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EXHIBIT 10-Q
ADVANTA BUSINESS RECEIVABLES CORP.,
Transferor,
ADVANTA FINANCIAL CORP.,
Master Servicer,
and
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
ADVANTA BUSINESS CARD MASTER TRUST
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1996
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TABLE OF CONTENTS
Page
ARTICLE I Definitions
Section 1.01. Definitions.......................................................................1
Section 1.02. Other Definitional Provisions................................................... 20
ARTICLE II Trust Assets
Section 2.01. Conveyance of Trust Assets...................................................... 22
Section 2.02. Acceptance by Trustee........................................................... 23
Section 2.03. Representations and Warranties of the Transferors Relating to the Transferors... 24
Section 2.04. Representations and Warranties of each Transferor Relating to
the Agreement and Any Supplement and the Receivables............................ 26
Section 2.05. Reassignment of Ineligible Receivables.......................................... 28
Section 2.06. Reassignment of Receivables in Trust Portfolio.................................. 29
Section 2.07. Covenants of the Transferor(s) With Respect to Interests in Receivables......... 30
Section 2.08. Covenants of The Transferor(s) with Respect to the
Participation Agreement or Receivables Purchase Agreement........................ 31
Section 2.09. Addition of Designated Assets................................................... 33
Section 2.10. Removal of Accounts and Participation Interests................................. 35
Section 2.11. Account Allocations............................................................. 37
Section 2.12. Discount Option................................................................. 37
ARTICLE III Administration and Servicing of Receivables
Section 3.01. Acceptance of Appointment and Other Matters Relating to the Master Servicer..... 39
Section 3.02. Servicing Compensation.......................................................... 40
Section 3.03. Representations, Warranties and Covenants of the Master Servicer................ 41
Section 3.04. Reports and Records for the Trustee............................................. 44
Section 3.05. Annual Certificate of Master Servicer........................................... 44
Section 3.06. Annual Servicing Report of Independent Public Accountants;
Copies of Reports Available..................................................... 44
Section 3.07. Tax Treatment................................................................... 45
Section 3.08. Notices to Trustee.............................................................. 45
Section 3.09. Adjustments..................................................................... 45
Section 3.10. Reports to the Commission....................................................... 46
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ARTICLE IV Rights of Certificateholders and Allocation and Application of Collections
Section 4.01. Rights of Certificateholders.................................................... 47
Section 4.02. Establishment of Collection Account and Excess Funding Account.................. 47
Section 4.03. Collections and Allocations..................................................... 49
Section 4.04. Shared Principal Collections.................................................... 50
Section 4.05. Allocation of Trust Assets to Series or Groups.................................. 51
ARTICLE V Distributions and Reports to Certificateholders
ARTICLE VI The Certificates
Section 6.01. The Certificates................................................................ 53
Section 6.02. Authentication of Certificates.................................................. 53
Section 6.03. New Issuances................................................................... 53
Section 6.04. Registration of Transfer and Exchange of Certificates........................... 55
Section 6.05. Mutilated, Destroyed, Lost or Stolen Certificates............................... 58
Section 6.06. Persons Deemed Owners........................................................... 58
Section 6.07. Appointment of Paying Agent..................................................... 59
Section 6.08. Access to List of Registered Certificateholders' Names and Addresses............ 59
Section 6.09. Authenticating Agent............................................................ 60
Section 6.10. Book-Entry Certificates......................................................... 61
Section 6.11. Notices to Clearing Agency...................................................... 62
Section 6.12. Definitive Certificates......................................................... 62
Section 6.13. Meetings of Certificateholders.................................................. 62
Section 6.14. Uncertificated Classes.......................................................... 64
ARTICLE VII Other Matters Relating to the Transferors
Section 7.01. Liability of the Transferors.................................................... 65
Section 7.02. Merger or Consolidation of, or Assumption of the Obligations
of, the Transferors............................................................. 65
Section 7.03. Limitations on Liability of the Transferors..................................... 66
Section 7.04. Operation of Business........................................................... 66
Section 7.05. Classification of Accounts...................................................... 66
Section 7.06. Ownership of Accounts, No Right of Set-Off...................................... 66
Section 7.07. Liabilities..................................................................... 67
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ARTICLE VIII Other Matters Relating to the Master Servicer
Section 8.01. Liability of the Master Servicer................................................ 68
Section 8.02. Merger or Consolidation of, or Assumption of the Obligations
of, the Master Servicer......................................................... 68
Section 8.03. Limitation on Liability of the Master Servicer and Others....................... 68
Section 8.04. Master Servicer Indemnification of the Trust and the Trustee.................... 69
Section 8.05. The Master Servicer Not To Resign............................................... 69
Section 8.06. Access to Certain Documentation and Information Regarding the Receivables....... 70
Section 8.07. Delegation of Duties............................................................ 70
Section 8.08. Examination of Records.......................................................... 70
ARTICLE IX Pay Out Events
Section 9.01. Trust Pay Out Events............................................................ 71
Section 9.02. Additional Rights Upon the Occurrence of Certain Events......................... 71
ARTICLE X Servicer Defaults
Section 10.01. Servicer Defaults............................................................... 73
Section 10.02. Trustee To Act, Appointment of Successor........................................ 75
Section 10.03. Notification to Certificateholders.............................................. 77
ARTICLE XI The Trustee
Section 11.01. Duties of Trustee............................................................... 78
Section 11.02. Certain Matters Affecting the Trustee........................................... 80
Section 11.03. Trustee Not Liable for Recitals in Certificates................................. 81
Section 11.04. Trustee May Own Certificates.................................................... 81
Section 11.05. The Transferors To Pay Trustee's Fees and Expenses.............................. 81
Section 11.06. Eligibility Requirements for Trustee............................................ 81
Section 11.07. Resignation or Removal of Trustee............................................... 82
Section 11.08. Successor Trustee............................................................... 82
Section 11.09. Merger or Consolidation of Trustee.............................................. 83
Section 11.10. Appointment of Co-Trustee or Separate Trustee................................... 83
Section 11.11. Tax Returns..................................................................... 84
Section 11.12. Trustee May Enforce Claims Without Possession of Certificates................... 85
Section 11.13. Suits for Enforcement........................................................... 85
Section 11.14. Rights of Certificateholders To Direct Trustee.................................. 86
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Section 11.15. Representations and Warranties of Trustee....................................... 86
Section 11.16. Maintenance of Office or Agency................................................. 87
Section 11.17. Trustee Indemnification of the Master Servicer and the Transferors.............. 87
Section 11.18. Obligor Claims.................................................................. 87
Section 11.19. Liabilities to Obligors......................................................... 88
ARTICLE XII Termination
Section 12.01. Termination of Trust............................................................ 89
Section 12.02. Final Distribution.............................................................. 89
Section 12.03. Transferors' Termination Rights................................................. 90
Section 12.04. Defeasance...................................................................... 91
Section 12.05. Optional Purchase............................................................... 92
ARTICLE XIII Miscellaneous Provisions
Section 13.01. Amendment; Waiver of Past Defaults.............................................. 93
Section 13.02. Protection of Right, Title and Interest to Trust................................ 94
Section 13.03. Limitation on Rights of Certificateholders...................................... 95
Section 13.04. GOVERNING LAW................................................................... 96
Section 13.05. Notices; Payments............................................................... 96
Section 13.06. Rule 144A Information........................................................... 97
Section 13.07. Severability of Provisions...................................................... 97
Section 13.08. Certificates Nonassessable and Fully Paid....................................... 97
Section 13.09. Further Assurances.............................................................. 97
Section 13.10. Nonpetition Covenant............................................................ 97
Section 13.11. No Waiver; Cumulative Remedies.................................................. 97
Section 13.12. Counterparts.................................................................... 98
Section 13.13. Third-Party Beneficiaries....................................................... 98
Section 13.14. Actions by Certificateholders................................................... 98
Section 13.15. Merger and Integration.......................................................... 98
Section 13.16. Headings........................................................................ 98
Section 13.17. Construction of Agreement....................................................... 98
Section 13.18. Successors and Assigns.......................................................... 99
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EXHIBITS
Exhibit A Form of ABRC Certificate
Exhibit B Form of Assignment of Receivables in Additional Designated Assets
Exhibit C Form of Reassignment of Receivables in Removed Accounts
Exhibit D Form of Annual Master Servicer's Certificate
Exhibit E-1 Private Placement Legend
Exhibit E-2 Form of Undertaking Letter
Exhibit E-3 ERISA Legend
Exhibit F-1 Form of Certificate of Foreign Clearing Agency
Exhibit F-2 Form of Alternate Certificate to be delivered to Foreign Clearing Agency
Exhibit F-3 Form of Certificate to be delivered to Foreign Clearing Agency
Exhibit G-1 Form of Opinion of Counsel with respect to Amendments
Exhibit G-2 Form of Opinion of Counsel with respect to Accounts
SCHEDULES
Schedule 1 List of Accounts [Deemed Incorporated]
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POOLING AND SERVICING AGREEMENT dated and effective as of June
1, 1996, by and among ADVANTA BUSINESS RECEIVABLES CORP., a
Nevada corporation, as Transferor, ADVANTA FINANCIAL CORP., a
Utah industrial loan corporation, as Master Servicer, and THE
FIRST NATIONAL BANK OF CHICAGO, a national banking
association, as Trustee.
In consideration of the mutual agreements herein contained,
each party agrees as follows for the benefit of the other parties, the
Certificateholders and any Series Enhancer to the extent provided herein and in
any Supplement (as such terms are defined below):
ARTICLE I
Definitions
Section 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings, and the
definitions of such terms are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms.
"ABRC" shall mean Advanta Business Receivables Corp., a Nevada
corporation.
"ABRC Certificate" shall mean the certificate executed by ABRC and
authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit A, as the same may be modified in accordance with subsection 2.09(e).
"Account" shall mean each MasterCard(R) and VISA(R)(1) business
revolving credit card account established pursuant to a Cardholder Agreement and
the Receivables in which or a Participation Interest in the Receivables in which
has been conveyed pursuant to this Agreement, but shall exclude any Account in
which all of the Receivables are either reassigned or assigned to a Transferor
or its designee or the Master Servicer in accordance with the terms of this
Agreement. The term "Account" shall include those additional Accounts designated
pursuant to subsection 2.09(a), (b) or (d) only from and after the Addition Date
with respect thereto, and the term "Account" shall be deemed to refer to any
Removed Account only prior to the Removal Date with respect thereto. Nothing in
this definition shall be construed to convey ownership of the Accounts to the
Transferor or the Trust. The Seller shall continue to maintain the exclusive
ownership interest in the Accounts.
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(1) MasterCard and VISA are registered trademarks of MasterCard
International Incorporated and of VISA USA, Inc., respectively.
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"Accumulation Period" shall mean, with respect to any Series, or any
Class within a Series, a period following the Revolving Period, which shall be
the accumulation or other period in which Collections of Principal Receivables
are accumulated in an account for the benefit of the Investor Certificateholders
of such Series, or a Class within such Series, in each case as defined for such
Series, or Class within such Series, in the related Supplement.
"ACH" shall mean automated clearing house, a clearing and settlement
facility for the interchange of electronic debits and credits among financial
institutions.
"Act" shall mean the Securities Act of 1933, as amended from time to
time.
"Addition" shall mean the designation of additional Eligible Accounts
to be included as Accounts or of Participation Interests to be included as Trust
Assets pursuant to subsection 2.09(a), (b) or (d).
"Additional Designated Assets" shall mean (i) the Receivables generated
from each Account designated pursuant to subsection 2.09(a), (b) or (d) to be
included as an Account and is identified by account number and by the Receivable
balance in a computer file or microfiche list or (ii) each Participation
Interest described in Section 2.09(a) or (b), in each case delivered to the
Trustee by the applicable Transferor pursuant to Sections 2.01 and 2.09.
"Additional Transferor" shall have the meaning specified in subsection
2.09(e).
"Addition Cut-Off Date" shall mean, with respect to any Additional
Designated Assets to be included in the Trust, the date specified in the related
Assignment.
"Addition Date" shall mean with respect to Additional Designated
Assets, (i) the date on which Additional Designated Assets described in clause
(i) of the definition thereof are conveyed to the Trust pursuant to subsection
2.09(a), (b) or (d) or (ii) the date from and after which Participation
Interests are to be included as Trust Assets pursuant to subsection 2.09(a) or
(b).
"Adverse Effect" shall mean, with respect to any action, that such
action will (a) result in the occurrence of a Pay Out Event with respect to any
Series or (b) materially adversely affect the amount or timing of distributions
to be made to the Investor Certificateholders of any Series or Class pursuant to
this Agreement and the related Supplement.
"AFC" shall mean Advanta Financial Corp., a Utah industrial loan
corporation.
"Affiliate" shall mean, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" shall mean the power to
direct the management and policies of a 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.
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"Aggregate Investor Amount" shall mean, as of any date of
determination, the sum of (i) the aggregate Investor Amounts of all Series of
Certificates issued and outstanding on such date of determination and (ii) the
sum of the Enhancement Investor Amounts, if any, for all outstanding Series on
such date of determination.
"Aggregate Series Percentage" shall mean, with respect to Principal
Receivables, Defaulted Receivables and Finance Charge and Administrative
Receivables on any date of determination, the sum of the Series Percentages for
such categories of Receivables for all outstanding Series on such date of
determination; provided, however, that the Aggregate Series Percentage shall not
exceed 100%.
"Agreement" shall mean this Pooling and Servicing Agreement and all
amendments hereof, including, with respect to any Series or Class, the related
Supplement.
"Amortization Period" shall mean, with respect to any Series, or any
Class within a Series, a period following the Revolving Period, which shall be
the controlled amortization period, the principal amortization period, the rapid
amortization period, the optional amortization period, the limited amortization
period or other amortization period, in each case as defined with respect to
such Series, or such Class within a Series in the related Supplement.
"Applicants" shall have the meaning specified in Section 6.08.
"Appointment Date" shall have the meaning specified in subsection
9.02(a).
"Assignment" shall have the meaning specified in subsection
2.09(c)(vi).
"Authorized Newspaper" shall mean any newspaper or newspapers of
general circulation in the Borough of Manhattan, The City of New York, or
Philadelphia, Pennsylvania, printed in the English language (and, with respect
to any Series or Class, if and so long as the Investor Certificates of such
Series are listed on the Luxembourg Stock Exchange and such Exchange shall so
require, in Luxembourg, printed in any language satisfying the requirements of
such Exchange) and customarily published on each business day at such place,
whether or not published on Saturdays, Sundays or holidays.
"Automatic Additional Designated Assets" shall have the meaning
specified in subsection 2.09(d)(i).
"Bearer Certificates" shall have the meaning specified in Section 6.01.
"Benefit Plan" shall have the meaning specified in subsection
6.04(c)(i) .
"Book-Entry Certificates" shall mean Investor Certificates registered
in the name of a Clearing Agency or its nominee as described in Section 6.10.
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"Business Day" shall mean any day other than (a) a Saturday or Sunday
or (b) any other day on which banks in New York, New Jersey, Utah or Nevada (or,
with respect to any Series, any additional city specified in the related
Supplement) or any other State in which the principal executive offices of AFC,
the Corporate Trust Office or any Additional Transferor are located, are
authorized or obligated by law, executive order or governmental decree to be
closed.
"Cardholder Agreement" shall mean, with respect to an Account, the
agreements between a Seller and the related Obligor, governing the terms and
conditions of such Account, as such agreements may be amended, modified or
otherwise changed from time to time in accordance with the Credit Card
Guidelines and as distributed (including any amendments and revisions thereto)
to Obligors of such Account.
"Cash Advance Fees" shall have the meaning specified in the Cardholder
Agreement applicable to each Account for cash advance fees or similar terms.
"CEDEL" shall mean Centrale de Livraison de Valeurs Mobilieres S.A.
"Certificate" shall mean any one of the Investor Certificates or the
Transferor Certificates.
"Certificateholder" or "Holder" shall mean an Investor
Certificateholder or a Person in whose name any one of the Transferor
Certificates is registered.
"Certificateholders' Interest" shall have the meaning specified in
Section 4.01.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the owner of such Book-Entry Certificate, 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).
"Certificate Rate" shall mean, with respect to any Series or Class, the
certificate rate specified in the related Supplement.
"Certificate Register" shall mean the register maintained pursuant to
Section 6.04, providing for the registration of the Registered Certificates and
the Transferor Certificates and transfers and exchanges thereof.
"Class" shall mean, with respect to any Series, any one of the classes
of Investor Certificates of that Series.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
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"Clearing Agency Participant" shall mean 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" shall mean, with respect to any Series, the closing date
specified in the related Supplement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collection Account" shall have the meaning specified in Section 4.02.
"Collections" shall mean all payments by or on behalf of Obligors for
the payment of Principal Receivables and Finance Charge and Administrative
Receivables in the form of cash, checks (to the extent collected), wire
transfers, electronic transfers, ATM transfers or other forms of payment in
accordance with the Cardholder Agreements in effect from time to time. All
Recoveries will be treated as Collections of Finance Charge and Administrative
Receivables. Collections with respect to any Monthly Period shall include a
portion, calculated pursuant to subsection 2.08(d), of Interchange paid to the
Trust with respect to such Monthly Period, to be applied as if such amounts were
Collections of Finance Charge and Administrative Receivables for all purposes.
As specified in any Participation Agreement or Supplement, Collections shall
include amounts received with respect to Participation Interests.
"Commission" shall have the meaning specified in subsection 3.01(b).
"Companion Series" shall mean (i) each Series which has been paired
with another Series (which Series may be prefunded or partially prefunded), such
that the reduction of the Investor Amount of such Series results in the increase
of the Investor Amount of such other Series, as described in the related
Supplements, and (ii) such other Series.
"Contractually Delinquent" with respect to an Account, shall mean an
Account as to which the required minimum payment set forth on the related
billing statement has not been received by the due date thereof.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate
Trust Services Division, except that for purposes of Section 6.04(b), 6.07 or
11.16, such term shall mean the office or agency of the Trustee in the Borough
of Manhattan, The City of New York, which office at the date hereof is located
at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Coupon" shall have the meaning specified in Section 6.01.
"Credit Card Guidelines" shall mean the written policies and procedures
of AFC or a Seller, as the case may be, relating to the operation of its
business revolving credit card
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business, including, without limitation, the written policies and procedures for
determining the creditworthiness of credit card account customers and the
extension of credit to credit card account customers and relating to the
maintenance of Accounts and collection of Receivables with respect thereto, as
such policies and procedures may be amended, modified, or otherwise changed from
time to time.
"Cut-Off Date" shall mean, with respect to the Initial Designated
Assets, the Trust CutOff Date, and with respect to any Additional Designated
Assets, the related Addition Cut-Off Date.
"Date of Processing" shall mean, with respect to any transaction or
receipt of Collections, the Business Day such transaction or receipt of
Collections is first recorded on the Master Servicer's computer file of Accounts
(without regard to the effective date of such recordation).
"Defaulted Amount" shall mean, with respect to any Monthly Period, an
amount (which shall not be less than zero) equal to (a) the amount of Principal
Receivables which became Defaulted Receivables in such Monthly Period, minus (b)
the amount of any Defaulted Receivables included in any Account in which a
Transferor or the Master Servicer became obligated to accept reassignment or
assignment of the Receivables in accordance with the terms of this Agreement
during such Monthly Period; provided, however, that, if an Insolvency Event
occurs with respect to any Transferor, the amount of such Defaulted Receivables
which are subject to reassignment to such Transferor in accordance with the
terms of this Agreement shall not be subtracted as set forth above; and
provided, further, that, if any of the events described in subsection 10.01(d)
occur with respect to the Master Servicer, the amount of such Defaulted
Receivables which are subject to reassignment or assignment to the Master
Servicer in accordance with the terms of this Agreement shall not be subtracted
as set forth above.
"Defaulted Receivables" shall mean, with respect to any Monthly Period,
all Principal Receivables which are charged off as uncollectible in such Monthly
Period in accordance with the Credit Card Guidelines and the Master Servicer's
customary and usual servicing procedures for servicing business revolving credit
card and other revolving credit account receivables comparable to the
Receivables. A Principal Receivable shall become a Defaulted Receivable on the
day on which such Principal Receivable is recorded as charged off on the Master
Servicer's computer master file of Accounts but, in any event, shall be deemed a
Defaulted Receivable no later than the day the related Account becomes 150 days
Contractually Delinquent unless the Obligor cures such default by making a
partial payment which satisfies the criteria for curing delinquencies set forth
in the applicable Credit Card Guidelines.
"Defeasance" shall have the meaning specified in subsection 12.04(a).
"Defeased Series" shall have the meaning specified in subsection
12.04(a).
"Definitive Certificates" shall have the meaning specified in Section
6.10.
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"Depositaries" shall mean the Person(s), if any, specified in the
applicable Supplement, in its capacity as depositary for the respective accounts
of any Clearing Agency or any Foreign Clearing Agencies.
"Depository Agreement" shall mean, if applicable with respect to any
Series or Class, the agreement among the Transferors, the Trustee and a Clearing
Agency, or as otherwise provided in the related Supplement.
"Designated Assets" shall mean either the Initial Designated Assets and
any Additional Designated Assets, which, in the case of a Participation
Interest, shall include the related Transferor's interest in the related
Participating Receivables.
"Determination Date" shall mean, unless otherwise specified in the
related Supplement, with respect to any Distribution Date, the third Business
Day preceding such Distribution Date.
"Discount Option Date" shall mean each date on which a Discount
Percentage designated by the Transferors pursuant to Section 2.12 takes effect.
"Discount Option Receivables" shall have the meaning specified in
Section 2.12. The aggregate amount of Discount Option Receivables outstanding on
any Date of Processing occurring on or after a Discount Option Date shall equal
the sum of (a) the aggregate Discount Option Receivables at the end of the prior
Date of Processing (which amount, prior to the initial Discount Option Date,
shall be zero) plus (b) any new Discount Option Receivables created on such Date
of Processing minus (c) any Discount Option Receivables Collections received on
such Date of Processing. Discount Option Receivables created on any Date of
Processing shall mean the product of the amount of any Principal Receivables
created on such Date of Processing (without giving effect to the proviso in the
definition of Principal Receivables) and the Discount Percentage.
"Discount Option Receivable Collections" shall mean on any Date of
Processing occurring in any Monthly Period succeeding the Monthly Period in
which the Discount Option Date occurs, the product of (a) a fraction the
numerator of which is the Discount Option Receivables and the denominator of
which is the sum of the Principal Receivables and the Discount Option
Receivables, in each case (for both the numerator and the denominator) at the
end of the preceding Monthly Period and (b) Collections of Principal Receivables
on such Date of Processing (without giving effect to the proviso in the
definition of Principal Receivables).
"Discount Percentage" shall mean the percentages, if any, designated by
the Transferors pursuant to Section 2.12.
"Distribution Date" shall mean, unless otherwise defined in a
Supplement with respect to a Series, the fifteenth day of each calendar month
or, if such fifteenth day is not a Business Day, the next succeeding Business
Day.
"Dollars", "$" or "U.S. $" shall mean United States Dollars.
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"Eligible Account" shall mean an Account identified by a Seller as
having the following characteristics as of the related Cut-Off Date:
(a) is in existence and maintained by a Seller;
(b) is payable in Dollars;
(c) has not been identified as an Account the credit card or
cards with respect to which have been reported to AFC or the applicable
Seller as having been lost or stolen;
(d) the Obligor of which has provided, as his or her billing
address, an address located in the United States (or its territories or
possessions or a military address);
(e) has an Obligor who has not been identified by AFC or the
applicable Seller as an employee of AFC or such Seller or any Affiliate
of either thereof;
(f) has an Obligor who has not been identified by AFC or the
applicable Seller as being involved in a voluntary or involuntary
bankruptcy proceeding; and
(g) does not have any Receivables which have been identified
by AFC, or the applicable Seller or the relevant Obligor as having been
incurred as a result of the fraudulent use of any related credit card.
"Eligible Deposit Account" shall mean either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States or any one of the states thereof, including the District of
Columbia (or any domestic branch of a foreign bank), and acting as a trustee for
funds deposited in such account, so long as any of the securities of such
depository institution shall have a credit rating from each Rating Agency in one
of its generic credit rating categories which signifies investment grade.
"Eligible Institution" shall mean the Trustee or any other depository
institution organized under the laws of the United States or any one of the
states thereof, including the District of Columbia (or any domestic branch of a
foreign bank), which other depository institution at all times (a) is a member
of the FDIC and (b) has (i) a long-term unsecured debt rating acceptable to each
Rating Agency or (ii) a certificate of deposit rating acceptable to each Rating
Agency. Notwithstanding the previous sentence, any institution the appointment
of which satisfies the Rating Agency Condition shall be considered an Eligible
Institution. If so qualified, the Master Servicer may be considered an Eligible
Institution for the purposes of this definition.
"Eligible Investments" shall mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as
to timely payment of principal and interest by, the United States of
America;
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(b) 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
foreign banks) and subject to supervision and examination by federal or
state banking or depository institution authorities; provided, that at
the time of the Trust's investment or contractual commitment to invest
therein, the short-term debt rating of such depository institution or
trust company shall be in the highest investment category of each
Rating Agency;
(c) commercial paper or other short-term obligations having,
at the time of the Trust's investment or contractual commitment to
invest therein, a rating from each Rating Agency in its highest
investment category;
(d) notes or bankers' acceptances (having original maturities
of no more than 365 days) issued by any depository institution or trust
company referred to in (b) above;
(e) investments in money market or common trust funds rated in
the highest investment category by each Rating Agency or otherwise
approved in writing by each Rating Agency;
(f) time deposits, other than as referred to in clause (e)
above, with a Person the commercial paper of which has a credit rating
from each Rating Agency in its highest investment category; or
(g) any other investments approved in writing by each Rating
Agency.
An Eligible Investment may be issued or sponsored by the Master Servicer, the
Trustee, or their Affiliates.
"Eligible Receivable" shall mean each Receivable:
(a) which has arisen under an Eligible Account;
(b) which was created in compliance in all material respects
with all Requirements of Law applicable to the institution which owned
such Receivable at the time of its creation and pursuant to a
Cardholder Agreement which complies in all material respects with all
Requirements of Law applicable to the related Seller;
(c) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations or declarations with,
any Governmental Authority required to be obtained, effected, or given
in connection with the creation of such Receivable or the execution,
delivery and performance by the related Seller, as the case may be, of
its obligations, if any, under the related Cardholder Agreement have
been duly obtained, effected, or given and are in full force and
effect;
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(d) as to which, at the time of the transfer of such
Receivable to the Trust, such Transferor or the Trust will have good
and marketable title thereto, free and clear of all Liens (other than
any Lien for municipal or other local taxes if such taxes are not then
due and payable or if such Transferor is then contesting the validity
thereof in good faith by appropriate proceedings and has set aside on
its books adequate reserves with respect thereto);
(e) which has been the subject of either a valid transfer and
assignment from such Transferor to the Trust of all such Transferor's
right, title and interest therein (including any proceeds thereof) or
the grant of a first priority perfected security interest therein (and
in the proceeds thereof), effective until the termination of the Trust;
(f) which will at all times be the legal, valid and binding
payment obligation of the Obligor thereon, enforceable against such
Obligor in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws, now or hereafter in effect, affecting
the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);
(g) which constitutes either an "account" or a "general
intangible" under and as defined in Article 9 of the UCC as then in
effect in any state where the filing of a financing statement is
required to perfect an interest in the Receivables and the proceeds
thereof;
(h) which, at the time of its transfer to the Trust, has not
been waived or modified except as permitted in accordance with the
Credit Card Guidelines and which waiver or modification is reflected in
the Master Servicer's computer file of revolving credit card accounts;
(i) which, at the time of its transfer to the Trust, is not
subject to any right of rescission, setoff, counterclaim or any other
defense of the Obligor (including defenses arising out of violations of
usury laws), other than defenses arising out of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights in general and general principles
of equity (whether considered in a suit at law or equity) or as to
which the Master Servicer is required by Section 3.09 to make an
adjustment;
(j) as to which, at the time of its transfer to the Trust,
such Transferor has satisfied all obligations to be fulfilled by such
Transferor at the time it is transferred to the Trust; and
(k) as to which, at the time of its transfer to the Trust,
such Transferor has not taken any action which would impair, or omitted
to take any action the omission of which would impair, the rights of
the Trust or the Certificateholders therein.
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"Eligible Servicer" shall mean AFC, the Trustee, or any of its
Affiliates or if the Trustee or any of its Affiliates is not acting as Successor
Servicer, an entity which, at the time of its appointment as Master Servicer,
(a) is servicing a portfolio of revolving credit card accounts, (b) is legally
qualified and has the capacity to service the Accounts, (c) is qualified to use
the software that is then being used to service the Accounts or obtains the
right to use software, or has its own software, which is adequate to perform its
duties under this Agreement, (d) has demonstrated the ability to professionally
and competently service a portfolio of accounts similar to the Accounts in
accordance with high standards of skill and care, and (e) has a net worth of at
least $10,000,000 as of the end of its most recent fiscal quarter.
"Enhancement Agreement" shall mean any agreement, instrument or
document governing the terms of any Series Enhancement or pursuant to which any
Series Enhancement is issued or outstanding.
"Enhancement Investor Amount" shall have the meaning, if applicable
with respect to any Series, specified in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Euroclear Operator" shall mean ▇▇▇▇▇▇ Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear System.
"Excess Funding Account" shall have the meaning specified in Section
4.02.
"Excess Funding Amount" shall mean the amount on deposit in the Excess
Funding Account.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor.
"Finance Charge and Administrative Receivables" shall mean all amounts
billed to the Obligors on any Account in respect of (i) Periodic Finance
Charges, (ii) Late Fees, (iii) Overlimit Fees, if any, (iv) Cash Advance Fees,
if any, (v) amounts deemed to be Discount Option Receivables, if any, in
accordance with Section 2.12 and (vi) all other fees and charges with respect to
the Accounts designated by the Transferor to be included as Finance Charge and
Administrative Receivables. All Recoveries will be treated as Collections of
Finance Charge and Administrative Receivables. Collections of Finance Charge and
Administrative Receivables with respect to any Monthly Period shall be deemed to
include Interchange as calculated pursuant to the related Supplement for any
Series. Finance Charge and Administrative Receivables shall also include the
interest portion of Participation Interests as shall be determined pursuant to
the applicable Participation Agreement or Supplement.
"FIRREA" shall mean the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended from time to time.
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"Fixed Amount" shall mean the dollar amount or fixed percentage of
Receivables required to be maintained in a Participation Interest pursuant to a
Participation Agreement.
"Foreign Clearing Agency" shall mean CEDEL and the Euroclear Operator.
"Governmental Authority" shall mean the United States of America, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Group" shall mean, with respect to any Series, the group of Series, if
any, in which the related Supplement specifies such Series is to be included.
"Included Account" with respect to any Account relating to a
Participation Interest, shall have the meaning set forth in the related
Participation Agreement.
"Ineligible Receivables" shall have the meaning specified in subsection
2.05(a).
"Initial Closing Date" shall mean June 27, 1996.
"Initial Designated Assets" shall mean the Participation Interest
described in the Master Participation Agreement dated as of June 1, 1996 between
ABRC as Transferor and AFC as Master Servicer.
"Insolvency Event" shall have the meaning specified in subsection
9.01(a).
"Insolvency Proceeds" shall have the meaning specified in subsection
9.02(b).
"Insurance Proceeds" shall mean any amounts recovered by any Master
Servicer pursuant to any credit insurance policies covering any Obligor with
respect to Receivables under such Obligor's Account.
