lien on, and valid and perfected first priority
security interest in, such Series Trust Estate so delivered, free and clear of
any other Lien together with satisfactory assurances thereof, and to pay any
reasonable costs incurred by any of the Servicer or Trustee or otherwise in
connection with such delivery; except that with respect to any interest in the
Equipment the Obligors shall be obligated to perfect their interest therein with
respect to any Series Trust Estate only to the extent provided in the related
Series Supplement.
Section 3.03. Waiver of Stay or Extension Laws; Marshalling of Assets.
Each Obligor covenants, to the fullest extent permitted by applicable law, that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any appraisement, valuation, stay, extension
or redemption law wherever enacted, now or at any time hereafter in force, in
order to prevent or hinder the enforcement of this Master Agreement, any Series
Supplement or any part hereof or thereof, to the fullest extent permitted by
applicable law, for itself and all who may claim under it, hereby waives the
benefit of all such laws, 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.
Each Obligor, for itself and all who may claim under it, waives, to the fullest
extent permitted by applicable law, all right to have any Series Trust Estate
marshalled upon any foreclosure or other disposition thereof.
Section 3.04. Noninterference, Etc. No Obligor shall (i) waive or alter
any of its rights under any portion of any Series Trust Estate (or any agreement
or instrument relating thereto) without the prior written consent of the Series
Controlling Party, which shall be given as provided in the related Series
Supplement; or (ii) take any action, or fail to take any action, if such action
or failure to take action will interfere with the enforcement of any rights
under the Series Related Documents.
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Section 3.05. Obligor Changes.
(a) Change in Name Structure, Etc. No Obligor shall change its name,
identity or corporate structure unless it shall have given the Trustee at least
30 days prior written notice thereof and shall effect any necessary or
appropriate assignments or amendments thereto and filings of financing
statements or amendments thereto within 60 days of such change.
(b) Relocation of the Obligors. No Obligor shall change its principal
executive office unless it gives the Trustee at least 30 days prior written
notice of any relocation of its principal executive office and effects within 60
days of such change whatever appropriate recordations and filings of financing
statements or amendments thereto are necessary.
Section 3.06. Limited Recourse to Obligors.
(a) Notwithstanding anything to the contrary contained herein, the
Trustee and each Holder by such Holder's acceptance of a Note hereunder agree
that the obligations of the Obligors hereunder, including, without limitation,
the obligations of the Obligors in respect of the Notes shall be payable solely
from the related Series Trust Estate and that neither the Trustee nor any Holder
shall look to any other Property or assets of such Obligors including,
specifically but without limitation, the Series Trust Estate with respect to any
other Series. No recourse shall be had for the Payment of any amount owing in
respect of any Obligor's obligations hereunder or for any payment obligation or
claim arising out of or based on this Master Agreement against any Affiliate,
agent, stockholder, employee, officer, director or incorporator of such Obligor.
(b) The Obligors' obligation to pay certain fees or expenses under, or
claims arising out of, this Master Agreement shall be limited to moneys
available to such Obligors from the related Series Trust Estate in accordance
with the payment priority set forth in the related Series Supplement, and to the
extent such funds are insufficient to pay such fees or expenses, it shall not
constitute a claim against the Obligors.
Section 3.07. Authorization of Actions to be Taken by the Trustee.
(a) The Trustee may take all actions it deems necessary or appropriate
in order to enforce or exercise its rights under each Series Supplement in
accordance with and subject to the provisions thereof and hereof and, subject to
the provisions of Section 11.03(e) of this Master Agreement, shall take action
in order to enforce or exercise such rights under a Series Supplement in
accordance with the terms of such Series Supplement and subject to the
limitations therein, upon the written direction of the holders of such amount of
the Notes of such Series as shall be provided in the Series Supplement. Subject
to the provisions thereof and hereof, the Trustee shall have power to institute
and to maintain suits and proceedings to prevent any impairment of the related
Series Trust Estate by any acts which may be unlawful or in violation of the
related Series Supplement or this Master Agreement, and suits and proceedings to
preserve or protect its interests and the interests of the Holders of the
related Notes in the related Series Trust Estate (including power to institute
and maintain suits or proceedings to restrain the enforcement of or compliance
with any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or
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compliance with, such enactment, rule or order would impair the security
hereunder or be prejudicial to the interests of such Holders or of the Trustee).
(b) The Trustee is authorized to receive any funds for the benefit of
the Holders distributed under the related Series Supplement and to make further
distributions of such funds to the Holders of the related Notes according to the
provisions of such Series Supplement.
Section 3.08. Termination of Security Interests. Upon the payment in
full of all secured obligations secured by a specific Series Supplement, the
Trustee shall, at the written request of the Obligors and with the written
consent of the Series Support Provider, if any, deliver such certificates,
notices, and instruments stating that all obligations secured by such Series
Supplement have been paid in full, and releasing the Trustee's Lien on the
related Series Trust Estate with respect to such Series Secured Obligations. In
addition, the Trustee shall, if and as provided in the related Series
Supplement, release the Lien on any Contract or other Property which has been
sold or otherwise disposed of by the Obligors.
Section 3.09. Filing; Maintenance of Contract Files. (a) On or prior to
the Series Closing Date with respect to a Series, the Obligors shall, and shall
cause the Originator to, file blanket UCC-1 financing statements with respect to
the related Series Trust Estate (which, in the case of any UCC-1 Financing
Statement filed by the Obligors against the Originator, shall be assigned by the
Obligors to the Trustee). Notwithstanding the foregoing, it is expressly agreed
that no such UCC-1 Financing Statement shall be filed with respect to the
Originator's ownership interest in any particular piece of Equipment, except to
the extent then required by the Servicer's Credit and Collection Policy, or as
may otherwise be required in the related Contribution Agreement Supplement or
Series Supplement. On or prior to each Series Closing Date the Obligors shall,
and shall cause the Originator to mark its internal records (including, where
applicable, its electronic ledger) to reflect (x) the conveyance of the related
Pledged Property from the Originator to the Obligors and (y) the Pledge of the
related Pledged Property to the Trustee. In no event shall the Trustee be
responsible for the filing, monitoring or maintenance of any UCC financing
statements, amendments or continuation statements hereunder.
Section 3.10. Costs and Expenses. The Obligors agree to pay all
reasonable costs and disbursements (and in the event the Obligors are unable to
pay such costs and disbursements, the Servicer shall pay such amounts) in
connection with the perfection and the maintenance of perfection and priority,
as against all third parties, of the Trustee's rights, title and interests in
and to each Series Trust Estate (other than the Equipment, except as otherwise
expressly agreed to herein).
ARTICLE IV
NOTE FORMS
Section 4.01. Forms Generally. The Notes of each Series shall be in
substantially the form set forth in the related Series Supplement, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Master Agreement or the related Series Supplement,
and may have such letters, numbers or other marks of identification
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and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Notes, as evidenced by their execution
of the Notes.
The Notes of any Series or Class shall be issued in fully registered
form (but may be in uncertificated form) ("Registered Notes") and shall, to the
extent represented by physical certificates, be substantially in the form of the
exhibits with respect thereto attached to the applicable Series Supplement.
The Trustee's certificate of authentication shall be in substantially
the form set forth in this Article.
The Notes shall be printed, lithographed or engraved on steel engraved
borders or may be produced in any other manner (provided that if any Notes are
to be listed on any securities exchange, then in any such manner as may be
permitted by the rules of any such securities exchange, all as determined by the
officers executing such Notes, as evidenced by their execution of such Notes).
Section 4.02. Form of Trustee's Certificate of Authentication. This is
one of the Notes designated herein and issued pursuant to in the
within-mentioned Master Agreement and the within-mentioned Series Supplement
thereto.
-----------------------------------,
not in its individual capacity, but
solely as Trustee
By
--------------------------------,
Authorized Signatory
Section 4.03. Securities Legend. Each Unregistered Note issued
hereunder shall bear such legend as are required by the respective Series
Supplement.
ARTICLE V
THE NOTES
Section 5.01. Amount Limited; Issuable in Series. The aggregate
principal amount of Notes which may be authenticated and delivered and
Outstanding at any time under this Master Agreement is not limited; provided
that any Series Supplement may so limit the aggregate principal amount of Notes
of the related Series. The Notes shall be issued in one or more Series, and may
be issued in Classes within a Series.
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No Series of Notes shall be issued under this Master Agreement unless
such Notes have been authorized pursuant to a Series Supplement, and all
conditions precedent to the issuance thereof, as specified in the related Series
Supplement, shall have been satisfied.
All Notes of each Series issued under this Master Agreement shall be in
all respects equally and ratably entitled to the benefits hereof and secured by
the related Series Trust Estate without preference, priority or distinction on
account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Master Agreement and the
related Series Supplement.
With the exception of the initial Series of Notes issued under this
Master Agreement and the Series Supplement hereto dated August 26, 1999, which
Series is designated as Series 1999-1, no Series of Notes may be issued unless
the Rating Agency Condition has been met with respect to the issuance of such
Series.
Section 5.02. Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of each of the Obligors by any of the Authorized
Officers of such Obligor. The signature of any of these officers on the Notes
may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who
were at the time of execution of such Notes the proper officers of the Obligors
shall bind the Obligors, notwithstanding that such individuals or any of them do
not hold such offices at the time of the authentication and delivery of such
Notes.
At any time and from time to time after the execution and delivery of
this Master Agreement and the related Series Supplement, and upon satisfaction
of all the conditions set forth in the related Series Supplement, the Obligors
may deliver Notes of the related Series (including Notes of any Class within
such Series) executed by the Obligors to the Trustee or Authenticating Agent for
authentication, together with an Obligors' Order for the authentication and
delivery of such Notes and an Officer's Certificate that all conditions
precedent for such issuance have been satisfied, and the Trustee in accordance
with the Obligors' Order shall authenticate and make available for delivery such
Notes.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Master Agreement or
any Series Supplement or be valid or obligatory for any purpose unless there
appears on such Note a certificate of authentication substantially in the form
provided for herein executed by the Trustee or the Authenticating Agent by
manual signature, and such certificate of authentication upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Master Agreement and the related Series Supplement. Notwithstanding the
foregoing, if any Note shall have been authenticated and delivered hereunder but
never issued and sold by the Obligors, and the Obligors shall deliver such Note
to the Trustee or the Authenticating Agent for cancellation as provided in
Section 5.08 together with a written statement (which need not comply with
Section 1.02 and need not be accompanied by an Opinion of Counsel) stating that
such Note has never been issued and sold by the Obligors, for all purposes of
this Master Agreement such Note shall
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be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Master Agreement.
Section 5.03. Temporary Notes. Pending the preparation of definitive
Notes of any Series (or of any Class within a Series), the Obligors may execute,
and, upon receipt of an Obligors' Order, the Trustee or the Authenticating Agent
shall authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, reproduced or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Notes in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as evidenced by
their execution of such Notes.
If temporary Notes of any Series (or of any Class within a Series) are
issued, Obligors will cause definitive Notes of that Series (or Class) to be
prepared without unreasonable delay. After the preparation of definitive Notes
of such Series (or Class), such temporary Notes shall be exchangeable for
definitive Notes of such Series (or Class) upon surrender of the temporary Notes
at the office or agency of the Obligors to be maintained as provided in Section
14.02. Upon surrender for cancellation of any one or more temporary Notes the
Obligors shall execute, and the Trustee or the Authenticating Agent shall
authenticate and make available for delivery, in exchange therefor a like
principal amount of definitive Notes of the same Series (or Class) and tenor, of
authorized denominations. Until so exchanged, the temporary Notes of any Series
(or Class) shall in all respects be entitled to the same benefits under this
Master Agreement and the related Series Supplement as definitive Notes of such
Series (or Class).
Section 5.04. Registration, Registration of Transfer and Exchange,
Transfer Restrictions. The Obligors shall cause to be kept a register (the "Note
Register") in which, subject to such reasonable regulations as they may
prescribe, the Obligors shall provide for the registration of Notes and of
transfers of the Notes. The Trustee is hereby initially appointed "Note
Registrar" for the purpose of registering Notes and transfers of the Notes as
herein provided. Upon any resignation of any Note Registrar, the Obligors shall
promptly appoint a successor or, if the Obligors elect not to make such an
appointment, one of the Obligors shall assume the duties of the Note Registrar.
If a Person other than the Trustee is appointed by the Obligors as Note
Registrar, the Obligors will give the Trustee prompt written notice of the
appointment of such Note Registrar and of the location, and any change in the
location, of the Note Registrar, and the Trustee shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof, and the
Trustee shall have the right to rely conclusively upon a certificate executed on
behalf of the Note Registrar by an executive officer thereof as to the names and
addresses of the Holders of the Notes and the principal amounts and number of
such Notes.
Upon surrender for registration of transfer of any Note at the office
of the Note Registrar, the Obligors shall execute, and the Trustee or the
Authenticating Agent shall authenticate and make available for delivery, in the
name of the designated transferee or transferees, one or more new Notes of any
authorized denominations and of a like tenor and aggregate principal amount.
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At the option of a Registered Noteholder, Registered Notes (of the same
Series and Class) may be exchanged for other Registered Notes of authorized
denominations upon surrender of the Registered Notes to be exchanged at the
office of the Note Registrar. Whenever any Notes are so surrendered for
exchange, the Obligors shall execute, and the Trustee or the Authenticating
Agent shall authenticate and make available for delivery, the Notes which the
Holder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Obligors, evidencing the same debt, and
entitled to the same benefits under this Master Agreement and the related Series
Supplement, as the Notes surrendered upon such registration of transfer or
exchange.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Obligors or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Obligors, the Trustee and the Note Registrar duly executed by the Holder
thereof or his or her attorney duly authorized in writing with such signature
guaranteed by a commercial bank or trust company located, or having a
correspondent located, in the City of New York or the city in which the
Corporate Trust Office is located, or by a member firm of a national securities
exchange, and such other documents as the Trustee may require.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Obligors or the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Sections 5.03 or 5.05 not involving any transfer.
No Holder of an Unregistered Note shall transfer its Note, unless such
transfer is made in accordance with the provisions of the Series Supplement.
Section 5.05. Mutilated, Destroyed, Lost and Stolen Notes. If any
mutilated Note is surrendered to the Trustee, the Obligors shall execute and the
Trustee shall authenticate and deliver in exchange therefor a new Note of the
same Series and Class, of like tenor and principal amount and bearing a number
not contemporaneously outstanding. If there shall be delivered to the Obligors
and the Trustee, (i) evidence to their satisfaction of the destruction, loss or
theft of any Note and (ii) such security or indemnity as may be required by them
to hold each of them and any agent of any of them harmless, then, in the absence
of written notice to the Obligors, the Trustee or the Support Provider that such
Note has been acquired by a bona fide purchaser, the Obligors shall execute and
upon its written request the Trustee shall authenticate and make available for
delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a new Note (of the same Series and Class), in lieu of any such
destroyed, lost or stolen Note, a new Note of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, the Obligors in their discretion may,
instead of issuing a new Note,
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cause the Trustee to pay such Note by depositing with the Trustee the full
amount needed to pay such Note.
Upon the issuance of any new Note under this Section, the Obligors or
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note of any Series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Obligors, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Master Agreement and the related Series Supplement
equally and proportionately with any and all other Notes of the same Series duly
issued hereunder and under the related Series Supplement.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
Section 5.06. Final Distribution.
(a) The Servicer shall give the Trustee at least 30 days prior written
notice of the Payment Date on which the Noteholders of any Series or Class may
surrender their Notes for payment of the final distribution on and cancellation
of such Notes. Not later than the fifth day of the month in which the final
distribution in respect of such Series or Class is payable to Noteholders, the
Trustee shall provide notice to the Noteholders of such Series or Class
specifying (i) the date upon which final payment of such Series or Class will be
made upon presentation and surrender of Notes of such Series or Class at the
office or offices therein designated, (ii) the amount of any such final payment
and (iii) that the Record Date otherwise applicable to such payment date is not
applicable, payments being made only upon presentation and surrender of such
Notes at the office or offices therein specified. The Trustee shall give such
notice to the Transfer Agent and Registrar and the Paying Agent at the time such
notice is given to Noteholders.
(b) Notwithstanding a final distribution to the Noteholders of any
Series or Class, except as otherwise provided in this paragraph, all funds then
on deposit in any Series Account allocated to such Noteholders shall continue to
be held in trust for the benefit of such Noteholders, and the Paying Agent or
the Trustee shall pay such funds to such Noteholders upon surrender of their
Notes. In the event that all such Noteholders shall not surrender their Notes
for cancellation within six months after the date specified in the notice from
the Trustee described in paragraph (a), the Trustee shall give a second notice
to the remaining such Noteholders to surrender their Notes for cancellation and
receive the final distribution with respect thereto. If within six months after
the second notice all such Notes shall not have been surrendered for
cancellation, the Trustee may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining such Noteholders concerning
surrender of their Notes, and the cost thereof shall be paid out of the funds in
the Series Account held for the benefit of Noteholders. The Trustee and the
Paying Agent shall upon written request pay to the
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Obligors any moneys held by them for the payment of principal or interest that
remains unclaimed for two years. After payment to the Obligors, Noteholders
entitled to the money must look to the Obligors for payment as general creditors
unless an applicable abandoned property law designates another Person.
(c) Any notice required or permitted to be given to a Holder of
Registered Notes shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Note Register. Any notice so mailed
within the time prescribed in this Master Agreement shall be conclusively
presumed to have been duly given, whether or not the Noteholder receives such
notice.
Section 5.07. Persons Deemed Owners. Prior to due presentment of a Note
for registration of transfer, the Obligors, the related Series Support Provider,
the Trustee and any agent of any of them may prior to due presentation of a
Registered Note for registration of transfer, treat the Person in whose name any
Registered Note is registered as the owner of such Registered Note for the
purpose of receiving distributions pursuant to the terms of the applicable
Series Supplement and for all other purposes whatsoever and none of the
Obligors, the related Series Support Provider, the Trustee nor any agent of any
of them, shall be affected by notice to the contrary.
Section 5.08. Cancellation. All Notes surrendered for payment,
prepayment in whole, registration of transfer or exchange shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by the Trustee. Any Obligor may at any time deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Obligor may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Notes previously authenticated hereunder which the Obligors
have not issued and sold, and all Notes so delivered shall be promptly cancelled
by the Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Master Agreement. All cancelled Notes held by the Trustee shall be held
or destroyed by the Trustee in accordance with its standard retention or
disposal policy as in effect at the time.
Section 5.09. Book-Entry Notes. Unless otherwise specified in the
related Series Supplement for any Series or Class, the Notes of each Series,
upon original issuance, shall be issued in the form of one or more typewritten
Notes representing the Book-Entry Notes, to be delivered to the Clearing Agency
specified in the applicable Series Supplement, by, or on behalf of, the
Obligors. The Notes shall initially be registered on the Note Register in the
name of the Clearing Agency or its nominee, and no Noteholder will receive a
definitive certificate representing such Noteholder's interest in the Notes,
except as provided in Section 5.11. Unless and until definitive, fully
registered Notes ("Definitive Notes") have been issued to the applicable
Noteholders pursuant to Section 5.11 or as otherwise specified in any such
Series Supplement:
(a) the provisions of this Section shall be in full force and effect;
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(b) the Obligors, the Servicer and the Trustee may deal with the
Clearing Agency and the Clearing Agency Participants for all purposes (including
the making of distributions) as the authorized representatives of the respective
Noteholders;
(c) to the extent that the provisions of this Section conflict with any
other provisions of this Master Agreement, the provisions of this Section shall
control; and
(d) the rights of the respective Noteholders shall be exercised only
through the Clearing Agency and shall be limited to those established by law and
agreements between such Noteholders and the Clearing Agency or the Clearing
Agency Participants. Pursuant to the Depository Agreement, unless and until
Definitive Notes are issued pursuant to Section 5.11, the Clearing Agency will
make book-entry transfers among the Clearing Agency Participants and receive and
transmit distributions of principal and interest on the related Notes to such
Clearing Agency Participants.
For purposes of any provision of this Master Agreement requiring, or
permitting actions with the consent of, or at the direction of, Noteholders
evidencing a specified percentage of the aggregate Outstanding Amount of Notes,
such direction or consent may be given by Noteholders (acting through the
Clearing Agency and the Clearing Agency Participants) owning Notes evidencing
the requisite percentage of Outstanding Notes.
Section 5.10. Notices to Clearing Agency. Whenever any notice or other
communication is required to be given to Noteholders of any Series or Class with
respect to which Book-Entry Notes have been issued, unless and until Definitive
Notes shall have been issued to the related Noteholders, the Trustee shall give
all such notices and communications to the applicable Clearing Agency.
Section 5.11. Definitive Notes. If Book-Entry Notes have been issued
with respect to any Series or Class and (a) the Obligors advise the Trustee in
writing that the Clearing Agency is no longer willing or able to discharge
properly its responsibilities under the Depository Agreement with respect to
such Series or Class and the Trustee or the Obligors are unable to locate a
qualified successor or (b) the Obligors, at their option, advise the Trustee in
writing that they elect to terminate the book-entry system with respect to such
Series or Class through the Clearing Agency, then upon surrender to the Trustee
of any such Notes by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration of Definitive Notes, the
Obligors shall execute and the Trustee shall authenticate and the Transfer Agent
and Registrar shall deliver such Definitive Notes. Neither the Obligors nor the
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
instructions. The Trustee shall recognize the Holders of such Definitive Notes
as Noteholders hereunder.
Section 5.12. CUSIP Numbers. The Obligors in issuing the Notes may use
"CUSIP" or "private placement" numbers (if then generally in use), and, if so,
the Trustee shall indicate the "CUSIP" or "private placement" numbers of the
Notes in notices of redemption and related materials as a convenience to
Noteholders; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of redemption and related materials.
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ARTICLE VI
ADMINISTRATION AND SERVICING OF THE CONTRACTS AND EQUIPMENT
Section 6.01. Appointment of Servicer: Responsibilities of Servicer.
(a) The Obligors hereby appoint the Servicer, and the Servicer hereby
accepts such appointment, for the purpose of administering and servicing the
Contracts and the Equipment; provided, however, that the Servicer shall
administer and service the Contracts and the Equipment materially and only in
conformance with the terms of this Master Agreement and the Series Supplements
and shall take no action to affect adversely the interests of the Trustee or the
Noteholders in such Contracts and Equipment. In consideration of such
appointment, the Obligors hereby agree to pay to the Servicer the Servicer Fee,
such Servicer Fee to be paid as provided in each Series Supplement and neither
the Trustee nor any Noteholder shall have any responsibility for the payment of
such fee.
