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EXHIBIT 4.3
ADVANTA BUSINESS CARD MASTER TRUST
TRANSFER AND SERVICING AGREEMENT
among
ADVANTA BUSINESS RECEIVABLES CORP.,
Transferor,
ADVANTA BANK CORP.,
Servicer,
and
ADVANTA BUSINESS CARD MASTER TRUST,
Issuer,
Dated as of [__________] 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS .............................................................................. 1
Section 1.01. Definitions ............................................. 1
ARTICLE II
CONVEYANCE OF RECEIVABLES ................................................................ 14
Section 2.01. Conveyance of Receivables ............................... 14
Section 2.03. Representations and Warranties of Each Transferor
Relating to Such Transferor ............................. 16
Section 2.04. Representations and Warranties of each Transferor
Relating to the Agreement and the Receivables ........... 17
Section 2.05. Reassignment of Ineligible Receivables .................. 19
Section 2.07. Covenants of each Transferor ............................ 21
Section 2.08. Covenants of each Transferor with Respect to the
Applicable Receivables Purchase Agreement .............. 23
Section 2.09. Addition of Accounts .................................... 24
Section 2.10. Removal of Accounts ..................................... 26
Section 2.11. Account Allocations ..................................... 28
[Section 2.12. Discount Option ......................................... 28
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES .............................................. 30
Section 3.01. Acceptance of Appointment and Other Matters
Relating to the Servicer ................................ 30
Section 3.02. Servicing Compensation .................................. 31
Section 3.03. Representations, Warranties and Covenants of the Servicer 31
Section 3.04. Reports and Records for the Owner Trustee ............... 34
Section 3.05. Annual Certificate of Servicer .......................... 34
Section 3.06. Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available ................ 34
Section 3.07. Tax Treatment ........................................... 35
Section 3.08. Notices to ABC .......................................... 35
Section 3.09. Adjustments ............................................. 36
Section 3.10. Reports to the Commission ............................... 36
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE IV
OTHER MATTERS RELATING TO EACH TRANSFEROR ......................................... 37
Section 4.01. Liability of each Transferor ..................... 37
Section 4.02. Merger or Consolidation of, or Assumption of the
Obligations of, a Transferor ..................... 37
Section 4.03. Limitations on Liability of Each Transferor ...... 38
ARTICLE V
OTHER MATTERS RELATING TO THE SERVICER ............................................ 39
Section 5.01. Liability of the Servicer ........................ 39
Section 5.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer ..................... 39
Section 5.03. Limitation on Liability of the Servicer and Others 39
Section 5.04. Servicer Indemnification of the Trust, the Owner
Trustee and the Indenture Trustee ................ 40
Section 5.05. Resignation of the Servicer ...................... 40
Section 5.06. Access to Certain Documentation and Information
Regarding the Receivables ........................ 41
Section 5.07. Delegation of Duties ............................. 41
Section 5.08. Examination of Records ........................... 41
ARTICLE VI
INSOLVENCY EVENTS ................................................................. 42
Section 6.01. Rights upon the Occurrence of an Insolvency Event 42
ARTICLE VII
SERVICER DEFAULTS ................................................................. 43
Section 7.01. Servicer Defaults ................................ 43
Section 7.02. Indenture Trustee To Act; Appointment of Successor 45
Section 7.03. Notification to Noteholders ...................... 46
ARTICLE VIII
TERMINATION ....................................................................... 47
Section 8.01. Termination of Agreement ......................... 47
ARTICLE IX
MISCELLANEOUS PROVISIONS .......................................................... 48
Section 9.01. Amendment; Waiver of Past Defaults ............... 48
Section 9.02. Protection of Right, Title and Interest to Trust . 49
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 9.03. GOVERNING LAW..................................... 50
Section 9.04. Notices; Payments................................. 50
Section 9.05. Severability of Provisions........................ 51
Section 9.06. Further Assurances................................ 51
Section 9.07. No Waiver; Cumulative Remedies.................... 51