"Interchange" shall mean interchange fees payable to AFC, or any other
Seller, in its capacity as credit card issuer, through VISA or MasterCard or any
other similar entity or organization with respect to any type of revolving
credit card accounts included as Accounts in connection with cardholder charges
for goods, services, and cash advances, as calculated pursuant to the related
Supplement for any Series.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended from time to time.
"Investor Amount" shall mean, with respect to any Series and for any
date, an amount equal to the Investor Amount specified in the related
Supplement.
"Investor Certificateholder" shall mean the Person in whose name a
Registered Certificate is registered in the Certificate Register or the bearer
of any Bearer Certificate or Coupon.
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"Investor Certificates" shall mean any certificated or uncertificated
interest in the Trust designated as, or deemed to be, an "Investor Certificate"
in the related Supplement.
"Late Fees" shall have the meaning specified in the Cardholder
Agreement applicable to each Account for late fees or similar terms.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, participation or equity interest, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever, including, without limitation, 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 or comparable law of any jurisdiction to evidence any of the foregoing;
provided, however, that any assignment or transfer pursuant to subsection
6.03(c) or (d) or Section 7.02 shall not be deemed to constitute a Lien.
"Master Servicer" shall mean initially AFC and its permitted successors
and assigns, in its capacity as Master Servicer pursuant to this Agreement, and
from the time of its appointment, any Person appointed Successor Servicer as
herein provided.
"MasterCard" shall mean MasterCard International Incorporated.
"Monthly Period" shall mean, with respect to each Distribution Date,
unless otherwise provided in a Supplement, the period from and including the
first day of the preceding calendar month to and including the last day of such
calendar month; provided, however, that the initial Monthly Period with respect
to any Series will commence on the Closing Date with respect to such Series.
"Monthly Servicing Fee" shall have the meaning specified in Section
3.02.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
"Notice of Servicer Default" shall have the meaning set forth in
Section 10.01 of this Agreement.
"Notices" shall have the meaning specified in subsection 13.05(a).
"Obligor" shall mean, with respect to any Account, the Person or
Persons obligated to make payments with respect to such Account, including any
guarantor thereof, but excluding any merchant.
"Officer's Certificate" shall mean, unless otherwise specified in this
Agreement, a certificate delivered to the Trustee signed by the Chairman of the
Board, President, any Vice President or the Treasurer of a Transferor or the
Master Servicer, as the case may be.
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"Opinion of Counsel" shall mean a written opinion of counsel, who may
be counsel for, or an employee of, the Person providing the opinion and who
shall be reasonably acceptable to the Trustee; provided, that (i) any Tax
Opinion shall be rendered by an independent law firm of nationally recognized
standing on such matters, and (ii) any opinion rendered pursuant to Section 8.05
shall be issued by an independent law firm.
"Overlimit Fees" shall have the meaning specified in the Cardholder
Agreement applicable to each Account for overlimit fees or similar terms if such
fees are provided for with respect to such Account.
"Participating Receivables" shall have the meaning specified in Section
2.05 of this Agreement.
"Participation Agreement" shall mean each participation agreement
pursuant to which a Participation Interest is conveyed by a Seller to a
Transferor.
"Participation Interest" shall mean a participation (including a 100%
participation) representing undivided interests in a pool of assets primarily
consisting of business revolving credit card receivables, and any interests in
the foregoing, including securities representing or backed by such receivables,
owned by a Transferor or any Affiliate of any Transferor and collections
thereon.
"Paying Agent" shall mean any paying agent and co-paying agent
appointed pursuant to Section 6.07 and shall initially be the Trustee; provided,
that if the Supplement for a Series so provides, a Paying Agent may be appointed
with respect to such Series.
"Pay Out Event" shall mean, with respect to each Series, a Trust Pay
Out Event or a Series Pay Out Event.
"Performance Guaranty" shall mean the performance guaranty issued by
Advanta Corp. dated as of June 1, 1996.
"Periodic Finance Charges" shall have the meaning specified in the
Cardholder Agreement applicable to each Account for finance charges (due to
periodic rate) or any similar term.
"Person" shall mean any legal person, including any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental entity or other entity of
similar nature.
"Principal Receivable" shall mean all amounts charged by Obligors for
merchandise and services, cash advances and any balance transfers, but shall not
include Finance Charge and Administrative Receivables or Defaulted Receivables;
provided, however, that after the Discount Option Date, Principal Receivables on
any Date of Processing thereafter shall mean Principal Receivables as otherwise
determined pursuant to this definition minus the amount of any
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Discount Option Receivables. Principal Receivables shall also include the
Principal Receivables portion of Participation Interests as shall be determined
pursuant to the applicable Participation Agreement or Supplement. In calculating
the aggregate amount of Principal Receivables on any day, the amount of
Principal Receivables shall be reduced by the aggregate amount of credit
balances in the Accounts on such day. Any Receivables which the related
Transferor is unable to transfer as provided in Section 2.10 shall not be
included in calculating the aggregate amount of Principal Receivables, except to
the extent so provided in Section 2.10.
"Principal Sharing Series" shall mean a Series that, pursuant to the
Supplement therefor, is entitled to receive Shared Principal Collections.
"Principal Shortfalls" shall have the meaning specified in Section
4.04.
"Principal Terms" shall mean, with respect to any Series, (i) the name
or designation; (ii) the Initial Investor Amount, the Series Investor Amount and
the Series Invested Amount (or method for calculating such amounts); (iii) the
Certificate 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 Certificateholders 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 Servicing Fee with
respect thereto; (viii) the terms of any form of Series Enhancement with respect
thereto; (ix) the terms on which the Investor Certificates of such Series may be
exchanged for Investor Certificates of another Series, repurchased by the
Transferors or remarketed to other investors; (x) the Series Termination Date;
(xi) the number of Classes of Investor Certificates of such Series and, if such
Series consists of more than one Class, the rights and priorities of each such
Class; (xii) whether the Investor Certificates of such Series may be issued as
Bearer Certificates and any limitations imposed thereon; (xiii) the priority of
such Series with respect to any other Series; (xiv) the Group, if any, to which
such Series belongs; (xv) whether or not such Series is a Principal Sharing
Series; and (xvi) any other terms of such Series.
"Rating Agency" shall mean, with respect to any outstanding Series or
Class, each statistical rating agency, if any, selected by the Transferors to
rate the Investor Certificates of such Series or Class, as specified in the
related Supplement.
"Rating Agency Condition" shall mean, with respect to any action, that
each Rating Agency shall have notified the Trustee and the Transferors in
writing that such action will not result in a reduction or withdrawal of the
rating of any outstanding Series or Class with respect to which it is a Rating
Agency.
"Reassignment" shall have the meaning specified in Section 2.10.
"Receivable" shall mean amounts (i) owing by an the Obligor from time
to time for Principal Receivables and Finance Charge and Administrative
Receivables, and (ii) calculated as Interchange with respect thereto. A
Receivable shall be deemed to have been created at the end of the day on the
Date of Processing of such Receivable. Receivables which become
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Defaulted Receivables shall not be shown on a Master Servicer's records as
amounts payable (and shall cease to be included as Receivables) on the day on
which they become Defaulted Receivables.
"Receivables Purchase Agreement" shall mean an agreement whereby
Receivables are conveyed from a Seller to a Transferor.
"Record Date" shall mean, with respect to any Distribution Date, the
last Business Day of the preceding Monthly Period, except as otherwise provided
with respect to a Series in the related Supplement.
"Recoveries" shall mean all amounts, including Insurance Proceeds,
received by a Master Servicer with respect to Receivables which have previously
become Defaulted Receivables, net of any out-of-pocket costs and expenses of
collection (including attorneys fees and expenses deducted therefrom).
"Registered Certificateholder" shall mean the Holder of a Registered
Certificate.
"Registered Certificates" shall have the meaning specified in Section
6.01.
"Removal Cut-Off Date" shall have the meaning specified in subsection
2.10(b).
"Removal Date" shall have the meaning specified in subsection 2.10(a).
"Removal Notice Date" shall have the meaning specified in subsection
2.10(a).
"Removed Accounts" shall have the meaning specified in Section 2.10.
"Required Designation Date" shall have the meaning specified in
subsection 2.09(a).
"Required Principal Balance" shall mean, as of any date of
determination, (a) the sum of the Series Investor Amounts for each Series
outstanding on such date, minus (b) the Excess Funding Amount.
"Required Transferor Amount" shall mean the sum of each of the amounts
specified as such in the applicable Supplement.
"Requirements of Law" with respect to any Person shall mean the
certificate of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty, rule
or regulation, or determination of an arbitrator or Governmental Authority, in
each case applicable to or binding upon such Person or to which such Person is
subject, whether Federal, state or local (including, without limitation, usury
laws, the Federal Truth in Lending Act and Regulation Z and Regulation B of the
Board of Governors of the Federal Reserve System) and rules, regulations and
bylaws of MasterCard
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International Incorporated, VISA USA, Inc., or any other similar entity or
organization applicable to or binding upon such Person.
"Responsible Officer" shall mean any officer within the Corporate Trust
Office (or any successor group of the Trustee) including any Vice President, any
Assistant Secretary, any Assistant Treasurer, or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above-designated officers 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.
"Revolving Period" shall mean, with respect to any Series, the period
specified as such in the related Supplement.
"RTC" shall mean the Resolution Trust Corporation or any successor.
"Rule 144A" shall mean Rule 144A under the Act, as such Rule may be
amended from time to time.
"Seller" shall mean AFC, a Utah industrial loan corporation or any
other entity which is the issuer of the credit card relating to an Account
pursuant to a Cardholder Agreement.
"Seller's Interest" shall mean (i) the aggregate principal amount of
the participation interests in the related Receivables retained by the Seller as
set forth in the related Participation Agreement and (ii) the Transferor's
Interest.
"Series" shall mean any series of Investor Certificates established
pursuant to a Supplement.
"Series Account" shall mean any deposit, trust, escrow or similar
account maintained for the benefit of any Series or Class, as specified in any
Supplement.
"Series Enhancement" shall mean the rights and benefits provided to the
Investor Certificateholders of any Series or Class pursuant to any letter of
credit, surety bond, cash collateral account, cash collateral guaranty, spread
account, guaranteed rate agreement, maturity liquidity facility, tax protection
agreement, interest rate swap agreement, interest rate cap agreement or other
similar arrangement. The subordination of any Series or Class to another Series
or Class shall be deemed to be a Series Enhancement.
"Series Enhancer" shall mean the Person or Persons providing any Series
Enhancement, other than the Investor Certificateholders of any Series or Class
which is subordinated to another Series or Class.
"Series Enhancer Default" shall have, with respect to any Series, the
meaning specified in the related Supplement, if any.
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"Series Invested Amount" shall have, with respect to any Series, the
meaning, if any, specified in the related Supplement.
"Series Investor Amount" shall have, with respect to any Series, the
meaning, if any, specified in the related Supplement.
"Series Pay Out Event" shall mean, with respect to any Series, each
event, if any, specified in the Supplement as a Series Pay Out Event with
respect to such Series.
"Series Percentage" shall have, with respect to Principal Receivables,
Finance Charge and Administrative Receivables and Defaulted Receivables, and any
Series of Certificates, the meaning, if any, stated in the related Supplement.
"Series Termination Date" shall mean, with respect to any Series, the
termination date for such Series specified in the related Supplement.
"Servicer Default" shall have the meaning specified in Section 10.01.
"Servicing Fee" shall have the meaning specified in Section 3.02.
"Servicing Fee Rate" shall mean, with respect to any Series, the
servicing fee rate specified in the related Supplement.
"Servicing Officer" shall mean any officer of the Master Servicer, or
any attorney-in-fact of the Master Servicer, involved in, or responsible for,
the administration and servicing of the Receivables whose name appears on a list
of servicing officers furnished to the Trustee by the Master Servicer, as such
list may from time to time be amended.
"Shared Principal Collections" shall have the meaning specified in
Section 4.04.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, or its successor.
"Successor Servicer" shall have the meaning specified in subsection
10.02(a).
"Supplement" shall mean, with respect to any Series, a Supplement to
this Agreement, executed and delivered in connection with the original issuance
of the Investor Certificates of such Series pursuant to Section 6.03, and all
amendments thereof and supplements thereto.
"Supplemental Certificate" shall have the meaning specified in
subsection 6.03(c).
"Tax Opinion" shall mean, with respect to any action, an Opinion of
Counsel to the effect that, (a) for Federal income tax purposes, such action
will not adversely affect the tax characterization as debt of Investor
Certificates of any outstanding Series or Class that were characterized as debt
at the time of their issuance, (b) following such action the Trust will not
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be deemed to be an association (or publicly traded partnership) taxable as a
corporation and (c) such action will not cause or constitute an event in which
gain or loss would be recognized by any Investor Certificateholder or the Trust.
"Termination Notice" shall have the meaning specified in Section 10.01.
"Termination Proceeds" shall have the meaning specified in Section
12.02(c).
"Transfer Agent and Registrar" shall have the meaning specified in
Section 6.04.
"Transfer Date" shall mean the Business Day immediately preceding each
Distribution Date.
"Transfer Restriction Event" shall have the meaning specified in
Section 2.11.
"Transferors" shall mean ABRC and any Additional Transferor, and their
successors and permitted assigns.
"Transferor Amount" shall mean, on any date of determination, an amount
equal to (i) the sum of (a) the aggregate amount of Principal Receivables at the
end of the day immediately prior to such date of determination, and (b) the
Excess Funding Amount at the end of the day immediately prior to such date of
determination, and minus (ii) the sum of the Series Invested Amounts for each
Series outstanding on such date at the end of such day.
"Transferor Certificates" shall mean, collectively, the ABRC
Certificate and any outstanding Supplemental Certificates.
"Transferors' Interest" shall have the meaning specified in Section
4.01.
"Transferor Percentage" shall mean, on any date of determination, when
used with respect to Principal Receivables, Finance Charge and Administrative
Receivables and Defaulted Receivables, a percentage equal to 100% minus the
Aggregate Series Percentage with respect to such categories of Receivables.
"Trust" shall mean the Advanta Business Card Master Trust created by
this Agreement.
"Trust Assets" shall have the meaning specified in Section 2.01.
"Trust Cut-Off Date" shall mean the opening of business on June 1,
1996.
"Trust Pay Out Event" shall mean each event specified in subsection
9.01(a).
"Trustee" shall mean The First National Bank of Chicago, in its
capacity as trustee on behalf of the Trust, or its successor in interest, or any
successor trustee appointed as herein provided.
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"UCC" shall mean the Uniform Commercial Code, as amended from time to
time, as in effect in the State of Nevada or any other state or states where the
filing of a financing statement is required to perfect the Trust's interest in
the Receivables and the proceeds thereof or in any other specified jurisdiction.
"United States" shall mean the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"Vice President" when used with respect to the Trustee, a Transferor or
the Master Servicer shall mean any vice president thereof whether or not
designated by a number or word or words added before or after the title "vice
president".
"VISA" shall mean VISA USA, Inc.
Section 1.02. Other Definitional Provisions.
(a) With respect to any Series, all terms used herein and not otherwise
defined herein shall have meanings ascribed to them in the related Supplement.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles or regulatory accounting
principles, as applicable. To the extent that the definitions of accounting
terms in this Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles or regulatory accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
(d) The agreements, representations and warranties of ABRC, AFC or any
Seller and any Additional Transferor in this Agreement in each of their
respective capacities as Transferors or as Sellers and, in the case of AFC, as
Master Servicer, shall be deemed to be the agreements, representations and
warranties of ABRC or AFC and such Additional Transferor or Seller solely in
each such capacity for so long as ABRC or AFC and such Additional Transferor or
Seller act in each such capacity under this Agreement.
(e) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; references to any Section,
Schedule or Exhibit are references to
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Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term "including" means "including without limitation."
(f) Unless otherwise specifically provided herein, the failure of this
Agreement to specify the meaning of a term or the applicability of a provision
to any Series shall not preclude the meaning of such term or the applicability
of such provision with respect to such Series being set forth in the Supplement
therefor.
[END OF ARTICLE I]
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ARTICLE II
Trust Assets
Section 2.01. Conveyance of Trust Assets. By execution hereof or of the
applicable amendment pursuant to Section 13.01(a), each Transferor does hereby
or shall covenant and agree to sell, transfer, assign, set over and otherwise
convey to the Trustee, on behalf of the Trust, for the benefit of the
Certificateholders, all its right, title and interest in, to and under the
Initial Designated Assets, and on each Addition Date, the Additional Designated
Assets, and in each case thereafter created from time to time until the
termination of the Trust, all Interchange and Recoveries allocable to the Trust
as provided herein, all moneys due or to become due and all amounts received
with respect thereto and all proceeds (including "proceeds" as defined in the
UCC) thereof; provided, that, nothing in this Agreement shall be construed to
convey ownership of the Accounts to the Transferor or the Trust. The related
Seller shall continue to maintain the exclusive ownership interest in the
Accounts which generate the Receivables. Such property, together with all moneys
on deposit in the Collection Account, the Excess Funding Account, the Series
Accounts and any Series Enhancement shall constitute the assets of the Trust
(the "Trust Assets"). The foregoing does not constitute and is not intended to
result in the creation or assumption by the Trust, the Trustee, any Investor
Certificateholder or any Series Enhancer of any obligation of any Seller, the
Master Servicer, the Transferor, or any Additional Transferor or any other
Person in connection with the Accounts or the Receivables or under any agreement
or instrument relating thereto, including any obligation to Obligors, merchant
banks, merchant clearance systems, VISA, MasterCard or insurers. The foregoing
sale, transfer, assignment, set over and conveyance to the Trust shall be made
to the Trustee, on behalf of the Trust, and each reference in this Agreement to
such sale, transfer, assignment, set over and conveyance shall be construed
accordingly. Each Transferor shall assign to the Trustee, as collateral
security, in connection with each transfer of Designated Assets, its rights
under the related Receivables Purchase Agreement or Participation Agreement.
Each Transferor agrees to record and file, at its own expense,
financing statements (and continuation statements when applicable) with respect
to the Designated Assets conveyed by such Transferor now existing and hereafter
created meeting the requirements of applicable state law in such manner and in
such jurisdictions as are necessary to perfect, and maintain the perfection of,
the sale and assignment of the Designated Assets to the Trust, and to deliver a
file stamped copy of each such financing statement or other evidence of such
filing (which may, for purposes of this Section 2.01, consist of telephone
confirmation of such filing) to the Trustee on or prior to the Initial Closing
Date, with respect to the Initial Designated Assets, and (if any additional
filing is so necessary) the applicable Addition Date, with respect to Additional
Designated Assets. The Trustee shall be under no obligation whatsoever to file
such financing or continuation statements or to make any other filing under the
UCC in connection with such sale and assignment.
Each Transferor further agrees, at its own expense, (a) on or prior to
(x) the Initial Closing Date, in the case of the Initial Designated Assets, (y)
the applicable Addition Date, in the case of Additional Designated Assets, and
(z) the applicable Removal Date, in the case of
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Removed Accounts, to indicate in the appropriate computer files that Receivables
created in connection with the Accounts (other than Removed Accounts),
Participating Receivables or Participation Interests in the related Receivables
have been conveyed to the Trust pursuant to this Agreement for the benefit of
the Certificateholders (or conveyed to the Transferors or their designees in the
case of Removed Accounts) by including (or deleting in the case of Removed
Accounts) in such computer files the code "20," (or any other code specified in
an Assignment) in the PORTF_CD field of such computer files, and (b) on or prior
to the Initial Closing Date, each Addition Date and each Removal Date, as
applicable, to deliver to the Trustee a computer file or microfiche list
containing a true and complete list of all such Accounts specifying for each
such Account, as of the Trust Cut-Off Date, in the case of the Initial
Designated Assets, the applicable Addition Cut-Off Date, in the case of
Additional Designated Assets, and the applicable Removal Cut-Off Date, in the
case of Removed Accounts, its account number, the aggregate amount outstanding
in such Account and the aggregate amount of Principal Receivables outstanding in
such Account. Such file or list, as supplemented from time to time to reflect
Additional Designated Assets and Removed Accounts, shall be marked as Schedule 1
to this Agreement and is hereby incorporated into and made a part of this
Agreement. The Transferor agrees not to alter the codes or field referenced in
clause (a) above with respect to any Account during the term of this Agreement
unless and until such Accounts become Removed Accounts or unless and until (i)
the Transferors shall give written notice of any such alteration to the Trustee,
such written notice to be as of the date of its receipt by the Trustee
incorporated into and made part of this Agreement, and (ii) the Trustee and the
Transferors shall execute and file any UCC financing statement or amendment
thereof necessitated by such alteration.
It is the intention of the parties hereto that the
arrangements with respect to the Designated Assets shall constitute a purchase
and sale of such Designated Assets and not a loan. In the event, however, that a
court of competent jurisdiction were to hold that the transactions evidenced
hereby constitute a loan and not a purchase and sale, it is the intention of the
parties hereto that the Agreement shall constitute a security agreement under
applicable law, and that each Transferor shall be deemed to have granted, and
hereby grants, to the Trust a first priority perfected security interest in all
of such Transferor's right, title and interest in, to and under the Designated
Assets and the other Trust Assets. Nothing in this Agreement shall be construed
to convey ownership of the Accounts to the Trust. The related Seller shall
continue to maintain the exclusive ownership interest in the Accounts.
Section 2.02. Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, on behalf of the
Trust, of all right, title and interest to the property, now existing and
hereafter created, conveyed to the Trust pursuant to Section 2.01 and declares
that it shall maintain such right, title and interest, upon the trust herein set
forth, for the benefit of all Certificateholders. The Trustee further
acknowledges that, prior to or simultaneously with the execution and delivery of
this Agreement, the Transferor delivered to the Trustee the computer file or
microfiche list relating to the Initial Designated Assets described in the
penultimate paragraph of Section 2.01.
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(b) The Trustee hereby agrees not to disclose to any Person (or to any
other department or operating division of the Trustee, other than the Corporate
Trust Office of the Trustee or, if the Trustee shall be appointed the Successor
Servicer, such other departments or operating divisions of the Trustee as shall
be necessary to fulfill its duties as Master Servicer), any of the account
numbers or other information contained in the computer files or microfiche lists
marked as Schedule 1 or otherwise delivered to the Trustee from time to time,
except (i) to a Successor Servicer or as required by a Requirement of Law
applicable to the Trustee, (ii) in connection with the performance of the
Trustee's duties hereunder, (iii) in enforcing the rights of Certificateholders
or (iv) after consultation with the Transferors, as requested by any Person in
connection with the financing statements filed pursuant to this Agreement. The
Trustee also agrees not to use any of the foregoing information for any purpose
other than for the purposes provided for in this Agreement. The Trustee agrees
to take such measures as shall be reasonably requested by the Transferors to
protect and maintain the security and confidentiality of such information and,
in connection therewith, will allow the Transferors to inspect the Trustee's
security and confidentiality arrangements from time to time during normal
business hours. The Trustee shall provide the Transferors with notice five
Business Days prior to any disclosure pursuant to this subsection 2.02(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement or any Supplement.
Section 2.03. Representations and Warranties of the Transferors
Relating to the Transferors. Each of the Transferors hereby severally represents
and warrants to the Trust as of each Closing Date that:
(a) Organization and Good Standing. Such Transferor is a corporation
duly organized and validly existing in good standing under the laws of the
jurisdiction of its organization or incorporation, and has full corporate power,
authority and legal right to own its properties and conduct its business
revolving credit card business as such properties are presently owned and such
business is presently conducted, to execute, deliver and perform its obligations
under this Agreement and each Supplement and to execute and deliver to the
Trustee the Certificates pursuant hereto.
(b) Due Qualification. Such Transferor is duly qualified to do business
and is in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and approvals with
respect to such Transferor, in each jurisdiction in which failure to so qualify
or to obtain such licenses and approvals would render any Cardholder Agreement
relating to an Account owned by such Transferor or any Receivable transferred to
the Trust by such Transferor unenforceable by such Transferor, the Master
Servicer or the Trustee or would have a material adverse effect on the interests
of the Certificateholders hereunder or under any Supplement; provided, however,
that no representation or warranty is made with respect to any qualification,
licenses or approvals which the Trustee has or may be required at any time to
obtain, if any, in connection with the transactions contemplated hereby.
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(c) Due Authorization. The execution, delivery and performance of this
Agreement and each Supplement by such Transferor and the execution and delivery
to the Trustee of the Certificates and the consummation by such Transferor of
the transactions provided for in this Agreement and each Supplement have been
duly authorized by such Transferor by all necessary corporate action on the part
of such Transferor and this Agreement and each Supplement will remain, from the
time of its execution, an official record of such Transferor.
(d) No Conflict. The execution and delivery by such Transferor of this
Agreement, each Supplement and the Certificates, the performance by such
Transferor of the transactions contemplated by this Agreement and each
Supplement and the fulfillment by such Transferor of the terms hereof and
thereof will not conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which such Transferor is a party or by
which it or any of its properties are bound.
(e) No Violation. The execution and delivery by such Transferor of this
Agreement, each Supplement and the Certificates, the performance by such
Transferor of the transactions contemplated by this Agreement and each
Supplement and the fulfillment by such Transferor of the terms hereof and
thereof will not conflict with or violate any Requirements of Law applicable to
such Transferor.
(f) No Proceedings. There are no proceedings or investigations pending
or, to the best knowledge of such Transferor, threatened against such
Transferor, before any Governmental Authority (i) asserting the invalidity of
this Agreement, any Supplement or the Certificates, (ii) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by this Agreement, any Supplement or the Certificates, (iii)
seeking any determination or ruling that, in the reasonable judgment of such
Transferor, would materially and adversely affect the performance by such
Transferor of its obligations under this Agreement or any Supplement, (iv)
seeking any determination or ruling that would materially and adversely affect
the validity or enforceability of this Agreement, any Supplement or the
Certificates or (v) seeking to affect adversely the income tax attributes of the
Trust under the Federal, Nevada or Utah income or franchise tax systems.
(g) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any governmental body or official
required in connection with the execution and delivery by such Transferor of
this Agreement, each Supplement and the Certificates, the performance by such
Transferor of the transactions contemplated by this Agreement and each
Supplement and the fulfillment by such Transferor of the terms hereof and
thereof, have been obtained; provided, however, that such Transferor makes no
representation or warranty regarding state securities or "blue sky" laws in
connection with the distribution of the Certificates.
(h) Insolvency. No Insolvency Event with respect to such Transferor has
occurred and the transfer of the Receivables by such Transferor to the Trust has
not been made in contemplation of the occurrence thereof.
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(i) FDIC Insurance. Such Transferor is either an insured institution
for purposes of the Federal Deposit Insurance Act or such Transferor shall at
all times comply with the covenants and restriction in its Articles of
Incorporation and Bylaws and will not amend such Bylaws except upon delivery to
the Trustee of an opinion by nationally recognized bankruptcy counsel
reconfirming the conclusion set forth in the opinion delivered at the initial
closing regarding the true sale of the Designated Assets and the substantive
non-consolidation of ABRC and AFC.
The representations and warranties of each Transferor set forth in this
Section 2.03 shall survive the transfer and assignment by such Transferor of the
respective Receivables to the Trust. Upon discovery by such Transferor, the
Master Servicer or the Trustee of a breach of any of the representations and
warranties by such Transferor set forth in this Section 2.03, the party
discovering such breach shall give prompt written notice to the others. Such
Transferor agrees to cooperate with the Master Servicer and the Trustee in
attempting to cure any such breach. For purposes of the representations and
warranties set forth in this Section 2.03, each reference to a Supplement shall
be deemed to refer only to those Supplements in effect as of the relevant
Closing Date.
Section 2.04. Representations and Warranties of each Transferor
Relating to the Agreement and Any Supplement and the Receivables.
(a) Representations and Warranties. Each of the Transferors hereby
severally represents and warrants to the Trust as of the initial Closing Date
and, with respect to Additional Designated Assets, as of the related Addition
Date that:
(i) this Agreement, each Supplement and any Assignment, as the
case may be, each constitutes a legal, valid and binding obligation of
such Transferor enforceable against such Transferor in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforcement of creditors'
rights in general and the rights of creditors of national banking
associations and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in
equity);
(ii) the Designated Assets which are being transferred by such
Transferor to the Trust as listed on Schedule 1 to this Agreement and
as supplemented on such date, is an accurate and complete listing in
all material respects of all the designated Accounts in connection with
such Designated Assets as of the Trust Cut-Off Date or such Addition
Cut-Off Date, as the case may be, and the information contained therein
with respect to the identity of such Accounts (including Included
Accounts) and the Receivables existing in such Accounts is true and
correct in all material respects as of the Trust Cut-Off Date or such
Addition Cut-Off Date, as the case may be;
(iii) each of the Designated Assets conveyed to the Trust by
such Transferor has been conveyed to the Trust free and clear of any
Lien of any Person claiming through or under such Transferor or any of
its Affiliates (other than Liens permitted
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under subsection 2.07(b)) and in compliance, in all material respects,
with all Requirements of Law applicable to such Transferor;
(iv) all authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required
to be obtained, effected or given in connection with the conveyance by
such Transferor of Designated Assets to the Trust have been duly
obtained, effected or given and are in full force and effect; provided,
however, that such Transferor makes no representation or warranty
regarding state securities or "blue sky" laws in connection with the
distribution of the Certificates.
(v) either this Agreement or any Assignment, as the case may
be, constitutes a valid sale, transfer and assignment to the Trust of
all right, title and interest of such Transferor in the Designated
Assets conveyed to the Trust by such Transferor and the proceeds
thereof or, if this Agreement or any Assignment does not constitute a
sale of such property, it constitutes a grant of a "security interest"
(as defined in the UCC) in such property to the Trust, which, in the
case of the Initial Designated Assets and the proceeds thereof, is
enforceable upon execution and delivery of this Agreement or, with
respect to Additional Designated Assets, as of the applicable Addition
Date, which will be enforceable with respect to such Additional
Designated Asset and the proceeds thereof. Upon the filing of the
financing statements pursuant to Sections 2.01 and 2.09 and, in the
case of the Designated Assets and the proceeds thereof, upon the
creation thereof, the Trust shall have a first priority perfected
security or ownership interest in such property and proceeds except for
(x) Liens permitted under subsection 2.07(b), (y) the interests of the
Transferors as Holders of the ABRC Certificate or any Supplemental
Certificate, and (z) the Transferors' right, if any, to interest
accruing on and investment earnings, if any, in respect of the
Collection Account or any Series Account, as provided in this Agreement
or the related Supplement; provided, however, that the Transferors make
no representation or warranty with respect to the effect of Section
9-306 of the UCC on the rights of the Trustee to proceeds held by any
Transferor;
(vi) except as otherwise expressly provided in this Agreement
or any Supplement, neither such Transferor nor any Person claiming
through or under such Transferor has any claim to or interest in the
Collection Account, the Excess Funding Account, any Series Account or
any Series Enhancement;
(vii) on the Trust Cut-Off Date, each Initial Designated Asset
relates to Eligible Accounts and, on the applicable Addition Cut-Off
Date, each related Additional Designated Asset relates to Eligible
Accounts;
(viii) on the Trust Cut-Off Date, each Participating
Receivable is an Eligible Receivable and, on the applicable Addition
Cut-Off Date, each Receivable (including any Participating Receivable)
relating to any related Additional Designated Assets owned by the
related Seller is an Eligible Receivable;
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(ix) as of the date of the creation of any new Receivable in
an Account, such Receivable is an Eligible Receivable; and
(x) no selection procedure has been utilized by such
Transferor which such Transferor reasonably believes would result in a
selection of Initial Designated Assets or Additional Designated Assets
(from among the available Eligible Accounts on the Trust Cut-Off Date
or the applicable Addition Cut-Off Date, as the case may be) that would
be materially adverse to the interests of the Investor
Certificateholders.