(b) The Servicer, for the benefit of the Trustee and the Noteholders,
shall be responsible for managing, servicing and administering the Contracts and
the Equipment, enforcing and making collections on the Contracts, any Insurance
Policies and any Related Security and enforcing any security interest in each
item of Equipment, each in accordance with the standards and procedures set
forth in this Master Agreement. The Servicer's responsibilities shall include
collecting and posting of all payments, responding to inquiries of Users,
investigating delinquencies, applying the Security Deposits, accounting for
collections and furnishing monthly and annual statements to the Trustee, with
respect to each Series Trust Estate and distributions to be made hereunder. In
addition, the Servicer may make Servicer Advances at its option and shall make
Servicer Advances to the extent required by a Series Supplement, provide
appropriate Federal income tax information to the Trustee for use in providing
information to the Noteholders, collect and remit sales and property taxes on
behalf of taxing authorities and maintain the perfection of any ownership and/or
security interest of the Trustee and the Noteholders in each Series Trust
Estate.
Subject to the terms of Section 6.02 of this Master Agreement, the
Servicer shall have full power and authority, acting at its sole discretion, to
do any and all things in connection with the management, servicing,
administration, enforcement and collection of the Contracts and the other
property comprising each Series Trust Estate that it may deem necessary or
desirable, including the prudent delegation of such responsibilities. Without
limiting the generality of the foregoing, the Servicer shall, and is hereby
authorized and empowered by the Obligors and the Trustee, subject to Section
6.02 hereof, to execute and deliver (on behalf of itself, the Noteholders, the
Trustee or any of them) any and all instruments of satisfaction or cancellation,
or of release or discharge and all other comparable instruments, with respect to
the Contracts and the other property comprising each Series Trust Estate in
accordance with (and to the extent permitted pursuant to) Section 6.11. The
Servicer may also, for itself and on behalf of the Obligors, in the Servicer's
sole discretion, waive any prepayment charge, late payment charge or penalty, or
any other Servicing Charges that may become due from any User in the ordinary
course of servicing any Contract. The Trustee and the Obligors shall execute and
deliver any powers of attorney and other documents reasonably necessary or
appropriate to enable the
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Servicer to carry out its servicing and administrative duties hereunder as may
be prepared by the Servicer, at the Servicer's expense, and delivered to the
Trustee and the Obligors for execution and delivery. The Trustee is not
responsible for any legal insufficiencies in any such powers of attorney or
other documents.
(c) The Servicer shall conduct the management, servicing
administration, collection or enforcement actions of or in connection with each
Series Trust Estate in the following manner:
(i) The Servicer may sue to enforce or collect upon Contracts
as agent for the Obligors and the Trustee. If the Servicer elects to
commence a legal proceeding to enforce a Contract, the act of
commencement shall be deemed to be an automatic assignment of the
Contract to the Servicer for purposes of collection only. If, however,
in any enforcement suit or legal proceeding, it is held that the
Servicer may not enforce a Contract on the ground that it is not a real
party in interest or a holder entitled to enforce the Contract, then
the related Obligor(s) and/or the Trustee shall, at the Servicer's
written request and upon receipt from the Servicer of satisfactory
indemnity, take such steps as the Servicer deems necessary to enforce
the Contract, including bringing suit in its name or the names of the
related Obligor(s) and/or the Trustee and/or the related Noteholders;
(ii) The Servicer shall exercise any rights of recourse
against third parties that exist with respect to any Contract in
accordance with the Servicer's usual practice. In exercising recourse
rights, the Servicer is authorized on the Trustee's behalf to reassign
the Contract to the person against whom recourse exists to the extent
necessary, and at the price set forth in the document creating the
recourse. The Servicer will not reduce or diminish such recourse
rights, except to the extent that it exercises such rights;
(iii) The Servicer may grant to the User under any Contract
any rebate, refund or adjustment that the Servicer in good faith
believes is required because of the prepayment in full of such
Contract; provided, however, that the Servicer will not permit any
rescission or cancellation of any Contract or take any action with
respect to any Contract which would materially impair the rights of the
Trustee in the Contract or the proceeds thereof;
(iv) In the event that the Servicer acquires title to any item
of Equipment in the enforcement of any Contract, the Servicer shall use
its best efforts to sell or otherwise dispose promptly of such item of
Equipment, consistent with the standard of care set forth in Section
6.02 hereof; and
(v) The Servicer may not allow an offset of the amount of any
Security Deposit against any Scheduled Payment or Booked Residual Value
under such Contract, except as expressly permitted in Section 6.14
hereof.
Section 6.02. Standard of Care. In managing, administering and
servicing each Series Trust Estate and enforcing and making collections on the
Contracts and any Related Security and Insurance Policies related to the
Contracts pursuant to this Master Agreement, the Servicer will exercise that
degree of skill and care consistent with that which the Servicer customarily
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exercises with respect to similar contracts owned by it; provided, however, that
to the extent that the Trustee shall be acting as Servicer, the Trustee shall
not have any liability for breaching any standard of care in its performance as
Servicer hereunder to the extent the Trustee was not grossly negligent or
willfully malfeasant. The Servicer shall comply with all applicable Federal and
State laws and regulations, shall maintain all State and Federal licenses and
franchises necessary for it to perform its servicing responsibilities hereunder
and thereunder and shall not materially impair the rights of the Trustee or the
Noteholders in any Contracts or payments thereunder.
The Servicer shall comply with all applicable Requirements of Law, the
noncompliance with which would, individually or in the aggregate, materially and
adversely affect the ability of the Servicer to perform its obligations under
this Master Agreement, the related Series Supplements or the related Series
Related Document.
Section 6.03. Credit and Collection Policy. The Servicer shall not
amend or modify the provisions of the Credit and Collection Policy if such
amendment or modification would, in the reasonable good faith business judgment
of the Servicer, materially and adversely affect the interests of any
Noteholder, the Trustee, or any Series Support Provider, without first obtaining
the prior written consent of the Series Controlling Party of each affected
Series given as provided in the related Series Supplement.
Section 6.04. Maintenance of Interest in the Trust Estate. The Servicer
shall, in accordance with customary servicing procedures and at the expense of
the Obligors as provided in Section 3.10 of this Master Agreement, use its best
efforts to maintain perfection and priority of the Trustee's interest in each
Series Trust Estate (other than with respect to the Equipment as to which such
perfection is not required under Section 3.09 and other than with respect to the
Pledged Property removed from the applicable Series Trust Estate pursuant to
Sections 6.11, 6.12 or 6.15 hereof). In connection with enforcing a Defaulted
Contract, if necessary, the Servicer shall prepare and the related Obligor shall
(and, to the extent necessary, the related Obligor shall cause the Originator
to) execute and deliver to the Servicer, and the Servicer shall file any
necessary UCC financing statements and/or amendments naming the Trustee as
secured party with respect to the related Equipment.
Section 6.05. Servicing Compensation; Payment of Certain Expenses by
Servicer.
(a) As compensation for its activities, the Servicer shall be entitled
to receive the Servicer Fee in accordance with the terms of the Series
Supplements. The monthly Servicer Fee shall be payable to the Servicer, in
arrears for each Collection Period, on the Payment Date in respect of such
Collection Period. The Servicer Fees shall be payable to the Servicer solely to
the extent amounts are available for distribution pursuant to the terms of the
Series Supplements; provided that in accordance with such provisions, any such
Servicer Fees not paid when due as a result of there not being sufficient
available funds therefor shall be payable on any future Payment Dates to the
extent amounts are then available for the payment thereof.
(b) The Servicer shall be required to pay all expenses incurred by the
Servicer in connection with its activities hereunder, including, without
limitation, fees and disbursements of the Independent Accountants, taxes imposed
on the Servicer (but excluding any sales taxes or
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other taxes imposed on any User, any Broker, the Obligors, the Originator, the
Trustee, any Noteholder, or any other Person), expenses incurred in connection
with distributions and reports to Noteholders and all other fees and expenses
not expressly stated hereunder to be for the account of the Obligors.
Section 6.06. Servicer's Certificate. Not later than the time specified
in the related Series Supplement, the Servicer shall deliver to the Obligors and
the Trustee a Servicer's Certificate containing the information required by the
related Series Supplement, with respect to the related Series Trust Estate,
Collection Period and Payment Date.
Section 6.07. Annual Statement as to Compliance. The Servicer will
deliver to the Obligors and the Trustee, not later than 90 days after the end of
each fiscal year, an Officer's Certificate signed by a Servicing Officer, dated
as of the last day of such fiscal year, stating that (a) a review of the
activities of the Servicer during the preceding 12-month period and of the
Servicer's performance under this Master Agreement has been made under such
Servicing Officer's supervision and (b) nothing has come to such Servicing
Officer's attention to indicate that an Event of Servicer Termination (or an
event which with the giving of notice (other than pursuant to subsection
9.01(iv)) or passage of time, or both, would constitute an Event of Servicer
Termination) hereunder has occurred and is continuing on such last day of such
fiscal year or, if an Event of Servicer Termination or such other event has so
occurred and is continuing, specifying each such Event of Servicer Termination
or such other event known to such Servicing Officer and the nature and status
thereof, and the steps, if any, necessary to remedy such Event of Servicer
Termination or such other event.
Section 6.08. Financial Statements.
(a) The Servicer shall, not later than 90 days after the end of each
fiscal year, deliver to the Trustee, a copy of the Servicer's (or, in the case
of Advanta Business Services Corp. or another Affiliate of Advanta Corp., of
Advanta Corp.'s) annual audited financial statements for such fiscal year,
audited by an Independent Accountant.
(b) The Servicer shall, within 45 days after the end of each of the
first three calendar quarters of the Servicer's fiscal year, deliver to the
Obligors and the Trustee, quarterly, unaudited financial statements of the
Servicer (or, in the case of Advanta Business Services Corp. or another
Affiliate of Advanta Corp., of Advanta Corp.) for such calendar quarter.
(c) The Servicer shall inform the Obligors and the Trustee in writing
of the Servicer's fiscal year and any change in such fiscal year.
Section 6.09. Access to Certain Documentation and Information Regarding
the Pledged Property.
(a) The Servicer and the Obligors shall each provide the Trustee,
and/or any of the Trustee's duly authorized representatives, attorneys or
accountants access to any and all documentation regarding each Series Trust
Estate (including the List of Contracts) that the Servicer or the Obligors, as
the case may be, may possess, such access being afforded without charge but only
upon reasonable request and during normal business hours, so as not to interfere
unreasonably with the Servicer's or any Obligor's, as the case may be, normal
operations or
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customer or employee relations, at such offices of the Servicer or such Obligor,
as the case may be, designated by the Servicer or an Obligor, respectively.
(b) The Servicer shall at all times during the term hereof either (x)
keep available in physical form for inspection by the Trustee, or any of the
Trustee's duly authorized representatives, attorneys or accountants, a list of
all Contracts then held as a part of each Series Trust Estate, together with a
reconciliation of such list to the List of Contracts and each of the Servicer's
Certificates, indicating the removals of Contracts from such List of Contracts
or (y) maintain electronic facilities which allow such a list and the
reconciliation thereof to be generated.
(c) The Servicer will maintain accounts and records, as to each
respective Contract serviced by the Servicer, that are accurate and sufficiently
detailed so as to permit (i) the reader thereof to know as of the most recent
Calculation Date the status of such Contract, including payments and recoveries
made and payments owing (and the nature of each), and (ii) reconciliation
between payments or recoveries on (or with respect to) each Contract and the
amounts from time to time deposited in the respective Series Account in respect
of such Contract.
(d) The Servicer will maintain its computerized accounts and records so
that (i) from and after the time of Pledge hereunder of each Contract to the
Trustee, the Servicer's accounts and records (including any back-up computer
archives) that refer to any Contract indicate clearly that the Contract is part
of a separate and distinct Series Trust Estate and (ii) the information relating
to such Contracts can be recreated in the event of the destruction of the
originals. Indication of a Contract being part of a Series Trust Estate will be
deleted from or modified on the Servicer's accounts and records when, and only
when, a Release Event has occurred with respect to such Contract.
(e) Nothing in this Section 6.09 shall derogate from the obligation of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Brokers or Users, and the failure, as a result of such obligation
of the Servicer, to provide access as provided in this Section 6.09 shall not
constitute a breach of this Section 6.09.
(f) No person entitled to receive copies of such reports or tapes shall
disclose the information therein to any Person, except such disclosures as are
required upon appointment of a successor Servicer or by law, rule, statute or
regulation, except when the Servicer consents to the disclosure of any material
nonpublic information with respect to it (i) to any other such party, (ii) to
any prospective or actual assignee or participant of any of them, (iii) by the
Trustee to any Rating Agency, commercial paper dealer or Support Provider, or
any entity organized for the purpose of purchasing, or making loans secured by,
financial assets for which any Noteholders' Agent provides managerial services
or acts as the administrative agent and (iv) to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing.
(g) Notwithstanding anything herein to the contrary, the foregoing
shall not be construed to prohibit (i) disclosure of any and all information
that is or becomes publicly known, or information obtained by the Trustee from
sources other than the Obligors or the Servicer, (ii) disclosure of any and all
information (A) to any government agency or regulatory
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body having or claiming authority to regulate or oversee any aspects of the
Trustee's business or that of its affiliates, (B) pursuant to any subpoena,
civil investigative demand or similar demand or request of any court, regulatory
authority, arbitrator or arbitration to which the Trustee or an affiliate or an
officer, director, employer or shareholder thereof is a party, (C) in any
preliminary or final offering circular, registration statement or contract or
other document pertaining to the transactions contemplated herein approved in
advance by the Obligors or the Servicer of (D) to any affiliate, independent or
internal auditor, agent, employee or attorney of the Trustee having a need to
know the same, provided that the Trustee advises such recipient of the
confidential nature of the information being disclosed, or (iii) any other
disclosure authorized by the Obligors or the Servicer.
Section 6.10. Other Necessary Data. The Servicer shall, on request of
the Trustee, furnish the Trustee such data necessary for the Trustee to
discharge its obligations with respect to each Series Trust Estate and the
related Notes as can be generated by the Servicer's existing data processing
systems; provided, that to the extent that the Servicer's existing data
processing systems cannot generate such data, the Servicer will cooperate with
the Trustee in finding a method of furnishing such data; however, the Servicer
shall not be obligated to provide such a method. The Servicer will cooperate in
generating additional data reasonably requested by the Trustee.
Section 6.11. Release of Contracts.
(a) Each of the following events shall herein be a "Release Event": (i)
payment in full of any Contract by the User or by any Person on behalf of such
User, (ii) any removal of a Contract by the related Obligor pursuant to Section
6.15 hereof, (iii) the Servicer's reasonable determination that all Recoveries
with respect to any Defaulted Contract have been received, (iv) delivery to the
Servicer by an Obligor of evidence that a Defaulted Contract has been sold and
the sale proceeds deposited as Recoveries into the appropriate Series Account,
or (v) any removal of a Contract by the related Obligor pursuant to subsection
6.12. Upon each Release Event, the Servicer will so notify the Trustee on the
next succeeding Determination Date or such other date as the Servicer deems
appropriate by certification to the Trustee from a Servicing Officer, which
certification shall include a statement to the effect that all amounts received
in connection with such Release Event have been remitted to the appropriate
Series Account and may request in writing delivery of the Contract to the
Servicer or other person designated by the Servicer.
Upon the Trustee's receipt of such certification and request (subject
to its confirmation of the receipt of the required funds as notified to the
Trustee in writing by the Servicer in the appropriate Series Account), such
Contract and the related Pledged Property appurtenant thereto shall be deemed to
be released from the related Series Trust Estate. Upon release of such Contract,
the Servicer is authorized to execute an instrument in satisfaction of such
Contract and to do such other acts and execute such other documents as it deems
necessary to discharge the User thereunder (except that such release shall not
be granted if the release is pursuant to (iv) in the immediately preceding
paragraph) and release the related Equipment (v) to the related User in the
event of a Release Event described in clause (i) of the immediately preceding
paragraph, (w) to or upon the direction of the related Obligor in the event of a
Release Event described in clause (ii) of the immediately preceding paragraph,
(x) to the Person, if any, purchasing the
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related Equipment in the event of a Release Event described in clause (iii) of
the immediately preceding paragraph, or, if no person is purchasing such
Equipment, to the related Obligor, (y) to the purchaser of the Contract in the
event of a release under clause (iv) of the immediately preceding paragraph, and
(z) to the related Obligor in the event of a Release Event described in clause
(v) of the immediately preceding paragraph.
(b) With respect to all Contracts so released, the Trustee shall
assign, without recourse, representation or warranty, to the appropriate Person
as directed in writing by the Servicer, all of the Trustee's right, title and
interest in and to such Contract and Pledged Property appurtenant thereto, such
assignment being an assignment outright and not for security. Such Person will
thereupon own such Contract and related Pledged Property appurtenant thereto
free of any further obligation to the Trustee or the Noteholders with respect
thereto. The Trustee shall also execute and deliver all such other instruments
or documents as shall be reasonably requested in writing by any such Person to
be required or appropriate to effect a valid transfer of title to a Contract and
the Pledged Property appurtenant thereto. Any instrument or documents required
to be executed by the Trustee pursuant to this subsection 6.11(b) shall be
prepared by the Servicer (or such Person) at the Servicer's (or such Person's)
expense; provided, that if the Servicer is not Advanta Business Services Corp.
or any of its Affiliates, then any such expenses to be paid by the Servicer
pursuant to this subsection 6.11(b) shall be paid by the Obligors.
Section 6.12. Removal Related to Upgrades or Trade-Ins and to Defaulted
Contracts.
(a) In the event that a User requests an upgrade or trade-in of
Equipment, the Obligors may remove the Equipment and the related Contract from
the related Series Trust Estate during any Collection Period by paying the
applicable Prepayment Amount received from the User to the Trustee for deposit
in the appropriate Series Account on or prior to the Determination Date relating
to such Collection Period.
(b) The Obligors may, at their option, during any Collection Period
remove any Defaulted Contract and the Related Security from the related Series
Trust Estate by deposit by the Obligors of the applicable Prepayment Amount in
the appropriate Series Account on or prior to the Determination Date relating to
such Collection Period; provided, however, that the terms under which such
removal may occur shall be set forth in the applicable Series Supplement and
provided that aggregate amount of such removals shall not exceed 5.0% of the
initial aggregate Contract Principal Balance, calculated as of the Settlement
Date, of the related Series Trust Estate.
(c) The Obligors shall report to the Servicer the amount of any
Prepayment Amounts received and deposited with the Trustee for the purpose of
removing Contracts and Equipment from the related Series Trust Estate and the
Servicer shall in each Servicer's Certificate delivered to the Trustee pursuant
to Section 6.06 of this Master Agreement, state the amount of each Prepayment
Amount received either by the Obligors or the Servicer and deposited into the
appropriate Series Account.
Section 6.13. Notification to Noteholders of Defaults and Events of
Default. The Servicer shall promptly notify the Trustee in writing of any
Default or any Event of Default upon
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the receipt of actual knowledge thereof by a Servicing Officer, and the Trustee
shall promptly thereupon give written notice thereof to each of the Series
Controlling Parties and each of the Series Support Providers.
Section 6.14. Security Deposits. The Obligors acknowledge that the
Security Deposits are held by Obligors on behalf of the Users and the Trustee.
In the event that (i) any User requests that a Security Deposit be applied as an
offset against such User's payment obligations or Booked Residual Value under a
Contract or (ii) any Contract becomes a Defaulted Contract, the Servicer shall
deliver to the appropriate Obligor written demand that such Obligor remit to the
Servicer, on the next Business Day, out of the applicable User's Security
Deposit an amount (the "Offset Amount") equal to the lesser of (a) the amount of
such Security Deposit and (b) the amount of all unpaid and remaining Scheduled
Payments and Booked Residual Value as payment in respect of, first, any unpaid
Scheduled Payments under the related Contract, and second, any unpaid Booked
Residual Value under the related Contract. The Servicer shall deposit any Offset
Amount so delivered to it into the appropriate Series Account within two
Business Days after its receipt thereof. The Servicer shall not be required to
remit from its own funds any Offset Amounts not received from the Obligor.
The Servicer shall notify the appropriate Obligor in writing of any
demand it receives from a User for refund of such User's Security Deposit at the
end of the term of the related Contract.
In no event shall the Trustee or any Noteholder be liable to any User
with respect to the Security Deposits. The Obligors shall indemnify and hold
harmless the Trustee and its officers, directors, agents and employees and the
Noteholders for any loss, cost and expense (including legal fees and expenses
incurred by such parties in connection with the prosecution of claims made in
connection therewith) suffered as a result of the Obligors' misappropriation or
misapplication of any Security Deposit received from a User. This right of
indemnification shall survive the termination of this Master Agreement and any
earlier removal or resignation of the Trustee.
Section 6.15. Removal of Nonconforming Pledged Property. Upon discovery
by an Obligor, the Trustee or the Servicer of a breach of any of the
representations or warranties of the Originator set forth in the Contribution
Agreement or related Contribution Agreement Supplement with respect to any
Contract, the related Equipment or the related Contract File, as the case may
be, the party discovering such breach shall give prompt written notice to the
other parties. The Trustee has no obligation to review or monitor the Pledged
Property for compliance with such representations and warranties. As of the last
day of the calendar month in which such breach was discovered or, if later, the
last day of the calendar month in which the Servicer received the notice thereof
(or, at the Servicer's and such Obligor's election, any earlier date), the
Servicer, unless such breach shall have been waived or cured in all material
respects prior to such time, shall notify the appropriate Obligor of such breach
and the appropriate Obligor shall remove such Contract and the related Pledged
Property from the related Series Trust Estate. In consideration for the removal
of such Pledged Property, the appropriate Obligor shall, no later than the
Determination Date prior to the Payment Date next following such date, cause the
Originator to pay the Prepayment Amount to the Servicer for deposit into the
appropriate Series Account.
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ARTICLE VII
ACCOUNTS
Section 7.01. Establishment of Series Accounts. The Obligors shall in
the respective Series Supplement direct the Trustee to establish and maintain
with respect to each Series such Series Accounts as the Obligors shall deem to
be appropriate.