Section 9.08. Counterparts...................................... 52
Section 9.09. ThirdParty Beneficiaries.......................... 52
Section 9.10. Actions by Noteholders............................ 52
Section 9.11. Rule 144A Information............................. 52
Section 9.12. Merger and Integration............................ 53
Section 9.13. Headings.......................................... 53
Section 9.14. Limitation of Liability........................... 53
EXHIBITS
EXHIBIT A Form of Assignment of Receivables in Additional
Designated Accounts.................................................. A-1
EXHIBIT B Form of Reassignment of Receivables in Removed Accounts................ B-1
EXHIBIT C Form of Annual Servicer's Certificate.................................. X-0
XXXXXXX X-0 Form of Opinion of Counsel with Respect to Amendments.................. X-0-0
XXXXXXX X-0 Form of Opinion of Counsel with Respect to Accounts.................... X-0-0
XXXXXXX X-0 Provisions to be Included in Annual Opinion of Counsel................. D-3-1
SCHEDULES
SCHEDULE 1 List of Accounts........................................................ 1-1
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TRANSFER AND SERVICING AGREEMENT, dated as of [__________] , 2000 among
ADVANTA BUSINESS RECEIVABLES CORP., a Nevada corporation, as Transferor, ADVANTA
BANK CORP., a Utah industrial loan corporation, as Servicer, and ADVANTA
BUSINESS CARD MASTER TRUST, a Delaware common law trust, as Issuer.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Noteholders and any
Series Enhancer to the extent provided herein, in the Indenture and in any
Indenture Supplement:
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.
"ABC" shall mean Advanta Bank Corp., a Utah industrial loan corporation,
and its successors and permitted assigns.
"ABRC" shall mean Advanta Business Receivables Corp., a Nevada corporation,
and its successors and permitted assigns.
"Account" shall mean each Mastercard(R) [and VISA(R)] (1) account
established pursuant to a Credit Card Agreement between ABC or any other Account
Owner and any Person.
"Account Owner" shall mean ABC or any other entity which is the issuer of
the credit card relating to an Account pursuant to a Credit Card Agreement.
"Addition Date" shall mean with respect to Additional Designated Accounts,
the date from and after which such Additional Designated Accounts are to be
included as Designated Accounts pursuant to subsection 2.09(a) or (b).
"Additional Cut-Off Date" shall mean with respect to Additional Designated
Accounts, the date specified as such in the notice delivered with respect
thereto pursuant to subsection 2.09(c).
"Additional Designated Account" shall mean each Eligible Account designated
pursuant to subsection 2.09(a) or (b) to be included as a Designated Account and
identified in the computer file or microfiche list delivered to the Owner
Trustee by the Transferor pursuant to Section 2.01 and subsection 2.09(h).
"Additional Transferors" shall have the meaning specified in subsection
2.09(g).
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(1) MasterCard [is a][and VISA are] registered trademark[s] of Mastercard
International Incorporated [and VISA USA, Inc., respectively].
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"Adverse Effect" shall mean, with respect to any action, that such action
will (a) result in the occurrence of a Pay Out Event or an Event of Default or
(b) materially and adversely affect the amount or timing of distributions to be
made to the Noteholders of any Series or Class pursuant to this Agreement, the
Indenture or the related Indenture Supplement.
"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.
"Aggregate Addition" shall mean the designation of additional Eligible
Accounts to be included as Designated Accounts pursuant to subsection 2.09(a) or
(b).
"Agreement" shall mean this Transfer and Servicing Agreement, as the same
may be amended, supplemented or otherwise modified from time to time.
"Appointment Date" shall have the meaning specified in Section 6.01.
"Assignment" shall have the meaning specified in subsection 2.09(h).
"Authorized Newspaper" shall mean any newspaper or newspapers of general
circulation in the Borough of Manhattan, the City of New York, printed in the
English language (and, with respect to any Series or Class, if and so long as
the Notes of such Series are (i) listed on the Luxembourg Stock Exchange and
such Exchange shall so require, in Luxembourg, printed in any language
satisfying the requirements of such Exchange or (ii) Bearer Notes, in such place
as may be specified in the applicable Indenture Supplement) and customarily
published on each business day at such place, whether or not published on
Saturdays, Sundays or holidays.
"Bearer Notes" shall have the meaning specified in the Indenture.