(b) Notice of Breach. The representations and warranties of each
Transferor set forth in this Section 2.04 shall survive the transfer and
assignment by such Transferor of Designated Assets to the Trust. Upon discovery
by such Transferor, the Master Servicer or the Trustee of a breach of any of the
representations and warranties by such Transferor set forth in this Section
2.04, the party discovering such breach shall give prompt written notice to the
others. Such Transferor agrees to cooperate with the Master Servicer and the
Trustee in attempting to cure any such breach. For purposes of the
representations and warranties set forth in this Section 2.04, each reference to
a Supplement shall be deemed to refer only to those Supplements in effect as of
the date of the relevant representations or warranties.
Section 2.05. Reassignment of Ineligible Receivables.
(a) Reassignment of Receivables. In the event (i) any representation or
warranty of a Transferor contained in subsection 2.04(a)(ii), (iii), (iv),
(vii), (viii), (ix) or (x) is not true and correct in any material respect as of
the date specified therein with respect to any Designated Asset transferred to
the Trust or any Receivables in which a Participation Interest is transferred to
the Trust (the "Participating Receivables") by such Transferor or with respect
to an Account designated by such Transferor and as a result of such breach any
Receivables or Participating Receivables in the related Account become Defaulted
Receivables or the Trust's rights in, to or under such Designated Asset or
Participating Receivables or the proceeds of such Designated Asset or
Participating Receivables are impaired or such proceeds are not available for
any reason to the Trust free and clear of any Lien, unless cured within 60 days
(or such longer period, not in excess of 150 days, as may be agreed to by the
Trustee and if such Transferor shall deliver to the Trustee an Officer's
Certificate stating that such breach is capable of being cured and describing
the method by which such breach is to be cured) after the earlier to occur of
the discovery thereof by such Transferor or receipt by such Transferor of notice
thereof given by the Trustee, or (ii) it is so provided in subsection 2.07(a)
with respect to any Designated Asset or Participating Receivables transferred to
the Trust by such Transferor, then such Transferor shall accept reassignment of
the related Receivables, Participation Interest or Participating Receivables in
the related Account ("Ineligible Receivables") on the terms and conditions set
forth in paragraph (b) below; provided, however, that such Receivables,
Participation Interest or Participating Receivables will not be deemed to be
Ineligible Receivables and will not be reassigned to such Transferor if, on any
day prior to the end of such 60-day or longer period, (x) either (A) in the case
of an event described in clause (i) above the relevant representation and
warranty shall be true and correct in all material respects as if made on such
day or (B) in the case of an event described in clause (ii) above the
circumstances causing such Receivable,
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Participation Interest or Participating Receivable to become an Ineligible
Receivable shall no longer exist and (y) such Transferor shall have delivered to
the Trustee an Officer's Certificate describing the nature of such breach and
the manner in which the relevant representation and warranty became true and
correct.
(b) Price of Reassignment. The Master Servicer shall deduct the portion
of the Ineligible Receivables reassigned to a Transferor which are Principal
Receivables from the aggregate amount of Principal Receivables used to calculate
the Transferor Amount, the Series Percentages and any other percentage used to
allocate within or among Series that is applicable to any Series. In the event
that, following the exclusion of such Principal Receivables from the calculation
of the Transferor Amount, the Transferor Amount would be less than the Required
Transferor Amount, not later than 12:00 noon, New York City time, on the first
Distribution Date following the Monthly Period in which such reassignment
obligation arises, the relevant Transferor shall make a deposit into the Excess
Funding Account in immediately available funds in an amount equal to the amount
by which the Transferor Amount would be reduced below the Required Transferor
Amount (up to the amount of such Principal Receivables).
Upon the deposit, if any, required to be made to the Excess Funding
Account as provided in this Section and the reassignment of Ineligible
Receivables, the Trustee, on behalf of the Trust, shall automatically and
without further action be deemed to sell, transfer, assign, set over and
otherwise convey to the relevant Transferor or its designee, without recourse,
representation or warranty, all of the right, title and interest of the Trust in
and to such Ineligible Receivables, all moneys due or to become due and all
amounts received with respect thereto and all proceeds thereof. The Trustee
shall execute such documents and instruments of transfer or assignment and take
such other actions as shall reasonably be requested by the relevant Transferor
to effect the conveyance of Ineligible Receivables pursuant to this Section. The
obligation of a Transferor to accept reassignment of any Ineligible Receivables,
and to make the deposits, if any, required to be made to the Excess Funding
Account as provided in this Section, shall constitute the sole remedy respecting
the event giving rise to such obligation available to Certificateholders (or the
Trustee on behalf of the Certificateholders).
Section 2.06. Reassignment of Designated Assets in Trust Portfolio. In
the event any representation or warranty of a Transferor set forth in subsection
2.03(a) or (c) or subsection 2.04(a)(i), (v) or (vi) is not true and correct in
any material respect and such breach has a material adverse effect on the
Certificateholders' Interest in the Designated Assets or Participating
Receivables transferred to the Trust by such Transferor, then either the Trustee
or the Holders of Investor Certificates evidencing more than 50% of the
Aggregate Investor Amount, by notice then given to such Transferor and the
Master Servicer (and to the Trustee if given by the Investor
Certificateholders), may direct such Transferor to accept a reassignment of the
Designated Assets or Participating Receivables transferred to the Trust by such
Transferor if such breach and any material adverse effect caused by such breach
is not cured within 60 days of such notice (or within such longer period, not in
excess of 150 days, as may be specified in such notice or if such notice is
issued by the Trustee, as may be permitted by Investor Certificate- holders
holding Certificates representing 50% or more of the Aggregate Investor
Amount)), and upon those conditions such Transferor shall be obligated to accept
such
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reassignment on the terms set forth below; provided, that, if the Trustee
directs such Transferor to accept reassignment of the Designated Assets or
Participating Receivables, the Trustee shall deliver an Officer's Certificate
stating that the Trustee has not taken any action with respect to such
Designated Assets or Participating Receivables which would result in the
creation of any liens or encumbrances on the Designated Assets or Participating
Receivables (other than those liens and encumbrances authorized by this
Agreement) provided, however, that such Designated Assets or Participating
Receivables will not be reassigned to such Transferor if, on any day prior to
the end of such 60-day or longer period (i) the relevant representation and
warranty shall be true and correct in all material respects as if made on such
day and (ii) such Transferor shall have delivered to the Trustee a certificate
of an authorized officer describing the nature of such breach and the manner in
which the relevant representation and warranty became true and correct.
The relevant Transferor shall deposit in the Collection Account in
immediately available funds or by ACH not later than 12:00 noon, New York City
time, on the first Distribution Date following the Monthly Period in which such
reassignment obligation arises, in payment for such reassignment, an amount
equal to the sum of the amounts specified therefor with respect to each
outstanding Series in the related Supplement. Notwithstanding anything to the
contrary in this Agreement, such amounts shall be distributed on such
Distribution Date in accordance with Article IV and the terms of each
Supplement.
Upon the deposit, if any, required to be made to the Collection Account
as provided in this Section and the reassignment of the Designated Assets or
Participating Receivables, the Trustee, on behalf of the Trust, shall
automatically and without further action be deemed to sell, transfer, assign,
set over and otherwise convey to the relevant Transferor or its designee,
without recourse, representation or warranty, all of the right, title and
interest of the Trust in and to such Designated Assets or Participating
Receivables, all moneys due or to become due and all amounts received with
respect thereto and all proceeds thereof. The Trustee shall execute such
documents and instruments of transfer or assignment and take such other actions
as shall reasonably be requested by the relevant Transferor to effect the
conveyance of such Designated Assets or Participating Receivables pursuant to
this Section. The obligation of a Transferor to accept reassignment of any
Designated Assets or Participating Receivables, and to make the deposits, if
any, required to be made to the Collection Account as provided in this section,
shall constitute the sole remedy respecting the event giving rise to such
obligation available to Certificateholders (or the Trustee on behalf of the
Certificateholders) or any Series Enhancer.
Section 2.07. Covenants of the Transferor(s) With Respect to Interests
in Receivables. Each Transferor hereby covenants as follows:
(a) Receivables to be Accounts or General Intangibles. Except in
connection with the enforcement or collection of a Receivable or Participating
Receivable, such Transferor will take no action to cause any Receivable or
Participating Receivable transferred by it to the Trust to be evidenced by any
instrument or chattel paper (as defined in the UCC) and, if any such Receivable
or Participating Receivable is so evidenced, it shall be deemed to be an
Ineligible
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Receivable in accordance with subsection 2.05(a) and shall be reassigned to such
Transferor in accordance with subsection 2.05(b); provided, however, that
Receivables or Participating Receivable evidenced by notes taken from Obligors
in the ordinary course of business of the Master Servicer's collection efforts
shall not be deemed Ineligible Receivables solely as a result thereof.
(b) Security Interests. Except for the conveyances hereunder, such
Transferor will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on any Designated
Assets transferred by it to the Trust, whether now existing or hereafter
created, or any interest therein; such Transferor will immediately notify the
Trustee of the existence of any Lien on any such Designated Assets; and such
Transferor shall defend the right, title and interest of the Trust in, to and
under such Designated Assets, whether now existing or hereafter created, against
all claims of third parties claiming through or under such Transferor; provided,
however, that nothing in this subsection 2.07(b) shall prevent or be deemed to
prohibit such Transferor from suffering to exist upon any of the Designated
Assets transferred by it to the Trust any Liens for municipal or other local
taxes if such taxes shall not at the time be due and payable or if such
Transferor shall currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate reserves
with respect thereto.
(c) Transferors' Interest. Except for the conveyances hereunder, in
connection with any transaction permitted by Section 7.02 and as provided in
Sections 2.09(e) and 6.03, such Transferor agrees not to transfer, assign,
exchange or otherwise convey or pledge, hypothecate or otherwise grant, add or
create a Lien in the Transferors' Interest represented by the ABRC Certificate
or any Supplemental Certificate and any such attempted transfer, assignment,
exchange, conveyance, pledge, hypothecation or grant shall be void.
(d) Delivery of Collections. In the event that such Transferor receives
Collections, such Transferor agrees to pay the Master Servicer all such
Collections as soon as practicable after receipt thereof but in any event no
later than two Business Days after the date of receipt by the Transferor.
(e) Notice of Liens. Such Transferor shall notify the Trustee promptly
after becoming aware of any Lien on any Designated Assets other than the
conveyances hereunder or Liens permitted under subsection 2.07(b).
Section 2.08. Covenants of The Transferor(s) with Respect to the
Participation Agreement or Receivables Purchase Agreement. Each Transferor in
its capacity, if any, as purchaser of the Designated Assets from a Seller
pursuant to the applicable Participation Agreement or Receivables Purchase
Agreement hereby covenants that such Transferor will at all times enforce the
covenants and agreements of such Seller in the related agreement, including,
without limitation, covenants to the effect set forth below only to the extent
to which they apply to such Seller pursuant to such Participation Agreement or
Receivables Purchase Agreement:
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(a) Periodic Finance Charges. (i) Except (x) as otherwise required by
any Requirements of Law or (y) as is deemed by the related Seller, to be
necessary in order for it to maintain its credit card business or a program
operated by such credit card business on a competitive basis based on a good
faith assessment by it of the nature of the competition with respect to the
credit card business or such program, it shall not at any time take any action
to reduce the annual percentage rate of the Periodic Finance Charges assessed on
the Receivables transferred by it to the Trust or other fees charged on any of
the Accounts owned by it, if (i) as a result of such reduction, such Seller's
reasonable expectation is that such reduction will cause a Pay Out Event to
occur or (ii) such reduction is not also applied to any comparable segments of
business revolving credit card accounts owned by such Seller which have
characteristics the same as, or substantially similar to, such Accounts.
(b) Credit Card Agreements and Credit Card Guidelines. Subject to
compliance with all Requirements of Law and paragraph (a) above, each Seller may
change the terms and provisions of the applicable Cardholder Agreements or the
applicable Credit Card Guidelines in any respect (including the calculation of
the amount or the timing of charge-offs and the Periodic Finance Charges to be
assessed thereon). Notwithstanding the above, unless required by Requirements of
Law or as permitted by Section 2.08(a), no Seller will take any action with
respect to the applicable Cardholder Agreements or the applicable Credit Card
Guidelines, which, at the time of such action, such Seller reasonably believes
will have a material adverse effect on the Investor Certificateholders. Each
Seller shall comply with and perform its obligations under the Cardholder
Agreements relating to the Accounts owned by it and the Credit Card Guidelines
and all applicable rules and regulations of MasterCard and Visa or their
respective substantial equivalents except insofar as any failure so to comply or
perform would not materially and adversely affect the rights of the Trust or the
Certificateholders hereunder.
(c) MasterCard and VISA. Each Seller shall, to the extent applicable to
Accounts owned or serviced by it, use its best efforts to remain, either
directly or indirectly, a member in good standing of the MasterCard system, the
VISA system and any other similar entity's or organization's system relating to
any other type of business revolving credit card accounts included as Accounts.
(d) Interchange. With respect to any Distribution Date, on or prior to
the Distribution Date, each Seller shall deposit into the Collection Account by
ACH or in immediately available funds the amount of Interchange to be so
included as Collections of Finance Charge and Administrative Receivables with
respect to such Monthly Period.
Each Transferor further covenants that the Transferor will not enter
into any amendments to any Participation Agreement or Receivables Purchase
Agreement unless the Rating Agency Condition, if any, has been satisfied. In the
event that any Additional Transferor is a Seller, such Additional Transferor
agrees to perform the covenants and agreements as set forth in clauses (a)
through (d) of this Section 2.08 with respect to such Accounts.
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Section 2.09. Addition of Designated Assets
(a) Required Additions. (i) If on any Determination Date, as of the
close of business on the last Business Day of the preceding Monthly Period,
either (x) the Transferor Amount is less than the Required Transferor Amount or
(y) the aggregate amount of Principal Receivables is less than the Required
Principal Balance, the Transferors shall on or prior to the close of business on
the 10th Business Day following such Determination Date (the "Required
Designation Date"), unless the Transferor Amount exceeds the Required Transferor
Amount or the aggregate amount of Principal Receivables exceeds the Required
Principal Balance, as the case may be, in either case as of the close of
business on any day after the last Business Day of such Monthly Period and prior
to the Required Designation Date, either (i) cause to be designated additional
Eligible Accounts to be included as Accounts, as of the Required Designation
Date or any earlier date in a sufficient amount (or such lesser amount as shall
represent all Eligible Accounts then available to the Transferor under the
Receivables Purchase Agreement or the Participation Agreement) or (ii) as
required by a Participation Agreement, increase the Fixed Amount of the
Participation Interest such that, after giving effect to such addition or
increase, the Transferor Amount as of the close of business on the applicable
Addition Date is at least equal to the Required Transferor Amount on such date
and the aggregate amount of Principal Receivables is at least equal to the
Required Principal Balance on such date. The failure of any condition set forth
in paragraph (c) below, as the case may be, shall not relieve the Transferors of
their obligation pursuant to this paragraph; provided, however, that the failure
of the Transferors to transfer Receivables to the Trust solely as a result of
the unavailability of a sufficient amount of Eligible Receivables shall not
constitute a breach of this Agreement; provided, further, that any such failure
which has not been timely cured may nevertheless result in the occurrence of a
Pay Out Event.
(b) Restricted Additions. Each Transferor may from time to time, at its
sole discretion, subject to the conditions specified below, designate Additional
Designated Assets relating to additional Eligible Accounts to be included as
Trust Assets as of the applicable Addition Date.
(c) Conditions to Required and Restricted Additions. On the Addition
Date with respect to any Additional Designated Assets designated pursuant to
subsection 2.09(a) or (b), the Trust shall purchase such Additional Designated
Assets as of the close of business on the applicable Addition Date, subject to
the satisfaction of the following conditions:
(i) on or before the fifth Business Day immediately preceding
the Addition Date, each Transferor which owns any such Additional
Designated Assets shall have given the Trustee, the Master Servicer and
each Rating Agency written notice (unless such notice requirement is
otherwise waived) that such Additional Designated Assets will be
included and specifying the applicable Addition Date, the Addition
Cut-Off Date, and the approximate number of Accounts expected to be
added and the approximate aggregate balances of Receivables expected to
be outstanding in the Accounts to be added or that an increase to the
Fixed Amount of a Participation Interest has been completed;
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(ii) with respect to Additional Designated Assets, each
Transferor shall have delivered to the Trustee copies of UCC-1
financing statements covering such Additional Designated Assets, if
necessary, to perfect the Trust's interest in the Receivables arising
therein;
(iii) as of each of the Addition Cut-Off Date and the Addition
Date, no Insolvency Event with respect to the Transferor shall have
occurred nor shall the transfer of the Receivables arising in the
Additional Designated Assets to the Trust have been made in
contemplation of the occurrence thereof;
(iv) except in the case of an Addition pursuant to subsection
2.09(a), the Rating Agency Condition shall have been satisfied;
(v) each Transferor shall have delivered to the Trustee an
Officer's Certificate, dated the Addition Date, stating that (x) with
respect to Additional Designated Assets, as of the applicable Addition
Cut-Off Date, the Additional Designated Assets relate to Eligible
Accounts, (y) to the extent applicable, the conditions set forth in
clauses (ii) through (iv) above have been satisfied and (z) such
Transferor reasonably believes that (A) the addition by such Transferor
of the Receivables (including Participating Receivables) relating to
the Additional Designated Assets to the Trust will not, based on the
facts known to such officer at the time of such addition, then or
thereafter cause a Pay Out Event to occur with respect to any Series
and (B) no selection procedure was utilized by such Transferor which
would result in a selection of Accounts (from among the available
Eligible Accounts owned by such Transferor) that would be materially
adverse to the interests of the Investor Certificateholders of any
Series as of the Addition Date; and
(vi) with respect to the designation of Additional Designated
Assets, the Transferors shall have delivered to the Trustee (x) the
computer file or microfiche list required to be delivered pursuant to
Section 2.01 with respect to such Additional Designated Assets and (y)
a duly executed, written assignment (including an acceptance by the
Trustee for the benefit of the Certificateholders), substantially in
the form of Exhibit B (the "Assignment").
(vii) the Transferors shall have delivered to the Trustee and
each Rating Agency an Opinion of Counsel, which counsel shall be
outside counsel, dated the Addition Date, in accordance with subsection
13.02(d).
(d) Automatic Account Additions.
(i) Each Transferor may from time to time, at its sole
discretion, subject to the applicable conditions specified in clause
(v) below, designate Eligible Accounts (which Accounts may be Included
Accounts) to be included as Accounts as of the applicable Addition Date
(the "Automatic Additional Designated Assets"). For purposes of this
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paragraph, Eligible Accounts shall be deemed to include only Accounts
which are originated by a Seller or any Affiliate of a Seller.
(ii) The Transferors shall have delivered to the Trustee
copies of UCC-1 financing statements covering such Automatic Additional
Designated Assets, if necessary, to perfect the Trust's interest in the
Receivables arising therein.
(iii) As of each of the Addition Cut-Off Date and the Addition
Date, no Insolvency Event with respect to any Transferor shall have
occurred nor shall the transfer of the Automatic Additional Designated
Assets to the Trust have been made in contemplation of the occurrence
thereof.
(iv) Each Transferor shall have delivered to the Trustee an
Officer's Certificate, dated the Addition Date, stating that (x) as of
the applicable Addition Cut-Off Date, such Automatic Additional
Designated Assets are all from Eligible Accounts, (y) to the extent
applicable, the conditions set forth in clauses (ii) through (v) of
Section 2.09(c) have been satisfied and (z) such Transferor reasonably
believes that (A) the addition by such Transferor of the Automatic
Additional Designated Assets will not, based on the facts known to such
officer at the time of such addition, then or thereafter cause a Pay
Out Event to occur with respect to any Series and (B) no selection
procedure was utilized by such Transferor which would result in a
selection of Accounts (from among the available Eligible Accounts owned
by such Seller) that would be materially adverse to the interests of
the Investor Certificateholders of any Series as of the Addition Date.
(v) Such Transferor shall have delivered to the Trustee (x)
the computer file or microfiche list required to be delivered pursuant
to Section 2.01 with respect to such Automatic Additional Designated
Assets and (y) a duly executed Assignment.
(vi) Such Transferor shall have delivered to the Trustee and
each Rating Agency an Opinion of Counsel, dated the Addition Date, in
accordance with subsection 13.02(d).
(e) Additional Transferors. ABRC may designate Affiliates of ABRC to be
included as Transferors ("Additional Transferors") under this Agreement by an
amendment hereto pursuant to subsection 13.01(a) and, in connection with such
designation, the Transferors shall surrender the Transferors' Certificate to the
Trustee in exchange for a newly issued ABRC Certificate modified to reflect such
Additional Transferor's interest in the Transferors' Interest in accordance with
Section 6.03(c) provided, that if any Series of Investor Certificates are
outstanding that were characterized as debt at the time of their issuance, the
Transferors shall have delivered to the Trustee and each Rating Agency, a Tax
Opinion, dated the date of such transfer.
Section 2.10. Removal of Accounts and Participation Interests. (a) On
any day of any Monthly Period each Transferor shall have the right to require
the reassignment to it or its designee of all of the Trust's right, title and
interest in, to and under any Receivables or Participating Receivables then
existing and thereafter created, all moneys due or to become due
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and all amounts received with respect thereto and all proceeds thereof in or
with respect to the Accounts designated by such Transferor (the "Removed
Accounts") or Participation Interests designated by the Transferor, upon
satisfaction of the following conditions:
(i) on or before the fifth Business Day immediately preceding the
Removal Date (the "Removal Notice Date"), such Transferor shall have given the
Trustee, the Master Servicer, each Rating Agency, if applicable, and any Series
Enhancer written notice of such removal, specifying the date for removal of the
Removed Accounts or Participation Interests (the "Removal Date");
(ii) with respect to Removed Accounts, such Transferor shall have
represented and warranted as of the Removal Date that the list of Removed
Accounts to be delivered pursuant to paragraph (c) below, as of the Removal
Cut-Off Date, will be true and complete in all material respects;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such removal; and
(iv) such Transferor shall have delivered to the Trustee an Officer's
Certificate, dated the Removal Date, to the effect that such Transferor
reasonably believes that (i) such removal will not, based on the facts known to
such officer at the time of such certification, then or thereafter cause a Pay
Out Event to occur and (ii) no selection procedure was utilized by such
Transferor which would result in a selection of Removed Accounts or
Participation Interests that would be materially adverse to the interests of the
Investor Certificateholders of any Series as of the Removal Date.
(b) Upon satisfaction of the above conditions, the Trustee shall
execute and deliver to the relevant Transferor or its designee a written
reassignment in substantially the form of Exhibit C (the "Reassignment") and
shall, without further action, be deemed to sell, transfer, assign, set over and
otherwise convey to such Transferor or its designee, effective as of the Removal
Date, without recourse, representation or warranty, all the right, title and
interest of the Trust in and to the Participation Interests or in and to the
Receivables generated from the Removed Accounts, all moneys due and to become
due and all amounts received with respect thereto and all proceeds thereof
provided, that, the Trustee delivers an Officer's Certificate stating that the
Trustee has not taken any action with respect to such Participation Interests or
Receivables which would result in the creation of any liens or encumbrances on
the Participation Interests or Receivables (other than those liens and
encumbrances authorized by this Agreement). In addition, the Trustee shall
execute such other documents and instruments of transfer or assignment and take
such other actions as shall reasonably be requested by the relevant Transferor
to effect the conveyance of Participation Interests or Receivables pursuant to
this Section 2.10.
(c) Within ten Business Days after each Removal Date, such Transferor
shall amend Schedule 1 by delivering to the Trustee a computer file or
microfiche list containing a true and complete list of the Removed Accounts
specifying for each such Account, as of the last day of
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the Monthly Period preceding the Removal Notice Date (the "Removal Cut-Off
Date"), its account number, the aggregate amount outstanding in such Account and
the aggregate amount of Principal Receivables outstanding in such Account.
Section 2.11. Account Allocations. In the event that any Transferor is
unable for any reason to transfer Receivables to the Trust in accordance with
the provisions of this Agreement, including by reason of the application of the
provisions of Section 9.02 or any order of any Governmental Authority (a
"Transfer Restriction Event"), then, in any such event, (a) such Transferor and
the Master Servicer agree (except as prohibited by any such order) to allocate
and pay to the Trust, after the date of such inability, all Collections of
Receivables transferred to the Trust by such Transferor, including Collections
of Receivables transferred to the Trust by such Transferor prior to the
occurrence of such event, and all amounts which would have constituted
Collections but for such Transferor's inability to transfer Receivables (up to
an aggregate amount equal to the amount of Receivables transferred to the Trust
by such Transferor in the Trust on such date), (b) such Transferor and the
Master Servicer agree that such amounts will be applied as Collections in
accordance with Article IV and the terms of each Supplement and (c) for so long
as the allocation and application of all Collections and all amounts that would
have constituted Collections are made in accordance with clauses (a) and (b)
above, Principal Receivables and all amounts which would have constituted
Principal Receivables but for such Transferor's inability to transfer
Receivables to the Trust which are written off as uncollectible in accordance
with this Agreement shall continue to be allocated in accordance with Article IV
and the terms of each Supplement. If such Transferor or the Master Servicer is
unable pursuant to any Requirements of Law to allocate Collections as described
above, such Transferor and the Master Servicer agree that, after the occurrence
of such event, payments on each Account owned by such Transferor with respect to
the principal balance of such Account shall be allocated first to the oldest
principal balance of such Account and shall have such payments applied as
Collections in accordance with Article IV and the terms of each Supplement. The
parties hereto agree that Finance Charge and Administrative Receivables,
whenever created, accrued in respect of Principal Receivables which have been
conveyed to the Trust shall continue to be a part of the Trust notwithstanding
any cessation of the transfer of additional Principal Receivables to the Trust
and Collections with respect thereto shall continue to be allocated and paid in
accordance with Article IV and the terms of each Supplement.
Section 2.12. Discount Option. (a) The Transferors shall have the
option to designate at any time and from time to time a percentage or
percentages, which may be a fixed percentage or a variable percentage based on a
formula (the "Discount Percentage"), of all or any specified portion of
Principal Receivables created after the Discount Option Date to be treated as
Finance Charge and Administrative Receivables ("Discount Option Receivables").
The Transferor shall also have the option of reducing or withdrawing the
Discount Percentage, at any time and from time to time, on and after such
Discount Option Date. The Transferors shall provide to the Master Servicer, the
Trustee and any Rating Agency 30 days prior written notice of the Discount
Option Date, and such designation shall become effective on the Discount Option
Date (i) unless such designation in the reasonable belief of the Transferors
would cause a Pay Out Event with respect to any Series to occur, or an event
which, with notice or lapse of time or both, would
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constitute a Pay Out Event with respect to any Series and (ii) only if the
Rating Agency Condition shall have been satisfied with respect to such
designation.
(b) After the Discount Option Date, the Transferors shall treat
Discount Option Receivable Collections as Collections of Finance Charge and
Administrative Receivables.
[END OF ARTICLE II]
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ARTICLE III
Administration and Servicing
of Receivables
Section 3.01. Acceptance of Appointment and Other Matters Relating to
the Master Servicer.
(a) The Transferor hereby appoints AFC as Master Servicer. AFC agrees
to act as the Master Servicer under this Agreement and the Certificateholders by
their acceptance of Certificates consent to AFC acting as Master Servicer.
(b) The Master Servicer shall service and administer the Receivables,
shall collect payments due under the Receivables and shall charge off as
uncollectible Receivables, all in accordance with its customary and usual
servicing procedures for servicing business revolving credit card receivables
comparable to the Receivables and in accordance with the Credit Card Guidelines.
The Master Servicer shall have full power and authority, acting alone or through
any party properly designated by it hereunder, to do any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing, subject to Section
10.01 and provided AFC is the Master Servicer, the Master Servicer or its
designee (rather than the Trustee) is hereby authorized and empowered (i) to
make withdrawals and payments or to instruct the Trustee to make withdrawals and
payments from the Collection Account, the Excess Funding Account and any Series
Account, as set forth in this Agreement or any Supplement, and (ii) to take any
action required or permitted under any Series Enhancement, as set forth in this
Agreement or any Supplement. Without limiting the generality of the foregoing
and subject to Section 10.01, the Master Servicer or its designee is hereby
authorized and empowered to make any filings, reports, notices, applications and
registrations with, and to seek any consents or authorizations from, the
Securities and Exchange Commission (the "Commission") and any state securities
authority on behalf of the Trust as may be necessary or advisable to comply with
any Federal or state securities laws or reporting requirements. The Trustee
shall furnish the Master Servicer with any powers of attorney or other documents
necessary or appropriate to enable the Master Servicer to carry out its
servicing and administrative duties hereunder.
(c) The Master Servicer shall not be obligated to use separate
servicing procedures, offices, employees or accounts for servicing the
Receivables from the procedures, offices, employees and accounts used by the
Master Servicer in connection with servicing other credit card receivables.
(d) The Master Servicer shall comply with and perform its servicing
obligations with respect to the Accounts and Receivables in accordance with the
Cardholder Agreements relating to the Accounts and the Credit Card Guidelines
and all applicable rules and regulations of VISA, MasterCard and any other
similar entity or organization relating to any other type of business revolving
credit card accounts included as Accounts, except insofar as any failure to so
comply or perform would not materially and adversely affect the Trust or the
Investor Certificateholders.
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(e) The Master Servicer shall pay out of its own funds, without
reimbursement, all expenses incurred in connection with the Trust and the
servicing activities hereunder including expenses related to enforcement of the
Receivables, fees and disbursements of any Transfer Agent and Registrar
(including the reasonable fees and expenses of its counsel) and independent
accountants and all other fees and expenses, including the costs of filing UCC
financing and continuation statements and the costs and expenses relating to
obtaining and maintaining the listing of any Investor Certificates on any stock
exchange, that are not expressly stated in this Agreement to be payable by the
Trust or the Transferors (other than Federal, state, local and foreign income,
franchise and other taxes, if any, or any interest or penalties with respect
thereto, assessed on the Trust).
(f) The Master Servicer agrees that upon a request by the Transferors
it will use its reasonable best efforts to obtain and maintain the listing of
the Investor Certificates of any Series or Class on any specified security
exchange. If any such request is made, the Master Servicer shall give notice to
the Transferors and the Trustee on the date on which such Investor Certificates
are approved for such listing and within three Business Days following receipt
of notice by the Master Servicer of any actual, proposed or contemplated
delisting of such Investor Certificates by any such securities exchange. The
Trustee or the Master Servicer, each in its sole discretion, may terminate any
listing on any such securities exchange at any time subject to the notice
requirements set forth in the preceding sentence. The relationship of the Master
Servicer (and of any Successor Servicer other than the Trustee) to the Trustee
under this Agreement is intended by the parties to be that of independent
contractor and not that of a joint venturer, partner, or agent of the Trustee.