Section 7.02. Investment of Funds in the Series Accounts. The Trustee,
at the written instruction of the Servicer, shall invest the amounts from time
to time on deposit in the Series Accounts in Eligible Investments or any other
investments permitted by the Series Supplement. In no event shall the Trustee be
liable for the selection of investments or for investment losses incurred
thereon. The Trustee shall have no liability in respect of losses incurred as a
result of the liquidation of any such investment prior to its stated maturity or
the failure of the party directing such investment to provide timely written
investment direction. The Trustee shall have no obligation to invest or reinvest
any amounts held hereunder in the absence of such written investment direction.
ARTICLE VIII
THE SERVICER AND THE OBLIGORS
Section 8.01. Liability of Servicer; Indemnities.
(a) The Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Servicer herein and in
the Series Supplements.
(b) Without in any way limiting the foregoing, the Servicer shall
indemnify and hold harmless the Trustee and its officers, directors, agents and
employees, the Obligors, the Noteholders, any Series Support Provider and any
permitted assignee of any of the foregoing (each an "Indemnified Party" and
collectively, the "Indemnified Parties") from and against any claims, expenses,
losses or liabilities (including, without limitation, attorneys' fees and court
costs) suffered or incurred by any Indemnified Party (collectively, "Indemnified
Amounts") arising out of or resulting in connection with (i) any breach by the
Servicer of its representations and warranties or of its obligations or its
negligence, acts or omissions in the performance of its duties under this Master
Agreement or under any Series Supplement or (ii) from the use, repossession or
operation of the Equipment by the Servicer or any of its Affiliates.
(c) The Servicer shall pay any amounts owing pursuant to subsection
8.01(b) hereof directly to the applicable Indemnified Parties entitled to the
receipt thereof, and such amounts shall not be deposited in any Series Account.
Any request by any Indemnified Party for indemnity pursuant to this Section 8.01
shall be made in writing delivered to the Servicer and the Trustee describing in
reasonable detail the amount thereof and the circumstances giving rise thereto.
The Servicer shall pay any such Indemnified Amounts within 30 days after its
receipt of any such request therefor; it being understood and agreed, however,
that payment of such amount shall not constitute a waiver of the Servicer's
right to contest the basis for such indemnity so
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long as the Servicer provides written notice to the applicable Indemnified Party
at the time of the Servicer's payment of the respective Indemnified Amounts,
which written notice shall state the basis, in reasonable detail, for the
Servicer's dispute of the requested Indemnified Amount.
(d) Indemnification under this Section 8.01 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation
reasonably incurred. If the Servicer has made any indemnity payments to any of
the Indemnified Parties pursuant to this Section 8.01 and such party, thereafter
collects any of such amounts from others, such party will promptly pay such
amounts collected to the Servicer, without interest.
(e) Notwithstanding anything contained herein to the contrary, if and
to the extent that the Servicer is the Trustee or any successor Servicer
appointed by the Trustee then such Servicer shall only be responsible pursuant
to this Section 8.01 for any such amounts suffered or incurred by any such
indemnified party hereunder as a result of the Trustee's or such other successor
Servicer's negligence or willful misconduct.
(f) The agreements contained in this Section 8.01 shall survive the
earlier removal or resignation of the Trustee, the Final Date of the last
outstanding Series and the termination of this Master Agreement and any
applicable Series Supplement.
Section 8.02. Merger, Consolidation, or Assumption of the Obligations
of Servicer. Any corporation (i) into which the Servicer may be merged or
consolidated, (ii) resulting from any merger or consolidation to which the
Servicer shall be a party or (iii) succeeding to the business of the Servicer,
shall be the successor to the Servicer hereunder without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, and such corporation in any of
the foregoing cases shall execute an agreement of assumption, in a form
reasonably satisfactory to the Trustee, agreeing to perform every obligation of
the Servicer hereunder and under each Series Supplement. Any corporation
succeeding to the business of the Servicer by merger, consolidation or otherwise
shall be a corporation organized and existing under the laws of the United
States or any State and have a tangible net worth of at least $20,000,000. The
Servicer shall provide prompt written notice of the effectiveness of any such
event to the Obligors and the Trustee.
In addition to the provisions set forth in the preceding paragraph, if
the Servicer is Advanta Business Services Corp. or an Affiliate thereof, the
Servicer may transfer all of its duties, obligations, rights and privileges as
Servicer under this Master Agreement and all Supplements hereto to an Affiliate
of Advanta Business Services Corp. provided that (i) the then Servicer shall
give 30 days prior written notice of such change to the Trustee, each of the
Obligors and each Series Controlling Person and the entity assuming the servicer
position shall execute an agreement of assumption, in a form reasonably
satisfactory to the Trustee agreeing to perform every obligation of the Servicer
hereunder and under each Series Supplement and (ii) the entity assuming the
servicer position shall deliver to the Trustee written evidence that the Rating
Agency Condition has been satisfied. Upon the execution and delivery to the
Trustee of such written assumption and delivery of evidence of the satisfaction
of the Rating Agency Condition and delivery to the Trustee of an Opinion of
Counsel to the effect that all conditions precedent to such assumption have been
complied with and that such assumption is authorized and permitted by this
Master Agreement, the Affiliate of Advanta Business Services Corp. shall
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become the Servicer hereunder and under each Series Supplement without any
further act on the part of any of the parties hereto and the entity serving as
Servicer prior to such assumption shall be relieved of all duties hereunder and
shall cease to be the Servicer. Any affiliate of Advanta Business Services Corp.
which becomes a Servicer under this paragraph shall not be required to have a
tangible net worth of at least $20,000,000.
Section 8.03. Limitation on Liability of Servicer and Others. No
directors, officers, employees or agents of the Servicer shall be under any
liability to the Trustee, the Obligors or any of the Noteholders, except as
provided in this Master Agreement, for any action taken or for refraining from
the taking of any action pursuant to this Master Agreement or for errors in
judgment. The Servicer and any director or officer or employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
Except as provided herein, the Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
duties to service each Series Trust Estate in accordance with this Master
Agreement and each Series Supplement and that in its opinion may involve it in
any expense or liability; provided, however, that the Servicer may take any such
action that is reasonable and that may be necessary or desirable in respect of
this Master Agreement and each Series Supplement and the rights and duties of
the parties hereto and thereto and the interests of the Trustee hereunder and
thereunder. In the event the Servicer takes such action, the reasonably incurred
legal expenses and costs of such action and any liabilities resulting therefrom
shall be expenses, costs and liabilities of the related Series Trust Estate, and
the Servicer shall be entitled to be reimbursed therefor in accordance with the
terms hereof.
Section 8.04. Servicer Not to Resign. Subject to the provisions of
Section 8.02 hereof, the Servicer shall not resign from the obligations and
duties hereby imposed on it as Servicer except upon determination that the
performance of its duties hereunder is no longer permissible under applicable
law. No such resignation shall become effective until a successor Servicer shall
have assumed the responsibilities and obligations of the Servicer in accordance
with Section 9.02 hereof.
Section 8.05. Reserved.
Section 8.06. Indemnities of the Obligors.
(a) Without limiting any other rights which any of the Indemnified
Parties may have hereunder, under any Series Supplement or under applicable law,
each Obligor hereby agrees to indemnify each Indemnified Party from and against
any and all Indemnified Amounts arising out of:
(i) reliance on any representation or warranty or statement of
such Obligor made or deemed made by such Obligor under or in connection
with this Master Agreement, the Contribution Agreement or in any of the
Series Related Documents to which such Obligor is a party or in any
certificate or report delivered in connection with any of the
foregoing, which shall have been incorrect in any material respect when
made;
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(ii) the failure by such Obligor to comply with this Master
Agreement, the Contribution Agreement or any of the Series Related
Documents to which any such Person is a party, or the failure by such
Obligor or the Originator, to comply with any applicable law, rule or
regulation with respect to any Contract,
(iii) the nonconformity of any Contract with any applicable
law, rule or regulation;
(iv) the failure of such Obligor to vest and maintain in the
name of the Trustee a valid first priority perfected security interest
in the property pledged by such Obligor (except to the extent that such
perfection is not required with respect to Equipment);
(v) the failure of such Obligor to pay or cause to be paid
when due any taxes, including without limitation sales, excise or
personal property taxes payable in connection with any of the Contracts
or any of the Equipment, to the extent required by Section 14.08
hereof.
(b) Any request by any Indemnified Party for indemnity pursuant to this
Section 8.06 shall be made in writing delivered to the affected Obligor and the
Trustee describing in reasonable detail the amount thereof and the circumstances
giving rise thereto. The related Obligor(s) shall pay any such Indemnified
Amounts within 30 days after its receipt of any such request therefor; it being
understood and agreed, however, that payment of such amount shall not constitute
a waiver of the Obligors' right to contest the basis for such indemnity so long
as the Obligor provides written notice to the applicable Indemnified Party at
the time of the affected Obligor's payment of the respective Indemnified
Amounts, which written notice shall state the basis, in reasonable detail, for
the Obligor's dispute of the requested Indemnified Amount.
(c) The agreement contained in this Section 8.06 shall survive the
earlier removal or resignation of the Trustee, the Final Date of the last
outstanding Series and the termination of this Master Agreement and any
applicable Series Supplement.
Section 8.07. Limitation on Liability of the Obligors. The directors,
officers, employees or agents of any Obligor shall not be under any liability to
the Trustee, the Noteholders, the Originator, the Servicer, any Series Support
Provider or any other Person hereunder or pursuant to any document delivered
hereunder, it being expressly understood that all such liability is expressly
waived and released as a condition of, and as consideration for, the Obligor's
execution and delivery of this Master Agreement and the issuance of the Notes.
The Obligors may rely in good faith on any document of any kind prima facie
properly executed and submitted by any other Person respecting any matters
arising hereunder.
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ARTICLE IX
SERVICER TERMINATION
Section 9.01. Events of Servicer Termination.
(a) If any of the following events (each, an "Event of Servicer
Termination") shall occur and be continuing:
(i) any failure by the Servicer to make any payment, transfer
or deposit, or, if applicable, to give instructions or notice to the
Trustee to make such payment, transfer or deposit, relating to the
payment of the principal of or interest on any Note, in either case, on
or before the fifth calendar day following the date such payment,
transfer or deposit or such instruction or notice is required to be
made or given, as the case may be, under the terms of this Master
Agreement or any applicable Series Supplement; or
(ii) the Servicer shall fail to perform or observe any other
term, covenant or agreement hereunder, under the Contribution
Agreement, or in any Series Related Document (other than as described
in clause (i) above), with the result that the interests of the
Trustee, the Noteholders or any Series Support Provider have been
materially and adversely affected, and such failure shall remain
unremedied for 30 calendar days after the receipt by the Servicer of
written notice of such failure from the Trustee;
(iii) any representation, warranty, certification or statement
made by the Servicer in this Master Agreement, the Contribution
Agreement, in any Series Related Document or in any other document
delivered pursuant hereto or thereto shall prove to have been incorrect
in any material respect when made; provided, however, that the breach
of any representation or warranty made by the Servicer will be deemed
to be "material" only if it affects the Noteholders, the enforceability
of the Master Agreement or a Series Supplement or the Notes; and
provided further that such material breach of any representation or
warranty made by the Originator or a successor thereto in the
Contribution Agreement or any Contribution Agreement Supplement with
respect to any of the Contracts or the Equipment subject thereto will
not constitute an Event of Servicer Termination if the Originator
repurchases such Contract and the Equipment in accordance with the
Contribution Agreement and the Contribution Agreement Supplement in the
manner provided therein.
(iv) an Insolvency Event shall occur with respect to the
Servicer;
then, and in each and every case, so long as an Event of Servicer Termination
shall be continuing, the Trustee may, and, at the written direction of the
Holders of not less than 66-2/3rds in aggregate principal amount of Notes
Outstanding, shall, by notice (the "Servicer Termination Notice") then given in
writing to the Servicer, terminate all, but not less than all, of the rights and
obligations of the Servicer under this Master Agreement and each Series Related
Document.
(b) On and after the time the Servicer receives a Servicer Termination
Notice pursuant to this Section 9.01, all authority and power of the Servicer
under this Master
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Agreement and each Series Related Document, whether with respect to the Notes or
each Series Trust Estate or otherwise, shall pass to and be vested in the
successor Servicer appointed pursuant to Section 9.02 hereof and, without
limitation, such successor Servicer is hereby authorized and empowered to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
Servicer Termination Notice, whether to complete the transfer of each Series
Trust Estate and related documents or otherwise.
The Servicer agrees to cooperate with the Trustee and the successor
Servicer in effecting the termination of the responsibilities and rights of the
Servicer hereunder, including, without limitation, the transfer to the successor
Servicer for administration by it of all cash amounts that shall at the time be
held by the Servicer for deposit, or have been deposited by the Servicer, in the
Advance Payment Account or the Master Facility Account or thereafter received
with respect to the related Series Trust Estate. To assist the successor
Servicer in enforcing all rights with respect to any Related Security or under
Broker Agreements and Insurance Policies to the extent that they relate to the
Contracts, the Servicer, at its own expense, shall transfer its electronic
records relating to such Contracts to the successor Servicer in such electronic
form as the successor Servicer may reasonably request and shall transfer the
related Contract Files and all other records, correspondence and documents
relating to the Contracts that it may possess to the successor Servicer in the
manner and at such times as the successor Servicer shall reasonably request. In
addition to any other amounts that are then payable to the Servicer under this
Master Agreement or any Series Related Document, the Servicer shall be entitled
to receive reimbursement for any unreimbursed Servicer Advances made during the
period prior to the delivery of a Servicer Termination Notice pursuant to this
Section 9.01.
Section 9.02. Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a Servicer Termination Notice pursuant to Section
9.01, the Trustee, if a successor Servicer is not appointed pursuant to the
second or third paragraphs of this Section 9.02 shall be the successor in all
respects to the terminated Servicer in its capacity as Servicer under this
Master Agreement, the Contribution Agreement and each Series Related Document
and the transactions set forth or provided for herein and therein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and thereof; provided,
however, that the Trustee shall not be liable for any acts or omissions of the
terminated Servicer or for any breach by either the terminated Servicer or the
Originator of any of their respective representations and warranties contained
herein, in the Contribution Agreement, in any other Series Related Document or
in any related document or agreement. As compensation for acting as Servicer
hereunder, the Trustee shall be entitled to the payment of the Servicer Fee and
other compensation including conversion costs (whether payable out of a Series
Account or otherwise) as the terminated Servicer would have been entitled to
hereunder if no such Servicer Termination Notice had been given.
Notwithstanding the foregoing, the Trustee may or, upon the direction
of a majority in aggregate principal amount of Notes Outstanding, shall appoint
any servicing entity acceptable to or designated by a majority in aggregate
principal amount of Notes Outstanding to act as the successor to the Servicer
hereunder and to assume (prospectively) all responsibilities, duties or
liabilities of the Servicer hereunder, provided that any such servicing entity
has a net worth of, or is a member of a consolidated group of entities which has
a net worth of, not less than
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$20,000,000 and whose regular business includes the servicing of receivables of
a similar nature to the Contracts and the Equipment. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
payment of a Servicer Fee to such successor Servicer in such an amount as the
Trustee and such successor Servicer shall agree; provided, however, that except
as set forth in the immediately succeeding paragraph no such agreed upon
Servicer Fee shall be in excess of the Servicer Fee then being received by the
Servicer; and provided further that in no event shall the Trustee be liable to
any successor Servicer for the Servicer Fee or any additional amounts including
conversion costs payable to such successor Servicer, either pursuant to this
Master Agreement, any Series Related Document or otherwise. The Trustee and such
successor Servicer shall take such action, consistent with this Master
Agreement, as shall be necessary to effectuate any such succession.
Notwithstanding the foregoing, if the Trustee is not legally permitted
to act as Servicer under any applicable law or is unable to act as Servicer and
the Trustee is unable to engage a successor Servicer willing to act as Servicer
for a fee equal to or less than the Servicer Fee then being received by the
Servicer then the Trustee may solicit bids from not less than three entities
currently engaged in businesses similar to that of the Originator (at the time
of the origination of the Contracts) or providing servicing services similar to
that of the Servicer which, in either case, are qualified to act as successor
Servicer pursuant to this Section 9.02 and appoint the qualified entity
submitting the proposal to act as successor Servicer for the lowest fee, even if
such fee exceeds the Servicer Fee as calculated by reference to the Original
Servicer Fee Rate (such higher fee being an "Increased Servicer Fee") and the
difference between such Increased Servicer Fee and the Original Servicer Fee
shall be the "Increased Servicer Fee Differential". Any Increased Servicer Fee
Differential shall be payable by the Obligors or from funds available to the
Obligors.
Section 9.03. Notification to Noteholders. The Servicer shall promptly
notify the Trustee in writing and the Obligors of any Event of Servicer
Termination upon the receipt of actual knowledge thereof by a Servicing Officer,
and the Trustee shall promptly thereupon give written notice thereof to each of
the Series Controlling Parties and each of the Series Support Providers. Upon
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article IX, the Trustee shall give prompt written notice thereof to each of
the Series Controlling Parties, the Noteholders, the Series Support Providers,
the Obligors and the Originator.
Section 9.04. Waiver of Past Events of Servicer Termination. The
Holders of not less than 66-2/3rds in aggregate principal amounts of Notes
Outstanding, on behalf of all Noteholders may waive any default by the Servicer
in the performance of its obligations hereunder and its consequences. Upon any
such waiver of a past default, such default shall cease to exist, and any Event
of Servicer Termination arising therefrom shall be deemed to have been remedied
for every purpose of this Master Agreement. No such waiver shall extend to any
subsequent similar or dissimilar default or impair any right consequent thereon
except to the extent expressly waived in accordance with this Section 9.04.
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Section 9.05. Effects of Termination of Servicer.
(a) Upon the appointment of the successor Servicer, the terminated
Servicer shall hold in trust for the Trustee and immediately remit any Scheduled
Payments, Residual Receipts, Recoveries, Overdue Payments, Security Deposit,
Insurance Proceeds, Advance Payments, Prepayment Amounts, and proceeds of any
Related Security that it may receive pursuant to any Contract, any Broker
Agreement, Insurance Policy or otherwise to the successor Servicer for the
benefit of the Trustee; provided, that amounts representing Security Deposits
shall be remitted as required by paragraph (b) below.
(b) After the delivery of a Servicer Termination Notice, the terminated
Servicer shall have no further obligations with respect to the management,
administration or servicing of any Series Trust Estate or the enforcement,
custody or collection of the Contracts, and the successor Servicer shall have
all of such obligations, except that the terminated Servicer will transmit or
cause to be transmitted directly to the successor Servicer for the benefit of
the Trustee (i) promptly upon receipt and in the same form in which received,
any amounts held or received by the former Servicer (properly endorsed where
required for the successor Servicer to collect them) as payments upon or
otherwise in connection with Contracts or any Series Trust Estate and (ii) when
and as required by Section 6.14 hereof, amounts representing Security Deposits.
The terminated Servicer's indemnification obligations pursuant to Section 8.01
hereof will survive its termination as the Servicer hereunder but will not
extend to any acts or omissions of any successor Servicer.
(c) Notwithstanding Section 9.05(b) hereof, it is hereby agreed by the
parties hereto that unless the Originator is Servicer, hereunder, the Obligors,
upon the request of the Trustee, shall instruct the Originator pursuant to the
Contribution Agreement to exercise any rights under any Contract or guaranty
thereof, Insurance Policy for the benefit of the Trustee and the related Series
Secured Parties.
(d) An Event of Servicer Termination shall not affect the rights and
duties of the parties hereunder other than those relating to the management,
administration, servicing, custody or collection of the Contracts or the payment
of certain expenses by the successor Servicer, in each case, as expressly set
forth herein.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.01. Events of Default. The "Events of Default," with respect
to a Series, shall be set forth in the related Series Supplement.
Section 10.02. Collection of Indebtedness and Suits for Enforcement by
Trustee: Authority of Controlling Party.
(a) Subject to the provisions of the related Series Supplement, if the
Notes of any Series are accelerated following the occurrence of an Event of
Default with respect to such
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Series, there shall be due and payable (but only from the funds available from
the related Series Trust Estate), the whole amount then due and payable on such
Notes for principal and interest, with interest upon the overdue principal, and,
to the extent payment at such rate of interest shall be legally enforceable,
upon overdue installments of interest, at the interest rate applicable to the
Notes of such Series and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee and
its agents and counsel.
(b) If an Event of Default occurs and is continuing with respect to a
Series, the Trustee may, and shall at the written direction of the Holders of
not less than a majority in principal amount of the Outstanding Principal Amount
of Notes, proceed to protect and enforce its rights and the rights of the
Noteholders of such Series by such appropriate Proceeding as shall be deemed
most effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Master Agreement or the related
Series Supplement or in aid of the exercise of any power granted herein or
therein, or to enforce any other proper remedy or legal or equitable right
vested in the Trustee by this Master Agreement, the related Series Supplement,
or by law; provided that Trustee shall be prohibited from selling the Series
Trust Estate following an Event of Default unless the requirements set forth in
the related Series Supplement are met.
(c) In case there shall be pending, relative to any Obligor or any
other obligor upon the Notes or to the Originator or the Servicer or any Person
having or claiming an ownership interest in the related Series Trust Estate,
Proceedings under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency, receivership, conservatorship or other
similar law, or in case a receiver, conservator, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of any Obligor or any substantial
part of its property or such other obligor or Person, or in case of any other
comparable judicial Proceedings relative to such Obligor or other obligor upon
the Notes of such Series, or to the creditors or property of such Obligor or
such other obligor, the Trustee, irrespective of whether the principal of any
Notes of such Series 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 pursuant to the provisions of this Section, shall be entitled and
empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of such Notes and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee against the related Series
Trust Estate (including, any claim for reasonable compensation to the
Trustee and each predecessor Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee) and of the Noteholders of such Series allowed in
such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of and at the written direction of the Holders of Notes
of such Series in any election of a trustee, a standby-trustee or
person performing similar functions in any such Proceedings;
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(iii) to collect and receive any moneys or other property
payable or deliverable on such claims and received with respect to the
related Series Trust Estate and to distribute all amounts received with
respect to the claims of the Noteholders of such Series and of the
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Trustee or the Holders of Notes of such Series, in each case
against the related Series Trust Estate, allowed in any judicial
proceedings relative to the Obligors, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar
official in any such Proceeding is hereby authorized by each of such
Noteholders to make payments to the Trustee as administrative expenses
associated with any such proceeding, and, in the event that the Trustee
shall consent to the making of payments directly to such Noteholders,
to pay to the Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Trustee, each predecessor Trustee and
their respective agents, attorneys and counsel, and all other expenses
and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee, and any other amounts due to the Trustee
under Section 11.06 hereof.