"Business Day" shall mean any day other than (a) a Saturday or Sunday or
(b) any other day on which national banking associations or state banking
institutions in New York, Utah, Delaware or any other state in which the
principal executive offices of ABC, the Owner Trustee, the Indenture Trustee or
other Account Owner, as the case may be, are located, are authorized or
obligated by law, executive order or governmental decree to be closed or (c) for
purposes of any particular Series, any other day specified in the related
Indenture Supplement.
"Cash Advance Fees" shall mean cash advance transaction fees and cash
advance late fees, if any, as specified in the Credit Card Agreement applicable
to each Account.
"Certificate" shall have the meaning specified in the Trust Agreement.
"Class" shall have the meaning specified in the Indenture.
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"Closing Date" shall mean, with respect to any Series, the closing date
specified in the related Indenture Supplement.
"Collections" shall mean all payments by or on behalf of Obligors
(including Insurance Proceeds) received in respect of the Receivables, in the
form of cash, checks, wire transfers, electronic transfers, ATM transfers or any
other form of payment in accordance with a Credit Card Agreement in effect from
time to time and all other amounts specified by this Agreement, the Indenture or
any Indenture Supplement as constituting Collections. All Recoveries with
respect to Receivables previously charged off as uncollectible 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 2.07(i), of Interchange paid to the Trust with respect to such
Monthly Period, to be applied as if such amount were Collections of Finance
Charge and Administrative Receivables for all purposes.
"Corporate Trust Office" shall have the meaning (a) when used in respect of
the Owner Trustee, specified in the Trust Agreement and (b) when used in respect
of the Indenture Trustee, specified in the Indenture.
"Coupon" shall have the meaning specified in the Indenture.
"Credit Card Agreement" shall mean, with respect to a revolving credit card
account, the agreements between an Account Owner and the Obligor governing the
terms and conditions of such account, as such agreements may be amended,
modified or otherwise changed from time to time and as distributed (including
any amendments and revisions thereto) to holders of such account.
"Credit Card Guidelines" shall mean the respective policies and procedures
of ABC or any other Account Owner, as the case may be, as such policies and
procedures may be amended from time to time, (a) relating to the operation of
its credit card business, which generally are applicable to its portfolio of
revolving credit card accounts or, in the case of an Account Owner that has only
a portion of its portfolio subject to a Receivables Purchase Agreement,
applicable to such portion of its portfolio, and in each case which are
consistent with prudent practice, including the policies and procedures for
determining the creditworthiness of credit card customers and the extension of
credit to credit card customers, and (b) relating to the maintenance of credit
card accounts and collection of credit card receivables.
"Date of Processing" shall mean, with respect to any transaction or receipt
of Collections, the date on which such transaction is first recorded on the
Servicer's computer file of revolving credit card 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 of which the Transferor or the Servicer
became obligated to accept reassignment or assignment in accordance with the
terms of this Agreement during such Monthly Period; provided, however, that, if
an Insolvency Event occurs with respect to the Transferor, the amount of such
Defaulted Receivables
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which are subject to reassignment to the Transferor in accordance with the terms
of this Agreement shall not be added to the sum so subtracted and, if any of the
events described in subsection 7.01(d) occur with respect to the Servicer, the
amount of such Defaulted Receivables which are subject to reassignment or
assignment to the Servicer in accordance with the terms of this Agreement shall
not be added to the sum so subtracted.
"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 Servicer's
customary and usual servicing procedures for servicing revolving credit card
accounts. A Principal Receivable shall become a Defaulted Receivable on the day
on which such Principal Receivable is recorded as charged-off on the Servicer's
computer file of revolving credit card accounts.
"Designated Account" shall mean (a) each Initial Designated Account, (b)
each Additional Designated Account (but only from and after the Addition Date
with respect thereto), (c) each Related Account, and (d) each Transferred
Account, but shall exclude (e) any Account all the Receivables in which are
either: (i) after the Removal Date, removed by the Transferor pursuant to
Section 2.10, (ii) reassigned to the Transferor pursuant to Section 2.05 or
(iii) assigned and transferred to the Servicer pursuant to Section 3.03.