Section 3.02. Servicing Compensation. As full compensation for its
servicing activities hereunder and as reimbursement for any expense incurred by
it in connection therewith, the Master Servicer shall be entitled to receive a
servicing fee (the "Servicing Fee") with respect to each Monthly Period, payable
monthly on the related Distribution Date, in an amount equal to one-twelfth of
the product of (a) the weighted average of the Servicing Fee Rates with respect
to each outstanding Series (based upon the Servicing Fee Rate for each Series
and the Investor Amount (or such other amount as specified in the related
Supplement) of such Series, in each case as of the last day of the prior Monthly
Period) and (b) the amount of Principal Receivables on the last day of the prior
Monthly Period. The share of the Servicing Fee allocable to (i) the
Certificateholders' Interest of a particular Series with respect to any Monthly
Period (the "Monthly Servicing Fee"), (ii) the Enhancement Investor Amount, if
any, of a particular Series with respect to any Monthly Period, (iii) the
Transferor's Interest and (iv) the Seller's Interest, if any, with respect to
any Monthly Period will each be determined in accordance with the relevant
Supplement. The portion of the Servicing Fee with respect to any Monthly Period
not specifically allocated to the Certificateholders' Interest, the Seller's
Interest, the Transferor's Interest or the Enhancement Investor Amount, if any,
of a particular Series shall be paid by the Holders of the Transferor
Certificates on the related Distribution Date and in no event shall the Trust,
the Trustee, the Investor Certificateholders of any Series or any Series
Enhancer be liable for the share of the Servicing Fee with respect to any
Monthly Period to be paid by the Holders of the Transferor Certificates.
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Section 3.03. Representations, Warranties and Covenants of the Master
Servicer. AFC, as initial Master Servicer, hereby makes, and any Successor
Servicer by its appointment hereunder shall make, on each Closing Date (and as
to any Successor Servicer, to the extent applicable to it on the date of any
such appointment), the following representations, warranties and covenants:
(a) Organization and Good Standing. The Master Servicer is an
industrial loan corporation duly organized, validly existing and in good
standing under the laws of Utah or a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation, and
has full corporate power, authority and legal right to execute, deliver and
perform its obligations under this Agreement and each Supplement and, in all
material respects, to own its properties and conduct its business as such
properties are presently owned and as such business is presently conducted.
(b) Due Qualification. The Master Servicer is duly qualified to do
business and is in good standing as a foreign corporation (or is exempt from
such requirements), and has obtained all necessary licenses and approvals in
each jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would have a material adverse effect on the interests of the Investor
Certificateholders hereunder or under any Supplement.
(c) Due Authorization. The execution, delivery, and performance of this
Agreement and each Supplement have been duly authorized by the Master Servicer
by all necessary corporate action on the part of the Master Servicer and this
Agreement and each Supplement will remain, from the time of its execution, an
official record of the Master Servicer.
(d) Binding Obligation. This Agreement and each Supplement constitutes
a legal, valid and binding obligation of the Master Servicer, enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect, affecting the enforcement of creditors' rights in general
and the rights of creditors of national banking associations and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(e) No Violation. The execution and delivery of this Agreement and each
Supplement by the Master Servicer, the performance of the transactions
contemplated by this Agreement and each Supplement and the fulfillment of the
terms hereof and thereof applicable to the Master Servicer will not conflict
with, violate, result in any breach of any of the material terms and provisions
of, or constitute (with or without notice or lapse of time or both) a default
under, any Requirement of Law applicable to the Master Servicer or any
indenture, contract, agreement, mortgage, deed of trust or other instrument to
which the Master Servicer is a party or by which it or any of its properties are
bound.
(f) No Proceedings. There are no proceedings or investigations pending
or, to the best knowledge of the Master Servicer, threatened against the Master
Servicer before any Governmental Authority seeking to prevent the issuance of
the Certificates or the consummation
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of any of the transactions contemplated by this Agreement or any Supplement,
seeking any determination or ruling that, in the reasonable judgment of the
Master Servicer, would materially and adversely affect the performance by the
Master Servicer of its obligations under this Agreement or any Supplement, or
seeking any determination or ruling that would materially and adversely affect
the validity or enforceability of this Agreement or any Supplement.
(g) Compliance with Requirements of Law. The Master Servicer shall duly
satisfy all obligations on its part to be fulfilled under or in connection with
the Receivables and the related Accounts, will maintain in effect all
qualifications required under Requirements of Law in order to service the
Receivables and the related Accounts properly and will comply in all material
respects with all other Requirements of Law in connection with servicing the
Receivables and the related Accounts, the failure to comply with which would
have a material adverse effect on the interests of the Certificateholders.
(h) No Rescission or Cancellation. Subject to Section 3.09, the Master
Servicer shall not permit any rescission or cancellation of a Receivable except
as ordered by a court of competent jurisdiction or required by Requirements of
Law, or as ordered by a court of law, or other Governmental Authority or in the
ordinary course of its business and in accordance with the Credit Card
Guidelines.
(i) Protection of Certificateholders' Rights. The Master Servicer shall
take no action which, nor omit to take any action the omission of which, would
substantially impair the rights of Certificateholders in any Receivable or
Account, nor shall it, except in the ordinary course of its business and in
accordance with the Credit Card Guidelines, reschedule, revise or defer
Collections due on the Receivables.
(j) Receivables Not To Be Evidenced by Promissory Notes. Except in
connection with its enforcement or collection of a Receivable, the Master
Servicer will take no action to cause any Receivable to be evidenced by any
instrument (as defined in the UCC) and, if any Receivable is so evidenced, it
shall be reassigned or assigned to the Master Servicer as provided in this
Section; provided, however, that Receivables evidenced by notes taken from
Obligors in the ordinary course of business of the Master Servicer's collection
efforts shall not be deemed Ineligible Receivables solely as a result thereof.
(k) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any governmental body or official
required in connection with the execution and delivery by the Master Servicer of
this Agreement and each Supplement, the performance by the Master Servicer of
the transactions contemplated by this Agreement and each Supplement and the
fulfillment by the Master Servicer of the terms hereof and thereof, have been
obtained; provided, however, that the Master Servicer makes no representation or
warranty regarding state securities or "blue sky" laws in connection with the
distribution of the Certificates.
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For purposes of the representations and warranties set forth in this
Section 3.03, each reference to a Supplement shall be deemed to refer only to
those Supplements in effect as of the relevant Closing Date or the date of
appointment of a Successor Servicer, as applicable.
In the event any of the representations, warranties or covenants of the
Master Servicer contained in paragraph (g), (h), (i) or (j) with respect to any
Receivable or the related Account is breached, and as a result of such breach
the Trust's rights in, to or under any Receivable in the related Account or the
proceeds of such Receivable are impaired or such proceeds are not available for
any reason to the Trust free and clear of any Lien, then no later than the
expiration of 60 days (or such longer period, not in excess of 150 days, as may
be agreed to by the Trustee and if such Transferor shall deliver to the Trustee
an Officer's Certificate stating that such breach is capable of being cured and
describing the method by which such breach is to be cured from the earlier to
occur of the discovery of such event by the Master Servicer, or receipt by the
Master Servicer of notice of such event given by the Trustee, all Receivables in
the Account or Accounts to which such event relates shall be reassigned or
assigned to the Master Servicer on the terms and conditions set forth below;
provided, however, that such Receivables will not be reassigned or assigned to
the Master Servicer if, on any day prior to the end of such 60-day or longer
period, (i) the relevant representation and warranty shall be true and correct,
or the relevant covenant shall have been complied with, in all material respects
and (ii) the Master Servicer shall have delivered to the Trustee a certificate
of an authorized officer describing the nature of such breach and the manner in
which such breach was cured.
If AFC is the Master Servicer, such reassignment or assignment shall be
accomplished in the manner set forth in subsection 2.05(b) as if the reassigned
or assigned Receivables were Ineligible Receivables (including the requirement,
if applicable, to reduce the aggregate amount of Principal Receivables used to
calculate the Transferor Amount, the Series Percentages and any other percentage
used to allocate within or among Series applicable to any Series and to make
deposits into the Excess Funding Account). If AFC is not the Master Servicer,
the Master Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds on the Transfer Date following
the Monthly Period in which such assignment obligation arises in an amount equal
to the amount of such Receivables, which deposit shall be considered a
Collection of Principal Receivables and shall be applied in accordance with
Article IV and the terms of each Supplement.
Upon each such reassignment or assignment to the Master Servicer, the
Trustee, on behalf of the Trust, shall automatically and without further action
be deemed to sell, transfer, assign, set over and otherwise convey to the Master
Servicer, without recourse, representation or warranty, all right, title and
interest of the Trust in and to such Receivables, all moneys due or to become
due and all amounts received with respect thereto and all proceeds thereof. The
Trustee shall execute such documents and instruments of transfer or assignment
substantially in the form of Exhibit C and take such other actions as shall be
reasonably requested by the Master Servicer to effect the conveyance of any such
Receivables pursuant to this Section. The obligation of the Master Servicer to
accept reassignment or assignment of such Receivables, and to make the deposits,
if any, required to be made to the Collection Account or the Excess Funding
Account as provided in the preceding paragraph, shall constitute the sole remedy
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respecting the event giving rise to such obligation available to
Certificateholders (or the Trustee on behalf of Certificateholders) or any
Series Enhancer.
Section 3.04. Reports and Records for the Trustee.
(a) Daily Records. On each Business Day, the Master Servicer, with
prior written notice by the Trustee shall make or cause to be made available at
the office of the Master Servicer on any Business Day during normal business
hours for inspection by the Trustee a record setting forth (i) the Collections
in respect of Principal Receivables and in respect of Finance Charge and
Administrative Receivables processed by the Master Servicer on the second
preceding Business Day in respect of the Accounts and (ii) the amount of
Receivables as of the close of business on the second preceding Business Day.
The Master Servicer shall, at all times, maintain its computer files with
respect to the Accounts in such a manner so that the Accounts may be
specifically identified.
(b) Monthly Servicer's Certificate. Not later than the Determination
Date immediately preceding each Distribution Date, the Master Servicer shall,
with respect to each outstanding Series, deliver to the Trustee, the Paying
Agent and each Rating Agency a certificate of a Servicing Officer in
substantially the form set forth in the related Supplement.
Section 3.05. Annual Certificate of Master Servicer. The Master
Servicer shall deliver to the Trustee and each Rating Agency, on or before
December 31 of each calendar year, beginning with December 31, 1996, an
Officer's Certificate (with appropriate insertions) substantially in the form of
Exhibit D, for the one-year period ending on the preceding September 30.
Section 3.06. Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available.
(a) On or before December 31 of each calendar year, beginning with
December 31, 1996, the Master Servicer shall cause a firm of nationally
recognized independent public accountants (who may also render other services to
the Master Servicer or the Transferors) to furnish a report (addressed to the
Trustee) to the Trustee, the Master Servicer and each Rating Agency certifying
the Master Servicer's compliance with the terms and conditions set forth in
Articles III and Article IV and Section 8.08 of this Agreement and the
applicable provisions of each Supplement, except for such exceptions as they
believe to be immaterial and such other exceptions as shall be set forth in such
statement, for the one-year period ending on the preceding September 30. Such
report shall set forth the agreed upon procedures performed.
(b) On or before December 31 of each calendar year, beginning with
December 31, 1996, the Master Servicer shall cause a firm of nationally
recognized independent public accountants (who may also render other services to
the Master Servicer or the Transferors) to furnish a report (addressed to the
Trustee) to the Trustee, the Master Servicer and each Rating Agency to the
effect that they have, for the one-year period ending on the preceding September
30, applied certain procedures agreed upon with the Master Servicer to compare
the
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mathematical calculations of certain amounts set forth in the Master Servicer's
certificates delivered pursuant to subsection 3.04(b) during the period covered
by such report with the Master Servicer's computer reports which were the source
of such amounts and that on the basis of such agreed-upon procedures and
comparison, such accountants are of the opinion that such amounts are in
agreement, except for such exceptions as they believe to be immaterial and such
other exceptions as shall be set forth in such statement.
(c) A copy of each certificate and report provided pursuant to Section
3.04(b), 3.05 or 3.06 may be obtained by any Investor Certificateholder or
Person certifying its status as a Certificate Owner by a written request to the
Trustee addressed to the Corporate Trust Office.
Section 3.07. Tax Treatment. Unless otherwise specified in a Supplement
with respect to a particular Series, the Transferors have entered into this
Agreement, and the Certificates will be issued, with the intention that, for
Federal, state and local income and franchise tax purposes only, the Investor
Certificates of each Series which are characterized as indebtedness of the
Transferors at the time of their issuance will qualify as indebtedness secured
by the Receivables. The Transferors, by entering into this Agreement, and each
Certificateholder, by the acceptance of any such Certificate (and each
Certificate Owner, by its acceptance of an interest in the applicable
Certificate), agree to treat such Investor Certificates for Federal, state and
local income and franchise tax purposes as indebtedness of the Transferors. Each
Holder of such Investor Certificate agrees that it will cause any Certificate
Owner acquiring an interest in a Certificate through it to comply with this
Agreement as to treatment as indebtedness of the Transferors under applicable
tax law, as described in this Section 3.07.
Section 3.08. Notices to Trustee. In the event that AFC is no longer
acting as Master Servicer, any Successor Servicer shall deliver to the Trustee
each certificate and report required to be provided thereafter pursuant to
Section 3.04(b), 3.05 or 3.06.
Section 3.09. Adjustments.
(a) If the Master Servicer adjusts downward the amount of any
Receivable because of a rebate, refund, unauthorized charge or billing error to
an account holder, or because such Receivable was created in respect of
merchandise which was refused or returned by an account holder, or if the Master
Servicer otherwise adjusts downward the amount of any Receivable without
receiving Collections therefor or charging off such amount as uncollectible,
then, in any such case, the amount of Principal Receivables used to calculate
the Transferor Amount, the Series Percentages and any other percentage used to
allocate within or among Series applicable to any Series will be reduced by the
amount of the adjustment. Similarly, the amount of Principal Receivables used to
calculate the Transferor Amount, the Series Percentages and any other percentage
used to allocate within or among Series applicable to any Series will be reduced
by the amount of any Receivable which was discovered as having been created
through a fraudulent or counterfeit charge. Any adjustment required pursuant to
either of the two preceding sentences shall be made on or prior to the end of
the Monthly Period in which such adjustment obligation arises. In the event
that, following the exclusion of such Principal Receivables from the calculation
of the Transferor Amount, the Transferor Amount would be
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less than the Required Transferor Amount, or the aggregate amount of Principal
Receivables is less than the Required Principal Balance, not later than 12:00
noon, New York City time, on the Distribution Date following the Monthly Period
in which such adjustment obligation arises, the Transferor which transferred
such Principal Receivables to the Trust shall make a deposit into the Excess
Funding Account in immediately available funds in an amount equal to the amount
by which the (i) Transferor Amount would be below the Required Transferor Amount
(up to the amount of such Principal Receivables) or (ii) the aggregate amount of
Principal Receivables would be below the Required Principal Balance.
(b) If (i) the Master Servicer makes a deposit into the Collection
Account in respect of a Collection of a Receivable and such Collection was
received by the Master Servicer in the form of a check which is not honored for
any reason or (ii) the Master Servicer makes a mistake with respect to the
amount of any Collection and deposits an amount that is less than or more than
the actual amount of such Collection, the Master Servicer shall appropriately
adjust the amount subsequently deposited into the Collection Account to reflect
such dishonored check or mistake. Any Receivable in respect of which a
dishonored check is received shall be deemed not to have been paid.
Section 3.10. Reports to the Commission. The Transferor shall, on
behalf of the Trust, cause to be filed with the Commission any periodic reports
required to be filed in accordance with the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder. The Transferor shall, at the expense of the Master
Servicer, cooperate in any reasonable request of the Master Servicer in
connection with such filings.
[END OF ARTICLE III]
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ARTICLE IV
Rights of Certificateholders and
Allocation and Application of Collections
Section 4.01. Rights of Certificateholders. The Investor Certificates
shall represent fractional undivided interests in the Trust, which, with respect
to each Series, shall consist of the right to receive, to the extent necessary
to make the required payments with respect to the Investor Certificates of such
Series at the times and in the amounts specified in the related Supplement, the
portion of Collections allocable to Investor Certificateholders of such Series
pursuant to this Agreement and such Supplement, funds on deposit in the
Collection Account and the Excess Funding Account allocable to
Certificateholders of such Series pursuant to this Agreement and such
Supplement, funds on deposit in any related Series Account and funds available
pursuant to any related Series Enhancement (collectively, with respect to all
Series, the "Certificateholders' Interest"), it being understood that the
Investor Certificates of any Series or Class shall not represent any interest in
any Series Account or Series Enhancement for the benefit of any other Series or
Class. The Transferor Certificates shall represent the ownership interest in the
remainder of the Trust Assets not allocated pursuant to this Agreement or any
Supplement to the Certificateholders' Interest, including the right to receive
Collections with respect to the Receivables and other amounts at the times and
in the amounts specified in this Agreement or any Supplement to be paid to the
Holders of the Transferor Certificates (the "Transferors' Interest"); provided,
however, that the Transferor Certificates shall not represent any interest in
the Collection Account, the Excess Funding Account, any Series Account or any
Series Enhancement, except as specifically provided in this Agreement or any
Supplement; provided, further, that the foregoing shall not be construed to
limit the Trustee's obligations to make payments to the Holders of the
Transferor Certificates, the Transferors and the Master Servicer as and when
required under this Agreement and any Supplement.
Section 4.02. Establishment of Collection Account and Excess Funding
Account. The Master Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee, on behalf of the Trust, an
Eligible Deposit Account (or Eligible Deposit Accounts) bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Certificateholders (the "Collection Account"). The Trustee shall possess all
right, title and interest in all funds on deposit from time to time in the
Collection Account and in all proceeds thereof. The Collection Account shall be
under the sole dominion and control of the Trustee for the benefit of the
Certificateholders. Except as expressly provided in this Agreement, the Master
Servicer agrees that it shall have no right of setoff or banker's lien against,
and no right to otherwise deduct from, any funds held in the Collection Account
for any amount owed to it by the Trustee, the Trust, any Certificateholder or
any Series Enhancer. If, at any time, the Collection Account ceases to be an
Eligible Deposit Account, the Trustee (or the Master Servicer on its behalf)
shall within ten Business Days (or such longer period, not to exceed 30 calendar
days) establish a new Collection Account meeting the conditions specified above,
transfer any cash or any investments to such new Collection Account and from the
date such new Collection Account is established, it shall be the "Collection
Account."
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Pursuant to the authority granted to the Master Servicer in subsection
3.01(b), the Master Servicer shall have the power, revocable by the Trustee, to
make withdrawals and payments from the Collection Account for the purposes of
carrying out the Master Servicer's or the Trustee's duties hereunder. The Master
Servicer shall reduce deposits into the Collection Account payable by the
Transferor on any Deposit Date to the extent the Transferor is entitled to
receive funds from the Collection Account on such Deposit Date.
Funds on deposit in the Collection Account (other than amounts
deposited pursuant to Section 2.06, 9.02, 10.01 or 12.02) shall at the direction
of the Master Servicer be invested by the Trustee in Eligible Investments
selected by the Master Servicer. All such Eligible Investments shall be held by
the Trustee for the benefit of the Certificateholders. The Trustee shall
maintain for the benefit of the Certificateholders possession of the negotiable
instruments or securities, if any, evidencing such Eligible Investments.
Investments of funds representing Collections collected during any Monthly
Period shall be invested in Eligible Investments that will mature so that funds
will be available at the close of business on the Transfer Date following such
Monthly Period. Unless directed by the Master Servicer, funds deposited in the
Collection Account on a Transfer Date with respect to the next following
Distribution Date are not required to be invested overnight. For purposes of
determining the availability of funds or the balances in the Collection Account
for any reason under this Agreement, all investment earnings net of investment
expenses and losses on such funds shall be deemed not to be available or on
deposit.
The Master Servicer, for the benefit of the Certificateholders, will
establish and maintain in the name of the Trustee, on behalf of the Trust, an
Eligible Deposit Account bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders (the
"Excess Funding Account"). The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Excess Funding Account
and in all proceeds thereof. The Excess Funding Account shall be under the sole
dominion and control of the Trustee for the benefit of the Certificateholders.
Except as expressly provided in this Agreement, the Master Servicer agrees that
it shall have no right of setoff or banker's lien against, and no right to
otherwise deduct from, any funds held in the Excess Funding Account for any
amount owed to it by the Trustee, the Trust, any Certificateholder or any Series
Enhancer. If, at any time, the Excess Funding Account ceases to be an Eligible
Deposit Account, the Trustee (or the Master Servicer on its behalf) shall within
10 Business Days (or such longer period, not to exceed 30 calendar days)
establish a new Excess Funding Account meeting the conditions specified above,
transfer any cash or any investments to such new Excess Funding Account and from
the date such new Excess Funding Account is established, it shall be the "Excess
Funding Account."
Funds on deposit in the Excess Funding Account shall at the direction
of the Master Servicer be invested by the Trustee in Eligible Investments
selected by the Master Servicer. All such Eligible Investments shall be held by
the Trustee for the benefit of the Certificateholders. The Trustee shall
maintain for the benefit of the Certificateholders possession of the negotiable
instruments or securities, if any, evidencing such Eligible Investments. Funds
on deposit in the Excess Funding Account on any date (after giving effect to any
withdrawals from the Excess
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Funding Account on such date) will be invested in Eligible Investments that will
mature so that funds will be available at the close of business on the Transfer
Date following such date. Unless directed by the Master Servicer, funds
deposited in the Excess Funding Account on a Transfer Date with respect to the
next following Distribution Date are not required to be invested overnight. On
each Transfer Date, the Master Servicer shall instruct the Trustee to withdraw
on the related Distribution Date from the Excess Funding Account and deposit in
the Collection Account all interest and other investment earnings (net of losses
and investment expenses) on funds on deposit in the Excess Funding Account, for
application as Collections of Finance Charge and Administrative Receivables with
respect to the prior Monthly Period. Interest (including reinvested interest)
and other investment income and earnings on funds on deposit in the Excess
Funding Account shall not be considered part of the Excess Funding Amount for
purposes of this Agreement. On any Transfer Date on which no Series is in an
Accumulation Period or Amortization Period, the Master Servicer shall determine
the amount by which the Transferor Amount exceeds the Required Transferor Amount
on such date and shall instruct the Trustee to withdraw such amount from the
Excess Funding Account on the related Distribution Date and pay such amount to
the Holders of the Transferor Certificates. On any Transfer Date on which one or
more Series is in an Accumulation Period or Amortization Period, the Master
Servicer shall determine the aggregate amount of Principal Shortfalls, if any,
with respect to each such Series that is a Principal Sharing Series (after
giving effect to the allocation and payment provisions in the Supplement with
respect to each such Series), and the Master Servicer shall instruct the Trustee
to withdraw such amount (up to the Excess Funding Amount) from the Excess
Funding Account on the succeeding Distribution Date and allocate such amount
among each such Series as Shared Principal Collections as specified herein and
in each related Supplement.
Section 4.03. Collections and Allocations.
(a) Collections. The Master Servicer will apply or will instruct the
Trustee to apply all funds on deposit in the Collection Account as described in
this Article IV and in each Supplement. Except as otherwise provided below or as
expressly provided in any Supplement with respect to Collections allocated to
the related Series, the Master Servicer shall deposit Collections into the
Collection Account no later than the second Business Day following the Date of
Processing of such Collections. Subject to the express terms of any Supplement,
but notwithstanding anything else in this Agreement to the contrary, for so long
as AFC remains the Master Servicer and no Pay Out Event has occurred and (x)
maintains a long-term rating of BBB-or better by Standard & Poor's and Baa3 by
Moody's (or such other rating below BBB-or Baa3, as the case may be, which is
satisfactory to each Rating Agency or, if a Series is not rated, each Investor
Certificateholder), or (y) Advanta Corp. has provided to the Trustee a
Performance Guaranty covering collection risk of the Master Servicer satisfying
the Rating Agency Condition or (z) the Master Servicer delivers to the Trustee a
letter of credit or other guaranty covering such collection risk and the Rating
Agency Condition is satisfied, the Master Servicer need not make the daily
deposits of Collections into the Collection Account as provided in the preceding
sentence, but may make a single deposit in the Collection Account by ACH by the
day before the Distribution Date or in immediately available funds by not later
than 12:00 noon, New York City time, on the Transfer Date following the Monthly
Period with respect to
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which such deposit was made. Subject to the express terms of any Supplement, but
notwithstanding anything else in this Agreement to the contrary, with respect to
any Monthly Period, whether the Master Servicer is required to make deposits of
Collections pursuant to the first or the second preceding sentence, and prior to
the occurrence of any Pay Out Event and so long as AFC maintains the ratings set
forth in (x) in the preceding sentence (i) the Master Servicer will only be
required to deposit Collections into the Collection Account up to the aggregate
amount of Collections required to be deposited into any Series Account or,
without duplication, distributed on or prior to the related Distribution Date to
Investor Certificateholders or to any Series Enhancer pursuant to the terms of
any Supplement or Enhancement Agreement and (ii) if at any time prior to such
Distribution Date the amount of Collections deposited in the Collection Account
exceeds the amount required to be deposited pursuant to clause (i) above, the
Master Servicer will be permitted to withdraw the excess from the Collection
Account.
(b) Allocations for the Transferor Certificates. Throughout the
existence of the Trust, unless otherwise stated in any Supplement, the Master
Servicer shall allocate to the Holders of the Transferor Certificates an amount
equal to the product of (A) the Transferor Percentage and (B) the aggregate
amount of such Collections allocated to Principal Receivables and Finance Charge
and Administrative Receivables, respectively, in respect of each Monthly Period.
Notwithstanding anything in this Agreement to the contrary, unless otherwise
stated in any Supplement, the Master Servicer need not deposit this amount or
any other amounts so allocated to the Transferor Certificates pursuant to any
Supplement into the Collection Account and shall pay, or be deemed to pay, such
amounts as collected to the Holders of the Transferor Certificates.
The payments to be made to the Holders of the Transferor Certificates
pursuant to this subsection 4.03(b) do not apply to deposits to the Collection
Account or other amounts that do not represent Collections, including payment of
the purchase price for Receivables pursuant to Section 2.06 or 10.01, proceeds
from the sale, disposition or liquidation of Receivables pursuant to Section
9.02 or 12.02 or payment of the purchase price for the Certificateholders'
Interest of a specific Series pursuant to the related Supplement.
Section 4.04. Shared Principal Collections. On each Distribution Date,
(a) the Master Servicer shall allocate Shared Principal Collections to each
Principal Sharing Series, pro rata, in proportion to the Principal Shortfalls,
if any, with respect to each such Series and (b) the Master Servicer shall
withdraw from the Collection Account and pay to the Holders of the Transferor
Certificates an amount equal to the excess, if any, of (x) the aggregate amount
for all outstanding Series of Collections of Principal Receivables which the
related Supplements or this Agreement specify are to be treated as "Shared
Principal Collections" for such Distribution Date over (y) the aggregate amount
for all outstanding Principal Sharing Series which the related Supplements
specify are "Principal Shortfalls" for such Distribution Date; provided,
however, that if, on any Distribution Date the Transferor Amount is less than or
equal to the Required Transferor Amount, the Master Servicer will not distribute
to the Holders of the Transferor Certificates any Shared Principal Collections
that otherwise would be distributed to the Holders of the Transferor
Certificates, but shall deposit such funds in the Excess Funding Account.
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Section 4.05. Allocation of Trust Assets to Series or Groups. To the
extent so provided in the Supplement for any Series or in an amendment to this
Agreement executed pursuant to subsection 13.01(a), Designated Assets conveyed
to the Trust pursuant to Section 2.01 and Designated Assets conveyed to the
Trust pursuant to Section 2.09, and all Collections received with respect to
such Receivables or Participation Interests, may be allocated in whole or in
part to one or more Series or Groups as may be provided in such Supplement or
amendment; provided, however, that any such allocation shall be effective only
upon satisfaction of the following conditions:
(i) on or before the fifth Business Day immediately preceding
such allocation, the Master Servicer shall have given the Trustee and
each Rating Agency written notice of such allocation;
(ii) the Rating Agency Condition shall have been satisfied
with respect to such allocation; and
(iii) the Master Servicer shall have delivered to the Trustee
an Officer's Certificate, dated the date of such allocation, to the
effect that the Master Servicer reasonably believes that such
allocation will not have an Adverse Effect.
Any such Supplement or amendment may provide that (i) such
allocation to one or more particular Series or Groups may terminate upon the
occurrence of certain events specified therein and (ii) that upon the occurrence
of any such event, such assets and any Collections with respect thereto, shall
be reallocated to other Series or Groups or to all Series, all as shall be
provided in such Supplement or amendment.
[END OF ARTICLE IV]
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ARTICLE V
Distributions and Reports to
Certificateholders
Distributions shall be made to, and reports shall be provided to,
Certificateholders as set forth in the applicable Supplement.
[END OF ARTICLE V]
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ARTICLE VI
The Certificates
Section 6.01. The Certificates. The Investor Certificates of any Series
or Class may be issued in bearer form ("Bearer Certificates") with attached
interest coupons and any other applicable coupon (collectively, the "Coupons")
or in fully registered form (but which may be uncertificated) ("Registered
Certificates") and shall, to the extent represented by physical certificates, be
substantially in the form of the exhibits with respect thereto attached to the
applicable Supplement. The ABRC Certificate will be issued in registered form,
substantially in the form of Exhibit A, and shall upon issue be executed and
delivered by the Transferor to the Trustee for authentication and redelivery as
provided in Section 6.02. The Transferors shall prepare any modifications to the
ABRC Certificate required by Section 2.09(e), upon which Exhibit A will be so
amended. Except as otherwise provided in Section 6.03 or in any Supplement,
Bearer Certificates shall be issued in minimum denominations of $100,000 and
Registered Certificates shall be issued in minimum denominations of $1,000 and
in integral multiples of $1,000 in excess thereof. The ABRC Certificate shall be
a single certificate and shall initially represent the entire Transferors'
Interest. Each Certificate shall be executed by manual or facsimile signature on
behalf of the Transferor by its respective President or any Vice President.
Certificates bearing the manual or facsimile signature of an individual who was,
at the time when such signature was affixed, authorized to sign on behalf of the
Transferor shall not be rendered invalid, notwithstanding that such individual
ceased to be so authorized prior to the authentication and delivery of such
Certificates or does not hold such office at the date of such Certificates. No
Certificates shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by or on
behalf of the Trustee by the manual signature of a duly authorized signatory,
and such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and delivered
hereunder. Bearer Certificates shall be dated the related Closing Date. All
Registered Certificates and Transferor Certificates shall be dated the date of
their authentication.
Section 6.02. Authentication of Certificates. The Trustee shall
authenticate and deliver the Investor Certificates of each Series and Class that
are issued upon original issuance to or upon the written order of the
Transferors. The Trustee shall authenticate and deliver the ABRC Certificate to
the Transferor simultaneously with its delivery of the Investor Certificates of
the first Series to be issued hereunder.
Section 6.03. New Issuances.
(a) The Transferors may from time to time direct the Trustee, on behalf
of the Trust, to authenticate one or more new Series of Investor Certificates.
The Investor Certificates of all outstanding Series shall be equally and ratably
entitled as provided herein to the benefits of this Agreement without
preference, priority or distinction, all in accordance with the terms and
provisions of this Agreement and the applicable Supplement except, with respect
to any Series or Class, as provided in the related Supplement.