(d) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar Person.
(e) All rights of action and of asserting claims under this Master
Agreement, the related Series Supplement, or under any of the Notes, may be
enforced by the Trustee without the possession of any of the Notes or the
production thereof in any trial or other Proceedings relative thereto, and any
such action or Proceedings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgement, subject to
the payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the related Notes.
(f) In any Proceedings brought by the Trustee (including any
Proceedings involving the interpretation of any provision of this Master
Agreement or the related Series Supplement), the Trustee shall be held to
represent all the Holders of the related Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
Section 10.03. Limitation on Suits. No Holder of any Note shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Master Agreement or the related Supplement, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Notes of
the related Series;
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(2) the Holders of not less than 50% of the Outstanding Amount
of the Notes of the related Series shall have made written request to
the Trustee to institute such Proceeding in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
Proceeding;
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority of the Outstanding Amount of the Notes of the related Series;
and
(6) if any Series Support secures such Series, a Support
Default shall have occurred and be continuing.
It is understood and intended that no one or more of the Holders shall
have any right in any manner whatever hereunder or under the Notes to (i)
affect, disturb or prejudice the rights of the Holders of any other Notes, (ii)
obtain or seek to obtain priority or preference over any other such Holder or
(iii) enforce any right under this Master Agreement, except in the manner herein
provided and for the equal, ratable and common benefit of all such Holders.
Section 10.04. Unconditional Right of Holders to Receive Principal and
Interest. Subject to the provisions of Section 3.06 hereof, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest on such Note on or after the respective
due dates thereof expressed in such Note, in this Master Agreement or the
related Series Supplement and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder; provided, however, that (x) if such Series is secured by any Series
Support, then, so long as no Support Default shall have occurred and be
continuing, no such suit shall be instituted and (y) in no event shall such
right entitle any Holder to a payment from a source of funds other than the
related Series Trust Estate.
Section 10.05. Restoration of Rights and Remedies. If any of the
Trustee, the related Series Support Provider or any Holder has instituted any
Proceeding, to enforce any right or remedy under this Master Agreement (or the
related Series Supplement) and such Proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee, the
related Series Support Provider or to such Holder, then and in every such case,
subject to any determination in such Proceeding, the Obligors, the Trustee, the
related Series Support Provider and the related Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee, the related Series Support Provider and
the related Holders shall continue as though no such Proceeding had been
instituted.
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Section 10.06. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen securities in the last paragraph of Section 5.05, no right or
remedy herein conferred upon or reserved to any of the Trustee, the related
Series Controlling Party or to the related Holders 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 10.07. Delay or Omission Not Waiver. No delay or omission of
any of the Trustee, the related Series Controlling Party or any Holder of any
related Note to exercise any right or remedy accruing upon any related Default
or related Event of Default shall impair any such right or remedy or constitute
a waiver of any such related Default or related Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the related Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the related Holders, as
the case may be.
Section 10.08. Control by Holders. If the Trustee is the Series
Controlling Party with respect to a Series, the Holders of a majority of the
Outstanding Amount of the Notes with respect to such Series 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 Notes; provided that
(1) such direction shall not be in conflict with any rule of
law, with this Master Agreement or with the related Series
Supplement, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 10.09. Waiver of Past Defaults. The Series Controlling Party
with respect to a Series may, as provided in the related Series Supplement, on
behalf of the Holders of all the Notes of the related Series waive any past
Default relating to such Series or Event of Default relating to such Series
hereunder and its consequences, except a Default relating to such Series:
(1) in the payment of the principal of or interest, if any, on
any Note of the related Series, or
(2) in respect of a covenant or provision hereof which cannot
be modified or amended without the consent of the Holder
of each Outstanding Note of the related Series affected.
The Trustee may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive any past Default or
Event of Default of the related Series. If a record date is fixed, the Holders
of the related Series on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to waive any such Default or Event of
Default, whether or not such Holders remain Holders after such record date;
and
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unless such majority in principal amount shall have been obtained prior to the
date which is 90 days after such record date, any such waiver previously given
shall automatically and without further action by any Holder be cancelled and of
no further effect.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Master Agreement and each applicable Series Supplements; but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereon.
Section 10.10. Undertaking for Costs. All parties to this Master
Agreement and the related Series Supplement agree, and each Holder of any Note
by such Holder's 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 this Master Agreement or the related Series Supplement, 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 Obligors, to any suit
instituted by the Trustee or any Series Support Provider, to any suit instituted
by any Holder, or group of Holders, holding in a the aggregate more than 10% of
the Outstanding Amount of the Notes of the related Series, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
or interest on any Note on or after the respective due dates expressed in such
Note and the related Series Supplement.
Section 10.11. Action on Notes. The Trustee's right to seek and recover
judgment on the Notes or under this Master Agreement or any Series Supplement
shall not be affected by the seeking, obtaining or application for any other
relief under or with respect to this Master Agreement or such Series Supplement.
Neither the lien hereof, the related Series Supplement nor any rights or
remedies of the Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Trustee against the Obligors or by the levy of any execution
under such judgment upon any portion of the related Series Trust Estate or upon
any of the assets of the Obligors.
ARTICLE XI
THE TRUSTEE
Section 11.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default with respect
to a Series:
(1) the Trustee undertakes to perform with respect to such Series
such duties and only such duties as are specifically set forth
in this Master Agreement and/or the related Series Supplement,
and no implied covenants or obligations shall be read into
this Master Agreement or the related Series Supplement against
the Trustee; and
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(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Master Agreement and/or
the related Series Supplement; but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Master
Agreement and/or the related Series Supplement.
(b) If an Event of Default with respect to a Series has occurred and is
continuing, the Trustee shall exercise such of the rights and powers with
respect to such Series vested in it by this Master Agreement and/or the related
Series Supplement, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(c) No provision of this Master Agreement or any Series Supplement
shall be construed to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct;
provided that
(1) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority of the
Outstanding Amount of the Notes of the related Series,
relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Master Agreement, the related Series Supplement or
the related Series Support with respect to the Notes of the
related Series; and
(4) no provision of this Master Agreement or the related Series
Supplement shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or thereunder, or
in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of such
funds or indemnity satisfactory to it against such risk or
liability is not reasonably assured to it.
(d) Whether or not herein or therein expressly so provided, every
provision of this Master Agreement and the related Series Supplement relating to
the conduct or affecting the
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liability of or affording protection to the Trustee shall be subject to the
provisions of paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Master
Agreement or the related Series Supplement.
(g) The Trustee shall, upon five Business Days' prior notice received
by the Trustee, permit any representative of the related Series Controlling
Party, the Servicer and the Obligors or any representative of the related Series
Support Provider, if any, during the Trustee's normal business hours, to examine
all books of account, records, reports and other papers of the Trustee relating
to the Notes of the related Series, to make copies and extracts therefrom and to
discuss the Trustee's affairs and actions, as such affairs and actions relate to
the Trustee's duties with respect to such Notes, with the Trustee's officers and
employees responsible for carrying out the Trustee's duties with respect to such
Notes.
(h) In no event shall the Trustee be required to perform, or be
responsible for the manner of performance of, any of the obligations of any
Servicer, with respect to any Series except during such time, if any, as the
Trustee, in its capacity as Successor Servicer for such Series shall be the
successor to, and be vested with the rights, powers, duties and privileges of
the Servicer in accordance with the provisions of Section 9.02 hereof.
(i) The Trustee shall maintain or cause to be maintained, in the
Borough of Manhattan in the City of New York, an office or agency where Notes
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Obligors in respect of the Notes, this Master
Agreement and the related Series Supplement may be served.
Section 11.02. Notice of Defaults. If a Default or Event of Default
occurs and is continuing with respect to a Series and if it is actually known to
a Responsible Officer of the Trustee, the Trustee shall mail to each Noteholder
of the related Series notice of such Default or Event of Default promptly, but
not later than 90 days after it occurs, and shall notify the Obligors, the
Originator, the Servicer and the related Series Support Provider, if any, of any
such Default or Event of Default promptly after it occurs. Except in the case of
a Default in payment of principal of or interest on any Note, the Trustee may
withhold the notice (but not to the related Series Support Provider, if any, or
the Obligors) if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is not materially adverse to the
interest of the Noteholders of the related Series. Except for a default in
respect of payment of principal or interest on any Notes, the Trustee shall not
be deemed to have actual notice or actual knowledge of any default or event
unless a Responsible Officer is specifically notified in writing of such event
by the Servicer, the Obligors or the Holders of not less than 25% in aggregate
principal amount of the Notes Outstanding.
Section 11.03. Certain Rights of Trustee. Subject to the provisions of
Section 11.01:
(a) the Trustee may conclusively rely on, and shall be fully protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report,
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notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Obligors mentioned herein shall be
sufficiently evidenced by an Obligors' Order;
(c) whenever in the administration of this Master Agreement and/or any
Series Supplement the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering, or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, request and conclusively rely upon an
Officer's Certificate and/or an Opinion of Counsel;
(d) the Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Master Agreement and/or any Series
Supplement at the request or direction of any of the related Series Support
Provider, if any, or the Holders of the related Series pursuant to this Master
Agreement, unless such Series Support Provider or such Holders shall have
offered to the Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation, into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the related Obligors, personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys,
custodians or nominees and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, attorney, custodian or
nominee appointed with due care by it hereunder;
(h) the Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers;
(i) the Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder;
(j) the permissive rights of the Trustee to do things enumerated in
this Master Agreement shall not be construed as a duty and the Trustee shall not
be answerable for other than its negligence or willful default;
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(k) the Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the Obligors or the Servicer; and
(l) in the event that the Trustee is also acting as Paying Agent, Note
Registrar or Transfer Agent hereunder, the rights and protections afforded to
the Trustee pursuant to this Article XI shall also be afforded to such Paying
Agent, Note Registrar or Transfer Agent.
Section 11.04. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein, in any Series Supplement and in the Notes, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Obligors, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Master Agreement, any Series Supplement or
of the Notes, or any Series Trust Estate. The Trustee or any Authenticating
Agent shall not be accountable for the use or application by the Obligors of
Notes or the proceeds thereof.
Section 11.05. May Hold Notes. The Trustee, any Authentication Agent, any
Paying Agent, any Note Registrar or any other agent of the Obligors, in its
individual or any other capacity, may become the owner or pledgee of Notes and,
subject to Sections 11.07 and 11.12, may otherwise deal with the Obligors with
the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Note Registrar or such other agent.
Section 11.06. Compensation and Indemnity.
(a) The Obligors agree to pay the Trustee, and the Trustee shall be
entitled to, certain annual fees with respect to its administration of the
related Notes and the related Series Trust Estate, which shall not be limited by
any law on compensation of a trustee of an express trust, and reasonable
out-of-pocket expenses (including, without limitation, legal fees and expenses),
disbursements and advances incurred or made by it, including costs of
collection, in addition to the compensation for its services as more further set
forth in the related Series Supplement. The agreement with respect to such fees
and expenses shall be set forth in a separate agreement between the Trustee and
the Obligors. The Obligors and the Servicer also agree to cause to be provided
to the Trustee and its officers, directors, agents and employees indemnity and
to hold them harmless against any and all loss, liability or expense (including
attorneys' fees and expenses) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder, the
Series Supplements and any other transaction or document contemplated herewith
or therewith, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance or any of its
powers or duties hereunder or under the Series Supplements. This subsection
11.06(a) shall survive the termination of this Master Agreement or the earlier
removal or resignation of the Trustee.
(b) When the Trustee incurs expenses after the occurrence of an Insolvency
Event with respect to any Obligor, the expenses are intended to constitute
expenses of administration under Title 11 of the United States Code or any other
applicable Federal or state bankruptcy, insolvency or similar law.
Notwithstanding anything else set forth in this Master Agreement, any Series
Supplement or any Series Related Documents, the Trustee agrees that the
obligations of the Obligors to the Trustee hereunder and under the related
Series Related Documents shall be
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recourse to the related Series Trust Estate only. In addition, the Trustee
agrees that its recourse to the Obligors and the related Series Trust Estate
shall be limited to the right to receive the distributions otherwise payable to
the Obligors as provided for in the payment priority provisions of the related
Series Supplement.
Section 11.07. Disqualification; Conflicting Interests. If this Master
Agreement is qualified under the Trust Indenture Act and if the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Master Agreement.
Section 11.08. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder, which (a) shall be a commercial bank or trust
company or organized and doing business under the laws of the United States of
America or any State thereof, (b) shall have a combined capital and surplus of
at least $50,000,000, (c) a long term deposit rating of at least A3 from Moody's
or otherwise be acceptable to Moody's and a long-term deposit rating of at least
A- from S&P or otherwise be acceptable to S&P and (d) shall be authorized to
exercise corporate trust powers and be subject to supervision or examination by
Federal or State authority. If such commercial bank or trust company publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such commercial bank or trust
company shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
Section 11.09. Resignation and Removal, Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 11.08.
(b) The Trustee may resign at any time with respect to the Notes by giving
written notice thereof to the Obligors. If the instrument of acceptance by a
successor Trustee required by Section 11.10 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of resignation, or its
removal under Sections 11.09(c) or 11.09(d), the resigning or removed Trustee,
the Obligors or the Holders of not less than a majority in aggregate principal
amount of Notes Outstanding may petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Notes.
(c) The Trustee may be removed at any time with respect to the Notes by
Act of the Holders of a majority in aggregate principal amount of Notes
Outstanding, delivered to the Trustee and to the Obligors.
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(d) If at any time:
(1) The Trustee shall fail to comply with Section 11.07 after
written request therefor by the Obligors or by any Holder who
has been a bona fide Holder of a Note for at least six months,
(2) the Trustee shall cease to be eligible under Section 11.08 and
shall fail to resign after written request therefor by the
Obligors or by any such Holder,
(3) the Trustee fails to perform in any material respect its
obligations under this Master Agreement or a Series
Supplement,
(4) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, the Obligors (with the
consent of each Series Support Provider as to which a Support
Default has not occurred and is continuing) may remove the
Trustee, or
(5) the Trustee commences a voluntary case under any federal or
state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or consents to
the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, conservator,
sequestrator or other similar official for Trustee or for any
substantial part of the Trustee's property, or makes any
assignment for the benefit of creditors or fails generally to
pay its debts as such debts become due or takes any corporate
action in furtherance of any of the foregoing.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Notes, the Obligors (with the consent of each Series Support Provider as
to which a Support Default has not occurred and is continuing) shall promptly
appoint a successor Trustee and shall comply with the applicable requirements of
Section 11.10.
(f) The Obligors shall give notice of each resignation and each removal of
the Trustee with respect to the Notes and each appointment of a successor
Trustee with respect to the Notes by mailing written notice of such event by
first-class mail, postage prepaid, to all holders of Notes as their names and
addresses appear in the Note Register. Each notice shall include the name of the
successor Trustee with respect to the Notes and the address of its Corporate
Trust Office.
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Section 11.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to the Notes, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Obligors, each Series Support Provider, if any
and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Obligors, the related Series
Support Provider, if any, or the successor Trustee, such retiring Trustee shall,
upon payment of its charges and expenses, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Obligors and each
Obligor shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (a) of this Section.
Section 11.11. Merger, Conversion, Consolidation or Succession to
Business. Any corporation or other entity into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation or other
entity resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or other entity succeeding to all
or substantially all the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation or other entity
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. The Trustee shall provide the Obligors and each Series Support
Provider prompt notice of any such transaction after the completion thereof. In
case any Notes shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Notes so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Notes.
Section 11.12. Preferential Collection of Claims Against Obligors. If this
Master Agreement is ever qualified under the Trust Indenture Act, then the
provisions of Section 311 of the Trust Indenture Act shall govern.
Section 11.13. Appointment of Authenticating Agent. As of the date of the
Master Agreement and at any time when any of the Notes remain Outstanding the
Trustee may appoint an Authenticating Agent or agents with respect to one or
more Series or Classes of Notes which shall be authorized to act on behalf of
the Trustee to authenticate Notes of such Series or Class issued upon exchange,
registration of transfer or partial prepayment thereof, or pursuant to Section
5.05, and Notes so authenticated shall be entitled to the benefits of this
Master Agreement and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Master Agreement or any Series Supplement to the authentication and delivery of
Notes by the Trustee upon exchange, registration of transfer or partial
prepayment thereof or the Trustee's certificate of authentication in connection
therewith, such reference shall be deemed to include authentication and delivery
on behalf of the Trustee by
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an Authenticating Agent and a certificate of authentication executed on behalf
of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Obligors, shall be authorized under law and shall meet the
eligibility criteria established for the Trustee, as set forth in Section 11.08
hereof. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Obligors. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Obligors. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Obligors and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of the
related Notes, as their names and addresses appear in the Note Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section. No resignation or termination of an Authenticating
Agent shall become effective until a successor Authenticating Agent shall be
appointed and qualified hereunder or the Trustee assumes the duties of
Authenticating Agent hereunder.
The Obligors agree to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
In the event an Authenticating Agent is appointed under this Master
Agreement, the Trustee shall incur no liability for such appointment or for any
misconduct or negligence of such Authenticating Agent, including without
limitation, its authentication of the Notes upon original issuance or pursuant
to Sections 5.03, 5.04 or 5.05.
If an appointment with respect to one or more Series or Classes is made
pursuant to this Section, the Notes of such Series or Classes may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
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This is one of the Notes referred to in the within-mentioned Master
Agreement and the within-mentioned Supplement thereto.
------------------------
not in its individual capacity, but
solely as Trustee
By:
---------------------
as Authenticating Agent
By:
---------------------
Authorized Officer
Section 11.14. Paying Agent.
(a) The payment responsibilities for the Notes shall be performed by a
Paying Agent, appointed by the Obligors which shall be authorized to exercise
corporate trust powers and shall meet the eligibility criteria established for
the Trustee, as set forth in Section 11.08 hereof. The Trustee is hereby
initially appointed Paying Agent for the purpose of making payments on the Notes
as herein provided.
(b) Each Paying Agent shall be acceptable to the Obligors, shall be
authorized under law and shall meet the eligibility criteria established for the
Trustee, as set forth in Section 11.08 hereof. If such Paying Agent publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Paying Agent shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time a Paying Agent shall cease to be eligible
in accordance with the provisions of this Section, such Paying Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which a Paying Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any mercer,
conversion or consolidation to which such Paying Agent shall be a party, or any
corporation succeeding to the corporate agency or corporate trust business of a
Paying Agent, shall continue to be a Paying Agent, provided such corporation
shall be otherwise eligible under this Section, without the execution or filing
of any paper or any further act on the part of the Trustee or the Paying Agent.
A Paying Agent may resign at any time by giving written notice thereof to
the Trustee and to the Obligors. The Trustee may at any time terminate the
agency of a Paying Agent by giving a written notice thereof to such Paying Agent
and to the Obligors. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Paying Agent shall cease to be eligible
in accordance with the provisions of this Section, the Trustee may appoint a
successor Paying Agent which shall be acceptable to the Obligors and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of the related Notes, as
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their names and addresses appear in the Note Register. Any successor Paying
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as a Paying Agent. No successor Paying Agent shall be
appointed unless eligible under the provisions of this Section. No resignation
or termination of a Paying Agent shall become effective until a successor Paying
Agent shall be appointed and qualified hereunder or the Trustee assumes the
duties of Paying Agent hereunder.
The Obligors agree to pay to each Paying Agent from time to time
reasonable compensation for its services under this Section.
In the event a Paying Agent is appointed under this Master Agreement, the
Trustee shall incur no liability for such appointment or for any misconduct or
negligence of such Paying Agent.
Section 11.15. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Master Agreement, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust may at the time be located, the Trustee, shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the related Series Trust Estate, and to vest in
such Person or Persons, in such capacity and for the benefit of the related
Noteholders, such title to the related Series Trust Estate, or any part hereof,
and subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor Trustee under Section 11.08 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 11.09 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder, and
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(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing, given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Each instrument appointing any
separate trustee or co-trustee shall refer to this Master Agreement and the
conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Master Agreement and the related Series Supplement(s), specifically including
every provision of this Master Agreement and the related Series Supplement(s)
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) If any separate trustee or co-trustee shall die, become incapable of
acting, resign or be removed, all of its estates, properties, rights, remedies
and trusts shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new successor trustee.
Section 11.16. Representations and Warranties of the Trustee. The Trustee
represents and warrants as follows:
(a) The Trustee has been duly organized and is validly existing as a
banking corporation in good standing under the laws of the State of New York.
(b) The Trustee is duly qualified to do business as a banking corporation
and is in good standing.
(c) The Trustee (i) has all necessary power, authority and legal rights to
(A) execute and deliver this Agreement, (B) carry out the terms of this Master
Agreement and the Series Supplements and (ii) has duly authorized by all
necessary action on its part, the execution, delivery and performance of this
Master Agreement.
(d) This Master Agreement constitutes a legal, valid and binding
obligation of the Trustee enforceable against the Trustee in accordance with its
terms except to the extent that such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, liquidation, or other similar laws
affecting the enforcement of creditors' rights generally, and by general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
ARTICLE XII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND OBLIGORS
Section 12.01. Obligors to Furnish Trustee Names and Addresses of Holders.
The Obligors will furnish or cause to be furnished to the Trustee with respect
to each Series of Notes
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(a) not more than five days after the earlier of (i) each Record Date with
respect to such Series and (ii) three months after the last Record Date with
respect to such Series, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of Notes of such Series as of
such Record Date, (b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Obligors of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; provided, however, that so long as the Trustee is the
Note Registrar, no such list shall be required to be furnished. The Trustee or,
if the Trustee is not the Note Registrar, the Obligors shall furnish or cause to
be furnished to the related Series Support Provider, if any, in writing on an
annual basis and at such other times as such Series Support Provider may request
a copy of such list with respect to the related Series.
Section 12.02. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 12.01 and the names and
addresses of Holders received by the Trustee in its capacity as Note Registrar.
The Trustee may destroy any list furnished to it as provided in Section 12.01
upon receipt of a new list so furnished.