"Discount Option Collections" shall have the meaning specified in Section
2.12. The aggregate amount of Discount Option Collections on any Date of
Processing shall equal the product of (a) the amount of any Collections of
Principal Receivables received on such Date of Processing and (b) the Discount
Percentage, if any, in effect on such Date of Processing.
"Discount Option Date" shall have the meaning specified in Section 2.12.
"Discount Percentage" shall have the meaning specified in Section 2.12.
"Document Delivery Date" shall have the meaning specified in subsection
2.09(h).
"Dollars," "$" or "U.S. $" shall mean United States dollars.
"Eligible Account" shall mean a revolving credit card account owned by ABC
in the case of the Initial Designated Accounts on the Initial Cut-Off Date, or
ABC or other Account Owner, in the case of Additional Designated Accounts after
the Initial Cut-Off Date which, as of the Initial Cut-Off Date with respect to
an Initial Designated Account or as of the Additional Cut-Off Date with respect
to an Additional Designated Account meets the following requirements:
(a) is a revolving credit card account in existence and maintained by ABC
or other Account Owner, as the case may be;
(b) is payable in Dollars;
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(c) has an obligor who has provided, as his or her most recent billing
address, an address located in the United States or its territories or
possessions or a military address;
(d) except as provided below, has an obligor who has not been identified by
the Servicer in its computer files as being involved in a voluntary or
involuntary bankruptcy proceeding;
(e) has not been identified as an account with respect to which the related
card has been lost or stolen;
(f) has not been sold or pledged to any other party except for any sale to
another Account Owner that has either entered into a Receivables Purchase
Agreement or is an Additional Transferor;
(g) does not have receivables which have been sold or pledged by ABC or any
other Account Owner, as the case may be, to any other party other than ABRC
pursuant to a Receivables Purchase Agreement;
(h) with respect to the Initial Designated Accounts, is an account in
existence and maintained by ABC as of the Initial Cut-Off Date and with respect
to Additional Designated Accounts is an account in existence and maintained by
ABC or other Account Owner as of the Additional Cut-Off Date;
(i) except as provided below, does not have any Receivables that are
Defaulted Receivables; and
(j) does not have any Receivables that have been identified by the Servicer
or the relevant Obligor as having been incurred as a result of fraudulent use of
any related credit card.
Eligible Accounts may include Accounts, the Receivables of which have been
charged off, or with respect to which the Servicer believes the related Obligor
is bankrupt, in each case as of the Initial Cut-Off Date, with respect to the
Initial Designated Accounts, and as of the related Additional Cut-Off Date, with
respect to Additional Designated Accounts; provided that (a) the balance of all
Receivables included in such Accounts is reflected on the books and records of
such Transferor (and is treated for purposes of this Agreement) as "zero" and
(b) charging privileges with respect to all such Accounts have been canceled in
accordance with the relevant Credit Card Guidelines.
"Eligible Receivable" shall mean each Receivable, including, where
applicable, the underlying receivable:
(a) which has arisen in 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 Credit Card Agreement which complies
in all material respects with all Requirements of Law applicable to ABC or other
Account Owner, as the case may be;
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(c) with respect to which all 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 ABC or
other Account Owner, as the case may be, of the Credit Card Agreement pursuant
to which such Receivable was created, have been duly obtained, effected or given
and are in full force and effect;
(d) as to which at the time of the transfer of such Receivable to the
Trust, the Transferor or the Trust will have good and marketable title thereto
and which itself is, and the underlying receivables are, free and clear of all
Liens;
(e) which has been the subject of either a valid transfer and assignment
from the Transferor to the Trust of all the 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 at all times will 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, at the time of 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 Servicer's computer file of
revolving credit card accounts;
(h) which, at the time of transfer to the Trust, is not subject to any
right of rescission, setoff, counterclaim or any other defense (including
defenses arising out of violations of usury laws) of the Obligor, other than
defenses arising out of applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
in general;
(i) as to which, at the time of transfer to the Trust, none of the
Transferor, ABC or any other Account Owner, as the case may be, has 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 Noteholders therein; and
(j) which constitutes either an "account" or a "general intangible" under
and as defined in Article 9 of the UCC as then in effect in the State of
Delaware and any other state where the filing of a financing statement is
required to perfect the Trust's interest in the Receivables and the proceeds
thereof.