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(b) On or before the Closing Date relating to any new Series, the
parties hereto will execute and deliver a Supplement which will specify the
Principal Terms of such new Series. The terms of such Supplement may modify or
amend the terms of this Agreement solely as applied to such new Series. The
obligation of the Trustee to authenticate the Investor Certificates of such new
Series and to execute and deliver the related Supplement is subject to the
satisfaction of the following conditions:
(i) on or before the fifth day immediately preceding the
Closing Date, the Transferors shall have given the Trustee and the
Master Servicer notice of such issuance and the Closing Date; and on or
before the tenth day immediately preceding the Closing Date, the
Transferors shall have given each Rating Agency notice of such
issuance;
(ii) the Transferors shall have delivered to the Trustee the
related Supplement, in form satisfactory to the Trustee, executed by
each party thereto;
(iii) the Transferors shall have delivered to the Trustee any
related Enhancement Agreement executed by each of the parties thereto,
other than the Trustee;
(iv) the Rating Agency Condition shall have been satisfied
with respect to such issuance;
(v) the Transferors shall have delivered to the Trustee an
Officer's Certificate, dated the Closing Date, to the effect that such
Transferor reasonably believes that such issuance will not, based on
the facts known to such officer at the time of such certification, then
or thereafter cause a Pay Out Event to occur with respect to any
Series; and
(vi) if any Series of Investor Certificates are outstanding
that were characterized as debt at the time of their issuance, the
Transferors shall have delivered to the Trustee and each Rating Agency
a Tax Opinion, dated the Closing Date, with respect to such issuance.
Upon satisfaction of the above conditions, the Trustee shall execute the
Supplement and authenticate the Investor Certificates of such Series upon
execution thereof by the Transferors.
(c) The Transferors may surrender the ABRC Certificate to the Trustee
in exchange for a newly issued ABRC Certificate and one or more additional
certificates (each a "Supplemental Certificate"), the terms of which shall be
defined in a supplement to this Agreement (which supplement shall be subject to
subsection 13.01(a) only to the extent that it amends any of the terms of this
Agreement), to be delivered to or upon the order of the Transferors (or the
Holder of a Supplemental Certificate, in the case of the transfer or exchange
thereof, as provided below), upon satisfaction of the following conditions:
(i) the Transferors shall have given written notice to each
Rating Agency of such exchange and the Rating Agency Condition shall
have been satisfied;
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(ii) the Transferor Amount (excluding the interest represented
by any Supplemental Certificate) shall not be less than 2% of the total
amount of Principal Receivables as of the date of, and after giving
effect to, such exchange; and
(iii) if any Series of Investor Certificates are outstanding
that were characterized as debt at the time of their issuance, the
Transferors shall have delivered to the Trustee and each Rating Agency
a Tax Opinion, dated the date of such exchange (or transfer or exchange
as provided below), with respect thereto.
Any Supplemental Certificate may be transferred or exchanged only upon
satisfaction of the conditions set forth in clause (ii) above.
(d) The ABRC Certificate (or any interest therein) may be transferred
to a Person which is a member of the "affiliated group" of which Advanta Corp.
is the "common parent" (as such terms are defined in Section 1504(a) of the
Code); provided that (i) if any Series of Investor Certificates are outstanding
that were characterized as debt at the time of their issuance, the Transferors
shall have delivered to the Trustee and each Rating Agency a Tax Opinion, dated
the date of such transfer, with respect thereto, and (ii) any such transferee
shall be deemed to be a "Transferor" for purposes of Sections 7.04 and 9.02.
Section 6.04. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency to be
maintained in accordance with the provisions of Section 11.16 a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
may prescribe, a transfer agent and registrar (which may be the Trustee) (the
"Transfer Agent and Registrar") shall provide for the registration of the
Registered Certificates and of transfers and exchanges of the Registered
Certificates as herein provided. The Transfer Agent and Registrar shall
initially be the Trustee and any co-transfer agent and co-registrar chosen by
the Transferors and acceptable to the Trustee, including, if and so long as any
Series or Class is listed on the Luxembourg Stock Exchange and such exchange
shall so require, a co-transfer agent and co-registrar in Luxembourg. Any
reference in this Agreement to the Transfer Agent and Registrar shall include
any co-transfer agent and co-registrar unless the context requires otherwise.
The Trustee may revoke such appointment and remove any Transfer Agent
and Registrar if the Trustee determines in its sole discretion that such
Transfer Agent and Registrar failed to perform its obligations under this
Agreement in any material respect. Any Transfer Agent and Registrar shall be
permitted to resign as Transfer Agent and Registrar upon 30 days' notice to the
Transferors, the Trustee and the Master Servicer; provided, however, that such
resignation shall not be effective and such Transfer Agent and Registrar shall
continue to perform its duties as Transfer Agent and Registrar until the Trustee
has appointed a successor Transfer Agent and Registrar reasonably acceptable to
the Transferors.
Subject to paragraph (c) below, upon surrender for registration of
transfer of any Registered Certificate at any office or agency of the Transfer
Agent and Registrar maintained
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for such purpose, one or more new Registered Certificates (of the same Series
and Class) in authorized denominations of like aggregate fractional undivided
interests in the Certificateholders' Interest shall be executed, authenticated
and delivered, in the name of the designated transferee or transferees.
At the option of a Registered Certificateholder, Registered
Certificates (of the same Series and Class) may be exchanged for other
Registered Certificates of authorized denominations of like aggregate fractional
undivided interests in the Certificateholders' Interest, upon surrender of the
Registered Certificates to be exchanged at any such office or agency; Registered
Certificates, including Registered Certificates received in exchange for Bearer
Certificates, may not be exchanged for Bearer Certificates. At the option of the
Holder of a Bearer Certificate, subject to applicable laws and regulations,
Bearer Certificates may be exchanged for other Bearer Certificates or Registered
Certificates (of the same Series and Class) of authorized denominations of like
aggregate fractional undivided interests in the Certificateholders' Interest,
upon surrender of the Bearer Certificates to be exchanged at an office or agency
of the Transfer Agent and Registrar located outside the United States. Each
Bearer Certificate surrendered pursuant to this Section shall have attached
thereto all unmatured Coupons; provided that any Bearer Certificate so
surrendered after the close of business on the Record Date preceding the
relevant payment date after the expected final payment date need not have
attached the Coupon relating to such payment date (in each case, as specified in
the applicable Supplement).
Whenever any Investor Certificates are so surrendered for exchange, the
Transferor shall execute, the Trustee shall authenticate and the Transfer Agent
and Registrar shall deliver (in the case of Bearer Certificates, outside the
United States) the Investor Certificates which the Investor Certificateholder
making the exchange is entitled to receive. Every Investor Certificate presented
or surrendered for registration of transfer or exchange shall be accompanied by
a written instrument of transfer in a form satisfactory to the Trustee or the
Transfer Agent and Registrar duly executed by the Investor Certificateholder or
the attorney-in-fact thereof duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any such transfer or exchange.
All Investor Certificates (together with any Coupons) surrendered for
registration of transfer and exchange or for payment shall be canceled and
disposed of in a manner satisfactory to the Trustee.
The Transferor shall execute and deliver to the Trustee Bearer
Certificates and Registered Certificates in such amounts and at such times as
are necessary to enable the Trustee to fulfill its responsibilities under this
Agreement, each Supplement and the Certificates.
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(b) The Transfer Agent and Registrar will maintain at its expense in
each of the Borough of Manhattan, The City of New York, and, if and so long as
any Series or Class is listed on the Luxembourg Stock Exchange, Luxembourg, an
office or agency where Investor Certificates may be surrendered for registration
of transfer or exchange (except that Bearer Certificates may not be surrendered
for exchange at any such office or agency in the United States).
(c)(i) Registration of transfer of Investor Certificates containing a
legend substantially to the effect set forth on Exhibit E-1 shall be
effected only if such transfer (x) is made pursuant to an effective
registration statement under the Act, or is exempt from the
registration requirements under the Act, and (y) is made to a Person
which is not an employee benefit plan, trust or account, including an
individual retirement account, that is subject to ERISA or that is
described in Section 4975(e)(1) of the Code or an entity whose
underlying assets include plan assets by reason of a plan's investment
in such entity (a "Benefit Plan"). In the event that registration of a
transfer is to be made in reliance upon an exemption from the
registration requirements under the Act, the transferor or the
transferee shall deliver, at its expense, to the Transferors, the
Master Servicer and the Trustee, an investment letter from the
transferee, substantially in the form of the investment and ERISA
representation letter attached hereto as Exhibit E-2, and no
registration of transfer shall be made until such letter is so
delivered.
Investor Certificates issued upon registration or transfer of,
or Investor Certificates issued in exchange for, Investor Certificates
bearing the legend referred to above shall also bear such legend unless
the Transferors, the Master Servicer, the Trustee and the Transfer
Agent and Registrar receive an Opinion of Counsel, satisfactory to each
of them, to the effect that such legend may be removed.
Whenever an Investor Certificate containing the legend
referred to above is presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and Registrar shall
promptly seek instructions from the Master Servicer regarding such
transfer and shall be entitled to receive instructions signed by a
Servicing Officer prior to registering any such transfer. The
Transferors hereby agree to indemnify the Transfer Agent and Registrar
and the Trustee and to hold each of them harmless against any loss,
liability or expense incurred without negligence or bad faith on their
part arising out of or in connection with actions taken or omitted by
them in relation to any such instructions furnished pursuant to this
clause (i).
(ii) Registration of transfer of Investor Certificates
containing a legend to the effect set forth on Exhibit E-3 shall be
effected only if such transfer is made to a Person which is not a
Benefit Plan. By accepting and holding any such Investor Certificate,
an Investor Certificateholder shall be deemed to have represented and
warranted that it is not a Benefit Plan. By acquiring any interest in a
Book-Entry Certificate which contains such legend, a Certificate Owner
shall be deemed to have represented and warranted that it is not a
Benefit Plan and any purported acquisition, sale, pledge or other
disposition of such beneficial ownership interest in any such
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Certificate that does not comply with the foregoing transfer
restriction shall be deemed absolutely null and void ab initio and the
transferor shall in the event of such noncompliance remain the
beneficial owner of such interest in such Certificates.
(iii) If so requested by the Transferors, the Trustee
will make available to any prospective purchaser of Investor
Certificates who so requests, a copy of a letter provided to the
Trustee by or on behalf of the Transferors relating to the
transferability of any Series or Class to a Benefit Plan.
Section 6.05. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate (together, in the case of Bearer Certificates, with
all unmatured Coupons (if any) appertaining thereto) is surrendered to the
Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar, any
Paying Agent and the Trustee such security or indemnity as may be required by
them to save each of them harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Transferor shall execute, the Trustee shall authenticate and the Transfer Agent
and Registrar shall deliver (in the case of Bearer Certificates, outside the
United States), in exchange for or in lieu of any such mutilated, destroyed,
lost or stolen Certificate, a new Certificate (of the same Series and Class) of
like tenor and aggregate fractional undivided interest. In connection with the
issuance of any new Certificate under this Section, the Trustee or the Transfer
Agent and Registrar may require the payment by the Certificateholder 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 and Transfer Agent and Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 6.06. Persons Deemed Owners. The Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them may (a) prior to due
presentation of a Registered Certificate for registration of transfer, treat the
Person in whose name any Registered Certificate is registered as the owner of
such Registered Certificate for the purpose of receiving distributions pursuant
to the terms of the applicable Supplement and for all other purposes whatsoever,
and (b) treat the bearer of a Bearer Certificate or Coupon as the owner of such
Bearer Certificate or Coupon for the purpose of receiving distributions pursuant
to the terms of the applicable Supplement and for all other purposes whatsoever;
and, in any such case, neither the Trustee, the Paying Agent, the Transfer Agent
and Registrar nor any agent of any of them shall be affected by any notice to
the contrary. Notwithstanding the foregoing, in determining whether the Holders
of the requisite Investor Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates
owned by any of the Transferors, the Master Servicer, any other Holder of a
Transferor Certificate, the Trustee or any Affiliate thereof, 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 Certificates which the
Trustee actually knows to be so owned shall be so disregarded. Certificates so
owned which have been pledged
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in good faith shall not be disregarded and 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 Certificates and that the pledgee is not any
Transferor, the Master Servicer, any other Holder of a Transferor Certificate or
any Affiliate thereof.
Section 6.07. Appointment of Paying Agent. The Paying Agent shall make
distributions to Investor Certificateholders from the Collection Account or any
applicable Series Account pursuant to the provisions of the applicable
Supplement and shall report the amounts of such distributions to the Trustee.
Any Paying Agent shall have the revocable power to withdraw funds from the
Collection Account or any applicable Series Account for the purpose of making
the distributions referred to above. The Trustee may revoke such power and
remove the Paying Agent if the Trustee determines in its sole discretion that
the Paying Agent shall have failed to perform its obligations under this
Agreement or any Supplement in any material respect. The Paying Agent shall
initially be the Trustee and any co-paying agent chosen by the Transferors and
acceptable to the Trustee, including, if and so long as any Series or Class is
listed on the Luxembourg Stock Exchange and such exchange so requires, a
co-paying agent in Luxembourg or another western European city. Any Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' notice to the
Trustee. In the event that any Paying Agent shall resign, the Trustee shall
appoint a successor to act as Paying Agent. The Trustee shall cause each
successor or additional Paying Agent to execute and deliver to the Trustee an
instrument in which such successor or additional Paying Agent shall agree with
the Trustee that it will hold all sums, if any, held by it for payment to the
Investor Certificateholders in trust for the benefit of the Investor
Certificateholders entitled thereto until such sums shall be paid to such
Investor Certificateholders. The Paying Agent shall upon written request return
all unclaimed funds to the Trustee and upon resignation or removal shall also
return all funds in its possession to the Trustee. The provisions of Sections
11.01, 11.02, 11.03 and 11.05 shall apply to the Trustee also in its role as
Paying Agent, for so long as the Trustee shall act as Paying Agent. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
Section 6.08. Access to List of Registered Certificateholders' Names
and Addresses. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Master Servicer or the Paying Agent, within five
Business Days after receipt by the Trustee of a request therefor, a list in such
form as the Master Servicer or the Paying Agent may reasonably require, of the
names and addresses of the Registered Certificateholders. If any Holder or group
of Holders of Investor Certificates of any Series or all outstanding Series, as
the case may be, evidencing not less than 10% of the aggregate unpaid principal
amount of such Series or all outstanding Series, as applicable (the
"Applicants"), apply to the Trustee, and such application states that the
Applicants desire to communicate with other Investor Certificateholders with
respect to their rights under this Agreement or any Supplement or under the
Investor Certificates and is accompanied by a copy of the communication which
such Applicants propose to transmit, then the Trustee, after having been
adequately indemnified by such Applicants for its costs and expenses, shall
afford or shall cause the Transfer Agent and Registrar to afford such Applicants
access during normal business hours to the most recent list of Registered
Certificateholders of such Series or all outstanding Series, as applicable, held
by the Trustee,
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within five Business Days after the receipt of such application. Such list shall
be as of a date no more than 45 days prior to the date of receipt of such
Applicants' request.
Every Registered Certificateholder, by receiving and holding a
Registered Certificate, agrees with the Trustee that neither the Trustee, the
Transfer Agent and Registrar, nor any of their respective agents, shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Registered Certificateholders hereunder, regardless of the
sources from which such information was derived.
Section 6.09. Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents with
respect to the Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an authenticating agent and certificate of authentication executed on behalf of
the Trustee by an authenticating agent. Each authenticating agent must be
acceptable to the Transferors and the Master Servicer.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any power or any further act on the part of the Trustee
or such authenticating agent. An authenticating agent may at any time resign by
giving notice of resignation to the Trustee and to the Transferors. The Trustee
may at any time terminate the agency of an authenticating agent by giving notice
of termination to such authenticating agent and to the Transferors. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time an authenticating agent shall cease to be acceptable to the Trustee or
the Transferors, the Trustee promptly may appoint a successor authenticating
agent. 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 acceptable to the Trustee and the Transferors. The Transferors agree to
pay to each authenticating agent from time to time reasonable compensation for
its services under this Section. The provisions of Sections 11.01, 11.02 and
11.03 shall be applicable to any authenticating agent.
(c) Pursuant to an appointment made under this Section, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
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This is one of the Certificates described in the Pooling and Servicing
Agreement.
----------------------------
----------------------------
as Authenticating Agent
for the Trustee,
by
---------------------------
Authorized Officer
Section 6.10. Book-Entry Certificates. Unless otherwise specified in
the related Supplement for any Series or Class, the Investor Certificates, upon
original issuance, shall be issued in the form of one or more typewritten
Investor Certificates representing the Book-Entry Certificates, to be delivered
to the Clearing Agency, by, or on behalf of, the Transferors. The Investor
Certificates shall initially be registered on the Certificate Register in the
name of the Clearing Agency or its nominee, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the Investor Certificates, except as provided in Section 6.12. Unless and
until definitive, fully registered Investor Certificates ("Definitive
Certificates") have been issued to the applicable Certificate Owners pursuant to
Section 6.12 or as otherwise specified in any such Supplement:
(a) the provisions of this Section shall be in full force and effect;
(b) the Transferors, the Master 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 Certificate Owners;
(c) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control; and
(d) the rights of the respective Certificate Owners shall be exercised
only through the Clearing Agency and the Clearing Agency Participants and shall
be limited to those established by law and agreements between such Certificate
Owners and the Clearing Agency or the Clearing Agency Participants. Pursuant to
the Depository Agreement, unless and until Definitive Certificates are issued
pursuant to Section 6.12, 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 Investor Certificates to such Clearing
Agency Participants.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Investor Certificateholders
evidencing a specified percentage
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of the aggregate unpaid principal amount of Investor Certificates, such
direction or consent may be given by Certificate Owners (acting through the
Clearing Agency and the Clearing Agency Participants) owning Investor
Certificates evidencing the requisite percentage of principal amount of Investor
Certificates.
Section 6.11. Notices to Clearing Agency. Whenever any notice or other
communication is required to be given to Investor Certificateholders of any
Series or Class with respect to which Book-Entry Certificates have been issued,
unless and until Definitive Certificates shall have been issued to the related
Certificate Owners, the Trustee shall give all such notices and communications
to the applicable Clearing Agency.
Section 6.12. Definitive Certificates. If Book-Entry Certificates have
been issued with respect to any Series or Class and (a) the Transferors advise
the Trustee 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 Transferors are unable to locate a
qualified successor, (b) the Transferors, at their option, advise the Trustee
that they elect to terminate the book-entry system with respect to such Series
or Class through the Clearing Agency or (c) after the occurrence of a Servicer
Default, Certificate Owners of such Series or Class evidencing more than 50% of
the aggregate unpaid principal amount of such Series or Class advise the Trustee
and the Clearing Agency through the Clearing Agency Participants that the
continuation of a book-entry system with respect to the Investor Certificates of
such Series or Class through the Clearing Agency is no longer in the best
interests of the Certificate Owners with respect to such Certificates, then the
Trustee shall notify all Certificate Owners of such Certificates, through the
Clearing Agency, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of any such Certificates by the Clearing Agency,
accompanied by registration instructions from the Clearing Agency for
registration, the Transferors shall execute and the Trustee shall authenticate
and the Transfer Agent and Registrar shall deliver such Definitive Certificates.
Neither the Transferors nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates, and the Trustee shall recognize the Holders of such
Definitive Certificates as Investor Certificateholders hereunder.
Section 6.13. Meetings of Certificateholders.
(a) If at the time any Bearer Certificates are issued and outstanding
with respect to any Series or Class to which any meeting described below
relates, the Master Servicer or the Trustee may at any time call a meeting of
Investor Certificateholders of any Series or Class or of all Series, to be held
at such time and at such place as the Master Servicer or the Trustee, as the
case may be, shall determine, for the purpose of approving a modification of or
amendment to, or obtaining a waiver of any covenant or condition set forth in,
this Agreement, any Supplement or the Investor Certificates or of taking any
other action permitted to be taken
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by Investor Certificateholders hereunder or under any Supplement. Notice of any
meeting of Investor Certificateholders, setting forth the time and place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be given in accordance with Section 13.05, the first mailing and
publication to be not less than 20 nor more than 180 days prior to the date
fixed for the meeting. To be entitled to vote at any meeting of Investor
Certificateholders a person shall be (i) a Holder of one or more Investor
Certificates of the applicable Series or Class or (ii) a person appointed by an
instrument in writing as proxy by the Holder of one or more such Investor
Certificates. The only persons who shall be entitled to be present or to speak
at any meeting of Investor Certificateholders shall be the persons entitled to
vote at such meeting and their counsel and any representatives of the
Transferors, the Master Servicer and the Trustee and their respective counsel.
(b) At a meeting of Investor Certificateholders, persons entitled to
vote Investor Certificates evidencing a majority of the aggregate unpaid
principal amount of the applicable Series or Class or all outstanding Series, as
the case may be, shall constitute a quorum. No business shall be transacted in
the absence of a quorum, unless a quorum is present when the meeting is called
to order. In the absence of a quorum at any such meeting, the meeting may be
adjourned for a period of not less than 10 days; in the absence of a quorum at
any such meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days; at the reconvening of any meeting further adjourned
for lack of a quorum, the persons entitled to vote Investor Certificates
evidencing at least 25% of the aggregate unpaid principal amount of the
applicable Series or Class or all outstanding Series, as the case may be, shall
constitute a quorum for the taking of any action set forth in the notice of the
original meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided above except that such notice must be given not less than five
days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage of the aggregate principal amount of the outstanding applicable
Investor Certificates which shall constitute a quorum.
(c) Any Investor Certificateholder who has executed an instrument in
writing appointing a person as proxy shall be deemed to be present for the
purposes of determining a quorum and be deemed to have voted; provided that such
Investor Certificateholder shall be considered as present or voting only with
respect to the matters covered by such instrument in writing. Subject to the
provisions of Section 13.01, any resolution passed or decision taken at any
meeting of Investor Certificateholders duly held in accordance with this Section
shall be binding on all Investor Certificateholders whether or not present or
represented at the meeting.
(d) The holding of Bearer Certificates shall be proved by the
production of such Bearer Certificates or by a certificate, satisfactory to the
Master Servicer, executed by any bank, trust company or recognized securities
dealer, wherever situated, satisfactory to the Master Servicer. Each such
certificate shall be dated and shall state that on the date thereof a Bearer
Certificate bearing a specified serial number was deposited with or exhibited to
such bank, trust company or recognized securities dealer by the Person named in
such certificate. Any such certificate may be issued in respect of one or more
Bearer Certificates specified therein. The holding by the Person named in any
such certificate of any Bearer Certificate specified therein
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shall be presumed to continue for a period of one year from the date of such
certificate unless at the time of any determination of such holding (i) another
certificate bearing a later date issued in respect of the same Bearer
Certificate shall be produced, (ii) the Bearer Certificate specified in such
certificate shall be produced by some other Person or (iii) the Bearer
Certificate specified in such certificate shall have ceased to be outstanding.
The appointment of any proxy shall be proved by having the signature of the
Person executing the proxy guaranteed by any bank, trust company or recognized
securities dealer satisfactory to the Trustee.
(e) The Trustee shall appoint a temporary chairman of the meeting. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Holders of Investor Certificates evidencing a majority of the
aggregate unpaid principal amount of Investor Certificates of the applicable
Series or Class or all outstanding Series, as the case may be, represented at
the meeting. No vote shall be cast or counted at any meeting in respect of any
Investor Certificate challenged as not outstanding and ruled by the chairman of
the meeting to be not outstanding. The chairman of the meeting shall have no
right to vote except as an Investor Certificateholder or proxy. Any meeting of
Investor Certificateholders duly called at which a quorum is present may be
adjourned from time to time, and the meeting may be held as so adjourned without
further notice.
(f) The vote upon any resolution submitted to any meeting of Investor
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of Investor Certificateholders or proxies and on which shall be
inscribed the serial number or numbers of the Investor Certificates held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Investor
Certificateholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was published as provided above. The record shall be
signed and verified by the permanent chairman and secretary of the meeting and
one of the duplicates shall be delivered to the Master Servicer and the other to
the Trustee to be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
Section 6.14. Uncertificated Classes. Notwithstanding anything to the
contrary contained in this Article VI or in Article XII, unless otherwise
specified in any Supplement, any provisions contained in this Article VI and in
Article XII relating to the registration, form, execution, authentication,
delivery, presentation, cancellation and surrender of Certificates shall not be
applicable to any uncertificated Certificates.
[END OF ARTICLE VI]
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ARTICLE VII
Other Matters Relating to the Transferors
Section 7.01. Liability of the Transferors. Each Transferor (including
any Additional Transferors) shall be severally, and not jointly liable in all
respects for the obligations, covenants, representations and warranties of such
Transferor arising under or related to this Agreement or any Supplement. A
Transferor shall be liable only to the extent of the obligations specifically
undertaken by it in its capacity as Transferor.
Section 7.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Transferors.
(a) None of the Transferors shall consolidate with or merge into any
other corporation or convey or transfer its properties and assets substantially
as an entirety to any Person unless:
(i) the corporation formed by such consolidation or into which
such Transferor is merged or the Person which acquires by conveyance or
transfer the properties and assets of such Transferor substantially as
an entirety shall be, if such Transferor is not the surviving entity, a
corporation organized and existing under the laws of the United States
of America or any State or the District of Columbia, and shall be a
savings and loan association, a national banking association, a bank or
other entity which is not subject to Title 11 of the United States Code
or a bankruptcy remote corporation and, if such Transferor is not the
surviving entity, such corporation shall expressly assume, by an
agreement supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, the performance of every covenant
and obligation of such Transferor hereunder, including its obligations
under Section 7.04; and (y) such Transferor has delivered to the
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section, that such supplemental
agreement is a valid and binding obligation of such surviving entity
enforceable against such surviving entity in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally from time to time in effect and except as
such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity), and that all
conditions precedent herein provided for relating to such transaction
have been complied with; and
(ii) the Rating Agency Condition shall have been satisfied
with respect to such consolidation, merger, conveyance or transfer.
(iii) if any Series of Investor Certificates are outstanding
that were characterized as debt at the time of their issuance, the
relevant Transferor shall have delivered to the Trustee and each Rating
Agency a Tax Opinion dated the date of such consolidation, merger,
conveyance or transfer, with respect thereto.
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(b) Except as permitted by subsection 2.07(c), the obligations, rights
or any part thereof of each Transferor hereunder shall not be assignable nor
shall any Person succeed to such obligations or rights of any Transferor
hereunder except (i) for conveyances, mergers, consolidations, assumptions,
sales or transfers in accordance with the provisions of the foregoing paragraph
and (ii) for conveyances, mergers, consolidations, assumptions, sales or
transfers to other entities (1) which such Transferor and the Master Servicer
determine will not result in an Adverse Effect and (2) which meet the
requirements of clause (ii) of the preceding paragraph.
Section 7.03. Limitations on Liability of the Transferors. Subject to
Sections 7.01 and 7.04, none of the Transferors nor any of the directors,
officers, employees or agents of any of the Transferors acting in their
capacities as Transferors shall be under any liability to the Trust, the
Trustee, the Certificateholders, the Certificate Owners, any Series Enhancer or
any other Person for any action taken or for refraining from the taking of any
action in good faith in their capacities as Transferors pursuant to this
Agreement, it being expressly understood that such liability is expressly waived
and released as a condition of, and consideration for, the execution of this
Agreement and any Supplement and the issuance of the Certificates; provided,
however, that this provision shall not protect any Transferor or any such Person
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The
Transferors and any director, officer, employee or agent of any of the
Transferors may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person (other than the Transferors)
respecting any matters arising hereunder.
The other parties hereto and each Certificateholder, by acceptance of
its Certificate, hereby covenant and agree that, prior to the date which is one
year and four days after the termination of the Trust, they will not institute
against ABRC, or join in any institution against ABRC of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any applicable bankruptcy or similar law in connection with
this Agreement.
Section 7.04. Liabilities. Each Transferor shall indemnify and hold
harmless the Trust and the Trustee, its officers, directors, employees and
agents from and against any reasonable loss, liability, expense, damage or
injury suffered or sustained by reason of any acts, omissions or alleged acts or
omissions arising out of or based upon the arrangement created by this Agreement
or any Supplement, as though this Agreement or such Supplement created a
partnership under the New York Uniform Partnership Law in which the Transferors
are general partners; provided, however, that the Transferors shall not
indemnify the Trustee if such acts, omissions or alleged acts or omissions
constitute or are caused by fraud, negligence, or willful misconduct by the
Trustee; provided, further, that the Transferors shall not indemnify the Trust,
the Investor Certificateholders or the Certificate Owners for any liabilities,
costs or expenses of the Trust with respect to any action taken by the Trustee
at the request of the Investor Certificateholders; provided, further, that the
Transferors shall not indemnify the Trust, the Investor Certificateholders or
the Certificate Owners as to any losses, claims or damages incurred by any of
them in their capacities as investors, including, without limitation, losses
incurred as a result of Defaulted Receivables; and provided, further, that the
Transferors shall
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not indemnify the Trust, the Investor Certificateholders or the Certificate
Owners for any liabilities, costs or expenses of the Trust, the Investor
Certificateholders or the Certificate Owners for any liabilities, costs or
expenses of the Trust, the Trustee or the Investor Certificateholders arising
under any tax law relating to any Federal, state, local or foreign income or
franchise taxes or any other tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply
therewith) required to be paid by the Trust, the Investor Certificateholders or
the Certificate Owners in connection herewith to any taxing authority. Any such
indemnification shall not be payable from the Trust Assets. The provisions of
this indemnity shall run directly to and be enforceable by an injured party
subject to the limitations hereof.
[END OF ARTICLE VII]
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ARTICLE VIII
Other Matters Relating to the Master Servicer
Section 8.01. Liability of the Master Servicer. The Master Servicer
shall be liable under this Article only to the extent of the obligations
specifically undertaken by the Master Servicer in its capacity as Master
Servicer.
Section 8.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer. The Master Servicer shall not consolidate
with or merge into any other corporation or convey or transfer its properties
and assets substantially as an entirety to any Person, unless:
(a)(i) the corporation or bank formed by such consolidation or
into which the Master Servicer is merged or the Person which acquires
by conveyance or transfer the properties and assets of the Master
Servicer substantially as an entirety shall be, if the Master Servicer
is not the surviving entity, a corporation or bank organized and
existing under the laws of the United States of America or any State or
the District of Columbia and, if the Master Servicer is not the
surviving entity, such corporation or bank shall expressly assume, by
an agreement supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the performance of every
covenant and obligation of the Master Servicer hereunder;
(ii) the Master Servicer has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental
agreement comply with this Section, that such supplemental agreement is
a valid and binding obligation of such surviving entity enforceable
against such surviving entity in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally from time to time in effect and except as
such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity), and that all
conditions precedent herein provided for relating to such transaction
have been complied with;
(b) the Rating Agency Condition shall have been satisfied with respect
to such assignment and succession; and
(c) the corporation or bank formed by such consolidation or into which
the Master Servicer is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Master Servicer substantially as an
entirety shall be an Eligible Servicer.
Section 8.03. Limitation on Liability of the Master Servicer and
Others. Except as provided in Section 8.04, neither the Master Servicer nor any
of the directors, officers, employees or agents of the Master Servicer in its
capacity as Master Servicer shall be under any liability to the Trust, the
Trustee, the Certificateholders, any Series Enhancer or any other
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Person for any action taken or for refraining from the taking of any action in
good faith in its capacity as Master Servicer pursuant to this Agreement;
provided, however, that this provision shall not protect the Master Servicer or
any such Person against any liability which would otherwise be imposed by reason
of willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and duties hereunder.
The Master Servicer and any director, officer, employee or agent of the Master
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person (other than the Master Servicer) respecting
any matters arising hereunder. The Master Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties as Master Servicer in accordance with this Agreement
and which in its reasonable judgment may involve it in any expense or liability.