(b) If three or more Holders of Notes of any particular Series (herein
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Note for a period
of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
of Notes of such Series with respect to their rights under this Master
Agreement, the related Series Supplement or under such Notes and is accompanied
by a copy of the form of proxy or other communication which such applicants
propose to transmit, then the Trustee shall, within five business days after the
receipt of such application, at its election, either
(i) afford such applicants access to the information preserved at
the time by the Trustee in accordance with subsection 12.02(a), or
(ii) inform such applicants as to the approximate number of Holders
whose names and addresses appear in the information preserved at the time
by the Trustee in accordance with subsection 12.02(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
(iii) Every Holder of Notes, by receiving and holding the same,
agrees with the Obligors and the Trustee that neither the Obligors nor the
Trustee nor any agent of either of them shall be held accountable by
reason of the disclosure of any such information as to the names and
addresses of the Holders in accordance with Section 12.01 or 12.02(b),
regardless of the source from which such information was derived, and that
the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under Section 12.01 or subsection
12.02(b).
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Section 12.03. Reports by Trustee. If this Master Agreement is ever
qualified under the Trust Indenture Act, then the Trustee shall comply with the
provisions of Section 313 of the Trust Indenture Act.
Section 12.04. Reports by Obligors. If this Master Agreement is qualified
under the Trust Indenture Act, the Obligors shall:
(1) file or cause to be filed with the Trustee, within 15 days
after the Obligors are required to file the same with the
Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the
Obligors may be required to file with the Commission pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934; or, if the Obligors are not required to file
information, documents or reports pursuant to either of said
Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports
which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(2) file or cause to be filed with the Trustee and the Commission,
in accordance with rules and regulations prescribed from time
to time by the Commission, such additional information,
documents and reports with respect to compliance by the
Obligors with the conditions and covenants of this Master
Agreement as may be required from time to time by such rules
and regulations;
(3) transmit or cause to be transmitted by mail to all Holders, as
their names and addresses appear in the Note Register and each
Series Support Provider within 30 days after the filing
thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Obligors
pursuant to paragraphs (1) and (2) of this Section as may be
required by rules and regulations prescribed from time to time
by the Commission; and
(4) furnish any other periodic reports as required by the Trust
Indenture Act.
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ARTICLE XIII
MASTER AGREEMENT SUPPLEMENTS
Section 13.01. Supplements Affecting All Series, or the Master Agreement
Generally.
(a) Without the consent of any Holders, the Obligors, the Trustee when
authorized by an Obligors' Order and the Servicer, at any time and from time to
time, may enter into one or more Master Agreement Supplements, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to authorize the issuance of one or more series of Notes;
(2) to evidence the succession, in compliance with the applicable
provisions hereof, of another corporation to any Obligors and
the assumption by any such successor of the covenants of the
Obligors herein, in any Series Supplement and in the Notes; or
(3) to add to the covenants of the Obligors for the benefit the
Holders of the Notes or to surrender any right or power herein
conferred upon the Obligors; or
(4) to add to or change any of the provisions of this Master
Agreement to such extent as shall be necessary to permit or
facilitate the issuance of Notes in bearer form, registrable
or not registrable as to principal, and with or without
interest coupons, or to permit or facilitate the issuance of
Notes in uncertificated form, or to facilitate the issuance of
Notes in global form through the facilities of a Depository;
or
(5) to modify the restrictions on and procedures for resale and
other transfers of the Notes to reflect any change in
applicable law or regulation (or the interpretation thereof)
or in practices relating to the resale or transfer of
restricted securities generally; or
(6) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes and
to add to or change any of the provisions of this Master
Agreement as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 11.15; or
(7) to modify, eliminate or add to the provisions of this Master
Agreement to such extent as shall be necessary to qualify,
requalify or continue the qualification of this Master
Agreement (including any supplemental indenture) under the
Trust Indenture Act, or under any similar Federal statute
hereafter enacted, and to add to this Master Agreement such
other provisions as may be expressly permitted by the Trust
Indenture Act, excluding, however, the provisions referred to
in Section 316(a)(2) of the
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Trust Indenture Act as in effect at the date as of which this
instrument was executed or any corresponding provision in any
similar Federal statute hereinafter enacted; or
(8) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to
matters or questions arising under this Master Agreement, as
long as such action shall not adversely affect the interests
of the Holders of Notes of any Series affected thereby in any
material respect.
(b) The Obligors, the Servicer and the Trustee, when authorized by an
Obligors' Order, may, enter into a Master Agreement Supplement or Supplements
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Master Agreement or of modifying in
any manner the rights of the Holders of Notes under this Master Agreement;
provided that with respect to any amendment made or supplement entered into
under this subsection (b), such amendment or supplement shall require, as a
condition thereto, that (i) there be delivered to the Trustee the written
consent of the Holders of not less than 662/3rds% of the Notes Outstanding and
(ii) there be delivered to the Trustee written evidence that the Rating Agency
Condition has been met; notwithstanding the foregoing, no such Master Agreement
Supplement shall, without the consent of the Holder of each Outstanding Note of
each affected Series affected thereby,
(1) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount
thereof or the rate of, or method of computation of the rate
of, interest thereon or any prepayment or redemption price
with respect thereto, change the provision of this Master
Agreement relating to the application or collections on, or
the proceeds of the sale of, the related Series Trust Estate
to payment of principal of or interest on the Notes, or change
any place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such
payment on or after the respective due dates thereof, or
(2) reduce the percentage of the Outstanding Amount of the Notes,
the consent of whose Holders is required for any such Master
Agreement Supplement, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions
of this Master Agreement or certain defaults hereunder and
their consequences) provided for in this Master Agreement, or
(3) permit the creation of any lien prior to the lien created by
the related Series Supplement with respect to any part of the
related Series Trust Estate, or terminate the lien created by
the related Series Supplement on any Pledged Property subject
hereto or deprive any related Holder of the security afforded
by the lien of the related Series Supplement, except to
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the extent expressly permitted by this Master Agreement, the
related Series Supplement or any other related Series Related
Document, or
(4) modify any of the provisions of this Section except to
increase any such percentage or to provide that certain other
provisions of this Master Agreement, the related Supplement or
the related Series Related Documents cannot be modified or
waived without the consent of the Holder of each Outstanding
Note affected thereby, or
(5) modify or alter the provisions of the second proviso to the
definition of the term "Outstanding."
The Trustee may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any Master Agreement
Supplement described in this Section 13.01. If a record date is fixed, the
applicable Holders on such record date or their duly designated proxies, and
only such Persons, shall be entitled to consent to such Master Agreement
Supplement, whether or not such Holders remain Holders after such record date;
provided that, unless such consent shall have become effective by virtue of the
requisite percentage having been obtained prior to the date which is 90 days
after such record date, any such consent previously given shall automatically
and without further action by any Holder be cancelled and of no further effect.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed Master Agreement Supplement, but it
shall be sufficient if such Act shall approve the substance thereof.
The Obligors shall in their discretion (which may be based on an Opinion
of Counsel) determine whether or not any Notes would be affected by any Master
Agreement Supplement and any such determination shall be conclusive upon the
Holders of all Notes, whether theretofore or thereafter authenticated and
delivered hereunder. The Trustee shall not be liable for any such determination.
Promptly after the execution by the parties hereto of any Master Agreement
Supplement pursuant to this Section, the Trustee shall mail to the Holders of
the Notes of the affected Series a notice setting, forth in general terms the
substance of such Master Agreement Supplement. Any failure of the Trustee to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such Master Agreement Supplement.
Section 13.02. Supplements Authorizing a Series of Notes.
(a) Each Series of Notes issued hereunder shall be issued pursuant to a
Series Supplement, which shall set forth the terms and provisions of such
Series.
(b) Amendments to Series Supplements shall be covered by the provisions of
Section 13.01, which for such purpose shall be deemed to refer only to the
related Series Supplement. The Trustee may conclusively rely on an Opinion of
Counsel as to which Series Supplements relate to which Series, or to this Master
Agreement (and thus all Series) as a whole.
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Section 13.03. Execution of Master Agreement Supplements. In executing, or
accepting the additional trusts created by, any Master Agreement Supplement
permitted by this Article or the modifications made to this Master Agreement,
the Trustee may receive, and (subject to Section 11.01) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such Master
Agreement Supplement is authorized or permitted by this Master Agreement. The
Trustee may, but shall not be obligated to, enter into any such Master Agreement
Supplement which affects the Trustee's own rights, duties or immunities under
this Master Agreement or otherwise.
Section 13.04. Effect of Master Agreement Supplements. Upon the execution
of any Master Agreement Supplement under this Article, this Master Agreement
shall be modified in accordance therewith, and such Master Agreement Supplement
shall form a part of this Master Agreement for all purposes, and every Holder of
Notes theretofore or thereafter authenticated and delivered hereunder shall be
bound thereby.
Section 13.05. Reference in Notes to Master Agreement Supplements. Notes
authenticated and delivered after the execution of any Master Agreement
Supplement pursuant to this Article may, and shall if required by the Obligors,
bear a notation as to any matter provided for in such Master Agreement
Supplement. If the Obligors shall so determine, new Notes so modified as to
conform, in the opinion of the Obligors, to any such Master Agreement Supplement
may be prepared and executed by the Obligors and authenticated and delivered by
the Trustee in exchange for Outstanding Notes.
ARTICLE XIV
COVENANTS
The Obligors hereby covenant and agree that so long as this Master
Agreement is in effect and any Notes remain Outstanding:
Section 14.01. Payment of Principal and Interest. The Obligors will duly
and punctually pay or cause to be paid, on a nonrecourse basis and solely from
the funds available from the related Series Trust Estate, the principal of and
interest on the Notes of the related Series in accordance with the terms of such
Notes, this Master Agreement and the related Series Supplement. Amounts on
deposit in the related Series Accounts (other than amounts representing payments
under any related Series Support) in respect of principal and interest on a
Payment Date shall constitute full satisfaction of the Obligors' obligation with
respect to the payment of such principal and interest on the related Notes.
Amounts properly withheld under the Code by any Person from a payment to any
Noteholder of interest or principal shall be considered as having been paid by
the Obligors to such Noteholder for all purposes of this Master Agreement.
Section 14.02. [Reserved.]
Section 14.03. Consolidation, Merger, Sale of Assets.
(a) No Obligor shall consolidate or merge with or into any other Person,
unless
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(i) the Person (if other than such Obligor) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any State and shall
expressly assume, by a Master Agreement Supplement, executed and delivered
to the Trustee, the Obligors and the Servicer the due and punctual payment
of the principal of and interest on all Notes previously issued and the
performance or observance of every agreement and covenant of this Master
Agreement and the related Series Supplement and each other related Series
Related Document on the part of such Obligor to be performed or observed,
all as provided herein;
(ii) immediately after giving effect to such transaction, no Default
with respect to any Series or Event of Default with respect to any Series
previously issued and shall have occurred and be continuing;
(iii) the Trustee has received written evidence that the Rating
Agency Condition for such consolidation or merger has been satisfied;
(iv) each Series Support Provider relating to such Series previously
issued, if any, shall have consented in writing to such transaction;
(v) any action as is necessary to maintain the lien and security
interest created in favor of the Trustee by the related Series Supplement
shall have been taken;
(vi) the Obligors and the Trustee shall have received an Opinion of
Counsel to the effect that such transaction will not have any material
adverse tax consequence to any Noteholder;
(vii) the Obligors shall have delivered to the Trustee an Officer's
Certificate and Opinion of Counsel (which shall describe the actions taken
as required by clause (v) above or that no such actions will be taken)
each stating that such consolidation or merger comply with this Master
Agreement and that all conditions precedent herein provided for relating
to such transaction have been complied with; and
(viii)the Person (if other than the Obligor) formed by or surviving
such consolidation or merger has a net worth, immediately after such
consolidation or merger, that is (A) greater than zero and (B) not less
than the net worth of the applicable Obligor immediately prior to giving
effect to such consolidation or merger.
(b) No Obligor shall convey or transfer all or substantially all of its
properties or assets or any Series Trust Estate to any Person (except as
expressly permitted by this Master Agreement, the related Series Supplement or
the related Series Related Documents), unless
(i) the Person that acquires by conveyance or transfer such Series
Trust Estate shall (A) be a United States citizen or a Person organized
and existing under the laws of the United States of America or any State,
(B) expressly assume, by a Master Agreement Supplement, executed and
delivered to the Trustee the due and punctual payment of the principal of
and interest on all Notes previously issued and the performance or
observance of every agreement and covenant of this Master Agreement, the
related Series
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Supplement or the related Series Related Documents on the part of such
Obligor to be performed or observed, all as provided herein or therein,
(C) expressly agree by means of such Master Agreement Supplement that all
right, title and interest so conveyed or transferred shall be subject and
subordinate to the rights of Holders of the related Notes, (D) unless
otherwise provided in such Master Agreement Supplement, expressly agree to
indemnify, defend and hold harmless such Obligor against and from any
loss, liability or expense arising under or related to this Master
Agreement, the related Series Supplement and the Notes previously issued
and (E) expressly agree by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the related Notes;
(ii) immediately after giving effect to such transaction, no Default
with respect to the affected Series or Event of Default with respect to
any Series previously issued shall have occurred and be continuing;
(iii) the Trustee has received written evidence that the Rating
Agency condition for such conveyance or transfer has been satisfied;
(iv) each Series Support Provider relating to such Series previously
issued, if any, shall have consented in writing to such transaction;
(v) any action as is necessary to maintain the lien and security
interest created in favor of the related Trustee(s) by the related Series
Supplement(s) shall have been taken;
(vi) the Obligors and the Trustee shall have received an Opinion of
Counsel to the effect that such transaction will not have any material
adverse tax consequence to any Noteholder;
(vii) the Obligors shall have delivered to the Trustee an Officer's
Certificate and Opinion of Counsel (which shall describe the actions taken
as required by clause (v) above or that no such actions will be taken)
each stating that such consolidation or merger comply with this Master
Agreement and that all conditions precedent herein provided for relating
to such transaction have been complied with; and
(viii)the Person that acquires by conveyance or transfer has a net
worth, immediately after such consolidation or merger, that is (A) greater
than zero and (B) not less than the net worth of the applicable Obligor
immediately prior to such conveyance or transfer.
(c) Upon any merger or consolidation of an Obligor in accordance with this
Section 14.03, the Person formed by or servicing such merger or consolidation
(if other than the Obligor) shall succeed to the rights and obligations of the
Obligor under this Master Agreement with the same effect as if such Person had
been a named Obligor herein.
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Section 14.04. Negative Covenants. Until the Termination Date, no Obligor
shall:
(i) except as expressly permitted by this Master Agreement, each
related Series Supplement and each related Series Related Document, sell,
transfer, exchange or otherwise dispose of any of the properties or assets
constituting any Series Trust Estate, unless directed to do so by the
related Series Controlling Party which direction shall be given as
provided in the related Series Supplement;
(ii) claim any credit on, or make any deduction from the principal
or interest in respect of, the Notes (other than amounts properly withheld
from such payments under the Code) or assert any claim against any present
or former Noteholder by reason of the payment of the taxes levied or
assessed upon any part of any Series Trust Estate;
(iii) (A) except as permitted by this Master Agreement, any related
Series Supplement or any related Series Related Documents, permit the
validity or effectiveness of the related Series Supplement to be impaired,
or permit the lien in favor of the Trustee created by the related Series
Supplement to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations with respect to any Notes under this Master Agreement or any
Series Supplement except as may be expressly permitted hereby, (B) permit
any lien, charge, excise, claim, security interest, mortgage or other
encumbrance (other than the lien in favor of the Trustee created by the
related Series Supplement) to be created on or extend to or otherwise
arise upon or burden any Series Trust Estate or any part thereof or any
interest therein or the proceeds thereof (other than tax liens, mechanics'
liens, storage liens and other liens that arise by operation of law, in
each case on any Pledged Property and arising solely as a result of an
action or omission of the related underlying obligors), (C) permit the
lien in favor of the Trustee created by the related Series Supplement not
to constitute a valid first priority (other than with respect to any such
tax, mechanics', storage or other lien) security interest in the related
Series Trust Estate (provided that no notation or filing of the transfer
of the Liens on the title documents of any Pledged Property is required as
of the date of this Master Agreement), or (D) amend, modify or fail to
comply with the provisions of the related Series Related Documents without
the prior written consent of the related Series Controlling Party which
consent shall be given as provided in the related Series Supplement; or
(iv) dissolve or liquidate in whole or in part.
Section 14.05. Performance of Obligations: Servicing of each Series Trust
Estate.
(a) No Obligor will take any action and will use its best efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's material covenants or obligations under any instrument or
agreement included in any Series Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Master Agreement, the related Series Supplement or
related Series Related Document or such other instrument or agreement.
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(b) Any Obligor may contract with other Persons (including other Obligors)
to assist it in performing its duties under this Master Agreement, and any
performance of such duties by a Person identified to the Trustee and each
related Series Support Provider in an Officer's Certificate of such Obligor
shall be deemed to be action taken by such Obligor.
(c) Each Obligor will punctually perform and observe or cause to be
performed and observed all of its obligations and agreements contained in this
Master Agreement, each related Series Supplement and each related Series Related
Document and in the instruments and agreements included in each Series Trust
Estate, including but not limited to filing, or causing to be filed all UCC
financing statements and continuation statements required to be filed by the
terms of this Master Agreement, each related Series Supplement and each related
Series Related Document in accordance with and within the time periods provided
for herein and therein.
(d) If any Obligor has knowledge of the occurrence of a "Servicer
Termination Event" under any Series Related Document, the Obligor shall promptly
notify the Trustee and the related Series Support Provider, if any, in writing
and shall specify in such notice the action, if any, such Obligor is taking with
respect of such default. If such Servicer Termination Event shall arise from the
failure of the Servicer to perform any of its duties or obligations hereunder
with respect to the related Series Trust Estate, the Obligors shall take all
reasonable steps available to it to remedy such failure.
(e) Upon any termination of any Servicer's rights and powers pursuant to
any Series Related Document, the Obligors shall promptly notify the Trustee in
writing. As soon as a successor Servicer is appointed, the Obligors shall notify
the Trustee of such appointment, specifying in such notice the name and address
of such successor Servicer.
Section 14.06. Money for Note Payments to Be Held in Trust. All payments
of amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the related Series Account shall be made on behalf of the
Obligors by the Trustee or by another Paying Agent, and no amounts so withdrawn
from any Series Account for payments of Notes shall be paid over to any Obligor,
except as provided in the related Series Supplement.
The Obligors will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will, with respect to each related Series of Notes:
(1) hold all sums held by it for the payment of the principal of
or interest on the related Notes in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Obligors (or any
other obligor upon the related Notes) in the making of any
payment of principal or interest on such Notes;
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(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent;
(4) immediately resign as a Paying Agent and forthwith pay to the
Trustee all sums held by it in trust for the payment of the
related Notes if at any time it ceases to meet the standards
required to be met by a Paying Agent at the time of its
appointment; and
(5) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect
to any applicable reporting requirements in connection
therewith.
The Obligors may at any time, for the purpose of obtaining the
satisfaction and discharge of any Series Supplement or for any other purpose,
pay, or by Obligors' Order direct any Paying Agent in writing to pay, to the
Trustee all sums held in trust by such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, in trust for the
payment of the principal of or interest on any Note and remaining unclaimed for
two years after such principal or interest has become due and payable shall be
paid to the Obligors, as specified in an Obligors' Order; and the Holder of such
Note shall thereafter, as an unsecured general creditor, look only to the
Obligors for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, shall thereupon cease; provided, however
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Obligors cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the Borough of Manhattan, The City of
New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Obligors.
Section 14.07. Corporate Existence; Separate Corporate Existence. Except
as provided in Section 14.03, each Obligor will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and material rights (charter and statutory) and material franchises of
such Obligor; provided, however that the Obligors with the prior written consent
of any Series Support Provider shall not be required to preserve any such right
or franchise if such Obligor shall determine that the preservation thereof is no
longer desirable in the conduct of the business of such Obligor, and that the
loss thereof is not disadvantageous in any material respect to the Holders of
the related Notes. Each Obligor shall, in addition:
(i) Maintain its own bank or securities account or accounts,
separate from those of any Affiliate of such Obligor, with
commercial financial institutions. The funds and other property of
such Obligor will not be diverted to any other Person or for other
than the corporate use of such Obligor, and, except
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as may be expressly permitted by this Master Agreement or the
Contribution Agreement or any Contribution Agreement Supplement to
which it is a party, the funds and the other property of such
Obligor shall not be commingled with those of any Affiliate of such
Obligor.
(ii) Ensure that, to the extent that it shares the same
officers or other employees as any of its stockholders or
Affiliates, the salaries of and the expenses related to providing
benefits to such officers and other employees shall be fairly
allocated among such entities, and each such entity shall bear its
fair share of the salary and benefit costs associated with all such
common officers and employees.
(iii) Ensure that, to the extent that it jointly contracts
with any of its stockholders or Affiliates to do business with
vendors or service providers or to share overhead expenses, the
costs incurred in so doing shall be allocated fairly among such
entities, and each such entity shall bear its fair share of such
costs. To the extent that such Obligor contracts or does business
with vendors or service providers where the goods and services
provided are partially for the benefit of any other Person, the
costs incurred in so doing shall be fairly allocated to or among
such entities for whose benefit the goods and services are provided,
and each such entity shall bear its fair share of such costs. All
material transactions between such Obligor and any of its Affiliates
shall be only on an arm's length basis and shall receive the
approval of such Obligor's Board of Directors including at least two
Independent Directors (defined below).
(iv) Maintain a principal executive and administrative office
through which its business is conducted and a telephone number
separate from those of its stockholders and Affiliates. To the
extent that such Obligor and any of its stockholders or Affiliates
have offices in contiguous space, there shall be fair and
appropriate allocation of overhead costs among them, and each such
entity shall bear its fair share of such expenses.
(v) Conduct its affairs strictly in accordance with its
Articles of Incorporation and observe all necessary, appropriate and
customary corporate formalities, including, but not limited to,
holding all regular and special stockholders' and directors'
meetings appropriate to authorize all corporate action, keeping
separate and accurate minutes of such meetings, passing all
resolutions or consents necessary to authorize actions taken or to
be taken, and maintaining accurate and separate books, records and
accounts, including, but not limited to, payroll and intercompany
transaction accounts. Regular stockholders' and directors' meetings
shall be held at least annually.