"Eligible Servicer" shall mean the Indenture Trustee or, if the Indenture
Trustee is not acting as Servicer, an entity which, at the time of its
appointment as Servicer, (a) is servicing a portfolio of revolving credit card
accounts, (b) is legally qualified and has the capacity to service the
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Accounts, (c) in the sole determination of the Indenture Trustee, which
determination shall be conclusive and binding, has demonstrated the ability to
service professionally and competently a portfolio of similar accounts in
accordance with high standards of skill and care, (d) is qualified to use the
software that is then being used to service the Accounts or obtains the right to
use or has its own software which is adequate to perform its duties under this
Agreement and (e) has a net worth of at least $50,000,000 as of the end of its
most recent fiscal quarter.
"Event of Default" shall have the meaning specified in the Indenture.
"Excess Funding Account" shall have the meaning specified in the Indenture.
"Excess Funding Amount" shall have the meaning specified in the Indenture.
"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 (a) all Periodic Rate
Finance Charges, (b) Cash Advance Fees, (c) annual membership fees and annual
service charges, (d) Late Fees, (e) Overlimit Fees, and (f) any other fees with
respect to the Accounts designated by the Transferor at any time and from time
to time to be included as Finance Charge and Administrative Receivables. Finance
Charge and Administrative Receivables shall also include (a) Interchange as
calculated pursuant to the Indenture Supplement for any Series and (b) all
Recoveries with respect to Receivables previously charged off as uncollectible.
"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.
"Indenture" shall mean the Master Indenture, dated as of [__________],
2000, between the Issuer and the Indenture Trustee, as the same may be amended,
supplemented or otherwise modified from time to time.
"Indenture Supplement" shall have the meaning specified in the Indenture.
"Indenture Trustee" shall mean [____________________], in its capacity as
trustee under the Indenture, its successors in interest and any successor
indenture trustee under the Indenture.
"Independent Director" shall have the meaning specified in subsection
2.07(h)(vii).
"Ineligible Receivables" shall have the meaning specified in subsection
2.05(a).
"Initial Designated Account" shall mean each Account, which account is
identified in the computer file or microfiche list delivered to the Owner
Trustee by the Transferor pursuant to Section 2.01 on the Initial Issuance Date.
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"Initial Cut-Off Date" shall mean [_________], 2000.
"Initial Issuance Date" shall mean [__________], 2000, the date the
Transferor's Certificate is delivered by the Trust to the Transferor pursuant to
the Trust Agreement.
"Insolvency Event" shall have the meaning specified in Section 6.01.
"Insurance Proceeds" shall mean any amounts received pursuant to the
payment of benefits under any credit life insurance policies, credit disability
or unemployment insurance policies covering any Obligor with respect to
Receivables under such Obligor's Account.
"Interchange" shall mean interchange fees payable to ABC or any other
Account Owner, in its capacity as credit card issuer, through MasterCard or VISA
in connection with cardholder charges for goods or services with respect to the
Accounts, as calculated pursuant to the related Indenture Supplement for any
Series. Any reference in this Agreement, the Indenture or any Indenture
Supplement to Interchange shall refer to only the fractional undivided interest
in the interchange fees that are transferred by ABC or another Account Owner to
a Transferor pursuant to a Receivables Purchase Agreement (or if the other
Account Owner is an Additional Transferor, transferred directly to the Trust
pursuant to this Agreement), which fractional undivided interest may be less
than a 100% interest therein.
"Invested Amount" shall mean, with respect to any Series and for any date,
an amount equal to the invested amount or adjusted invested amount, as
applicable, specified in the related Indenture Supplement.
"Issuer" shall mean the Trust.
"Late Fees" shall have the meaning specified in the Credit Card Agreement
applicable to each Account for late fees or similar terms.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, equity interest, encumbrance, lien (statutory
or other), preference, participation interest, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including 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 Lien
for municipal or other local taxes if such taxes are not then due and payable or
if the 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 and any assignment permitted by subsection 3.06(b) of the Trust
Agreement or Section 4.02 of, and the lien created by, this Agreement shall not
be deemed to constitute a Lien.