The Master Servicer may, in its sole discretion, undertake any such legal action
which it may deem necessary or desirable for the benefit of the
Certificateholders with respect to this Agreement and the rights and duties of
the parties hereto and the interests of the Certificateholders hereunder.
Section 8.04. Master Servicer Indemnification of the Trust and the
Trustee. The Master Servicer shall indemnify and hold harmless the Trust and the
Trustee (including its directors, officers, employees, agents and affiliates.)
from and against any loss, liability, expense, damage or injury suffered or
sustained by reason of any acts or omissions of the Master Servicer with respect
to the Trust pursuant to this Agreement, including any judgment, award,
settlement, reasonable attorneys' fees and other costs or expenses incurred in
connection with the defense of any action, proceeding or claim; provided,
however, that the Master Servicer shall not indemnify the Trustee if such acts,
omissions or alleged acts or omissions constitute or are caused by fraud, gross
negligence, or willful misconduct by the Trustee; provided, further, that the
Master Servicer shall not indemnify the Trust, the Investor Certificateholders
or the Certificate Owners for any liabilities, costs or expenses of the Trust
with respect to any action taken by the Trustee at the request of the Investor
Certificateholders; provided, further, that the Master Servicer shall not
indemnify the Trust, the Investor Certificateholders or the Certificate Owners
as to any losses, claims or damages incurred by any of them in their capacities
as investors, including without limitation losses incurred as a result of
Defaulted Receivables unless such losses, claims or damages are directly caused
by the fraud, gross negligence or willful misconduct of the Master Servicer; and
provided, further, that the Master Servicer shall not indemnify the Trust, the
Investor Certificateholders or the Certificate Owners for any liabilities, costs
or expenses of the Trust, the Investor Certificateholders or the Certificate
Owners arising under any tax law, including without limitation, any Federal,
state, local or foreign income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or arising
from a failure to comply therewith) required to be paid by the Trust, the
Investor Certificateholders or the Certificate Owners in connection herewith to
any taxing authority. Indemnification pursuant to this Section shall not be
payable from the Trust Assets. The provisions of this indemnity shall run
directly to and be enforceable by an injured party subject to the limitations
hereof.
Section 8.05. The Master Servicer Not To Resign. The Master Servicer
shall not resign from the obligations and duties hereby imposed on it except
upon determination that (i) the
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performance of its duties hereunder is no longer permissible under any
Requirement of Law and (ii) there is no reasonable action which the Master
Servicer could take to make the performance of its duties hereunder permissible
under any such Requirements of Law. Any determination permitting the resignation
of the Master Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No resignation shall become effective until the
Trustee or a Successor Servicer shall have assumed the responsibilities and
obligations of the Master Servicer in accordance with Section 10.02. If within
120 days of the date of the determination that the Master Servicer may no longer
act as Master Servicer the Trustee is unable to appoint a Successor Servicer,
the Trustee shall serve as Successor Servicer. Notwithstanding the foregoing,
the Trustee shall, if it is legally unable so to act, petition a court of
competent jurisdiction to appoint any established institution that is an
Eligible Servicer as the Successor Servicer hereunder. The Trustee shall give
prompt notice to each Rating Agency upon the appointment of a Successor
Servicer.
Section 8.06. Access to Certain Documentation and Information Regarding
the Receivables. The Master Servicer shall provide to the Trustee access to the
documentation regarding the Accounts and the Receivables in such cases where the
Trustee is required in connection with the performance of its duties under this
Agreement or by applicable statutes or regulations to review such documentation,
such access being afforded without charge but only (a) upon reasonable request,
(b) during normal business hours, (c) subject to the Master Servicer's normal
security and confidentiality procedures and (d) at reasonably accessible offices
in the continental United States designated by the Master Servicer. Nothing in
this Section shall derogate from the obligation of the Transferors, the Trustee
and the Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
Section 8.07. Delegation of Duties. In the ordinary course of business,
the Master Servicer may at any time delegate any duties hereunder to any Person
who agrees to conduct such duties in accordance with the Credit Card Guidelines
and this Agreement. Any such delegations shall not relieve the Master Servicer
of its liability and responsibility with respect to such duties, and shall not
constitute a resignation within the meaning of Section 8.05.
Section 8.08. Examination of Records. The Master Servicer shall clearly
and unambiguously indicate in its computer files or other records that the
Designated Assets arising in the Accounts have been conveyed to the Trustee, on
behalf of the Trust, pursuant to this Agreement for the benefit of the
Certificateholders. The Master Servicer shall, prior to the sale or transfer to
a third party of any receivables held in its custody, examine its computer and
other records to determine that such receivables are not Designated Assets.
[END OF ARTICLE VIII]
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ARTICLE IX
Pay Out Events
Section 9.01. Trust Pay Out Events. If any one of the following events
shall occur with respect to the Trust ("Trust Pay Out Events"):
(a) any of the Transferors shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to such Transferor or of or relating to all or
substantially all of its property, or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against such Transferor; or any of the
Transferors shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make any assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations (any such event, an "Insolvency Event");
(b) the Trust shall become subject to regulation by the
Commission as an "investment company" within the meaning of the
Investment Company Act; or
(c) a Transfer Restriction Event shall occur;
then, a Pay Out Event shall occur with respect to each Series without any notice
or other action on the part of the Trustee or the Investor Certificateholders,
immediately upon the occurrence of such event.
Section 9.02. Additional Rights Upon the Occurrence of Certain Events.
(a) If an Insolvency Event occurs with respect to any of the
Transferors, the Transferors shall on the day any such Insolvency Event occurs
(the "Appointment Date"), immediately cease to transfer Principal Receivables to
the Trust and shall promptly give notice to the Trustee thereof. Notwithstanding
any cessation of the transfer to the Trust of additional Principal Receivables,
Principal Receivables transferred to the Trust prior to the occurrence of such
Insolvency Event and Collections in respect of such Principal Receivables and
Finance Charge and Administrative Receivables whenever created, accrued in
respect of such Principal Receivables, shall continue to be a part of the Trust.
Within 15 days after receipt of such notice by the Trustee of the occurrence of
such Insolvency Event, the Trustee shall (i) publish a notice in an Authorized
Newspaper that an Insolvency Event has occurred and that the Trustee intends to
sell, dispose of or otherwise liquidate the Receivables on commercially
reasonable terms and in a commercially reasonable manner and (ii) give notice to
the Investor Certificateholders describing the provisions of this Section and
requesting instructions from such Holders. Unless the Trustee shall have
received instructions within 90 days from the date notice pursuant to
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clause (i) above is first published from (x) Holders of Investor Certificates
evidencing more than 50% of the Investor Amount of each Series or, with respect
to any Series with two or more Classes, of each Class, to the effect that such
Investor Certificateholders disapprove of the liquidation of the Receivables and
wish to continue having Principal Receivables transferred to the Trust as before
such Insolvency Event, and (y) each of the Transferors (other than the
Transferor that is the subject of such Insolvency Event), including any
Additional Transferor, any Holder of a Supplemental Certificate and any
permitted assignee or successor under Section 7.02, to such effect, the Trustee
shall promptly sell, dispose of or otherwise liquidate the Receivables in a
commercially reasonable manner and on commercially reasonable terms, which shall
include the solicitation of competitive bids. The Trustee may obtain a prior
determination from any such conservator, receiver or liquidator that the terms
and manner of any proposed sale, disposition or liquidation are commercially
reasonable. The provisions of Sections 9.01 and 9.02 shall not be deemed to be
mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to paragraph (a) ("Insolvency Proceeds") shall be
immediately deposited in the Collection Account. The Trustee shall determine
conclusively the amount of the Insolvency Proceeds which are deemed to be
Finance Charge and Administrative Receivables and Principal Receivables. The
Insolvency Proceeds shall be allocated to Finance Charge and Administrative
Receivables and Principal Receivables in the same proportion as the amount of
Finance Charge and Administrative Receivables and Principal Receivables bear to
one another on the prior Determination Date. The Insolvency Proceeds shall be
allocated and distributed to Investor Certificateholders in accordance with
Article IV and the terms of each Supplement and the Trust shall terminate
immediately thereafter.
(c) The Trustee may appoint an agent or agents (including any of its
Affiliates) to assist with its responsibilities pursuant to this Article IX with
respect to competitive bids.
[END OF ARTICLE IX]
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ARTICLE X
Servicer Defaults
Section 10.01. Servicer Defaults. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Master Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Trustee pursuant to the terms
of this Agreement or any Supplement on or before the date occurring five
Business Days after 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 Agreement or any Supplement;
(b) failure on the part of the Master Servicer duly to observe or
perform in any material respect any other covenants or agreements of the Master
Servicer set forth in this Agreement or any Supplement which has an Adverse
Effect on the interests hereunder of the Investor Certificateholders of any
Series or Class and which continues unremedied for a period of 60 days after the
date on which written notice of such failure, requiring the same to be remedied,
and stated to be a "Notice of Servicer Default," shall have been given to the
Master Servicer by the Trustee, or to the Master Servicer and the Trustee by
Holders of Investor Certificates evidencing more than 25% of the Aggregate
Investor Amount (or, with respect to any such failure that does not relate to
all Series, 25% of the aggregate Investor Amount of all Series to which such
failure relates); or the Master Servicer shall delegate its duties under this
Agreement, except as permitted by Section 8.02 or 8.07, and a Responsible
Officer of the Trustee has actual knowledge of such delegation and such
delegation continues unremedied for 15 days after the date on which written
notice thereof, requiring the same to be remedied, and stated to be a "Notice of
Servicer Default," shall have been given to the Master Servicer by the Trustee,
or to the Master Servicer and the Trustee by Holders of Investor Certificates
evidencing more than 25% of the Aggregate Investor Amount;
(c) any representation, warranty or certification made by the Master
Servicer in this Agreement or any Supplement or in any certificate delivered
pursuant to this Agreement or any Supplement shall prove to have been incorrect
when made, which has an Adverse Effect on the rights of the Investor
Certificateholders of any Series or Class and which continues to be incorrect in
any material respect for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, and stated to be a
"Notice of Servicer Default," shall have been given to the Master Servicer by
the Trustee, or to the Master Servicer and the Trustee by the Holders of
Investor Certificates evidencing more than 25% of the Aggregate Investor Amount
(or, with respect to any such representation, warranty or certification that
does not relate to all Series, 25% of the aggregate Investor Amount of all
Series to which such representation, warranty or certification relates); or
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Master Servicer or of or relating to all or substantially
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all of its property, or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Master Servicer, and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or the Master Servicer shall
admit in writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or reorganization
statute, make any assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations;
then, in the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied or waived, either the Trustee or the Holders of
Investor Certificates evidencing more than 50% of the Aggregate Investor Amount,
by notice then given to the Master Servicer (and to the Trustee if given by the
Investor Certificateholders) (a "Termination Notice"), may terminate all but not
less than all the rights and obligations of the Master Servicer as Master
Servicer under this Agreement and in and to the Receivables and the proceeds
thereof; provided, however, if within 60 days of receipt of a Termination Notice
the Trustee does not receive any bids from Eligible Servicers in accordance with
subsection 10.02(c) to act as a Successor Servicer and receives an Officer's
Certificate of the Master Servicer to the effect that the Master Servicer cannot
in good faith cure the Servicer Default which gave rise to the Termination
Notice, the Trustee shall offer the Transferors the right at their option to
purchase the Certificateholders' Interest on the Distribution Date next
succeeding 60 days after the receipt by the Master Servicer of a Termination
Notice. A Termination Notice shall not release any liability which arose prior
to the time of the Master Servicer's termination. The purchase price for the
Certificateholders' Interest shall be equal to the sum of the amounts specified
therefor with respect to each outstanding Series in the related Supplement. The
Transferors shall notify the Trustee prior to the Record Date for the
Distribution Date of the purchase if they are exercising such option. If any of
the Transferors exercise such option, such Transferors shall deposit the
purchase price into the Collection Account not later than 12:00 noon, New York
City time, on such Distribution Date in immediately available funds. The
purchase price shall be allocated and distributed to Investor Certificateholders
in accordance with Article IV and the terms of each Supplement.
After receipt by the Master Servicer of such Termination Notice, and on
the date that a Successor Servicer shall have been appointed by the Trustee
pursuant to Section 10.02, all authority and power of the Master Servicer under
this Agreement shall, subject to Section 10.02, pass to and be vested in a
Successor Servicer; and, without limitation, the Trustee is hereby authorized
and empowered (upon the failure of the Master Servicer to cooperate) to execute
and deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise,
all documents and other instruments upon the failure of the Master Servicer to
execute or deliver such documents or instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. The Master Servicer agrees to cooperate with the
Trustee and such Successor Servicer in effecting the termination of the
responsibilities and rights of the Master Servicer to conduct servicing
hereunder including, without limitation, the transfer to such Successor Servicer
of all authority of the Master Servicer to service the
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Receivables provided for under this Agreement, including, without limitation,
all authority over all Collections which shall on the date of transfer be held
by the Master Servicer for deposit, or which have been deposited by the Master
Servicer, in the Collection Account, or which shall thereafter be received with
respect to the Receivables, and in assisting the Successor Servicer and in
enforcing all rights to Insurance Proceeds. The Master Servicer shall within 10
Business Days transfer its electronic records relating to the Receivables to the
Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the continued
servicing of the Receivables in the manner and at such times as the Successor
Servicer shall reasonably request. To the extent that compliance with this
Section 10.01 shall require the Master Servicer to disclose to the Successor
Servicer information of any kind which the Master Servicer reasonably deems to
be confidential, the Successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as the Master Servicer shall
deem necessary to protect its interests. The Master Servicer being terminated
shall bear all reasonable costs and expenses in connection with a transfer of
duties and obligations to a Successor Servicer.
Notwithstanding the foregoing, any delay in or failure of performance
under subsection 10.01(a) for a period of 5 Business Days or under subsection
10.01(b) or (c) for a period of 60 days (in addition to any period provided in
subsection 10.01(a), (b) or (c)) shall not constitute a Servicer Default until
the expiration of such additional 5 Business Days or 60 days, respectively, if
such delay or failure could not be prevented by the exercise of reasonable
diligence by the Master Servicer and such delay or failure was caused by an act
of God or the public enemy, acts of declared or undeclared war, terrorism,
public disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence shall
not relieve the Master Servicer from using its best efforts to perform its
respective obligations in a timely manner in accordance with the terms of this
Agreement and any Supplement and the Master Servicer shall provide the Trustee,
each Rating Agency, the Holders of the Transferor Certificates and the Investor
Certificateholders with an Officer's Certificate giving prompt notice of such
failure or delay by it, together with a description of its efforts to so perform
its obligations.
Section 10.02. Trustee To Act, Appointment of Successor.
(a) On and after the receipt by the Master Servicer of a Termination
Notice pursuant to Section 10.01, or the Master Servicer's resignation pursuant
to Section 8.05, the Master Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Trustee or until a date mutually agreed
upon by the Master Servicer and Trustee. The Trustee shall as promptly as
possible after the giving of a Termination Notice appoint an Eligible Servicer
as a successor servicer (the "Successor Servicer"), and such Successor Servicer
shall accept its appointment by a written assumption in a form acceptable to the
Trustee. In the event that a Successor Servicer has not been appointed or has
not accepted its appointment at the time when the Master Servicer ceases to act
as Master Servicer, the Trustee without further action shall automatically be
appointed the Successor Servicer. The Trustee may delegate any of its servicing
obligations to an Affiliate of
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the Trustee or agent in accordance with Section 3.01(b) and 8.07.
Notwithstanding the foregoing, the Trustee shall, if it is legally unable so to
act, petition a court of competent jurisdiction to appoint any established
institution qualifying as an Eligible Servicer as the Successor Servicer
hereunder. The Trustee shall give prompt notice to each Rating Agency upon the
appointment of a Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the successor
to the Master Servicer with respect to servicing functions under this Agreement
and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Master Servicer by the terms and provisions
hereof, and all references in this Agreement to the Master Servicer shall be
deemed to refer to the Successor Servicer. Notwithstanding the above, or
anything in this Section to the contrary, the Trustee, if it becomes Successor
Servicer pursuant to this Section, shall have no responsibility or obligation
(i) to repurchase or substitute any Account or Receivable and (ii) for any act
or omission of either a predecessor or Successor Servicer other than the
Trustee. The Trustee may conduct any activity required of it as Master Servicer
hereunder through an Affiliate or through an agent provided, that, (i) such
Affiliate or agent is an Eligible Servicer and (ii) the Transferor provides
written consent of its approval of such Affiliate of the Trustee. Neither the
Trustee nor any other Successor Servicer shall be deemed to be in default
hereunder due to any act or omission of a predecessor Master Servicer,
including, but not limited to, failure to timely deliver to the Trustee any
Monthly Servicer's Certificate, any funds required to be deposited to the Trust
Fund, or any breach of a predecessor Master Servicer's duty to cooperate with a
transfer of servicing as required by Section 10.01.
(c) In connection with any Termination Notice, the Trustee will review
any bids which it obtains from Eligible Servicers and shall be permitted to
appoint any Eligible Servicer submitting such a bid as a Successor Servicer for
servicing compensation not in excess of the aggregate Servicing Fees for all
Series; provided, however, that the Holders of the Transferor Certificates shall
be responsible for payment of the Transferors' portion of such aggregate
Servicing Fees and that no such monthly compensation paid out of Collections
shall be in excess of such aggregate Servicing Fees. Each Holder of a Transferor
Certificate agrees that, if AFC (or any Successor Servicer) is terminated as
Master Servicer hereunder, the portion of the Collections in respect of Finance
Charge and Administrative Receivables that such Holders are entitled to receive
pursuant to this Agreement or any Supplement shall be reduced by an amount
sufficient to pay such Holders' share (determined by reference to the
Supplements with respect to any outstanding Series) of the compensation of the
Successor Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of the
Trust pursuant to Section 12.01 and shall pass to and be vested in the
Transferors and, without limitation, the Transferors are hereby authorized and
empowered to execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights. The Successor Servicer agrees to
cooperate with the Transferors in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct servicing on
the Receivables. The Successor Servicer shall transfer its electronic records
relating to the
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Receivables to the Transferors in such electronic form as the Transferors may
reasonably request and shall transfer all other records, correspondence and
documents to the Transferors in the manner and at such times as the Transferors
shall reasonably request. To the extent that compliance with this Section 10.02
shall require the Successor Servicer to disclose to the Transferors information
of any kind which the Successor Servicer deems to be confidential, the
Transferors shall be required to enter into such customary licensing and
confidentiality agreements as the Successor Servicer shall deem necessary to
protect its interests.
Section 10.03. Notification to Certificateholders. Within two Business
Days after the Master Servicer becomes aware of any Servicer Default, the Master
Servicer shall give notice thereof to the Trustee and each Rating Agency and the
Trustee shall give notice to the Investor Certificateholders unless the Master
Servicer has done so pursuant to Section 10.01. Upon any termination or
appointment of a Successor Servicer pursuant to this Article, the Trustee shall
give prompt notice thereof to the Investor Certificateholders.
[END OF ARTICLE X]
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ARTICLE XI
The Trustee
Section 11.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of a Servicer Default and
after the remediation or waiver of all Servicer Defaults which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Responsible Officer has received
written notice that a Servicer Default has occurred (which has not been remedied
or waived) the Trustee shall exercise such rights and powers vested in it by
this Agreement, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs. If the Trustee is acting as Successor Servicer, it shall use
the same degree of care and skill in the exercise of its duties in such capacity
as the Master Servicer is required under this Agreement. The permissive rights
of the Trustee shall not be construed as duties under this Agreement.
(b) Except as may be required by subsection 11.01(a) hereof, the
Trustee shall not be required to make any initial or periodic examination of any
documents or records related to the Receivables or the Accounts for the purpose
of establishing the presence or absence of defects, the compliance by any
Transferor with its representations and warranties, or for any other purpose.
(c) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
substantially conform on their face to the requirements of this Agreement. The
Trustee shall give prompt written notice to the Transferor and Master Servicer
of any material lack of conformity of any such instrument to the applicable
requirements of this Agreement discovered by the Trustee which would entitle a
specified percentage of Investor Certificateholders to take any action pursuant
to this Agreement.
(d) Subject to subsection 11.01(a), no provision of this Agreement
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, however, that:
(i) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of any Series Enhancer or the
Holders of Investor Certificates evidencing more than 50% of the
Investor Amount of any Series relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any
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trust or power conferred upon the Trustee in relation to such Series,
under this Agreement; and
(iii) the Trustee shall not be charged with knowledge of any
failure by the Master Servicer referred to in clauses (a) and (b) of
Section 10.01 unless a Responsible Officer of the Trustee obtains
actual knowledge of such failure or the Trustee receives written notice
of such failure from the Master Servicer or any Holders of Investor
Certificates evidencing not less than 10% of the Investor Amount of any
Series adversely affected thereby.
(e) The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of (i) the Master Servicer under this Agreement except during
such time, if any, as the Trustee shall be the Successor Servicer in accordance
with the terms of this Agreement or (ii) any Transferor under any circumstance.
(f) Except for actions expressly authorized by this Agreement, the
Trustee shall take no action reasonably likely to (i) impair the interests of
the Trust in any Receivable now existing or hereafter created or (ii) impair the
value of any Receivable now existing or hereafter created.
(g) The Trustee shall have no power to vary the corpus of the Trust,
except as expressly provided in this Agreement.
(h) In the event that the Paying Agent or the Transfer Agent and
Registrar shall fail to perform any obligation, duty or agreement in the manner
or on the day required to be performed by the Paying Agent or the Transfer Agent
and Registrar, as the case may be, under this Agreement, the Trustee shall be
obligated, promptly upon knowledge of a Responsible Officer thereof, to
terminate any such agency and perform such obligation, duty or agreement in the
manner so required except that it shall not be obligated to remit any payment
other than from funds deposited with such Paying Agent for that purpose.
(i) If any of the Transferors has agreed to transfer any of its
business revolving credit card receivables (other than the Receivables) to
another Person, upon the written request of such Transferor, the Trustee will
enter into such intercreditor agreements with the transferee of such receivables
as are customary and necessary to separately identify the rights, if any, of the
Trust and such other Person in such Transferor's business revolving credit card
receivables; provided, that the Trustee shall not be required to enter into any
intercreditor agreement which could have an Adverse Effect upon the interests of
the Certificateholders and, upon the request of the Trustee, such Transferor
will deliver an Opinion of Counsel on any matters relating to such intercreditor
agreement, reasonably requested by the Trustee and provided, further, that the
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Trustee shall not be liable for interest or other compensation on uninvested
funds held under this Agreement except as may be expressly agreed to in writing.
Section 11.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.01:
(a) the Trustee may rely on and shall be protected in acting on, or in
refraining from acting in accord with, and without independent verification of
the contents or computations therein, any Assignment, the initial report, the
annual Servicer's certificate, the monthly payment instructions and notification
to the Trustee, the monthly Certificateholder's statement, any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and to
have been signed or presented to it pursuant to this Agreement by the proper
party or parties;
(b) the Trustee may consult with counsel, and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Enhancement Agreement, or
to institute, conduct or defend any litigation hereunder or in relation hereto,
at the request, order or direction of any of the Certificateholders, or any
Enhancement Provider, pursuant to the provisions of this Agreement or any
Enhancement Agreement, unless such Certificateholders or any Enhancement
Provider shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby; provided, that, nothing contained herein shall relieve the Trustee of
the obligations, upon the occurrence of any Servicer Default (which has not been
remedied or waived), to exercise such of the rights and powers vested in it by
this Agreement and any Series Enhancement, and to use the same degree of care
and skill in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs;
(d) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(e) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any Assignment, the annual Servicer's certificate,
the monthly payment instructions and notification to the Trustee, the monthly
Certificateholder's statement, any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by Holders of
Investor Certificates evidencing more than 50% of the Investor Amount of any
Series which could be adversely affected if the Trustee does not perform such
acts; and
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(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents ,
Affiliates or attorneys or a custodian, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent, Affiliates
attorney or custodian appointed with due care by it hereunder.
Section 11.03. Trustee Not Liable for Recitals in Certificates. The
Trustee assumes no responsibility for the correctness of the recitals contained
herein and in the certificates (other than the certificate of authentication on
the Certificates). Except as set forth in Section 11.15, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or any
Supplement or of the Certificates (other than the certificate of authentication
on the Certificates) or of any Receivable or related document. The Trustee shall
not be accountable for the use or application by the Transferors of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Transferors or the Holders of the
Transferor Certificates in respect of the Receivables or deposited in or
withdrawn from the Collection Account, the Excess Funding Account or any Series
Account by the Master Servicer. The Trustee may transact business with the
Master Servicer, the Transferor, any Series Enhancer or their respective
Affiliates with the "same rights" it would have were it not the Trustee
hereunder.
Section 11.04. Trustee May Own Certificates. Subject to Section 6.06,
the Trustee in its individual or any other capacity may become the owner or
pledgee of Investor Certificates or Supplemental Certificates with the same
rights as it would have if it were not the Trustee.
Section 11.05. The Transferors To Pay Trustee's Fees and Expenses. In
consideration of receiving the Servicing Fee, the Master Servicer covenants and
agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to receive, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trust hereby created and
in the exercise and performance of any of the powers and duties hereunder of the
Trustee, and, subject to Section 7.04, the Transferors will pay or reimburse the
Trustee (without reimbursement from the Collection Account or otherwise) upon
its request for all reasonable expenses, disbursements and advances (if any)
incurred or made by the Trustee (including the fees and expenses of Trustee's
counsel) in accordance with any of the provisions of this Agreement except any
such expense, disbursement or advance as may arise from its own negligence or
bad faith and except as provided in the following sentence. If the Trustee is
appointed Successor Servicer pursuant to Section 10.02, the provisions of this
Section 11.05 shall not apply to expenses, disbursements and advances made or
incurred by the Trustee solely in its capacity as Successor Servicer. The
obligations of the Transferors under Section 7.04 and this Section 11.05 shall
survive the termination of the Trust and the resignation or removal of the
Trustee.
Section 11.06. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a bank or a corporation organized and doing
business under the laws of the United States of America or any state thereof and
subject to supervision or examination by Federal or state authority and
authorized under such laws to exercise corporate trust powers that either
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(x) has a long-term unsecured debt or deposit rating of at least Baa3 by Moody's
and BBB- by Standard & Poor's and, in the case of an entity that is subject to
risk-based capital adequacy requirements, risk-based capital of at least
$50,000,000 or, in the case of an entity that is not subject to risk-based
capital adequacy requirements, a combined capital and surplus of at least
$50,000,000 or (y) shall otherwise satisfy the Rating Agency Condition. If such
bank or corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section 11.06, the combined capital and
surplus of such bank or corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 11.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 11.07.
Section 11.07. Resignation or Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from the trust
hereby created by giving written notice thereof to the Master Servicer. Upon
receiving such notice of resignation, the Master Servicer shall promptly appoint
a successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have
accepted within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.06 and shall fail to resign after written
request therefor by the Master Servicer or the Transferors, or if at any time
the Trustee shall be legally unable to act, 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 the Master Servicer or Transferors may, but shall not be
required to, remove the Trustee and promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.07 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.08 and any liability of the resigning Trustee arising
hereunder shall survive such resignation or removal, but shall in no event be
attributable to any successor trustee.
Section 11.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 11.07 shall
execute, acknowledge and deliver to the Transferors, to the Master Servicer and
to its predecessor Trustee an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor trustee, without
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any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as Trustee herein. The predecessor Trustee
shall deliver to the successor trustee all documents and statements held by it
hereunder, and the Transferors and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section 11.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 11.06.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section 11.08, such successor trustee shall provide notice of such
succession hereunder to all Investor Certificateholders and the Master Servicer
shall provide such notice to each Rating Agency and any Series Enhancer entitled
thereto pursuant to the relevant Supplement.
Section 11.09. Merger or Consolidation of Trustee. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.06, 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.
Section 11.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements 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 Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Certificateholders, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section 11.10, such powers, duties, obligations, rights and trusts as the
Trustee may consider necessary or desirable; provided, however, that the Trustee
shall exercise due care in the appointment of any co-trustee. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 11.06 and no notice to Certificateholders of
the appointment of any co-trustee or separate trustee shall be required under
Section 11.08.
(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
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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 laws of any jurisdiction in which any particular
act or acts are to be performed (whether as Trustee hereunder or as
successor to the Master Servicer hereunder) 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
(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. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XI. 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 Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Agreement on its behalf and in its name. 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 or
successor trustee.
Section 11.11. Tax Returns. In the event the Trust shall be required to
file tax returns, the Master Servicer, as soon as practicable after it is made
aware of such requirement, shall prepare or cause to be prepared any tax returns
required to be filed by the Trust and, to the extent possible, shall file such
returns at least five days before such returns are due to be filed. The Trustee
is hereby authorized to sign any such return on behalf of the Trust. The Master
Servicer shall prepare or shall cause to be prepared all tax information
required by law to be distributed to Certificateholders and shall deliver such
information to the Trustee at least five days prior to the date it is required
by law to be distributed to Certificateholders. The Master Servicer, upon
request, will furnish the Trustee with all such information known to the Master
Servicer as may be reasonably required in connection with the preparation of all
tax returns of the Trust. In no event shall the Trustee or the Master Servicer
be liable for any liabilities, costs
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or expenses of the Trust, the Investor Certificateholders or the Certificate
Owners arising under any tax law, including without limitation federal, state,
local or foreign income or excise taxes or any other tax imposed on or measured
by income (or any interest or penalty with respect thereto or arising from a
failure to comply therewith).
Section 11.12. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or any Series
of Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of any Series of Certificates in respect of which such judgment
has been obtained.
Section 11.13. Suits for Enforcement.
(a) If a Servicer Default shall occur and be continuing, the Trustee,
in its discretion may, subject to the provisions of Sections 10.01 and 11.14,
proceed to protect and enforce its rights and the rights of any Series of
Certificates under this Agreement by a suit, action or proceeding in equity or
at law or otherwise, whether for the specific performance of any covenant or
agreement contained in this Agreement or in aid of the execution of any power
granted in this Agreement or for the enforcement of any other legal, equitable
or other remedy as the Trustee, being advised by counsel, shall deem most
effectual to protect and enforce any of the rights of the Trustee or any Series
of Certificates.
(b) If the FDIC, the RTC or any equivalent governmental agency or
instrumentality or any designee or any other Governmental Authority of any of
them shall have been appointed as receiver, conservator, assignee, trustee in
bankruptcy or reorganization, liquidator, sequestrator or custodian with respect
to any Transferor (the "Receiver"), the Trustee shall, irrespective of whether
the principal of any Series or Class of Certificates shall then be due and
payable;
(i) unless prohibited by applicable law or regulation or
unless under FIRREA the Receiver is required to participate in the
process as a defendant or otherwise, promptly take or cause to be taken
any and all necessary or advisable commercially reasonable action as a
secured creditor on behalf of the Certificateholders to recover,
repossess, collect or liquidate the Receivables or any other Trust
Assets on a "self-help" basis or otherwise and exercise any rights or
remedies of a secured party under the applicable UCC and take any other
appropriate action to protect and enforce the rights and remedies of
the Trustee and the Certificateholders;
(ii) promptly, and in any case within any applicable claims
bar period specified under FIRREA or otherwise, file and prove a claim
or claims under FIRREA or otherwise, by filing proofs of claim,
protective proofs of claim or otherwise, for the whole amount of unpaid
principal and interest in respect of the Certificates and to file
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such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee and the Certificateholders
allowed in any judicial, administrative, corporate or other proceedings
relating to such Transferor, its creditors or its property, including
any actions relating to the preservation of deficiency claims or for
the protection against loss of any claim in the event the Trustee's or
the Certificateholders' status as secured creditors are successfully
challenged; and
(iii) collect and receive any moneys or other property payable
or deliverable on any such claims and distribute all amounts with
respect to the claims of the Certificateholders to the
Certificateholders.