(vi) Ensure that its Board of Directors shall at all times
include at least two Independent Directors (for purposes hereof,
"Independent Directors" shall mean any member of the Board of
Directors of such Obligor that is not and has not at any time during
the preceding five years been (x) a director, officer, consultant,
agent, employee, affiliate or shareholder of any Affiliate of such
Obligor or any affiliate or subsidiary thereof, or of any major
creditor thereof, and
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who is not the beneficial owner, at the time of such individual's
appointment as an Independent Director, of more than 1,000 shares in
the aggregate of all classes of common stock of an Affiliate of such
Obligor, or if greater, such number of shares the value of which
constitutes no more than 10% of such individual's net worth or (y) a
member of the immediate family of any of the foregoing).
(vii) Ensure that decisions with respect to its business and
daily operations shall be independently made by such Obligor
(although the officer making any particular decision may also be an
officer or director of an Affiliate of such Obligor) and shall not
be dictated by an Affiliate of such Obligor.
(viii) Act solely in its own corporate name and through its
own authorized officers and agents, and no Affiliate of such Obligor
shall be appointed to act as agent of such Obligor, except as
expressly contemplated by this Master Agreement or the Contribution
Agreement or any Contribution Agreement Supplement to which it is a
party. The Obligor shall at all times use its own stationery.
(ix) Ensure that no Affiliate of such Obligor shall advance
funds to such Obligor, and no Affiliate of such Obligor will
otherwise guaranty debts of, such Obligor; provided, however, that
an Affiliate of such Obligor may provide funds to such Obligor in
connection with the capitalization of such Obligor, including
capital necessary to assure that such Obligor has "substantial
assets" as described in Treasury Regulation Section 301.7701-2(d)(2)
as in effect on December 16, 1996 prior to amendment by Treasury
Decision 8697.
(x) Other than organization expenses and as expressly provided
herein, pay all expenses, indebtedness and other obligations
incurred by it.
(xi) Not enter into any guaranty, or otherwise become liable,
with respect to any obligation of any Affiliate of such Obligor nor
shall such Obligor make any loans to any Person.
(xii) Ensure that any financial reports required of such
Obligor shall be issued separately from, but may be consolidated
with, any reports prepared for any of its Affiliates.
(xiii) Ensure that at all times it is adequately capitalized
to engage in the transactions contemplated in its Articles of
Incorporation.
Section 14.08. Payment of Taxes and Other Claims. Each Obligor will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon such Obligor on any portion of any Series Trust Estate, or upon the
income, profits or property of such Obligor, and (2) all lawful claims for
labor, materials and supplies which, if unpaid, might by law become a Lien upon
the Property of such Obligor; provided, however, that such Obligor shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate
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proceedings and such Obligor shall have set aside on its books adequate reserves
with respect thereto.
Section 14.09. Amendment of Organizational Documents.
(a) No Obligor will make any material change in any of its Organizational
Documents without the prior written consent of the related Series Controlling
Parties, and shall not amend its Organizational Documents in any manner that
materially and adversely affects the Holders of the related Notes or any related
Series Support Provider.
(b) No Obligor shall take any action which would adversely impact the
corporate separateness of such Obligor from its parent, or which would adversely
impact its status as a "bankruptcy remote" entity. Each Obligor shall strictly
abide by the restrictive provisions of its Organizational Documents in
furtherance of the forgoing.
Section 14.10. Rule 144A Information. With respect to the Holder of any
Unregistered Note, the Obligors shall promptly furnish or cause to be furnished
to such Holder or to a prospective purchaser of such an Unregistered Note
designated by such Holder, as the case may be, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act ("Rule 144A
Information") in order to permit compliance by such Holder with Rule 144A in
connection with the resale of such Unregistered Note by such Holder; provided,
however that the Obligors shall not be required to furnish Rule 144A Information
in connection with any request made on or after the date which is three years
from the later of (i) the date such Note (or any predecessor Note) was acquired
from the Obligors or (ii) the date such Note (or any predecessor Note) was last
acquired from an "affiliate" of the Obligors within the meaning of Rule 144
under the Securities Act; and provided, further, that the Obligors shall not be
required to furnish such information at any time to a prospective purchaser
located outside the United States who is not a "United States Person" within the
meaning of Regulation S under the Securities Act if such Note may then be sold
to such prospective purchaser in accordance with Rule 904 under the Securities
Act (or any successor provision thereto).
Section 14.11. Further Instruments and Acts. Upon request of the Trustee
or any Series Support Provider, each Obligor will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Master Agreement, any
related Series Supplement and any related Series Related Document.
Section 14.12. Compliance with Laws. Each Obligor shall comply with all
applicable Requirements of Law, the noncompliance with which would, individually
or in the aggregate, materially and adversely affect the ability of such Obligor
to perform its obligations under the related Notes, this Master Agreement, the
Contribution Agreement the related Series Supplements or the related Series
Related Document.
Section 14.13. Income Tax Characterization. For purposes of Federal
income, state and local income and franchise and any other income taxes, each
Obligor will treat the related Notes as debt of such Obligor.
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ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.01. Counterparts. For the purpose of facilitating the execution
of this Master Agreement and for other purposes, this Master Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
Section 15.02. Governing Law. This Master Agreement, each Series
Supplement and each Note 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
regard to the conflict of laws provisions of any State.
Section 15.03. Notices. All demands, notices and communications (other
than periodic communications of a routine nature made in connection with the
dissemination of information regarding the Pledged Property and the Servicer
required to be delivered hereunder, which shall be delivered or mailed by first
class mail) hereunder shall be in writing, personally delivered or mailed by
first class mail or overnight courier, or delivered by facsimile and shall be
deemed to have been duly given upon receipt (a) in the case of the Originator
and the Servicer, at the following address: Advanta Business Services Corp.,
1020 Laurel Oak Road, Voorhees, New Jersey 08043, Attention: Treasurer; (b) in
the case of the Trustee, at the following address: Bankers Trust Company, 4
Albany Street, New York, New York 10006, Attention: Corporate Trust and Agency
Services -- Structured Finance Team; (c) in the case of the Obligors, at the
following, address: Advanta Leasing Receivables Corp. VIII, 639 Isbell Road,
Suite 390A, Reno, Nevada 89509; Attention: Treasurer, and Advanta Leasing
Receivables Corp. IX, 639 Isbell Road, Suite 390B, Reno, Nevada 89509;
Attention: Treasurer; and (d) in the case of any Series Support Party, at the
address specified for such notice in the applicable Series Supplement, or, in
each of the foregoing cases (a) through (d), at such other address as shall be
designated by such party in a written notice to the other parties. Any notice
required or permitted to be mailed to a Noteholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Note
Register or the related Series Supplement, respectively. Any notice to a
Noteholder which is so mailed within the time prescribed in this Master
Agreement shall be conclusively presumed to have been duly given on the fifth
Business Day following mailing, whether or not the Noteholder receives such
notice.
Section 15.04. Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Master Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Master Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Master
Agreement or of the Notes or the rights of the Holders thereof.
Section 15.05. Binding Effect. This Master Agreement shall inure to the
benefit of, and shall be binding upon, (i) the Servicer, (ii) each Obligor,
(iii) the Trustee, (iv) the Noteholders, (v) the Series Support Providers, if
any, (vi) to the extent expressly provided hereunder, the Affiliates of the
Trustee, the Noteholders and the Series Support Providers, if any, and (vii) the
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respective successors and permitted assigns of each of the foregoing, subject,
in each of the foregoing cases, to the limitations contained in this Master
Agreement.
Section 15.06. Exhibits. The exhibits to this Master Agreement are hereby
incorporated herein and made a part hereof and are an integral part of this
Master Agreement.
Section 15.07. Calculations. All interest rate calculations under this
Master Agreement will be carried out to at least seven decimal places.
Section 15.08. Further Assurances. The Obligors and the Servicer agree to
do and perform and the Obligors agree to cause the Originator to do and perform,
from time to time, any and all acts and to execute (or cause the Originator to
execute) any and all further instruments and documents required or reasonably
requested by the Trustee to effect more fully the purposes of this Master
Agreement, including, without limitation, the execution of any financing
statements or continuation statements relating to the Trust Estate for filing
under the provisions of the UCC of any applicable jurisdiction.
Section 15.09. Nonpetition Covenant. Notwithstanding any prior termination
of this Master Agreement, none of the parties hereto, any Noteholder, any Series
Support Provider, the Originator, nor any Obligor shall, prior to the date which
is one year and one day after the payment in full of the Notes of all Series,
acquiesce, petition or otherwise invoke or cause any Obligor to invoke the
process of any Governmental Authority for the purpose of commencing or
sustaining a case against any 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 any Obligor
or any substantial part of its property or ordering the winding-up or
liquidation of the affairs of any Obligor; provided, however, that nothing
herein shall prohibit the Trustee from filing a proof of claim or otherwise
participating in any Proceedings instituted by any other Person.
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IN WITNESS WHEREOF, the Servicer, the Obligors and the Trustee have caused
this Master Agreement to be duly executed by their respective officers, all as
of the day and year first above written.
ADVANTA BUSINESS SERVICES
CORP., as Servicer
By: /s/ Mark Shapiro
-----------------------------------
Name: Mark Shapiro
Title: Assistant Treasurer
ADVANTA LEASING RECEIVABLES
CORP. VIII, as Obligor
By: /s/ Mark Shapiro
-----------------------------------
Name: Mark Shapiro
Title: Treasurer
ADVANTA LEASING RECEIVABLES
CORP. IX, as Obligor
By: /s/ Mark Shapiro
-----------------------------------
Name: Mark Shapiro
Title: Treasurer
BANKERS TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By: /s/ Peter Becker
-----------------------------------
Name: Peter Becker
Title: Assistant Vice President
<PAGE> 1
Exhibit 4.3
EXECUTION COPY
------------------------------------------------------------------------------
MASTER SALE AND CONTRIBUTION AGREEMENT
among
ADVANTA BUSINESS SERVICES CORP.,
as the Originator and Servicer,
ADVANTA LEASING RECEIVABLES CORP. VIII
and
ADVANTA LEASING RECEIVABLES CORP. IX,
as the Obligors
Dated as of
August 26, 1999
------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I
DEFINITIONS
SECTION 1.01 Terms Defined in the Master Agreement.................. 1
SECTION 1.02 Additional Definitions................................. 2
ARTICLE II
CONVEYANCE OF CONVEYED ASSETS
SECTION 2.01 Conveyance............................................. 3
SECTION 2.02 Custody of Contract Files.............................. 4
SECTION 2.03 Servicing of Conveyed Assets........................... 4
SECTION 2.04 Conveyance of Conveyed Assets.......................... 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.0l Representations and Warranties of ABS.................. 5
SECTION 3.02 Representations and Warranties of the Obligors......... 7
SECTION 3.03 Repurchase Contracts and Equipment by ABS.............. 10
ARTICLE IV
COVENANTS OF ABS AND THE OBLIGORS
SECTION 4.01 ABS Covenants.......................................... 10
SECTION 4.02 Covenants of Each Obligor.............................. 13
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01 Conditions to the Obligors' Obligations................ 14
SECTION 5.02 Conditions to ABS' Obligations......................... 15
ARTICLE VI
TERMINATION
SECTION 6.01 Termination............................................ 16
SECTION 6.02 Effect of Termination.................................. 16
</TABLE>
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01 Amendment.............................................. 16
SECTION 7.02 Governing Law.......................................... 16
SECTION 7.03 Notices................................................ 16
SECTION 7.04 Severability of Provisions............................. 17
SECTION 7.05 Assignment............................................. 17
SECTION 7.06 Further Assurances..................................... 17
SECTION 7.07 No Waiver; Cumulative Remedies......................... 17
SECTION 7.08 Counterparts........................................... 17
SECTION 7.09 Binding Effect......................................... 17
SECTION 7.10 Merger and Integration................................. 17
SECTION 7.11 Headings............................................... 18
SECTION 7.12 Exhibit................................................ 18
SECTION 7.13 No Bankruptcy Petition Against any Obligor............. 18
</TABLE>
-xxii-
<PAGE> 4
MASTER SALE AND CONTRIBUTION AGREEMENT
THIS MASTER SALE AND CONTRIBUTION AGREEMENT, dated as of August 26,
1999 (this "Master Sale Agreement"), is entered into among ADVANTA BUSINESS
SERVICES CORP., a Delaware corporation ("ABS"), as Originator and as Servicer
under the Master Agreement, ADVANTA LEASING RECEIVABLES CORP. VIII, a Nevada
corporation located at 639 Isbell Road, Suite 390-A, Reno, Nevada 89509 ("ALRC
VIII") and ADVANTA LEASING RECEIVABLES CORP. IX, a Nevada corporation located at
639 Isbell Road, Suite 390-B, Reno, Nevada 89509 ("ALRC IX"), (ALRC VIII and
ALRC IX each individually, an "Obligor" and, together, the "Obligors") as the
purchasers or recipient of Conveyed Assets hereunder.
W I T N E S S E T H:
WHEREAS, ABS, in the ordinary course of its business has,
originated or acquired a portfolio of Contracts; and
WHEREAS, ABS desires to sell, contribute, transfer and assign all of
its right, title and interest in and to the Conveyed Assets (as defined below)
to the Obligors upon the terms and conditions set forth herein;
WHEREAS, the Obligors, ABS, in its capacity as Servicer, and Bankers
Trust Company, as Trustee, has on the date hereof entered into a Master Facility
Agreement, dated as of August 26, 1999 (the "Master Agreement") pursuant to
which the Obligors will finance, in whole or in part, their purchase and holding
of the Conveyed Assets;
WHEREAS, it is contemplated that, following the purchase of the
Conveyed Assets by the Obligors, ABS, as Servicer or any successor thereto as
Servicer under the Master Agreement, will administer and service the Conveyed
Assets.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Terms Defined in the Master Agreement. For the purposes
of this Master Sale Agreement, capitalized terms used herein but not otherwise
defined shall have the respective meanings assigned to such terms in the Master
Agreement.
<PAGE> 5
SECTION 1.02 Additional Definitions. Whenever used in this Master
Sale Agreement, the following words and phrases shall have the following
meanings:
"ABS" shall mean Advanta Business Services Corp., a Delaware
corporation, and its successors and assigns.
"Conveyance" shall have the meaning set forth in Section 2.01
hereof.
"Conveyed Assets" shall mean all accounts, general intangibles,
instruments, chattel paper, documents, money, letters of credit, advices of
credit, deposit accounts, certificates of deposit, investment property, goods
and other property consisting of, arising from or related to any of the
following: (i) the Contracts listed on the respective List of Contracts
delivered with the Sale Agreement Supplements and all amounts due or to become
due thereunder, (ii) all Collections after the related Cut-Off Date, (iii) all
of ABS' right, title and interest in, to and under the Related Security
associated therewith, (iv) all balances, instruments, monies, securities,
investment property or other property received or held from time to time by the
Servicer and representing Collections received after the related Cut-off Date,
(v) the right, title and interest of ABS in the Equipment associated with such
Contracts, and (vii) all proceeds of the foregoing, but excluding, any Insurance
Premiums, taxes, late charge fees (if the Servicer has made an advance to cover
such late payment) and Initial Unpaid Amounts.
"Electronic Ledger" shall mean the Servicer's master electronic
record of all contracts serviced by it, including the Contracts.
"Insurance Premiums" shall mean amounts paid on the Contracts to
cover insurance premiums.
"Master Sale Agreement" shall mean this Master Sale and Contribution
Agreement and all amendments hereto.
"Purchase Date" shall mean each date on which a sale and/or
contribution of Conveyed Assets is to be effected, as set forth in the related
Sale Agreement Supplement.
"Sale Agreement Supplement" shall mean each Sale and Contribution
Agreement Supplement executed and delivered pursuant to this Master Sale
Agreement substantially in the form of Exhibit A.
"Series Supplement" shall mean each supplement to the Master
Agreement which provides for the issuance of a Series of Notes as provided in
such supplement and the Master Agreement.
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<PAGE> 6
ARTICLE II
CONVEYANCE OF CONVEYED ASSETS
SECTION 2.01 Conveyance. (a) ABS hereby, on each Purchase Date, as
evidenced by the execution and delivery by ABS and the Obligors of a Sale
Agreement Supplement, sells, transfers, assigns, sets over, contributes,
quitclaims and otherwise conveys to the Obligors (collectively, the
"Conveyance") all of ABS' right, title and interest in, to and under the related
Conveyed Assets, whether in existence at the Purchase Date or thereafter
arising. The Conveyed Assets conveyed to each of the respective Obligors shall
be as set forth in the related Sale Agreement Supplement. Each such transfer of
Conveyed Assets by ABS shall be without representation, warranty or recourse
except as expressly provided in Section 3.01.
(b) The purchase price for the Conveyed Assets conveyed pursuant to
this Master Sale Agreement and the amount of such Conveyed Assets which will be
contributed to the Obligors shall be determined by ABS and the Obligors at the
time of the execution and delivery of such related Sale Agreement Supplement.
The amount paid to ABS for the Conveyed Assets sold on a Purchase Date shall be
paid by the Obligors to or at the direction of ABS as provided in the related
Sale Agreement Supplement.
(c) In connection with each such Conveyance, prior to each related
Purchase Date, ABS agrees to record and file, at its own expense, financing
statements (and thereafter timely continuation statements with respect to such
financing statements) with respect to the related Conveyed Assets, meeting the
requirements of applicable state law in such manner and in such jurisdictions as
are necessary or reasonably desirable to perfect and to maintain the perfection
of, the conveyance of the related Conveyed Assets from ABS to the Obligors and
the pledge of such related Conveyed Assets from the Obligors to the Trustee, and
to deliver a copy of such financing statements or other evidence of such filings
to the Obligors on or prior to the related Purchase Date; provided, however,
that except as required by the Master Agreement, no financing statements will be
recorded or filed with respect to the sale or transfer of the Equipment owned by
ABS unless (i) ABS, as Servicer shall determine to file UCC-3 statements or
similar statements with respect to such Equipment in order to exercise remedies
with respect to Defaulted Contracts to which such Equipment relates or (ii) such
Equipment has a value in excess of $25,000; and provided further that the
Contract Files will not be physically delivered to the Obligors or to the
Trustee, but instead will be held by the Servicer (or its designated custodian)
on behalf of the Trustee and the Contract Files will be marked as required by
the Master Agreement.
(d) In connection with each such Conveyance, ABS shall, at its own
expense, (i) cause its books and records to be marked to show that the related
Conveyed Assets have been transferred to the Obligors in accordance with this
Master Sale Agreement, and that the related Conveyed Assets have been pledged to
the Trustee in accordance with the Master Agreement on or prior to the related
Purchase Date and (ii) deliver to the Obligors or at their direction the related
List of Contracts on the related Purchase Date. Each Obligor agrees (i) to mark
its books and records to show the acquisition of the Conveyed Assets and that
such Conveyed Assets have been pledged to the Trustee in accordance with the
Master Agreement and a specified Series Supplement and (ii) to deliver to the
Trustee the related List of Contracts on the related Purchase
3
<PAGE> 7
Date. In addition, the Servicer, shall cause its Electronic Ledger to include
the Conveyed Assets as contracts serviced by the Servicer and shall mark its
Electronic Ledger to show that the related Conveyed Assets are owned by the
Obligors in accordance with this Master Sale Agreement and such Conveyed Assets
have been pledged to the Trustee in accordance with the Master Agreement and the
Series Supplement on or prior to the related Purchase Date.
(e) The parties hereto intend that the conveyance of ABS' right,
title and interest in and to the Conveyed Assets (other than Insurance Premiums,
taxes, late charge fees (if the Servicer has made an advance to cover such late
payment) and Initial Unpaid Amounts) shall constitute an absolute sale or
contribution to capital, conveying good title free and clear of any liens,
claims, encumbrances or rights of others from ABS to the respective Obligor and
that the Conveyed Assets shall not be part of ABS' estate in the event of the
insolvency, bankruptcy or similar event with respect to ABS. It is the intention
of the parties hereto that the arrangement with respect to Conveyed Assets shall
constitute a purchase and sale or contribution to capital and not a loan. In the
event, however, that it were to be determined that the transactions evidenced
hereby constitute a loan and not a purchase and sale, it is the intention of the
parties hereto that this Master Sale Agreement and each Sale Agreement
Supplement shall constitute a security agreement under applicable law, and that
ABS shall be deemed to have granted, and does hereby grant, to the respective
Obligors a first priority perfected security interest in all of ABS' right,
title and interest in the Conveyed Assets.
SECTION 2.02 Custody of Contract Files. In connection with (a) each
Conveyance of Conveyed Assets to the Obligors, and (b) each pledge by such
Obligors to the Trustee for the benefit of the related Series Secured Parties
pursuant to this Master Agreement or pursuant to any Sale Agreement Supplement,
the Servicer will retain the Contract Files (provided that such Contract Files
may be held by a designated custodian of the Servicer) and any related evidence
of insurance and payments on behalf of the Trustee.
SECTION 2.03 Servicing of Conveyed Assets. In connection with the
Conveyance of the Conveyed Assets to the Obligors pursuant to this Master Sale
Agreement and pursuant to the related Sale Agreement Supplement and the pledge
thereof to the Trustee, ABS hereby agrees, until a successor servicer accepts
such duties and responsibilities, to service the Conveyed Assets for the benefit
of the Obligors (and their respective successors and assigns) and the Trustee in
accordance with the terms and conditions of the Master Agreement and the
respective Series Supplement.
SECTION 2.04 Conveyance of Conveyed Assets. Each Conveyance of
Conveyed Assets shall be evidenced by the execution and delivery by the Obligors
and ABS of this Master Sale Agreement and the execution and delivery of a Sale
Agreement Supplement in the form of Exhibit A hereto, and all of the Obligors'
rights hereunder and thereunder shall similarly be pledged to the Trustee for
the benefit of the related Series Secured Parties as of the related Purchase
Date. Each such Conveyance shall be effective as of the related Purchase Date.
4
<PAGE> 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.0l Representations and Warranties of ABS. ABS hereby makes
the following representations and warranties for the benefit of the Obligors,
the Trustee and, with respect to each Series of Notes, as defined in the Master
Agreement, the related Series Secured Parties. Such representations and
warranties speak, as to the Conveyed Assets conveyed as of the related Purchase
Date, unless otherwise indicated, but shall survive each Conveyance of the
Conveyed Assets to the Obligors and their successors and assigns.
(a) Each Contract, as of the relevant Purchase Date, is an "Eligible
Contract" as such term is defined in the related Series Supplement; provided
that to the extent certain characteristics of the Eligible Contract are to be
satisfied as of the Cut-Off Date rather than the Purchase Date, each such
characteristic is satisfied as of the relevant Cut-Off Date.