"MasterCard" shall mean MasterCard International Incorporated, and its
successors in interest.
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"Monthly Period" shall have the meaning specified in the Indenture.
"Monthly Servicing Fee" shall have the meaning specified in Section 3.02.
"Net Portfolio Yield" shall have the meaning specified in the Indenture
Supplement.
"Note Interest Rate" shall have the meaning specified in the Indenture.
"Note Owner" shall have the meaning specified in the Indenture.
"Note Register" shall have the meaning specified in the Indenture.
"Noteholder" or "Holder" shall have the meaning specified in the Indenture.
"Notices" shall have the meaning specified in subsection 9.04(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 have the meaning specified in the Indenture.
"Opinion of Counsel" shall have the meaning specified in the Indenture.
"Overlimit Fees" shall have the meaning specified in the Credit Card
Agreement applicable to each Account for overlimit fees or similar terms if such
fees are provided for with respect to such Account.
"Owner Trustee" shall mean [____________________], in its capacity as owner
trustee under the Trust Agreement, its successors in interest and any successor
owner trustee under the Trust Agreement.
"Pay Out Event" shall have the meaning specified in the Indenture.
"Paying Agent" shall have the meaning specified in the Indenture.
"Payment Date" shall mean, with respect to any Series, the date specified
in the applicable Indenture Supplement.
"Periodic Rate Finance Charges" shall have the meaning specified in the
Credit Card 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, limited liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental entity or
other entity of any nature.
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"Principal Receivables" shall mean all Receivables other than Finance
Charge and Administrative Receivables or Defaulted Receivables. 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 Principal Receivables which the
Transferor is unable to transfer as provided in Section 2.11 shall not be
included in calculating the amount of Principal Receivables.
"Rating Agency" shall have the meaning specified in the Indenture.
"Rating Agency Condition" shall have the meaning specified in the
Indenture.
"Reassignment" shall have the meaning specified in Section 2.10.
"Receivables" shall mean all amounts shown on the Servicer's records as
amounts payable by Obligors on any Account from time to time, including amounts
payable for Principal Receivables and Finance Charge and Administrative
Receivables. Receivables which become Defaulted Receivables will cease to be
included as Receivables as of the day on which they become Defaulted
Receivables. Unless the context otherwise requires (whether or not there is a
specific reference to the underlying receivable), any reference in this
Agreement, the Indenture or any Indenture Supplement to a Receivable (including
any Principal Receivable, Finance Charge and Administrative Receivable or
Defaulted Receivable) and any Collections thereon or other amounts recoverable
with respect thereto (including any Insurance Proceeds or Recoveries with
respect thereto) shall refer to only the fractional undivided interest in the
amounts paid or payable by Obligors on the Accounts that are transferred by ABC
or another Account Owner to a Transferor pursuant to a Receivables Purchase
Agreement, which undivided interest may be less than a 100% undivided interest
therein. Any reference in this Agreement, the Indenture or any Indenture
Supplement to the "underlying receivable" with respect to a Receivable shall
refer to the receivable in which such Receivable represents an undivided
interest.
"Receivables Purchase Agreement" shall mean the Receivables Purchase
Agreement, dated as of [__________] , 2000, between ABC and ABRC, as amended
from time to time.
"Receivables Purchase Agreement" shall mean the receivables purchase
agreement, dated as of [__________], 2000, between ABC and ABRC, as amended from
time to time, and includes any receivables purchase agreement, substantially in
the form of such agreement entered into between a Transferor and ABC or another
Account Owner in the future, if any.
"Recoveries" shall mean all amounts received (net of out-of-pocket costs of
collection) including Insurance Proceeds, which is reasonably estimated by the
Transferor to be attributable to Defaulted Receivables, including the net
proceeds of any sale of such Defaulted Receivables by the Transferor.
"Registered Notes" shall have the meaning specified in the Indenture.
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"Related Account" shall mean an Account with respect to which a new credit
account number has been issued by the applicable Account Owner or Servicer or
the applicable Transferor under circumstances resulting from a lost or stolen
credit card and not requiring standard application and credit evaluation
procedures under the Credit Card Guidelines.
"Removal Date" shall have the meaning specified in Section 2.10.