(c) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Certificateholder
any plan of reorganization, arrangement, adjustment or composition affecting the
Certificates or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Certificateholder in any such proceeding.
Section 11.14. Rights of Certificateholders To Direct Trustee. Holders
of Investor Certificates evidencing more than 50% of the Aggregate Investor
Amount (or, with respect to any remedy, trust or power that does not relate to
all Series, 50% of the aggregate Investor Amount of all Series to which such
remedy, trust or power relates) 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; provided, however,
that, subject to Section 11.01, the Trustee shall have the right to decline to
follow any such direction if the Trustee being advised by counsel determines
that the action so directed may not lawfully be taken, or if the Trustee in good
faith shall, by a Responsible Officer or Responsible Officers of the Trustee,
determine that the proceedings so directed would be illegal or involve it in
personal liability or be unduly prejudicial to the rights of Certificateholders
not parties to such direction; and provided, further, that nothing in this
Agreement shall impair the right of the Trustee to take any action deemed proper
by the Trustee and which is not inconsistent with such direction of such Holders
of Investor Certificates.
Section 11.15. Representations and Warranties of Trustee. The Trustee
represents and warrants as of each Closing Date that:
(a) the Trustee is a national banking association organized, existing
and in good standing under the laws of the United States of America;
(b) the Trustee has full power, authority and right to execute, deliver
and perform this Agreement and each Supplement, and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Agreement and each Supplement; and
(c) this Agreement and each Supplement has been duly executed and
delivered by the Trustee.
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(d) the Trustee meets the eligibility requirements set forth in Section
11.06.
Section 11.16. Maintenance of Office or Agency. For purposes of this
Section, the Trustee will maintain at its expense the Corporate Trust Office
where notices and demands to or upon the Trustee in respect of the Certificates
and this Agreement may be served (a) in the Borough of Manhattan, The City of
New York, which shall initially be located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in the case of Registered Certificates and Holders
thereof, and (b) in London or Luxembourg, in the case of Bearer Certificates and
Holders thereof, if and for so long as any Bearer Certificates are outstanding.
The Trustee will give prompt notice to the Master Servicer and to Investor
Certificateholders of any change in the location of the Certificate Register or
any such office or agency.
Section 11.17. Trustee Indemnification of the Master Servicer and the
Transferors. The Trustee shall indemnify and hold harmless the Master Servicer
and the Transferors (including their respective directors, officers, employees,
and agents) from and against any reasonable loss, liability, expense, damage or
injury suffered or sustained by reason of any acts or omissions of the Trustee
caused by its fraud, gross negligence, or willful misconduct with respect to the
performance of its duties pursuant to this Agreement, including any judgment,
award, settlement, reasonable attorneys' fees and other costs or expenses
incurred in connection with the defense of any action, proceeding or claim.
Section 11.18. Obligor Claims. In connection with any offset defenses,
or affirmative claims for recovery, asserted in legal actions brought by
Obligors under one or more Receivables based upon provisions therein or upon
other rights or remedies arising from any Requirements of Law applicable to the
Receivables:
(a) The Trustee is the holder of the Receivables only as trustee on
behalf of the holders of the Certificates, and not or in its individual or
personal capacity.
(b) The Trustee shall not be personally liable for, or obligated to pay
Obligors, any affirmative claims asserted thereby, or responsible to holders of
the Certificates for any offset defense amounts applied against Receivable
payments, pursuant to such legal actions provided, that this subsection 11.18(b)
shall not be construed to relieve the Trustee of liability pursuant to Section
11.17 of this Agreement.
(c) The Trustee will pay, solely from available Trust money,
affirmative claims for recovery by Obligors only pursuant to final judicial
orders or judgments, or judicially-approved settlement agreements, resulting
from such legal actions.
(d) The Trustee will comply with judicial orders and judgments which
require its action or cooperation in connection with any Obligor's legal actions
to recover affirmative claims against holders of the Investor Certificates.
(e) The Trustee will cooperate with and assist the Transferors, the
Master Servicer, or holders of the Certificates in their defense of legal
actions by Obligors to recover affirmative
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claims if such cooperation and assistance is not contrary to the interests of
the Trustee as a party to such legal actions and if the Trustee is
satisfactorily indemnified for all liability, costs and expenses arising
therefrom.
(f) The Master Servicer hereby agrees to indemnify, hold harmless and
defend the Trustee from and against any and all liability, loss, costs and
expenses of the Trustee resulting from any affirmative claims for recovery
asserted or collected by Obligors under the Receivables.
Section 11.19. Liabilities to Obligors. No liability to any Obligor
under any of the Receivables arising out of any act or omission of the Master
Servicer or any Transferor in servicing the Receivables is intended to be
assumed by the Trust or the Trustee under, or as a result of, this Agreement and
the transactions contemplated hereby and, to the maximum extent permitted under
the law, the Trust and the Trustee expressly disclaim such assumption of
liability.
[END OF ARTICLE XI]
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ARTICLE XII
Termination
Section 12.01. Termination of Trust. The Trust and the respective
obligations and responsibilities of the Transferors, the Master Servicer and the
Trustee created hereby (other than the obligation of the Trustee to (i) make
payments to Investor Certificateholders as hereinafter set forth and (ii)
indemnify the Transferor and the Master Servicer (including their respective
directors, officers, employees, and agents) pursuant to Section 11.17 of this
Agreement) shall terminate, except with respect to the duties described in
Sections 7.04, 8.04 and 12.02(b), upon the earliest of (i) the day following the
payment date on which the Investor Amount and the Enhancement Investor Amount,
if any, for each Series is zero (provided that the Transferors have delivered a
written notice to the Trustee electing to terminate the Trust) and (ii) the time
provided in subsection 9.02(b); provided, however, that in no event shall the
Trust created by the Agreement continue beyond the expiration of 21 years from
the death of the last descendant of ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of the State of Indiana
living on the date of the Agreement.
Section 12.02. Final Distribution.
(a) The Master Servicer shall give the Trustee at least 30 days prior
notice of the payment date on which the Investor Certificateholders of any
Series or Class may surrender their Investor Certificates for payment of the
final distribution on and cancellation of such Investor Certificates (or, in the
event of a final distribution resulting from the application of Section 2.06,
9.02 or 10.01, notice of such payment date promptly after the Master Servicer
has determined that a final distribution will occur, if such determination is
made less than 30 days prior to such payment date). Such notice shall be
accompanied by an Officer's Certificate setting forth the information specified
in Section 3.05 covering the period during the then-current calendar year
through the date of such notice. Not later than the fifth day of the month in
which the final distribution in respect of such Series or Class is payable to
Investor Certificateholders, the Trustee shall provide notice to Investor
Certificateholders 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 Investor Certificates 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
Investor Certificates at the office or offices therein specified (which, in the
case of Bearer Certificates, shall be outside the United States). The Trustee
shall give such notice to the Transfer Agent and Registrar and the Paying Agent
at the time such notice is given to Investor Certificateholders.
(b) Notwithstanding a final distribution to the Investor
Certificateholders of any Series or Class (or the termination of the Trust),
except as otherwise provided in this paragraph, all funds then on deposit in the
Collection Account and any Series Account allocated to such Investor
Certificateholders shall continue to be held in trust for the benefit of such
Investor Certificateholders and the Paying Agent or the Trustee shall pay such
funds to such Investor Certificateholders upon surrender of their Investor
Certificates (and any excess shall be paid in
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accordance with the terms of any relevant Enhancement Agreement). In the event
that all such Investor Certificateholders shall not surrender their Investor
Certificates 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 Investor Certificateholders to surrender
their Investor Certificates for cancellation and receive the final distribution
with respect thereto (which surrender and payment, in the case of Bearer
Certificates, shall be outside the United States). If within one year after the
second notice all such Investor Certificates 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 Investor
Certificateholders concerning surrender of their Investor Certificates, and the
cost thereof shall be paid out of the funds in the Collection Account or any
Series Account held for the benefit of such Investor Certificateholders. The
Trustee and the Paying Agent shall upon written request pay to the Transferors
any moneys held by them for the payment of principal or interest that remains
unclaimed for two years. After payment to the Transferors, Investor
Certificateholders entitled to the money must look to the Transferors for
payment as general creditors unless an applicable abandoned property law
designates another Person. The Trustee's obligations pursuant to Section 11.17
of this Agreement shall survive final distribution and cancellation of such
Investors Certificates as set forth in this Section 12.02.
(c) In the event that the Investor Amount with respect to any Series is
greater than zero on its Series Termination Date or such earlier date as is
specified in the related Supplement (after giving effect to deposits and
distributions otherwise to be made on such date), the Trustee will sell or cause
to be sold on such Series Termination Date, in accordance with the procedures
and subject to the conditions described in such Supplement, Principal
Receivables or Participation Interests and the related Finance Charge and
Administrative Receivables (or interests therein) in an amount equal to 100% of
the Investor Amount and accrued and unpaid interest thereon with respect to such
Series on such date (after giving effect to such deposits and distributions;
provided, however, that in no event shall such amount exceed such Series'
Percentages of Receivables on such Series Termination Date). The proceeds (the
"Termination Proceeds") from any such sale shall be allocated and distributed in
accordance with the terms of the applicable Supplement.
Section 12.03. Transferors' Termination Rights. Upon the termination of
the Trust pursuant to Section 12.01 and the surrender of the Transferor
Certificates, the Trustee shall sell, assign and convey to the Holders of the
Transferor Certificates or their designee, without recourse, representation or
warranty, all right, title and interest of the Trust in the Receivables, whether
then existing or thereafter created, all moneys due or to become due and all
amounts received with respect thereto and all proceeds thereof, except for
amounts held by the Trustee pursuant to subsection 12.02(b). The Trustee shall
execute and deliver such instruments of transfer and assignment, in each case
without recourse, as shall be reasonably requested by the Holders of the
Transferor Certificates to vest in the Holders of the Transferor Certificates or
their designee all right, title and interest which the Trust had in the
Receivables and such other related assets.
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Section 12.04. Defeasance. Notwithstanding anything to the contrary in
this Agreement or any Supplement:
(a) The Transferor may at its option be discharged from its obligations
hereunder with respect to any Series or all outstanding Series (the "Defeased
Series") on the date the applicable conditions set forth in subsection 12.04(c)
are satisfied (a "Defeasance"); provided, however, that the following rights,
obligations, powers, duties and immunities shall survive with respect to the
Defeased Series until otherwise terminated or discharged hereunder: (i) the
rights of the Holders of Investor Certificates of the Defeased Series to
receive, solely from the trust fund provided for in subsection 12.04(c),
payments in respect of principal of and interest on such Investor Certificates
when such payments are due; (ii) the Transferors' obligations with respect to
such Certificates under Sections 6.04 and 6.05; (iii) the rights, powers,
trusts, duties, and immunities of the Trustee, the Paying Agent and the
Registrar hereunder; and (iv) this Section 12.04.
(b) Subject to subsection 12.04(c), the Transferors at their option may
cause Collections allocated to the Defeased Series and available to purchase
additional Receivables to be applied to purchase Eligible Investments rather
than additional Receivables.
(c) The following shall be the conditions to Defeasance under
subsection 12.04(a):
(i) the Transferors irrevocably shall have deposited or caused
to be deposited with the Trustee (such deposit to be made from other
than the Transferors' or any Affiliate of the Transferors' funds),
under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust for making the
payments described below, (A) Dollars in an amount, or (B) Eligible
Investments which through the scheduled payment of principal and
interest in respect thereof will provide, not later than the due date
of payment thereon, money in an amount, or (C) a combination thereof,
in each case sufficient to pay and discharge (without relying on income
or gain from reinvestment of such amount), and which shall be applied
by the Trustee to pay and discharge, all remaining scheduled interest
and principal payments on all outstanding Investor Certificates of the
Defeased Series on the dates scheduled for such payments in this
Agreement and the applicable Supplements and all amounts owing to the
Series Enhancers with respect to the Defeased Series;
(ii) a statement from a firm of nationally recognized
independent public accountants (who may also render other services to
the Transferors) to the effect that such deposit is sufficient to pay
the amounts specified in clause (i) above;
(iii) prior to its first exercise of its right pursuant to
this Section 12.04 with respect to a Defeased Series to substitute
money or Eligible Investments for Receivables, if any Series of
Investor Certificates are outstanding that were characterized as debt
at the time of their issuance, the Transferor shall have delivered to
the Trustee a Tax Opinion with respect to such deposit and termination
of obligations, and (in any case) an Opinion of Counsel to the effect
that (A) such deposit and termination of obligations will
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not result in the Trust being required to register as an "investment
company" within the meaning of the Investment Company Act and (B) if
the Transferors' short-term deposit or long-term unsecured debt
obligations are not rated at least P-3 or Baa3, respectively, by
Moody's, such deposit and termination of obligations would not be a
fraudulent conveyance (based in reliance on certain certificates to the
effect that the Receivables and termination of obligations constitute
fair value for consideration paid therefor and as to the solvency of
the Transferors);
(iv) the Transferors shall have delivered to the Trustee an
Officer's Certificate of the Transferors stating that the Transferors
reasonably believe that such deposit and termination of obligations
will not, based on the facts known to such officer at the time of such
certification, then cause a Pay Out Event with respect to any Series or
any event that, with the giving of notice or the lapse of time, would
result in the occurrence of a Pay Out Event with respect to any Series;
(v) the Rating Agency Condition shall have been satisfied.
Section 12.05. Optional Purchase.
(a) If so provided in any Supplement, the Transferors may, but shall
not be obligated to, cause a final distribution to be made in respect of the
related Series of Investor Certificates on a specified Distribution Date or when
the Investor Amount reaches a specified level or under any circumstances
specified in such Supplement by depositing into the Collection Account or the
applicable Series Account, not later than the Transfer Date preceding such
Distribution Date, for application in accordance with Section 12.02, the amount
specified in such Supplement. In connection with any such deposit the
Transferor(s) shall deliver an Opinion of Counsel that such deposit does not
constitute a fraudulent conveyance.
(b) The amount deposited pursuant to subsection 12.05(a) shall be paid
to the Investor Certificateholders of the related Series pursuant to Section
12.02 on the related Distribution Date following the date of such deposit. All
Certificates of a Series which are purchased by the Transferors pursuant to
subsection 12.05(a) shall be delivered by the Transferors upon such purchase to,
and be cancelled by, the Transfer Agent and Registrar and be disposed of in a
manner satisfactory to the Trustee and the Transferor. The Investor Amount of
each Series which is purchased by the Transferors pursuant to subsection
12.05(a) shall, for the purposes of the definitions of "Series Invested Amount"
and "Transferor Amount," be deemed to be equal to zero on the Distribution Date
following the making of the deposit, and the Transferor Amount shall thereupon
be deemed to have been increased by the Series Invested Amount of such Series.
[END OF ARTICLE XII]
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ARTICLE XIII
Miscellaneous Provisions
Section 13.01. Amendment; Waiver of Past Defaults.
(a) This Agreement or any Supplement may be amended from time to time
(including in connection with (x) the provision of additional Series Enhancement
for the benefit of the Certificateholders of any Series (or the reduction of
such Series Enhancement), (y) the addition of a Participation Interest to the
Trust or (z) the designation of an Additional Transferor) by the Master
Servicer, the Transferors (including, if applicable, any Additional Transferor
being designated) and the Trustee without the consent of or notice to any of the
Certificateholders, provided that (i) each Transferor shall have delivered to
the Trustee an Officer's Certificate to the effect that such Transferor
reasonably believes that such action will not have an Adverse Effect and (ii)
the Rating Agency Condition shall be satisfied.
(b) This Agreement or any Supplement may also be amended from time to
time by the Master Servicer, the Transferors and the Trustee, with the consent
of the Holders of Investor Certificates evidencing not less than 66-2/3% of the
aggregate Investor Amount of the Investor Certificates of all adversely affected
Series, for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or any Supplement or of
modifying in any manner the rights of the Certificateholders; provided, however,
that no such amendment shall (i) reduce in any manner the amount of or delay the
timing of any distributions to be made to Investor Certificateholders or
deposits of amounts to be so distributed or the amount available under any
Series Enhancement without the consent of each affected Certificateholder, (ii)
change the definition of or the manner of calculating the interest of any
Investor Certificateholder without the consent of each affected Investor
Certificateholder, (iii) reduce the aforesaid percentage required to consent to
any such amendment without the consent of each Investor Certificateholder or
(iv) adversely affect the rating of any Series or Class by each Rating Agency
without the consent of the Holders of Investor Certificates of such Series or
Class evidencing not less than 66-2/3% of the aggregate Investor Amount of the
Investor Certificates of such Series or Class. Any amendment to be effected
pursuant to this paragraph shall be deemed not to adversely affect any
outstanding Series if the Transferors deliver an Opinion of Counsel, addressed
and delivered to the Trustee, that such action will not, in such counsel's
reasonable opinion, have an Adverse Effect with respect to such Series.
(c) Promptly after the execution of any such amendment or consent
(other than an amendment pursuant to paragraph (a)), the Trustee shall furnish
notification of the substance of such amendment to each Investor
Certificateholder, and the Master Servicer shall furnish notification of the
substance of such amendment to each Rating Agency.
(d) It shall not be necessary for the consent of Investor
Certificateholders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and
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of evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(e) Any Supplement executed in accordance with the provisions of
subsection 6.03(b) shall not be considered an amendment to this Agreement for
the purposes of this Section.
(f) The Holders of Investor Certificates evidencing more than 66-2/3%
of the aggregate Investor Amount of the Investor Certificates of each Series, or
with respect to any Series with two or more Classes, of each Class (or with
respect to any default or Servicer Default that does not relate to all Series,
66-2/3% of the aggregate Investor Amount of the Investor Certificates of each
Series to which such default relates or, with respect to any such Series with
two or more Classes, of each Class) may, on behalf of all Certificateholders,
waive any default or Servicer Default by the Transferors or the Master Servicer
in the performance of their obligations hereunder and its consequences, except
the failure to make any distributions required to be made to Investor
Certificateholders or to make any required deposits of any amounts to be so
distributed. Upon any such waiver of a past default or Servicer Default, such
default or Servicer Default shall cease to exist, and any default or Servicer
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or Servicer Default or impair any right consequent thereon except
to the extent expressly so waived.
Section 13.02. Protection of Right, Title and Interest to Trust.
(a) The Master Servicer shall cause this Agreement, all amendments and
Supplements hereto and all financing statements and continuation statements and
any other necessary documents covering the Certificateholders' and the Trustee's
right, title and interest to the Trust to be promptly recorded, registered and
filed, and at all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Certificateholders and the Trustee
hereunder to all property comprising the Trust. The Master Servicer shall
deliver to the Trustee file-stamped copies of, or filing receipts for, any
document recorded, registered or filed as provided above, as soon as available
following such recording, registration or filing. The Transferors shall
cooperate fully with the Master Servicer in connection with the obligations set
forth above and will execute any and all documents reasonably required to
fulfill the intent of this paragraph.
(b) Within 30 days after any of the Transferors makes any change in its
name, identity or corporate structure which would make any financing statement
or continuation statement filed in accordance with paragraph (a) seriously
misleading within the meaning of Section 9-402(7) (or any comparable provision)
of the UCC, such Transferor shall give the Trustee notice of any such change and
shall file such financing statements or amendments as may be necessary to
continue the perfection of the Trust's security interest in the Receivables and
the proceeds thereof.
(c) Each Transferor and the Master Servicer will give the Trustee
prompt notice of any relocation of any office from which it services Receivables
or keeps records concerning the
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Receivables or of its principal executive office and whether, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement or
of any new financing statement and shall file such financing statements or
amendments as may be necessary to perfect or to continue the perfection of the
Trust's security interest in the Receivables and the proceeds thereof. Each
Transferor and the Master Servicer will at all times maintain each office from
which it services Receivables and its principal executive offices within the
United States.
(d) The Master Servicer will deliver to the Trustee: (i) upon the
execution and delivery of each amendment of this Agreement or any Supplement, an
Opinion of Counsel to the effect specified in Exhibit G-1; (ii) on or before
December 31 of each year, beginning with December 31, 1996, an Opinion of
Counsel substantially in the form of Exhibit G-2 and (iii) on each Addition Date
on which any additional Accounts are to be designated pursuant to subsection
2.09 (a), (b) or (d), an Opinion of Counsel substantially in the form or Exhibit
G-2.
Section 13.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust, nor shall such death or incapacity
entitle such Certificateholders' legal representatives or heirs to claim an
accounting or to take any action or commence any proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) No Investor Certificateholder shall have any right to vote (except
as expressly provided in this Agreement) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Investor Certificateholders
from time to time as partners or members of an association, nor shall any
Investor Certificateholder be under any liability to any third person by reason
of any action taken by the parties to this Agreement pursuant to any provision
hereof.
(c) No Investor Certificateholder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Investor Certificateholder previously shall have made, and unless the Holders of
Investor Certificates evidencing more than 50% of the aggregate unpaid principal
amount of all Investor Certificates (or, with respect to any such action, suit
or proceeding that does not relate to all Series, 50% of the aggregate unpaid
principal amount of the Investor Certificates of all Series to which such
action, suit or proceeding relates) shall have made, a request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after such request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted by
each Investor Certificateholder with every other Investor Certificateholder and
the Trustee, that no one or more Investor Certificateholders shall
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have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Investor Certificates, or to
obtain or seek to obtain priority over or preference to any other such Investor
Certificateholder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Investor Certificateholders except as otherwise expressly provided in this
Agreement. For the protection and enforcement of the provisions of this Section,
each and every Investor Certificateholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
SECTION 13.04. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 13.05. Notices; Payments.
(a) All demands, notices, instructions, directions and communications
(collectively, "Notices") under this Agreement shall be in writing and shall be
deemed to have been duly given if personally delivered at, mailed by registered
mail, return receipt requested, or sent by facsimile transmission (i) in the
case of the Transferor, to Advanta Business Receivables Corp., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, (ii) in the case of the Master Servicer, to Advanta
Financial Corp., ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, (iii) in the
case of the Trustee, to the Corporate Trust Office, (iv) in the case of Moody's,
to ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ABS ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇ (facsimile no. 212-553- 4600), (v) in the case of Standard & Poor's,
to ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: Asset Backed Group, 15th Floor
(facsimile no. 212-412-0323), (vi) in the case of the Paying Agent or the
Transfer Agent and Registrar, to the Corporate Trust Office and (vii) in the
case of Notices sent under clauses (i) and (ii) above, an informational copy of
such Notice shall also be sent to Advanta Business Services Corp., P.O. Box
1228, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Treasurer, and
(viii) to any other Person as specified in any Supplement; or, as to each party,
at such other address or facsimile number as shall be designated by such party
in a written notice to each other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Certificates shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. No Notice shall
be required to be mailed to a Holder of Bearer Certificates or Coupons but shall
be given as provided below. Any Notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given, whether
or not the Investor Certificateholder receives such Notice. In addition, (a) if
and so long as any Series or Class is listed on the Luxembourg Stock Exchange
and such Exchange shall so require, any Notice to Investor Certificateholders
shall be published in an Authorized Newspaper of general circulation in
Luxembourg within the time period prescribed in this Agreement and (b) in the
case of any Series or Class with respect to which any Bearer Certificates are
outstanding, any Notice required or permitted to be given to Investor
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Certificateholders of such Series or Class shall be published in an Authorized
Newspaper within the time period prescribed in this Agreement.
Section 13.06. Rule 144A Information. For so long as any of the
Investor Certificates of any Series or Class are "restricted securities" within
the meaning of Rule 144(a)(3) under the Act, each of the Transferors, the
Trustee, the Master Servicer and any Series Enhancer agree to cooperate with
each other to provide to any Investor Certificateholders of such Series or Class
and to any prospective purchaser of Certificates designated by such an Investor
Certificateholder, upon the request of such Investor Certificateholder or
prospective purchaser, any information required to be provided to such holder or
prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act.
Section 13.07. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the remaining provisions or of the
Certificates or the rights of the Certificateholders.
Section 13.08. Certificates Nonassessable and Fully Paid. It is the
intention of the parties to this Agreement that the Certificateholders shall not
be personally liable for obligations of the Trust, that the interests in the
Trust represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever and that Certificates upon
authentication thereof by the Trustee pursuant to Section 6.02 are and shall be
deemed fully paid.
Section 13.09. Further Assurances. The Transferors and the Master
Servicer agree to do and perform, from time to time, any and all acts and to
execute any and all further instruments required or reasonably requested by the
Trustee more fully to effect the purposes of this Agreement, including the
execution of any financing statements or continuation statements relating to the
Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
Section 13.10. Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement, the Master Servicer, the Trustee, each
Transferor, each Series Enhancer and each Holder of a Transferor Certificate
shall not, prior to the date which is one year and one day after the termination
of this Agreement with respect to the Trust, acquiesce, petition or otherwise
invoke or cause the Trust to invoke the process of any Governmental Authority
for the purpose of commencing or sustaining a case against the Trust under any
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Trust or any substantial part of its property or ordering the winding-up
or liquidation of the affairs of the Trust.
Section 13.11. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Trustee or the
Certificateholders, any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof; nor shall any single or partial
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exercise of any right, remedy, power or privilege under this Agreement preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges provided
under this Agreement are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
Section 13.12. Counterparts. This 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 together shall constitute one and
the same instrument.
Section 13.13. Third-Party Beneficiaries. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Certificateholders,
any Series Enhancer (to the extent provided in this Agreement and the related
Supplement and so long as no Series Enhancer Default shall be continuing) and
their respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, no other Person will have any right or obligation
hereunder.
Section 13.14. Actions by Certificateholders.
(a) Wherever in this Agreement a provision is made that an action may
be taken or a Notice given by Certificateholders, such action or Notice may be
taken or given by any Certificateholder, unless such provision requires a
specific percentage of Certificateholders.
(b) Any Notice, request, authorization, direction, consent, waiver or
other act by the Holder of a Certificate shall bind such Holder and every
subsequent Holder of such Certificate and of any Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or omitted to be done by the Trustee or the Master
Servicer in reliance thereon, whether or not notation of such action is made
upon such Certificate.
Section 13.15. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 13.16. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
Section 13.17. Construction of Agreement. The Transferors hereby grant
a security interest to (i) the Trustee for the benefit of the Certificateholders
and (ii) any Series Enhancer to the extent of the Enhancement Investor Amount,
if any, provided for in the relevant Supplement (which interest, in the case of
any Series Enhancer will be subordinated to the interest of the Investor
Certificateholders), in all of the Transferors' right, title and interest in, to
and under the Receivables now existing and hereafter created, all moneys due or
to become due and all amounts received with respect thereto and all "proceeds"
thereof and any other Trust Assets, to secure all the Transferors' and Master
Servicer's obligations hereunder, including,
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without limitation, the Transferors' obligation to sell or transfer Receivables
hereafter created to the Trust and the Master Servicer's obligation to remit
Collections hereunder (collectively, the "Obligations"). This Agreement shall
constitute a security agreement under applicable law.
Section 13.18 Successors and Assigns. All covenants and agreements in
this Agreement by any party hereto shall bind its successors and assigns,
whether so expressed or not.
Section 13.19. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 7.02 and 8.02 and as provided
in the provisions of this Agreement concerning the resignation of the Master
Servicer, this Agreement may not be assigned by the Master Servicer or the
Transferors without the prior written consent of the Trustee and the holders of
Certificates evidencing more than 50% of the Aggregate Investor Amount.
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IN WITNESS WHEREOF, the Transferor, the Master Servicer and
the Trustee have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written.
ADVANTA FINANCIAL CORP.,
Master Servicer,
by
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
THE FIRST NATIONAL BANK OF
CHICAGO,
Trustee,
by
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
ADVANTA BUSINESS RECEIVABLES
CORP., Transferor,
by
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
100
107
EXHIBIT A
FORM OF ABRC CERTIFICATE
THIS ABRC CERTIFICATE HAS NOT BEEN REGISTERED UNDER SECURITIES
ACT OF 1933, AS AMENDED. NEITHER THIS ABRC CERTIFICATE NOR ANY PORTION HEREOF OR
ANY INTEREST HEREIN MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
SUCH REGISTRATION PROVISIONS.
THIS ABRC CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE WITH
THE TERMS OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
No. ____ One Unit
ADVANTA BUSINESS CARD MASTER TRUST
ABRC CERTIFICATE
THIS CERTIFICATE REPRESENTS AN INTEREST IN CERTAIN
ASSETS OF THE ADVANTA BUSINESS CARD MASTER TRUST
Evidencing an interest in a trust, the corpus of which consists primarily of
receivables generated from time to time in the ordinary course of business in a
portfolio of business revolving credit card accounts originated or acquired by
Advanta Financial Corp. (the "Seller"), or participation interests therein, and,
in certain circumstances, certain Additional Transferors (as defined in the
Pooling and Servicing Agreement referred to below).
(Not an interest in or obligation of the Transferors or any affiliate
thereof)
This certifies that ABRC is the registered owner of an
interest in the assets of a trust (the "Trust") not allocated to the
Certificateholders' Interest or the interest of any holder of a Supplemental
Certificate pursuant to the Pooling and Servicing Agreement dated as of June 1,
1996 (the "Agreement"), among Advanta Financial Corp., a Utah industrial loan
corporation, as Master Servicer (the "Master Servicer"), ABRC, a Nevada
corporation, as Transferor (the "Transferor"), and The First National Bank of
Chicago, a national banking association, as trustee (the "Trustee"). The corpus
of the Trust consists of (i) a portfolio of all receivables (the "Receivables")
existing in the revolving credit card accounts identified under the Agreement
from time to time (the "Accounts"), (ii) all Interchange and Recoveries
allocable to the Trust
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as provided in the Agreement, (iii) all monies due or to become due and all
amounts received with respect thereto and all proceeds (including "proceeds" as
defined in the UCC) of and Collections of such Receivables (iv) all funds which
are from time to time on deposit in the Collection Account, the Excess Funding
Account and in the Series Accounts, (v) the benefits of any Series Enhancements
issued and to be issued by Series Enhancers with respect to one or more Series
of Investor Certificates and (vi) all other assets and interests constituting
the Trust.
Although a summary of certain provisions of the Agreement is
set forth below, this Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Trustee. A copy of the Agreement
may be requested from the Trustee by writing to the Trustee at the Corporate
Trust Office. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Agreement.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as amended and
supplemented from time to time, ABRC by virtue of the acceptance hereof assents
and is bound.
The Receivables consist of Principal Receivables which arise
generally from the purchase of merchandise and services and amounts advanced to
cardholders as cash advances and Finance Charge and Administrative Receivables
which arise generally from Periodic Finance Charges, Cash Advance Fees, Late
Fees and other fees and charges with respect to the Accounts.