(b) As to ABS:
(i) Organization and Good Standing. ABS is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, with full corporate power and authority to own its
properties as presently owned and to conduct its business as presently
conducted, and ABS had at all relevant times, and now has, power,
authority, and legal right to acquire, own, contribute and sell the
Conveyed Assets;
(ii) Due Qualification. ABS is duly qualified to do business
as a foreign corporation and is in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which its
ownership or lease of property or the servicing of the Contracts or the
conduct of its business requires such qualification, license or approval,
except to the extent that the failure to be so qualified, or to obtain
such licenses and approvals, would not, in the aggregate, materially and
adversely affect the ability of ABS to perform its obligations under the
Master Agreement and all Series Supplements, this Master Sale Agreement,
each Sale Agreement Supplement and each Series Related Document to which
ABS is a party;
(iii) Power and Authority. ABS has full corporate power and
authority to execute and deliver and perform its obligations under this
Master Sale Agreement, each Sale Agreement Supplement, the Master
Agreement, the Series Supplements and each other Series Related Document
to which ABS is a party and to carry out their respective terms; ABS has
duly authorized the sale and contribution to the Obligor(s) of the related
Conveyed Assets by all necessary corporate action; and the execution,
delivery, and performance of all Series Related Documents has been duly
authorized by ABS by all necessary corporate action;
(iv) Valid Sale; Binding Obligations. Upon execution and
delivery of each Sale Agreement Supplement by ABS, such Sale Agreement
Supplement will constitute an absolute assignment to the Obligors of all
right, title and interest of ABS in
5
<PAGE> 9
the Conveyed Assets transferred thereby, and the Conveyed Assets will
thereafter be held by the Obligors free and clear of Adverse Claims of ABS
or any Person claiming through or under ABS, except for Adverse Claims
permitted under, or to be created by, the Master Agreement and the related
Series Supplement; this Master Sale Agreement, the Master Agreement and
the Series Supplements and each Series Related Document to which ABS is a
party when duly executed and delivered, will each constitute a legal,
valid, and binding obligation of ABS, enforceable against ABS in
accordance with its terms, except that (A) such enforcement may be subject
to bankruptcy, insolvency, receivership, conservatorship or other similar
laws (whether statutory, regulatory or decisional) now or hereafter in
effect relating to creditors' rights generally and (B) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to certain equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought whether a
proceeding at law or in equity;
(v) No Violation. The consummation of the transactions
contemplated by and the fulfillment of the terms of the Master Agreement,
each Series Supplement, this Master Sale Agreement, each Sale Agreement
Supplement and each Series Related Document to which ABS is a party will
not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default
under, the certificate of incorporation or bylaws of ABS, or any material
term of any indenture, agreement, mortgage, deed of trust, or other
instrument to which ABS is a party or by which it is bound, or result in
the creation or imposition of any Adverse Claim upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust, or other instrument, other than this Master Sale Agreement, the
Sale Agreement Supplement, the Master Agreement, the Series Supplements
and each Series Related Document to which ABS is a party, or violate any
law or any order, writ, judgment award, injunction, decree, rule, or
regulation applicable to ABS or affecting it or its property, which would
have a material adverse effect on the Conveyed Assets, and no transaction
contemplated hereby requires compliance with any bulk sales act or similar
law;
(vi) No Proceedings. There are no proceedings or
investigations pending, or, to the knowledge of ABS, threatened, before
any court, regulatory body, administrative agency, or other tribunal or
governmental authority (A) asserting the invalidity of this Master Sale
Agreement, the Sale Agreement Supplement, the Master Agreement or the
Series Supplements, (B) seeking to prevent the consummation of the
transactions contemplated by this Master Sale Agreement, any Sale
Agreement Supplement, the Master Agreement or the Series Supplements, or
(C) seeking any determination or ruling, that might (in the reasonable
judgement of ABS) materially and adversely affect the performance by ABS
of its obligations under, or the validity or enforceability of, this
Master Sale Agreement, any Sale Agreement Supplement, the Master Agreement
or the Series Supplements;
(vii) Insolvency. ABS is not insolvent and will not be
rendered insolvent by the transactions contemplated by this Master Sale
Agreement, the Sale Agreement Supplements, the Master Agreement or the
Series Supplements;
6
<PAGE> 10
(viii) Principal Place of Business. Except to the extent that
notice of any change in such location or locations has been given as
provided in Section 4.01(e) of this Master Sale Agreement, ABS' principal
place of business, and chief executive office is located at 1020 Laurel
Oak Road, Voorhees, New Jersey 08043;
(ix) Valid Assignment. It is the intention of ABS that each
sale, contribution, transfer and assignment herein contemplates or in a
Sale Agreement Supplement contemplated constitutes a valid assignment of
the related Conveyed Assets from ABS to the Obligors and that the
beneficial interest in and title to the Conveyed Assets not be part of the
estate of ABS in the event of any insolvency or receivership or
conservatorship proceeding with respect to ABS;
(x) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body, is required for the due execution, delivery
and performance by ABS of this Master Sale Agreement or any Sale Agreement
Supplement;
(xi) Accuracy of Information. All information heretofore
furnished in writing by ABS to the Obligors or the Trustee for purposes of
or in connection with this Master Sale Agreement or any transfer is true,
accurate and complete in every material respect on the date such
information is stated or certified, and all such information hereafter
furnished by ABS to such Persons will be true, accurate and complete in
every material respect, on the date such information is stated or
certified;
(xii) Names. ABS was until September 19, 1994 known as Advanta
Leasing Corp. and has, commencing in 1998 for certain of its operations,
used the names Advanta Capital Funding Group, Advanta Leasing Services and
Executive Capital. Except as stated in the preceding sentence, ABS has
not, in the past five years, used any corporate names, trade names or
assumed names other than the name in which it has executed this Master
Sale Agreement; and
(xiii) Year 2000. Any computer reprogramming required by ABS
to properly perform its obligations under this Master Sale Agreement, each
Sale Agreement Supplement, the Master Agreement and the Series Supplements
on and after January 1, 2000 will be completed prior to January 1, 2000.
SECTION 3.02 Representations and Warranties of the Obligors. Each
Obligor hereby makes the following representations and warranties with respect
to itself and not with respect to any other Obligor. The following
representations and warranties are made to ABS in its individual capacity and as
Seller and as Servicer and to the Trustee and to each Series Secured Party. ABS
will rely and the Obligors acknowledge and agree that ABS will rely on the
following representations and warranties in agreeing to enter into this Master
Sale Agreement and sell and contribute Conveyed Assets hereunder. Such
representations and warranties speak
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as of each Purchase Date, and shall survive each sale, transfer and assignment
of the respective Conveyed Assets to the Obligors and their respective
successors and assigns.
(a) Organization and Good Standing. The Obligor is a legal entity
duly organized, validly existing and in good standing under the laws of the
State of its organization, with full corporate power and authority to own its
properties and to conduct its business as presently conducted;
(b) Due Qualification. The Obligor is duly qualified to do business
as a foreign corporation and is in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification, license or
approval, except to the extent that the failure to be so qualified, or to obtain
such license and approvals would not, in the aggregate, materially and adversely
affect the ability of the Obligor to comply with the terms of this Master Sale
Agreement, any Sale Agreement Supplement, the Master Agreement, the Series
Supplements or Series Related Documents to which the Obligor is a party;
(c) Power and Authority. The Obligor has the corporate power and
authority to execute and deliver this Master Sale Agreement, each Sale Agreement
Supplement, the Master Agreement, the Series Supplements and all Series Related
Documents to which it is a party and to carry out their respective terms; and
the execution, delivery, and performance of this Master Sale Agreement, each
Sale Agreement Supplement, the Master Agreement, the Series Supplements and all
Series Related Documents to which the Obligor is a party have been or prior to
the execution thereof will have been duly authorized by the Obligor by all
necessary corporate action;
(d) Binding Obligations. This Master Sale Agreement, each Sale
Agreement Supplement, the Master Agreement, the Series Supplements and each
Series Related Document to which the Obligor is a party, when executed and
delivered, will constitute a legal, valid and binding obligation of such Obligor
enforceable against such Obligor in accordance with its terms, except that (A)
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws (whether statutory, regulatory or decisional)
now or hereafter in effect relating to creditors' rights generally and (B) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to certain equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought whether a proceeding
at law or in equity;
(e) No Violation. The consummation of the transactions contemplated
by and the fulfillment of the terms of the Master Agreement, each Series
Supplement, this Master Sale Agreement, each Sale Agreement Supplement and each
Series Related Document to which the Obligor is a party will not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the certificate of
incorporation or bylaws of the Obligor, or any material term of any indenture,
agreement, mortgage, deed of trust, or other instrument to which the Obligor is
a party or by which it is bound, or result in the creation or imposition of any
Adverse Claim upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust, or other
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instrument, other than this Master Sale Agreement, the Sale Agreement
Supplement, the Master Agreement and each Series Related Document to which the
Obligor is a party, or violate any law or any order, writ, judgment award,
injunction, decree, rule, or regulation applicable to the Obligor or affecting
it or its property, which would have a material adverse effect on the Conveyed
Assets, and no transaction contemplated hereby requires compliance with any bulk
sales act or similar law;
(f) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of either Obligor, threatened, before any court,
regulatory body, administrative agency, or other tribunal or governmental
authority (A) asserting the invalidity of this Master Sale Agreement, the Sale
Agreement Supplement, the Master Agreement or the Series Supplements, (B)
seeking to prevent the consummation of the transactions contemplated by this
Master Sale Agreement, any Sale Agreement Supplement, the Master Agreement or
the Series Supplements, or (C) seeking any determination or ruling, that might
(in the reasonable judgement of the Obligors) materially and adversely affect
the performance by each Obligor of its obligations under, or the validity or
enforceability of, this Master Sale Agreement, any Sale Agreement Supplement,
the Master Agreement or the Series Supplements;
(g) Insolvency. Neither Obligor is insolvent and will not be
rendered insolvent by the transactions contemplated by this Master Sale
Agreement, the Sale Agreement Supplements, the Master Agreement or the Series
Supplements;
(h) Principal Place of Business. Except to the extent that notice of
any change in such location or locations has been given as provided in Section
4.01(e) of this Master Sale Agreement, ALRC VIII's principal place of business
and chief executive office is located at 639 Isbell Road, Suite 390-A, Reno,
Nevada 89509, and ALRC IX's principal place of business and chief executive
office is located at 639 Isbell Road, Suite 390-B, Reno, Nevada 89509;
(i) Valid Assignment. It is the intention of the Obligors that each
sale, contribution, transfer and assignment herein contemplates or in a Sale
Agreement Supplement contemplated constitutes a valid assignment of the related
Conveyed Assets from ABS to the Obligors and that the beneficial interest in and
title to the Conveyed Assets not be part of the estate of ABS in the event of
any insolvency or receivership or conservatorship proceeding with respect to
ABS;
(j) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body, is required for the due execution, delivery and performance by
ABS of this Master Sale Agreement or any Sale Agreement Supplement;
(k) Accuracy of Information. All information heretofore furnished in
writing by the Obligors to ABS or the Trustee for purposes of or in connection
with this Master Sale Agreement or any transfer is true, accurate and complete
in every material respect on the date such information is stated or certified,
and all such information hereafter furnished by the
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Obligors to such Persons will be true, accurate and complete in every material
respect, on the date such information is stated or certified;
(l) Names. Neither Obligor has, in the past five years, used any
corporate names, trade names or assumed names other than the name in which it
has executed this Master Sale Agreement; and
(m) Year 2000. Any computer reprogramming required by each Obligor
to properly perform its obligations under this Master Sale Agreement, each Sale
Agreement Supplement, the Master Agreement and the Series Supplements on and
after January 1, 2000 will be completed prior to January 1, 2000.
(n) Organizational Documents. The Obligor will comply with the terms
of its articles of incorporation and bylaws and will not amend its articles of
incorporation unless the Rating Agency Condition has been met with respect to
such amendment.
SECTION 3.03 Repurchase Contracts and Equipment by ABS. Upon
discovery by the Trustee, the Servicer or an Obligor of a breach of any of the
representations and warranties made by ABS in this Master Sale Agreement or in
any Sale Agreement Supplement that materially and adversely affects the
interests of the Obligors or their successors or assigns, including the Trustee
or any Holder of Notes, in any of the Contracts, the related Equipment or the
Contract File, the party discovering such breach shall give prompt written
notice to the others. Unless the breach shall have been cured by ABS or any
successor thereto or waived prior to the last day of the calendar month in which
such breach was discovered or, if later, the last day of the calendar month in
which the Servicer received the notice thereof (or, at the Servicer's and the
Obligor's election, any earlier date), ABS shall repurchase such Contract and
the related Pledged Property subject to such Contract from the appropriate
Obligor or Obligors on the date such Contract is removed from the Series Trust
Estate and on such date pay the repurchase price to the Trustee for the benefit
of the Obligors and the Obligors shall direct the Trustee to deposit such amount
in the Collection Account created under the appropriate Series Supplement. The
repurchase price shall be equal to the Prepayment Amount determined as provided
under the terms of the Master Agreement. The obligation of ABS as provided in
this Section 3.03 to repurchase any Contract and the Equipment subject to such
Contract as to which a breach has occurred and is continuing and to remit the
Prepayment Amount shall constitute the sole remedy against ABS for such breach
available to the Obligors and the Trustee. The representations and warranties
set forth in this Master Sale Agreement and the Sale Agreement Supplements shall
survive each sale, transfer and assignment of the Conveyed Assets to the
Obligors and their pledge to the Trustee.
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ARTICLE IV
COVENANTS OF ABS AND THE OBLIGORS
SECTION 4.01 ABS Covenants. ABS hereby covenants and agrees with the
Obligors as follows:
(a) Merger of, Consolidation of, or Assumption of the Obligations
of, ABS. Any corporation (i) into which ABS may be merged or consolidated, (ii)
resulting from any merger, conversion, or consolidation to which ABS shall be
party, or (iii) succeeding to the business of ABS substantially as a whole,
which corporation in any of the foregoing cases executes an agreement of
assumption to perform every obligation of ABS under this Master Sale Agreement
and each Sale Agreement Supplement and under the Master Agreement, each Series
Supplement and all other Series Related Documents, will be the successor to ABS
under this Master Sale Agreement and each Sale Agreement Supplement without the
execution or filing of any document or the taking of any further act on the part
of any of the parties to this Master Sale Agreement, anything in this Master
Sale Agreement or any Sale Agreement Supplement notwithstanding; provided,
however, that immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 3.01 shall have been
breached.
(b) Limitation on Liability of ABS and Others. ABS and any director
or officer or employee or agent of ABS may rely in good faith on any document of
any kind, prima facie properly executed and submitted by any Person respecting
any matters arising under this Master Sale Agreement and each Sale Agreement
Supplement. ABS shall not be under any obligation to appear in, prosecute, or
defend any legal action that is not incidental to its obligations as the seller
of the Conveyed Assets under this Master Sale Agreement or any Sale Agreement
Supplement and that in its opinion may involve it in any expense or liability.
(c) Preservation of Security Interest. ABS shall execute and file
such financing statements and cause to be executed and filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain, and protect the interest of the Obligors under this
Master Sale Agreement and each Sale Agreement Supplement in the Conveyed Assets
and in the proceeds thereof; provided that no filings shall be required on any
Equipment owned by ABS except (i) as required by ABS' Credit and Collection
Policy and (ii) as otherwise required by any Sale Agreement Supplement. ABS
shall not be required to file financing statements with respect to the Equipment
owned by ABS except as otherwise required hereby or by the Sale Agreement
Supplement.
(d) Preservation of Name, etc. ABS will not change its name,
identity or corporate structure in any manner that would, could, or might make
any financing statement or continuation statement filed by ABS in accordance
with paragraph (c) above or the Master Agreement seriously misleading within the
meaning of Section 9-402 (7) of the UCC, unless it shall have given the Obligors
and the Trustee at least 30 days prior written notice thereof.
(e) Preservation of Office. ABS will give the Obligors and the
Trustee at least 30 days prior written notice of any relocation of its principal
executive office if, as a result of such relocation, the applicable provisions
of the UCC would require the filing of any amendment
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of any previously filed financing, or continuation statement or of any new
financing statement filed hereunder or pursuant to the terms of any conveyance
agreement and will give the Obligors and the Trustee at least 30 days prior
written notice of any change in location of the Contract Files.
(f) Making of Record. ABS, as transferor of the Contracts and
Equipment will, at its own cost and expense, (i) maintain a master record of the
Contracts and Equipment and (ii) mark its records to show that the Contracts and
any interest ABS may have in the Equipment have been conveyed to the Obligors
and that they have been pledged and assigned to the Trustee pursuant to the
Master Agreement and the Series Supplement.
(g) Compliance with Law. ABS will comply, in all material respects,
with all acts, rules, regulations, orders, decrees and directions of any
governmental authority applicable to the Conveyed Assets or ABS or any part
thereof; provided, however, that ABS may contest any act, regulation, order,
decree or direction in any reasonable manner which shall not materially and
adversely affect the rights of the Obligors or the Trustee in the Conveyed
Assets.
(h) Conveyance of Conveyed Assets; Security Interests. Except for
the sales and conveyances under this Master Sale Agreement and under each Sale
Agreement Supplement and pursuant to the Master Agreement and the Series
Supplements, ABS will not sell, pledge, assign or transfer to any other Person,
or grant, create, incur, assume or suffer to exist any Adverse Claim on any
Asset, or any interest therein and ABS shall defend the right, title, and
interest of the Obligors and their successors and assigns in, to and under the
Conveyed Assets, against all claims of third parties claiming through or under
ABS; provided, however that nothing in this subsection 4.01(h), shall prevent or
be deemed to prohibit ABS from suffering to exist upon any of the Conveyed
Assets 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 ABS shall concurrently
be contesting the validity thereof in good faith by appropriate proceedings
which act to stay enforcement thereof and shall have set aside on its books
adequate reserves with respect thereto.
(i) Notification of Breach. ABS will advise each Obligor and the
Trustee promptly, in reasonable detail, of the occurrence of any breach by ABS
or other party hereto following discovery by ABS of such breach of any of its
representations, warranties and covenants contained herein.
(j) Further Assurances. ABS will make, execute or endorse,
acknowledge and file or deliver to the Obligors from time to time such
schedules, confirmatory assignments, conveyances, transfer endorsements, powers
of attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Conveyed Assets and other rights covered by
this Master Sale Agreement or any Sale Agreement Supplement, as the Obligors or
the Trustee may request and reasonably require; provided, however, that, no UCC
filing will be required with respect to the Equipment except as otherwise
required hereby or by the Master Agreement, the Series Supplement or the Sale
Agreement Supplement.
(k) Maintenance of Records. ABS agrees to maintain this Master Sale
Agreement and each Sale Agreement Supplement continuously from the time of its
execution.
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(l) Non-disclosure. ABS hereby covenants and agrees with the
Obligors not to disclose to any Person (except the Trustee, any rating agency
rating obligations issued by the Obligors and investors or potential investors
in such obligations and any information required to be disclosed in connection
with the registration and sale of the Obligors' securities which are payable
from the Conveyed Assets) any of the information provided to the Servicer to be
included in the Electronic Ledger or any List of Contracts delivered on any
Purchase Dates pursuant to subsection 5.01(c) hereof or subsection 2(c) of the
Sale Agreement Supplement, except such disclosures as are required upon the
appointment of a successor Servicer under the Master Agreement or by law and
except that ABS consents to the disclosure of any material nonpublic information
with respect to it (i) to any other such party, (ii) to any prospective or
actual assignee or participant of any of them, (iii) by the Trustee to any
Rating Agency, commercial paper dealer or Support Provider, or any entity
organized for the purpose of purchasing or making loans secured by, financial
assets for which any Noteholders' Agent provides managerial services or acts as
the administrative agent and (iv) to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing. ABS hereby agrees to take
such measures as shall be reasonably requested by the Obligors or their duly
appointed agent or the Trustee to protect and maintain the security and
confidentiality of any of the information, and in connection therewith, shall
allow the Obligors or their duly appointed agent and the Trustee from time to
time during normal business hours and upon reasonable prior notice to inspect
the applicable security and confidentiality arrangements from time to time in
normal business hours. ABS shall give the Obligors and the Trustee five days
prior written notice of any disclosure pursuant to this Section 4.01(l).
(m) ABS understands that the Obligors intend to pledge the Conveyed
Assets and the Obligors' rights (but not their obligations) under this Master
Sale Agreement to the Trustee pursuant to the Master Agreement and hereby
consents to the assignment of all or any portion of this Master Sale Agreement
and the Sale Agreement Supplements by each Obligor to the Trustee. ABS agrees
that any such assignee of each Obligor may exercise the rights of such Obligor
hereunder and shall be entitled to all of the benefits of such Obligor hereunder
and to the extent provided for in the Master Agreement.
(n) Guarantees. Except in connection with the Series Related
Documents, the Servicer shall not become or remain liable, directly or
contingently, in connection with any Indebtedness or other liability of the
Obligors, whether by guarantee, endorsement (other than endorsements of
negotiable instruments for deposit or collection in the ordinary course of
business), agreement to contribute, agreement to supply or advance funds, or
otherwise.
(o) Nature of Business. The Servicer will engage in no business with
the Obligors other than the transfer of Conveyed Assets hereunder and the other
transactions permitted or contemplated by this Master Sale Agreement, the Master
Agreement and the Series Supplements.
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SECTION 4.02 Covenants of Each Obligor. Each Obligor for itself and
not for any other Obligor, each hereby covenants and agrees with ABS as follows:
(a) Non-disclosure; Inspection. Each Obligor hereby covenants and
agrees with ABS not to disclose to any Person (except the Servicer, the Trustee,
any rating agency rating obligations issued by the Obligors and investors or
potential investors in such obligations and any information required to be
disclosed in connection with the registration and sale of the Obligors'
securities which are payable from the Conveyed Assets) any of the information
contained in the Electronic Ledger, or any List of Contracts delivered on any
Purchase Date to the Obligors pursuant to subsection 5.01(c) hereof and
subsection 2(c) of the Sale Agreement Supplement, except such disclosures as are
required upon appointment of a successor Servicer under the Master Agreement or
by law and except that the Obligor consents to the disclosure of any material
nonpublic information with respect to it (i) to any other such party, (ii) to
any prospective or actual assignee or participant of any of them, (iii) by the
Trustee to any Rating Agency, commercial paper dealer or a support provider or
any entity organized for the purpose of purchasing, or making loans secured by
financial assets for which any Noteholders' Agent provides managerial services
or acts as the administrative agent and (iv) to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing. Each
Obligor agrees to take such measures as shall be reasonably requested by ABS to
protect and maintain the security and confidentiality of such information, and,
in connection therewith, shall allow ABS from time to time during normal
business hours and upon reasonable prior notice to inspect the applicable
security, and confidentiality arrangements. The Obligors shall give ABS five
days' prior written notice of any disclosure pursuant to this subsection
4.02(a).