"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 Minimum Principal Balance" shall mean, unless otherwise provided
in an Indenture Supplement relating to a Series having a Paired Series, with
respect to any date (a) the sum of the Initial Invested Amounts for each Series
outstanding on such date minus (b) the Excess Funding Amount.
"Required Transferor Interest" shall have the meaning specified in the
Indenture.
"Requirements of Law" shall mean any law, treaty, rule or regulation, or
determination of an arbitrator or Governmental Authority, whether Federal, state
or local (including usury laws, the Federal Truth in Lending Act and Regulation
B and Regulation Z of the Board of Governors of the Federal Reserve System),
and, when used with respect to any Person, the certificate of incorporation and
by-laws or other organizational or governing documents of such Person.
"Series" shall have the meaning specified in the Indenture.
"Series Account" shall have the meaning specified in the Indenture.
"Series Enhancement" shall have the meaning specified in the Indenture.
"Series Enhancer" shall have the meaning specified in the Indenture.
"Servicing Transfer" shall have the meaning specified in Section 7.01.
"Servicer" shall mean ABC, in its capacity as Servicer pursuant to this
Agreement, and, after any Servicing Transfer, the Successor Servicer.
"Servicer Default" shall have the meaning specified in Section 7.01.
"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 Indenture Supplement.
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"Successor Servicer" shall have the meaning specified in subsection
7.02(a).
"Supplemental Certificate" shall have the meaning specified in the Trust
Agreement.
"Tax Opinion" shall have the meaning specified in the Indenture.
"Termination Notice" shall have the meaning specified in subsection
7.01(d).
"Transfer Agent and Registrar" shall have the meaning specified in the
Indenture.
"Transfer Restriction Event" shall have the meaning specified in Section
2.11.
"Transferor" shall mean (a) ABRC and (b) any Additional Transferor or
Transferors. References to "each Transferor" shall refer to each entity
mentioned in the preceding sentence and references to "the Transferor" shall
refer to all of such entities.
"Transferor Interest" shall have the meaning specified in the Indenture.
"Transferred Account" shall mean each account into which an Account shall
be transferred; provided that (i) such transfer was made in accordance with the
Credit Card Guidelines and (ii) such account can be traced or identified as an
account into which an Account has been transferred.
"Trust" shall mean the Advanta Business Card Master Trust.
"Trust Agreement" shall mean the Trust Agreement relating to the Trust,
dated as of [__________], 2000, between ABRC and the Owner Trustee, as the same
may be amended, supplemented or otherwise modified from time to time.
"Trust Assets" shall have the meaning specified in Section 2.01.
"Trust Beneficial Interest" shall have the meaning specified in the Trust
Agreement.
"UCC" shall mean the Uniform Commercial Code, as amended from time to time,
as in effect in any specified jurisdiction.
"VISA" shall mean VISA USA, Inc., and its successors in interest.
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 Trust Agreement, the
Indenture or the related Indenture Supplement, as applicable.
(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.
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(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
GAAP. 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 GAAP, the definitions contained in this Agreement or in any
such certificate or other document shall control.
(d) The agreements, representations and warranties of ABRC and ABC in this
Agreement in each of their respective capacities as Transferor and Servicer
shall be deemed to be the agreements, representations and warranties of ABRC and
ABC solely in each such capacity for so long as ABRC and ABC act in each such
capacity under this Agreement.
(e) Any reference to each Rating Agency shall only apply to any specific
rating agency if such rating agency is then rating any outstanding Series.
(f) Unless otherwise specified, references to any amount as on deposit or
outstanding on any particular date shall mean such amount at the close of
business on such day.
(g) The words "hereof," "herein," "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 subsection,
Section, Schedule or Exhibit are references to subsections, Sections, Schedules
and Exhibits in or to this Agreement unless otherwise specified; and the term
"including" means "including without limitation."