This Certificate is the ABRC Certificate, which represents the
Transferor's interest in certain assets of the Trust, including the right to
receive a portion of the Collections and other amounts at the times and in the
amounts specified in the Agreement. The aggregate interest represented by the
ABRC Certificate at any time in the Receivables in the Trust shall not exceed
the Transferor's Interest at such time. In addition to the ABRC Certificate, (i)
Investor Certificates will be issued to investors pursuant to the Agreement,
which will represent the Certificateholders' Interest, and (ii) Supplemental
Certificates may be issued pursuant to the Agreement, which will represent that
portion of the Transferor's Interest not allocated to the Transferor. This ABRC
Certificate shall not represent any interest in the Collection Account, the
Excess Funding Account or the Series Accounts, except as expressly provided in
the Agreement, or any Series Enhancements.
ABRC has entered into the Agreement, and this Certificate is
issued, with the intention that, except as otherwise provided for in any
Supplement, for Federal, state and local income and franchise tax purposes only,
the Investor Certificates will qualify as indebtedness secured by the
Receivables. ABRC, by entering into the Agreement and by the acceptance of this
Certificate, agrees to treat such Investor Certificates for Federal, state and
local income and franchise tax purposes as indebtedness.
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Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual or facsimile signature, this
Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, Advanta Business Receivables Corp. has
caused this Certificate to be duly executed.
ADVANTA BUSINESS RECEIVABLES
CORP.
By:
--------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the ABRC Certificate described in the within-mentioned
Agreement.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
------------------------------
Authorized Officer
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EXHIBIT B
FORM OF ASSIGNMENT OF ADDITIONAL DESIGNATED ASSETS
ASSIGNMENT No.____ OF ADDITIONAL DESIGNATED ASSETS, dated as
of ____________ ___, _____ by and among Advanta Financial Corp., a Utah
industrial loan corporation as seller, (the "Seller"), and as Master Servicer
(the "Master Servicer"), Advanta Business Receivables Corp., a Nevada
corporation, as Transferor (the "Transferor), an Additional Transferor]
([_______________] and, together with Advanta Business Receivables Corp., the
"Transferor(s)") and The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States (the
"Trustee"), pursuant to the Pooling and Servicing Agreement referred to below.
W I T N E S S E T H :
WHEREAS the Transferor(s), the Master Servicer, and the
Trustee are parties to the Pooling and Servicing Agreement, dated as of June 1,
1996 (hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Agreement");
WHEREAS pursuant to the Agreement, the Transferor(s) wish[es]
to designate [additional Accounts/additional Participation Interests] and to
convey Additional Designated Assets, whether now existing or hereafter created,
to the Trust as part of the corpus of the Trust (as each such term is defined in
the Agreement);
WHEREAS the Trustee is willing to accept such designation and
conveyance subject to the terms and conditions hereof; and
WHEREAS the Master Servicer is willing to service the
Additional Designated Assets hereby conveyed under the terms and conditions
specified in the Agreement and herein.
NOW, THEREFORE, the Transferor(s), the Master Servicer and the
Trustee hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have
the meanings ascribed to them in the Agreement unless otherwise defined herein.
"Addition Cut-Off Date" shall mean ____________ ______,
__________.
"Addition Date" shall mean, with respect to the Additional
Designated Assets designated hereby, ________________, _____, _____.
"Notice Date" shall mean, with respect to the Additional
Designated Assets designated hereby, the fifth Business Day prior to the
Addition Date.
B-1
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2. Designation of Additional Designated Assets. The Master
Servicer does hereby deliver herewith a computer file or microfiche list
containing a true and complete schedule identifying all the Additional
Designated Assets designated hereby, specifying for each such Account, as of the
Addition Cut-Off Date, its account number, its collection status, the aggregate
amount of Receivables outstanding in such Account and the aggregate amount of
Principal Receivables in such Account. Such computer file or microfiche list
shall be, as of the date of this Assignment, incorporated into and made part of
this Assignment and the Agreement and is marked as Schedule 1 to this
Assignment.
3. Conveyance of Additional Designated Asset.
(a) Each of the Transferor(s) do[es] hereby sell, transfer,
assign, set over and otherwise convey to the Trustee, on behalf of the Trust,
for the benefit of the Certificateholders, without recourse, all of its right,
title and interest in and to (i) the Additional Designated Asset, (ii) all
monies due or to become due and all amounts received with respect to such
Additional Designated Asset and (iii) all proceeds (including "proceeds" as
defined in the UCC) of such Additional Designated Asset, including Insurance
Proceeds, and (iv) to the extent not otherwise included in such Additional
Designated Asset, Interchange allocable to the Trust pursuant to the Agreement.
The foregoing transfer, assignment, set over and conveyance does not constitute
and is not intended to result in a creation or an assumption by the Trust, the
Trustee or any Investor Certificateholder of any obligation of the Master
Servicer, the Transferor(s) or any other Person in connection with the Accounts,
the Receivables or under any agreement or instrument relating thereto,
including, without limitation, any obligation to any Obligors, VISA, MasterCard
or insurers.
(b) In connection with such transfer, assignment, set over and
conveyance, [the/each] Transferor agrees to record and file, at its own expense,
any financing statements (and continuation statements with respect to such
financing statements when applicable) with respect to the Receivables now
existing and hereafter created in connection with the Additional Designated
Assets designated hereby (as defined in Section 9-106 of the UCC as in effect in
[the State of ________ and including credit device accounts, as defined in
Section 9-105 of the UCC as in effect in the State of ________]) meeting the
requirements of applicable state law in such manner and in such jurisdictions as
are necessary to perfect the transfer and assignment of such Receivables to the
Trust, and to deliver a file-stamped copy of such financing statement or other
evidence of such filing (which may, for purposes of this Section 3, consist of a
telecopy of a file-stamped copy of such financing statement, with the original
of such file-stamped financing statement delivered within 24 hours) to the
Trustee on or prior to the date of this Assignment. The Trustee shall be under
no obligation whatsoever to file such financing statement, or a continuation
statement to such financing statement, or make any other filing under the UCC in
connection with such transfer. The foregoing transfer, assignment, set over and
conveyance to the Trust shall be made to the Trustee, on behalf of the Trust,
and such reference in this Assignment and the Agreement to such transfer,
assignment, set over and conveyance shall be construed accordingly.
B-2
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(c) In connection with such conveyance, the Master Servicer
has, at its own expense, on or prior to the Addition Date, indicated and
identified in its books and records (including its computer files) that all
Receivables created in connection with the Additional Designated Assets
designated hereby have been conveyed to the Trust pursuant to this Assignment
for the benefit of the Certificateholders, by identifying such Additional
Designated Assets in the Transferor's computer files by including the
Transferor's Code "________" or "________" in the PORTF_CD field of the
Transferor's computer files (the "Code"). [The/Each] Transferor agrees not to
alter the Code or the field referenced above with respect to any such Additional
Designated Assets during the term of this Assignment and the Agreement unless
and until such Additional Designated Assets become Removed Accounts or unless
and until (i) such Transferor shall give written notice of any such alteration
to the Trustee, such written notice to be as of the date of its receipt by the
Trustee incorporated into and made part of this assignment and the Agreement,
and (ii) the Trustee and such Transferor shall execute and file any UCC
financing statement or amendment thereof necessitated by such alteration;
provided, that such Transferor may alter the Code of any such Additional
Designated Assets from "________" to "________" during the term of this
Assignment and the Agreement without providing any notice to the Trustee or
filing any UCC financing statements.
(d) The parties intend that if, and to the extent that, the
foregoing conveyance is not deemed to be a sale, [the/each] Transferor hereby
grants to the Trustee a first priority perfected security interest in all of
such Transferor's right, title and interest in and to (i) the Receivables now
existing and hereafter created and arising in connection with the Additional
Designated Assets designated hereby, (ii) all monies due or to become due and
all amounts received with respect thereto (including all Finance Charge and
Administrative Receivables), (iii) all proceeds (including "proceeds" as defined
in the UCC) of and Collections of such Receivables, including Insurance Proceeds
and Recoveries relating thereto, (iv) to the extent not otherwise included in
the Receivables, Interchange allocable to the Trust pursuant to the Agreement
and (v) all amounts on deposit in the Collection Account (other than net
investment earnings thereon), the Excess Funding Account and any Series Account
and that this Assignment shall constitute a security agreement under applicable
law.
4. Acceptance by Trustee. Subject to the satisfaction of the
conditions set forth in Section 6 of this Assignment, the Trustee hereby
acknowledges its acceptance on behalf of the Trust of all right, title and
interest in and to the property, now existing and hereafter created, conveyed to
the Trust pursuant to subsection 3(a) of this Assignment, and declares that it
shall maintain such right, title and interest, upon the Trust set forth in the
Agreement for the benefit of all the Investor Certificateholders. The Trustee
further acknowledges that, prior to or simultaneously with the execution and
delivery of this Assignment, the Transferors delivered to the Trustee the
computer file or microfiche list described in Section 2 of this Agreement.
5. Representations and Warranties of the Transferor(s).
[The/Each] Transferor hereby represents and warrants to the Trustee, on behalf
of the Trust as of the date of this Assignment and as of the Addition Date, that
B-3
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(a) Legal, Valid and Binding Obligation. This Assignment
constitutes a legal, valid and binding obligation of such Transferor,
enforceable against such Transferor in accordance with its terms, except as such
enforceability may be subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability relating to or affecting
creditors' rights, and to general principles of equity;
(b) List of Accounts. As of the Addition Date, the computer
file or microfiche list of designated Accounts complies with the requirements of
Section 2 hereof.
(c) Eligibility of Receivables. As of the Addition Cut-Off
Date, each Receivable in the related Additional Designated Assets is an Eligible
Receivable in all material respects;
(d) Selection Procedures. No selection procedures believed by
such Transferor to be adverse to the interests of Investor Certificateholders of
any Series was utilized in selecting the Additional Designated Assets designated
hereby from the available Eligible Accounts owned by such Transferor;
(e) Insolvency. Such Transferor is not insolvent and will not
be made insolvent by the transfer of the Receivables of such Additional
Designated Assets, and such transfer has not been made after the commission of
an act of insolvency or in contemplation thereof [or with a view to prevent the
application of the assets of such Transferor prescribed in the National Bank
Act], with a view to the preference of one creditor over another or with the
intent to hinder, delay or defraud such Transferor or any creditor of such
Transferor;
(f) Security Interest. This Assignment constitutes either (i)
a valid transfer and assignment to the Trust of all right, title and interest of
such Transferor in and to the Additional Designated Assets designated by such
Transferor now existing and hereafter created therein, and all proceeds (as
defined in the UCC) thereof and Insurance Proceeds relating thereto, and such
Addition Designated Assets and any proceeds thereof and Insurance Proceeds
relating thereto will be held by the Trust free and clear of any Lien of any
Person claiming through or under such Transferor or any of its Affiliates except
for (x) Liens permitted under subsection 2.07(b) of the Agreement, (y) the
interests of the Transferors as Holders of the Transferor Certificates and (z)
the right of the Transferors to receive interest and investment earnings (net of
losses and investment expenses) in respect of the Collection Account or any
Series Account as provided in the Agreement; or (ii) a valid grant of a
"security interest" (as defined in the UCC) in such property to the Trust, which
in the case of existing Additional Designated Assets from the Accounts
designated hereby and the proceeds thereof, including Insurance Proceeds and
Recoveries, is enforceable upon the conveyance of such Receivables to the Trust,
and which will be enforceable with respect to the Receivables hereafter created
in respect of Additional Designated Assets designated hereby and the proceeds
thereof upon such creation. If this Assignment constitutes the grant of a
security interest (as defined in the UCC) to the Trust in such property, free
and clear of any Lien upon the filing of the financing statements described in
Section 3 of this Assignment and, in the case of the Receivables of such
Additional Designated Assets thereafter created and the proceeds thereof, upon
such creation, the Trust shall have a first priority perfected security interest
(as defined in the UCC) in such property,
B-4
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except for (i) Liens permitted under subsection 2.07(b) of the Agreement, (ii)
the interests of the Transferors as Holders of the Transferor Certificates and
(iii) the right to receive interest and investment earnings (net of losses and
investment expenses) in respect of the Collection Account or any Series Account
as provided in the Agreement; provided, however, that such Transferor makes no
representation or warranty with respect to the effect of Section 9-306 of the
UCC on the rights of the Trust to proceeds held by such Transferor;
(g) No Pay Out Event. The addition of any Receivable in the
Additional Designated Assets from Accounts designated hereby on the Addition
Date will not, in the reasonable belief of such Transferor, cause a Pay Out
Event to occur.
(h) The representations and warranties in Section 2.03 and
2.04 of the Agreement are incorporated herein as though fully set forth herein,
and such representations and warranties are true and correct as of the date
hereof.
6. Conditions Precedent. The acceptance of the Trustee set
forth in Section 4 of this Assignment and the amendment of the Agreement as set
forth in Section 7 of this Assignment are subject to the satisfaction, on or
prior to the Addition Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Transferor(s) in Section 5 of this
Assignment shall be true and correct as of the Addition Date.
(b) Officer's Certificate. The Transferor(s) shall have
delivered to the Trustee an Officer's Certificate confirming the items set forth
in subsections 2.09(c)(ii) through (vi) of the Agreement.
7. Amendment of the Agreement. The Agreement is hereby amended
by providing that all references to the "Pooling and Servicing Agreement", to
"this Agreement" and "herein" shall be deemed from and after the Addition Date
to be a dual reference to the Agreement as supplemented by this Assignment.
Except as expressly amended hereby, all of the representations, warranties,
terms, covenants and conditions of the Agreement shall remain unamended and
shall continue to be and shall remain in full force and effect in accordance
with its terms and except as expressly provided herein shall not constitute or
be deemed to constitute a waiver of compliance with or consent to noncompliance
with any term or provision of the Agreement.
8. Counterparts. This Assignment may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument.
9. Governing Law. This Assignment shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligation, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
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IN WITNESS WHEREOF, the undersigned have caused this
Assignment of Additional Designated Assets to be duly executed and delivered by
their respective duly authorized officers on the day and the year first above
written.
ADVANTA FINANCIAL CORP.
Master Servicer
By:
--------------------------------
Title:
[-------------------------------],
Transferor,
By:
--------------------------------
Title:
THE FIRST NATIONAL BANK OF
CHICAGO,
Trustee
By:
--------------------------------
Title:
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116
EXHIBIT C
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
REASSIGNMENT No. ________ OF RECEIVABLES dated as of
____________, _____,(1) by and among Advanta Financial Corp., a Utah industrial
loan Corporation, as Master Servicer, Advanta Business Receivables Corp., a
Nevada corporation, as Transferor (the "Transferor"), [____________], an
Additional Transferor ([____________] and, together with Advanta Business
Receivables Corp., the "Transferors"), and The First National Bank of Chicago, a
national banking association (the "Trustee"), pursuant to the Pooling and
Servicing Agreement referred to below.
WITNESSETH:
WHEREAS the Transferors, [____________] and the Trustee are
parties to the Pooling and Servicing Agreement dated as of June 1, 1996 (the
"Agreement");
WHEREAS pursuant to the Agreement, the Transferors wish to
remove from the Trust all Receivables in certain designated Accounts owned by
the Transferors, or included in Participation Interests owned by the Transferors
(the "Removed Accounts") and to cause the Trustee to reconvey the Receivables of
such Removed Accounts, whether now existing or hereafter created, from the Trust
to the Transferors; and
WHEREAS the Trustee is willing to accept such designation and
to reconvey the Receivables in the Removed Accounts subject to the terms and
conditions hereof;
NOW, THEREFORE, the Transferors and the Trustee hereby agree
as follows:
1. Defined Terms. All terms defined in the Agreement and used
herein shall have such defined meanings when used herein, unless otherwise
defined herein.
"Removal Date" shall mean, with respect to the Removed
Accounts designated hereby, ________ ___, ____.
"Removal Notice Date" shall mean, with respect to the Removed
Accounts,____________ ___,____ .
--------
(1) To be dated as of the Removal Date.
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2. Designation of Removed Accounts. On or before the date that
is 10 Business Days after the Removal Date, the Transferors will deliver to the
Trustee a computer file or microfiche list containing a true and complete
schedule identifying all Accounts in which the Receivables are being removed
from the Trust, specifying for each such Account, as of the Removal Notice Date,
its account number, the aggregate amount outstanding in such Account and the
aggregate amount of Principal Receivables in such Account, which computer file
or microfiche list shall supplement Schedule 1 to the Agreement.
3. Conveyance of Receivables. (a) The Trustee does hereby
transfer, assign, set over and otherwise convey to each Transferor, without
recourse, on and after the Removal Date, all right, title and interest of the
Trust in, to and under the Receivables existing at the close of business on the
Removal Date and thereafter created from time to time in the Removed Accounts
designated hereby which are owned by such Transferor, all monies due or to
become due and all amounts received with respect thereto and all proceeds
thereof but excluding all Recoveries relating thereto but in each case without
recourse, representation or warranty of any kind.
(b) In connection with such transfer, the Transferors shall
prepare and the Trustee agrees to execute and deliver to the Transferors on or
prior to the date this Reassignment is delivered, applicable termination
statements with respect to the Receivables existing at the close of business on
the Removal Date and thereafter created from time to time in the Removed
Accounts reassigned hereby and the proceeds thereof evidencing the release by
the Trust of its interest in the Receivables in the Removed Accounts, and
meeting the requirements of applicable state law, in such manner and such
jurisdictions as are necessary to terminate such interest.
4. Representations and Warranties of the Transferors. Each of
the Transferors hereby severally represents and warrants to the Trustee, on
behalf of the Trust, as of the Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment
constitutes a legal, valid and binding obligation of such Transferor,
enforceable against such Transferor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and the rights of
creditors of national banking associations] and except as such enforceability my
be limited by general principles of equity (whether considered in a suit at law
or in equity);
(b) Pay Out Event. Such Transferor reasonably believes that
(A) the removal of the Receivables existing in the Removed Accounts will not,
based on the facts known to such Transferor, then or thereafter cause a Pay Out
Event to occur with respect to any Series and (B) no selection procedure was
utilized by such Transferor which would result in a selection of Removed
Accounts that would be materially adverse to the interests of the Investor
Certificateholders of any Series as of the Removal Date.
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118
(c) List of Removed Accounts. The list of Removed Accounts
delivered pursuant to subsection 2.09(b) of the Agreement, as of the Removal
Date is true and complete in all material respects.
5. Ratification of Agreement. As supplemented by this
Reassignment, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Reassignment shall be read, taken and
construed as one and the same instrument.
6. Counterparts. This Reassignment 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.
7. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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119
IN WITNESS WHEREOF, the Transferors and the Trustee have
caused this Reassignment to be duly executed by their respective officers as of
the day and year first above written.
ADVANTA BUSINESS RECEIVABLES
CORP., Transferor
By:
---------------------------
Title:
[-------------------------],
Transferor,
By:
---------------------------
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, Trustee
By:
----------------------------
Title:
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120
EXHIBIT D
FORM OF ANNUAL MASTER SERVICER'S CERTIFICATE
(To be delivered on or before December 31 of
each calendar year beginning with December 31, 1996,
pursuant to Section 3.05 of the Pooling and
Servicing Agreement referred to below)
ADVANTA FINANCIAL CORP.
----------------------------------------
ADVANTA BUSINESS CARD MASTER TRUST
----------------------------------------
The undersigned, a duly authorized representative of Advanta
Financial Corp., ("AFC"), pursuant to the Pooling and Servicing Agreement dated
as of June 1, 1996 (the "Agreement"), among AFC, as Master Servicer, Advanta
Business Receivables Corp. as Transferor, and The First National Bank of
Chicago, as Trustee, does hereby certify that:
1. AFC is, as of the date hereof, the Master Servicer under
the Agreement. Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly
authorized pursuant to the Agreement to execute and deliver this Certificate to
the Trustee.
3. A review of the activities of the Master Servicer during
the period ended September 30, ____, and of its performance under the Agreement
was conducted under my supervision.
4. Based on such review, the Master Servicer has, to the best
of my knowledge, performed in all material respects its obligations under the
Agreement throughout such year and no default in the performance of such
obligations has occurred or is continuing except as set forth in paragraph 5
below.
5. The following is a description of each default in the
performance of the Master Servicer's obligations under the provisions of the
Agreement known to me to have been made by the Master Servicer during the period
ended September 30, ____, which sets forth in detail
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121
(i) the nature of each such default, (ii) the action taken by the Master
Servicer, if any, to remedy each such default and (iii) the current status of
each such default: [If applicable, insert "None."]
6. To the best of my knowledge, AFC, as Master Servicer, is in
compliance with Articles III and IV and Section 8.08 of the Agreement.
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate this day of , .
----- -------- ----
ADVANTA FINANCIAL CORP.
Master Servicer,
By:
--------------------------------
Name:
Title:
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122
EXHIBIT E-1
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY
INTEREST HEREIN MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE PROVISIONS OF ANY
STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO
CERTAIN CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF
A BENEFIT PLAN (AS DEFINED BELOW).
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EXHIBIT E-2
FORM OF UNDERTAKING LETTER
[Date]
The First National Bank of Chicago
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Advanta Financial Corp.
c/o Advanta Business Services Corp.
P.O. Box 1228
▇▇▇▇▇▇▇▇, N.J. 08043-1228
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, General Counsel
Re: Purchase of $____________ principal amount of Advanta
Business Card Master Trust, [_____%] [Floating Rate]
Asset Backed Certificates, Series [_____]
Dear Sirs:
In connection with our purchase of the above [___%] [Floating
Rate] Asset Backed Certificates (the "Certificates") we confirm that:
(i) we understand that the Certificates are not being
registered under the Securities Act of 1933, as amended (the "1933
Act"), and are being sold to us in a transaction that is exempt from
the registration requirements of the 1933 Act;
(ii) any information we desire concerning the Certificates or
any other matter relevant to our decision to purchase the Certificates
is or has been made available to us;
(iii) we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
an investment in the Certificates, and we (and any account for which we
are purchasing under paragraph (iv) below) are able to bear the
economic risk of an investment in the Certificates; we (and any account
for which we are purchasing under paragraph (iv) below) are an
"accredited investor" (as such term is defined in Rule 501(a)(1), (2)
or (3) of Regulation D under the ▇▇▇▇ ▇▇▇); and we are not, and none of
such accounts is, a Benefit Plan;
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124
(iv) we are acquiring the Certificates for our own account or
for accounts as to which we exercise sole investment discretion and not
with a view to any distribution of the Certificates, subject
nevertheless to the understanding that the disposition of our property
shall at all times be and remain within our control;
(v) we agree that the Certificates must be held indefinitely
by us unless subsequently registered under the 1933 Act or an exemption
is available from any registration requirements of that Act and any
applicable state securities law;
(vi) we agree that in the event that at some future time we
wish to dispose of or exchange any of the Certificates (such
disposition or exchange not being currently foreseen or contemplated),
we will not transfer or exchange any of the Certificates unless:
(A)(1) the sale is to an Eligible Purchaser (as defined
below), (2) a letter to substantially the same effect as
paragraphs (i), (ii), (iii), (iv), (v) and (vi) of this letter
is executed promptly by the purchaser and (3) all offers or
solicitations in connection with the sale, whether directly or
through any agent acting on our behalf, are limited only to
Eligible Purchasers and are not made by means of any form of
general solicitation or general advertising whatsoever; or
(B) the Certificates are transferred pursuant to Rule
144 under the 1933 Act by us after we have held them for more
than three years; or
(C) the Certificates are sold in any other transaction
that does not require registration under the 1933 Act and, if
the Transferors, the Master Servicer, the Trustee or the
Transfer Agent and Registrar so requests, we therefore have
furnished to such party an opinion of counsel satisfactory to
such party, in form and substance satisfactory to such party,
to such effect; or
(D) the Certificates are transferred pursuant to an
exception from the registration requirements of the 1933 Act
under Rule 144A under the 1933 Act; and
(vii) we understand that the Certificates will bear a legend
to substantially the following effect:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY
INTEREST HEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE
PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM SUCH PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO
E-2-2
125
CERTAIN CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN."
"THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE
ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW)."
The first paragraph of this legend may be removed if the Transferors, the Master
Servicer, the Trustee and the Transfer Agent and Registrar have received an
opinion of counsel satisfactory to them, in form and substance satisfactory to
them, to the effect that such paragraph may be removed.
"Eligible Purchaser" means either an Eligible Dealer or a
corporation, partnership or other entity which we have reasonable grounds to
believe and do believe can make representations with respect to itself to
substantially the same effect as the representations set forth herein. "Eligible
Dealer" means any corporation or other entity the principal business of which is
acting as a broker or dealer in securities. "Benefit Plan" means any employee
benefit plan, trust or account, including an individual retirement account, that
is subject to the Employee Retirement Income Security Act of 1974, as amended,
or that is described in Section 4975(e)(l) of the Internal Revenue Code of 1986,
as amended, or an entity whose underlying assets include plan assets by reason
of a plan's investment in such entity. Capitalized terms used but not defined
herein shall have the meanings given to such terms in the Pooling and Servicing
Agreement dated as of June 1, 1996, between Advanta Financial Corp, as Master
Servicer, Advanta Business Receivables Corp., as Transferor, and The First
National Bank of Chicago, as Trustee.
Very truly yours,
-------------------------------
(Name of Purchaser)
by
-------------------------------
(Authorized Officer)
E-2-3
126
EXHIBIT E-3
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE
ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW).(2)
--------
(2) The following text should be included in any Certificate in which the
above legend appears:
The [Certificates] may not be acquired by or for the account of any
employee benefit plan, trust or account, including an individual retirement
account, that is subject to the Employee Retirement Income Security Act of 1974,
as amended, or that is described in Section 4975(e)(1) of the Internal Revenue
Code of 1986, as amended, or an entity whose underlying assets include plan
assets by reason of a plants investment in such entity (a "Benefit Plan"). By
accepting and holding this Certificate, the Holder hereof shall be deemed to
have represented and warranted that it is not a Benefit Plan. By acquiring any
interest in this Certificate, the applicable Certificate Owner or Owners shall
be deemed to have represented and warranted that it or they are not Benefit
Plans.
E-3-1
127
EXHIBIT F-1
FORM OF CERTIFICATE TO BE DELIVERED
TO EUROCLEAR OR CEDEL
BY [INSERT NAME OF MANAGER]
WITH RESPECT TO REGISTERED CERTIFICATES SOLD TO
QUALIFIED INSTITUTIONAL BUYERS
ADVANTA BUSINESS CARD MASTER TRUST,
[_____%] Floating Rate Asset Backed Certificates, Series [_____]
In connection with the initial issuance and placement of the
above referenced Asset Backed Certificates (the "Certificates"), an
institutional investor in the United States ("institutional investor") is
purchasing U.S. $__________ aggregate principal amount of the Certificates held
in our account at [▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels office,
as operator of the Euroclear System] [Cedel S.A.] on behalf of such investor.
We reasonably believe that such institutional investor is a
qualified institutional buyer as such term is defined under Rule 144A of the
Securities Act of 1933, as amended.
[We understand that this certificate is required in connection
with United States laws. We irrevocably authorize you to produce this
certificate or a copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters covered by
this certificate.]
The Definitive Certificates in respect of this certificate are
to be issued in registered form in the minimum denomination of U.S. $_______ and
such Definitive Certificates (and, unless the Pooling and Servicing Agreement or
Supplement relating to the Certificates otherwise provides, any Certificates
issued in exchange or substitution for or on registration of transfer of
Certificates) shall bear the following legend:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933. NEITHER THIS CERTIFICATE NOR ANY
PORTION HEREOF MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY,
IN THE UNITED STATES OR TO U.S. PERSONS (EACH AS DEFINED HEREIN),
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS
SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN. THIS CERTIFICATE
CANNOT BE EXCHANGED FOR A BEARER CERTIFICATE."
Dated: ________ ___, _____ [_________________________]
by_________________________
Authorized Officer
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EXHIBIT F-2
[FORM OF CERTIFICATE TO BE DELIVERED
TO EUROCLEAR OR CEDEL BY A BENEFICIAL OWNER
OF CERTIFICATES, OTHER THAN A QUALIFIED INSTITUTIONAL BUYER]
ADVANTA BUSINESS CARD MASTER TRUST,
[_____%] [Floating Rate] Asset Backed Certificates, Series [____]
This is to certify that as of the date hereof and except as
provided in the third paragraph hereof, the above-captioned Certificates held by
you for our account (i) are owned by a person that is a United States person, or
(ii) are owned by a United States Person that is (A) the foreign branch of a
United States financial institution (as defined in U.S. Treasury Regulations
Section 1.165-12(c)(1)(v)) (a "financial institution") purchasing for its own
account or for resale, or (B) a United States person who acquired the
Certificates through the foreign branch of a financial institution and who holds
the Certificates through the financial institution on the date hereof (and in
either case (A) or (B), the financial institution hereby agrees to comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder), or (iii) are owned by
a financial institution for purposes of resale during the Restricted Period (as
defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)). In
addition, financial institutions described in clause (iii) of the preceding
sentence (whether or not also described in clause (i) or (ii)) certify that they
have not acquired the Certificates for purposes of resale directly or indirectly
to a United States Person or to a person within the United States or its
possessions.
We undertake to advise you by facsimile if the above statement
as to beneficial ownership is not correct on the date of delivery of the
above-captioned Certificates in bearer form with respect to such of said
Certificates as then appear in your books as being held for our account.
We understand that this certificate is required in connection
with certain securities and tax laws of the United States of America. If
administrative or legal proceedings are commenced or threatened, in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate or a copy thereof to any interested party in
such proceedings. As used herein, "United States" means the United States of
America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction; and "United States
Person" means a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of
F-2-1
129
the United States, or any political subdivision thereof, or an estate or trust
the income of which is subject to United States federal income taxation
regardless of its source.
Dated: , (1) By
------------ ---- -------------------------
--------------------------
As, or as agent for, the
beneficial owner(s) of the
interest in the
Certificates to which this
certificate relates.
--------
(1) This Certificate must be dated on the earlier of the date of the first
actual payment of interest in respect of the Certificates and the date
of delivery of the Certificates in definitive form.
F-2-2
130
EXHIBIT G-1
FORM OF OPINION OF COUNSEL
WITH RESPECT TO AMENDMENTS
Provisions to be included in
Opinion of Counsel to be delivered pursuant
to Section 13.02(d)(i)
The opinions set forth below may be subject to all the
qualifications, assumptions, limitations and exceptions taken or made in the
Opinions of Counsel delivered on any applicable Closing Date.
(i) The amendment to the [Pooling and Servicing Agreement],
[Supplement], attached hereto as Schedule 1 (the "Amendment"), has been duly
authorized, executed and delivered by the Transferors and constitutes the legal,
valid and binding agreement of the Transferors, enforceable in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws from time to
time in effect affecting creditors' rights generally or the rights of creditors
of national banking associations. The enforceability of the Transferors'
obligations is also subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(ii) The Amendment has been entered into in accordance with
the terms and provisions of Section 13.01 of the Pooling and Servicing
Agreement.
G-1-1
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EXHIBIT G-2
FORM OF OPINION OF COUNSEL
WITH RESPECT TO ACCOUNTS
Provisions to be included in
Opinion of Counsel to be
delivered pursuant to
Section 13.02(d)(ii)
The opinions set forth below may be subject to all the
qualifications, assumptions, limitations and exceptions taken or made in the
Opinions of Counsel delivered on any applicable Closing Date.
1. A court would hold that the transfer to the Transferor of
the Additional Designated Assets was a true sale or absolute
assignment of such interests by the Seller to the Transferor
rather than a pledge of collateral by the Seller to the
Transferor.
2. The Trustee has a valid perfected first priority security
interest with respect to the Transferor's right, title and
interest in and to the Additional Designated Assets.
G-2-1
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SCHEDULE 1
List of Accounts
[Original list delivered to Trustee]