(b) Reconveyance. Prior to each date as of which Contracts and the
Equipment subject to such Contracts are to be repurchased by ABS pursuant to
Section 3.03, the Obligors shall cause the Trustee, in accordance with Section
6.11 of the Master Agreement, to assign, on behalf of the Obligors, without
recourse, representation, or warranty, to ABS all of the Obligor's right, title,
and interest in and to such removed Contract and any interest in the related
Pledged Property, and all security and documents relating, thereto, such
assignment being an assignment outright and not for security; and upon payment
of the Prepayment Amount, ABS will thereupon own such Contract and any interest
in the Equipment which had been acquired by either of the Obligors and all such
security and documents, free of any further obligation to the Obligors with
respect thereto. If in any enforcement suit or legal proceeding holds that the
Servicer may not enforce a Contract on the ground that it is not a real party in
interest or holder entitled to enforce the Contract, the Obligors shall, at the
Obligors' expense, take such steps as the Obligors deem necessary to enforce the
Contract, including bringing suit in such Obligors' names.
(c) User's Quiet Enjoyment. Each Obligor hereby acknowledges and
agrees that its rights in the Equipment are expressly subject to the rights of
the related Users in such Equipment pursuant to the applicable Contract. Each
Obligor covenants and agrees that, so long as a User shall not be in default of
any of the provisions of the applicable Contract, no Obligor nor any assignee of
any Obligor will disturb the User's quiet and peaceful possession of the related
Equipment and the User's unrestricted use thereof for its intended purpose.
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ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01 Conditions to the Obligors' Obligations. The
obligations of an Obligor to enter into this Master Sale Agreement and each a
Sale Agreement Supplement and purchase or otherwise acquire Conveyed Assets on
the related Purchase Date shall be subject to the satisfaction of the following
conditions:
(a) All representations and warranties of ABS contained in this
Master Sale Agreement with respect to the Conveyed Assets conveyed on the
Purchase Date shall be true and correct on the related Purchase Date with the
same effect as though such representations and warranties had been made on such
date;
(b) All information concerning such Conveyed Assets provided to such
Obligor shall be true and correct as of the related Cut-Off Date in all material
respects;
(c) ABS shall have delivered to the Obligors or at the direction of
the Obligors, a List of Contracts as of the related Cut-Off Date and shall have
substantially performed all other obligations required to be performed by the
provisions of this Master Sale Agreement;
(d) ABS shall have recorded and filed, at its expense, any financing
statement with respect to such Conveyed Assets pursuant to this Master Sale
Agreement meeting the requirements of applicable state law in such manner in
such jurisdictions as are necessary to perfect the transfer of such Conveyed
Assets from ABS to such Obligor, and shall deliver a copy of such financing
statements or other evidence of such filings to the Obligors and the Trustee;
and
(e) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Master Sale Agreement
shall be satisfactory in form and substance to the Obligors and the Obligors
shall have received from ABS copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as the Obligors may reasonably have requested.
SECTION 5.02 Conditions to ABS' Obligations. The obligations of ABS
to enter into this Master Sale Agreement and any Sale Agreement Supplement and
to sell, transfer, contribute and assign any Conveyed Assets on the related
Purchase Date shall be subject to the satisfaction of the following conditions:
(a) All representations and warranties of the Obligors contained in
this Master Sale Agreement and in the related Sale Agreement Supplement shall be
true and correct with the same effect as though such representations and
warranties had been made on such date;
(b) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Master Sale Agreement
shall be satisfactory in form and
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substance to ABS, and ABS shall have received from the Obligors copies of all
documents (including, without limitation, records of corporate proceedings)
relevant to the transactions herein contemplated as ABS may reasonably have
requested; and
(c) ABS shall have received payment, to the extent agreed with the
Obligors, in satisfaction of the transfer of the Conveyed Assets, and to the
extent the value of the Conveyed Assets exceeds the amount paid the difference
shall constitute a capital contribution to the Obligors and shall be allocated
between the Obligors as determined by ABS.
ARTICLE VI
TERMINATION
SECTION 6.01 Termination. The respective obligations and
responsibilities of ABS and each Obligor created by this Master Sale Agreement
and any Sale Agreement Supplement shall terminate upon the earliest of (i) the
maturity or other liquidation of the last Contract and the disposition of any
amounts received upon disposition of any Defaulted Contracts or sale of the
Equipment; (ii) the distribution to all Obligors of all amounts required to be
paid to them pursuant to this Master Sale Agreement; and (iii) the termination
of the Master Sale Agreement.
SECTION 6.02 Effect of Termination. No termination nor rejection or
failure to assume the executory obligations of this Master Sale Agreement in the
bankruptcy, insolvency conservatorship or receivership of ABS, or any Obligor
shall be deemed to impair or affect the obligations pertaining to any executed
sale or executed obligations, including, without limitation, pretermination
breaches of representations and warranties by ABS or any Obligor.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01 Amendment. This Master Sale Agreement may be amended
from time to time by ABS and each of the Obligors, but only with the prior
written consent of the Trustee.
SECTION 7.02 Governing Law. This Master Sale Agreement and any
amendment hereof pursuant to Section 7.01 shall be construed in accordance with
and governed by the substantive laws of the State of New York (without regard to
choice of law principles) applicable to agreements made and to be performed
therein and the obligations, rights, and remedies of the parties under this
Master Sale Agreement shall be determined in accordance with such laws.
SECTION 7.03 Notices. All demands, notices, and communications under
this Master Sale Agreement shall be in writing, and shall be deemed to have been
duly given, made and received (i) when delivered against receipt of registered
or certified mail or upon actual receipt of registered or certified mail,
postage prepaid, return receipt requested; (ii) when
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delivered by courier with appropriate evidence of receipt; or (iii) upon
transmission via facsimile or telex with appropriate evidence of receipt (a) in
the case of ABS, at the following address: Advanta Business Services Corp., 1020
Laurel Oak Road, Voorhees, New Jersey, 08043, attention: Treasury Department,
(b) in the case of Advanta Leasing Receivables Corp. VIII, to such Obligor at
the following address: Advanta Leasing Receivables Corp. VIII, 639 Isbell Road,
Suite 390-A, Reno, Nevada 89509, and (c) in the case of Advanta Leasing
Receivables Corp. IX, to such Obligor at the following address: Advanta Leasing
Receivables Corp. IX, to such Obligor, at the following address: 639 Isbell
Road, Suite 390-B, Reno, Nevada 89509. Any party may alter the address to which
communications are to be sent by giving notice of such change of address in
conformity with the provisions of this Section 7.03 for giving notice and by
otherwise complying with any applicable terms of this Master Sale Agreement,
including, but not limited to, subsections 4.01(d) and (e).
SECTION 7.04 Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Master Sale Agreement shall
be for any reason whatsoever held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining covenants,
agreements, provisions, or terms of this Master Sale Agreement and shall in no
way affect the validity or enforceability of the other provisions of this Master
Sale Agreement.
SECTION 7.05 Assignment. Notwithstanding, anything to the contrary
contained in this Master Sale Agreement, this Master Sale Agreement may not be
assigned by ABS, except (i) as provided in Section 4.01(a) and (ii) as
collateral security, granted to the Trustee, without the prior written consent
of each of the Obligors, and, except as pledged and assigned to the Trustee,
this Master Sale Agreement may not be assigned by either of the Obligors without
the prior written consent of ABS.
SECTION 7.06 Further Assurances. Each of ABS and each Obligor agrees
to do such further acts and to execute and deliver to the Trustee such
additional assigns, agreements, powers and instruments as are required by the
Trustee to carry into effect the purposes of this Master Sale Agreement or to
better assure and confirm unto the Trustee its rights, powers and remedies
hereunder.
SECTION 7.07 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of either Obligor or ABS, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise hereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of any rights,
remedies, powers and privilege provided by law.
SECTION 7.08 Counterparts. This Master Sale Agreement may be
executed in two or more counterparts and by different parties on separate
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
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SECTION 7.09 Binding Effect. This Master Sale Agreement will inure
to the benefit of and be binding upon the parties hereto, the Trustee, the
Noteholders and their respective successors and permitted assigns.
SECTION 7.10 Merger and Integration. Except as specifically stated
otherwise herein, this Master Sale Agreement, the Sale Agreement Supplements,
the Master Agreement and all related Series Related Documents set forth the
entire understanding of the parties relating to the subject matter hereof, and
all prior understandings, written or oral, are superseded by, this Master Sale
Agreement, the Sale Agreement Supplements, the Master Agreement and the Series
Related Documents. This Master Sale Agreement may not be modified, amended,
waived or supplemented except as provided herein.
SECTION 7.11 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 7.12 Exhibit. The exhibit attached hereto and referred to
herein shall constitute a part of this Master Sale Agreement and is incorporated
into this Master Sale Agreement for all purposes.
SECTION 7.13 No Bankruptcy Petition Against any Obligor. Each of ABS
and each Obligor agrees that, prior to the date that is one year and one day
after the payment in full of the Notes, it will not institute against any
Obligor, or join any other Person in instituting against any Obligor, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other proceedings under the laws of the United States or any state of the
United States. This Section 7.13 shall survive the termination of this Master
Sale Agreement.
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<PAGE> 22
IN WITNESS WHEREOF, ABS and the Obligors have caused this Master
Sale and Contribution Agreement to be duly executed by their respective officers
as of the day and year first above written.
ADVANTA BUSINESS SERVICES CORP.,
in its individual capacity and as
Originator and Servicer
By: /s/ Mark Shapiro
-------------------------------------
Name: Mark Shapiro
Title: Assistant Treasurer
By: /s/ Mark Shapiro
-------------------------------------
Name: Mark Shapiro
Title: Assistant Treasurer
ADVANTA LEASING RECEIVABLES CORP. VIII,
as an Obligor
By: /s/ Mark Shapiro
--------------------------------------
ADVANTA LEASING RECEIVABLES CORP. IX,
as an Obligor
By: /s/ Mark Shapiro
--------------------------------------
<PAGE> 23
EXHIBIT A
[To be added]
<PAGE> 1
Exhibit 4.4
SALE AND CONTRIBUTION AGREEMENT SUPPLEMENT
THIS SALE AND CONTRIBUTION AGREEMENT SUPPLEMENT (this "Sale Agreement
Supplement"), dated August 26, 1999 (the "Purchase Date") is entered into among
ADVANTA BUSINESS SERVICES CORP. ("ABS," in its capacity as "Originator" and
"Servicer"), a Delaware corporation located at 1020 Laurel Oak Road, Voorhees,
New Jersey 08043, ADVANTA LEASING RECEIVABLES CORP. VIII ("ALRC VIII"), a Nevada
corporation located at 639 Isbell Road, Suite 390-A, Reno, Nevada 89509 and
ADVANTA LEASING RECEIVABLES CORP. IX ("ALRC IX"), a Nevada corporation located
at 639 Isbell Road, Suite 390-B, Reno, Nevada 89509 (each of ALRC VIII and ALRC
IX is an "Obligor" and a purchaser or recipient of a contribution hereunder and,
together, ALRC VIII and ALRC IX are the "Obligors").
W I T N E S S E T H:
Reference is hereby made to that certain Master Sale and
Contribution Agreement, dated as of August 26, 1999 (the "Master Sale
Agreement"), between ABS and the Obligors. Pursuant to the Master Sale Agreement
ABS agrees to sell, transfer, assign, set over, contribute, quitclaim and
otherwise convey to the Obligors and the Obligors agree to purchase, acquire or
accept, from time to time, Conveyed Assets (as defined below) and the Obligors
agree to Pledge such Conveyed Assets to the Trustee. The Master Sale Agreement
provides that each sale of Conveyed Assets be evidenced by the execution of
delivery of a Sale and Contribution Agreement Supplement (each, a "Sale
Agreement Supplement") such as this Supplement.
The Conveyed Assets sold or contributed by ABS pursuant to this
Supplement consist of all accounts, general intangibles, instruments, chattel
paper, documents, money, letters of credit, advices of credit, deposit accounts,
certificates of deposit, investment property, goods and other property
consisting of, arising from or related to any of the following: (i) the
Contracts listed on the List of Contracts delivered with this Sale Agreement
Supplement, all amounts due or to become due thereunder, (ii) all Collections
after the related Cut-Off Date, (iii) all of ABS' right, title and interest in,
to and under the Related Security associated therewith, (iv) all balances,
instruments, monies, securities, investment property or other property received
or held from time to time by the Servicer and representing Collections received
after the related Cut-Off Date; (v) the right, title and interest of ABS in the
Equipment associated with such Contracts, and (vi) all proceeds of the
foregoing, but excluding any Insurance Premiums, taxes, late charge fees (if the
Servicer has made an advance to cover such late payment) and Initial Unpaid
Amounts.
The Cut-Off Date with respect to the Contracts is the opening of
business on August 1, 1999. The Purchase Date is August 26, 1999.
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. For the purposes of this Agreement,
capitalized terms used herein but not otherwise defined shall have the
respective meanings assigned to such terms in the Master Agreement or the Master
Sale Agreement.
Section 2. Conveyance. (a) (i) ABS hereby sells, transfers, assigns,
sets over, contributes, quitclaims and otherwise conveys to ALRC VIII all of
ABS' right, title and interest in, to, and under ABS' Residual Interest in the
Equipment, whether now existing or hereafter arising and all monies due or to
become due in respect thereof. Each such transfer of the Residual Interest shall
be without representation, warranty or recourse except as set forth in Section 3
hereof.
(ii) ABS hereby sells, transfers, assigns, sets over, contributes,
quitclaims and otherwise conveys to ALRC IX all of ABS' right, title and
interest in, to, and under all Conveyed Assets other than the Residual Interest,
and all monies due or to become due in respect thereof whether now existing or
hereafter arising. Each such transfer of Conveyed Assets by ABS shall be without
representation, warranty or recourse except as set forth in Section 3 hereof.
(iii) The parties hereto intend that the conveyance of ABS' right,
title and interest in and to the Conveyed Assets (other than Insurance Premiums,
taxes, late charge fees (if the Servicer has made an advance to cover such late
payment) and Initial Unpaid Amounts) shall constitute an absolute sale or
contribution to capital, conveying good title free and clear of any liens,
claims, encumbrances or rights of others from ABS to the respective Obligor and
that the Conveyed Assets shall not be part of ABS' estate in the event of the
insolvency, bankruptcy or similar event with respect to ABS. It is the intention
of the parties hereto that the arrangement with respect to the Conveyed Assets
shall constitute a purchase and sale or contribution to capital and not a loan.
In the event, however, that it were to be determined that the transactions
evidenced hereby constitute a loan and not a purchase and sale, it is the
intention of the parties hereto that this Sale Agreement Supplement shall
constitute a security agreement under applicable law and that ABS shall be
deemed to have granted and does hereby grant, to the respective Obligors a first
priority perfected security interest in all of ABS' right, title and interest in
the Conveyed Assets.
(b) In connection with such transfer, ABS has heretofore recorded
and filed, at its own expense, financing statements (and will hereafter file
timely continuation statements with respect to such financing statements) with
respect to the Conveyed Assets, meeting the requirements of applicable state law
in such manner and in such jurisdictions as are necessary to perfect and to
maintain the perfection of, the conveyance of the Conveyed Assets from ABS to
the Obligors and the pledge of the Conveyed Assets from the Obligors to the
Trustee, and delivered a copy of such financing statements or other evidence of
such filings to the Obligors; in addition, ABS, in connection with the
conveyance of the Conveyed Assets under this Sale Agreement Supplement, shall on
or prior to the date hereof, file UCC-1 financing statements
2
<PAGE> 3
with respect to its interest, if any, in the Equipment in such jurisdictions as
it shall determine to be required to perfect its interest, if any, in the
Equipment, related to Contracts representing not less than 85% of the
Statistical Aggregate Contract Principal Balance. Each of the Obligors shall
also, on or prior to the date hereof, file UCC-1 financing statements with
respect to its interest, if any, in the Equipment related to the Contracts
representing not less than 85% of the Statistical Aggregate Contract Principal
Balance. For such purpose, Statistical Aggregate Contract Principal Balance
means the aggregate of the Contract Principal Balances of the related Contracts,
calculated as of the Statistical Calculation Date using the Statistical Discount
Rate (all as defined or described in the Prospectus dated August 20, 1999 and
relating to the Obligors' Equipment Receivables Asset-Backed Notes, Series
1999-1, Class A-1, Class A-2 and Class A-3).
(c) Except as provided in the preceding subsection (b) and except as
required by the Master Agreement or the Series Supplements, no financing
statements have been or will be recorded or filed with respect to the sale or
transfer of the Equipment unless (i) ABS as Servicer shall determine to file
UCC-3 or similar statements with respect to such Equipment in order to exercise
remedies with respect to Defaulted Contracts to which such Equipment relates or
(ii) such Equipment has a value in excess of $25,000; and the Contract Files
will not be physically delivered to the Obligors or to the Trustee but instead
will be held by the Servicer (or its designated custodian) on behalf of the
Trustee and the Contract Files will be marked as required by the Master
Agreement.
(d) In connection with such transfer, ABS shall, at its expense, (i)
cause its books and records to be marked to show that the Conveyed Assets have
been transferred to the Obligors in accordance with the Master Sale Agreement
and this Sale Agreement Supplement and the Conveyed Assets have been pledged to
the Trustee in accordance with the Master Agreement and the related Series
Supplement on or prior to the Purchase Date and (ii) deliver to the Obligors or
as directed by the Obligors, the related List of Contracts. Each Obligor agrees
(i) to mark its books and records to show the acquisition of the Conveyed Assets
and that such Conveyed Assets have been pledged to the Trustee in accordance
with the Master Agreement, the related Series Supplement and this Sale Agreement
Supplement and (ii) to deliver to the Trustee or cause to be delivered to the
Trustee, the related List of Contracts on the Purchase Date.
(e) (i) With respect to the Residual Interest contributed to ALRC
VIII under Section 2(a)(i) of this Sale Agreement Supplement, ABS and ALRC VIII
agree that ALRC VIII shall pay to ABS such amount as is agreed between ABS and
ALRC VIII, if any, in payment of the purchase price of the Residual Interest and
any value of the Residual Interest in excess thereof, ABS hereby contributes to
the capital of ALRC VIII. The amount, if any, to be paid by ALRC VIII to ABS as
set forth in this subsection 2(d)(i) shall be paid to ABS on the date hereof in
immediately available funds.
(ii) With respect to the Conveyed Assets sold and contributed to
ALRC IX under Section 2(a)(ii) of this Sale Agreement Supplement, ABS and ALRC
IX agree that ALRC IX shall pay to ABS such amount as is agreed between ABS and
ALRC IX in payment of the purchase price of the Conveyed Assets (other than the
Residual Interest) and any value of the Conveyed Assets (other than the Residual
Interest) in excess thereof, ABS hereby contributes to
3
<PAGE> 4
the capital of ALRC IX. The amount, if any, to be paid by ALRC IX to ABS as set
forth in this subsection 2(d)(ii) shall be paid to ABS on the date hereof in
immediately available funds.
Section 3. Representations and Warranties. (a) ABS hereby (i)
confirms the accuracy, as of the Purchase Date, of the representations and
warranties of ABS set forth in the Master Sale Agreement, and (ii) represents
and warrants that, as of the Purchase Date, each Contract is an "Eligible
Contract" as such term is defined in the Series 1999-1 Supplement, dated as of
August 26, 1999. Such representations and warranties are made for the benefit of
the Obligors and the Trustee, and the Obligors are relying on such
representations and warranties in acquiring the Conveyed Assets. Such
representations and warranties speak as of the Purchase Date, unless otherwise
indicated, but shall survive the transfer of the respective Conveyed Assets to
the Obligor and its successors and assigns and the Pledge by the Obligor to the
Trustee.
(b) Each Obligor hereby confirms the accuracy as of the Purchase
Date of the representations and warranties set forth in Section 3.02 of the
Master Sale Agreement.
Section 4. Amendment. This Sale Agreement Supplement may be amended
from time to time by ABS and the Obligors only with the prior written consent of
the Trustee.
Section 5. Governing Law. This Sale Agreement Supplement and any
amendment hereof pursuant to Section 4 shall be construed in accordance with and
governed by the substantive laws of the State of New York (without regard to
choice of law principles) applicable to agreements made and to be performed
therein and the obligations, rights, and remedies of the parties under this Sale
Agreement Supplement shall be determined in accordance with such laws.
Section 6. Counterparts. This Sale Agreement Supplement may be
executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which shall
constitute one and the same instrument.
Section 7. Binding Effect: Third-Party Beneficiaries. This Sale
Agreement Supplement will inure to the benefit of and be binding upon the
parties hereto, the Trustee and their respective successors and permitted
assigns.
Section 8. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
4
<PAGE> 5
IN WITNESS WHEREOF, ABS and the Obligors have caused this Sale and
Contribution Agreement Supplement to be duly executed by their respective
officers as of the day and year first above written.
ADVANTA BUSINESS SERVICES CORP.,
in its individual capacity and as
Originator and Servicer
By: /s/ Mark Shapiro
-------------------------------------
Name: Mark Shapiro
------------------------------
Title: Assistant Treasurer
------------------------------
By: /s/ Mark Shapiro
-------------------------------------
Name: Mark Shapiro
------------------------------
Title: Assistant Treasurer
------------------------------
ADVANTA LEASING RECEIVABLES VIII,
as an Obligor
By: /s/ Mark Shapiro
-------------------------------------
Name: Mark Shapiro
------------------------------
Title: Treasurer
------------------------------
ADVANTA LEASING RECEIVABLES IX,
as an Obligor
By: /s/ Mark Shapiro
-------------------------------------
Name: Mark Shapiro
------------------------------
Title: Treasurer
------------------------------