[END OF ARTICLE I]
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ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables. By execution of this Agreement,
ABRC and, in the case of Additional Designated Accounts, ABRC or, if applicable,
any Additional Transferor does hereby transfer, assign, set over and otherwise
convey to the Trust, without recourse except as provided herein, all its right,
title and interest in, to and under the Receivables existing at the close of
business on the Initial Cut-Off Date, in the case of Receivables arising in the
Initial Designated Accounts, and on each Additional Cut-Off Date, in the case of
Receivables arising in the Additional Designated Accounts, 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 monies
due or to become due and all amounts received or receivable with respect thereto
and all proceeds (including "proceeds" as defined in the UCC) thereof. Such
property, together with all monies and other property credited to the Collection
Account, the Series Accounts and the Excess Funding Account (including any
subaccounts of such account), the rights of the Trust under this Agreement and
the Trust Agreement and the right to receive Recoveries attributed to cardholder
charges for merchandise and services in the Accounts 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 Owner
Trustee, the Indenture Trustee or any Noteholder of any obligation of ABC or
other Account Owner or the Transferor, any Additional Transferor, the Servicer
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, merchants clearance systems, VISA, MasterCard or
insurers. The Obligors shall not be notified in connection with the creation of
the Trust of the transfer, assignment, set-over and conveyance of the
Receivables to the Trust. The Transferor does hereby further transfer, assign,
set over and otherwise convey to the Trust all of its right, title and interest
in and under the Receivables Purchase Agreements.
Each Transferor agrees to record and file, at its own expense, financing
statements (and continuation statements when applicable) with respect to the
Receivables conveyed by such Transferor existing on the Initial Cut-Off Date and
thereafter 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 transfer and assignment of its interest in such Receivables
to the Trust, and to deliver a file stamped copy of each such financing
statement or other evidence of such filing to the Owner Trustee as soon as
practicable after the first Closing Date, in the case of Receivables arising in
the Initial Designated Accounts, and (if any additional filing is so necessary)
as soon as practicable after the applicable Addition Date, in the case of
Receivables arising in Additional Designated Accounts. The Owner 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
transfer and assignment.
Each Transferor further agrees, at its own expense, on or prior to (x) the
first Closing Date, in the case of the Initial Designated Accounts, (y) the
applicable Addition Date, in the case of Additional Designated Accounts
specified in the Receivables Purchase Agreement with such Transferor, if any,
and (z) the applicable Removal Date, in the case of Removed Accounts with
respect to such Transferor, (a) to indicate in the appropriate computer files
that Receivables created
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(or reassigned, in the case of Removed Accounts) in connection with the Accounts
have been conveyed to the Trust pursuant to this Agreement (or conveyed to each
such Transferor or its designee in accordance with Section 2.10, in the case of
Removed Accounts) by including (or deleting in the case of Removed Accounts) in
such computer files the applicable code in the field "CHD-PORTFOLIO-NO" that
identifies each such Account and (b) to deliver to the Owner 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 Initial Cut-Off Date, in the case of
the Initial Designated Accounts, the applicable Additional Cut-Off Date in the
case of Additional Designated Accounts, and the applicable Removal Date in the
case of Removed Accounts, its account number and, other than in the case of
Additional Designated Accounts, the aggregate amount outstanding in such Account
and the aggregate amount of Principal Receivables outstanding in such Account.
Each such file or list, as supplemented, from time to time, to reflect
Additional Designated Accounts and Removed Accounts, shall be marked as Schedule
1 to this Agreement and is hereby incorporated into and made a part of this
Agreement. Each Transferor further agrees not to alter the code referenced in
this paragraph with respect to any Account during the term of this Agreement
unless and until such Account becomes a Removed Account.
If the arrangements with respect to the Receivables hereunder shall
constitute a loan and not a purchase and sale of such Receivables, it is the
intention of the parties hereto that this Agreement shall constitute a security
agreement under applicable law, and that each Transferor shall be deemed to have
granted to the Trust a first priority perfected security interest in all of such
Transferor's right, title and interest, whether owned on the Initial Cut-Off
Date or thereafter acquired, in, to and under the Receivables and the other
Trust Assets conveyed by such Transferor, and all money, accounts, general
intangibles, chattel paper, instruments, documents, goods, investment property,
deposit accounts, certificates of deposit, letters of credit, and advices of
credit consisting of, arising from or related to the Trust Assets, to secure its
obligations hereunder.
Section 2.02. Acceptance by Trust.
(a) The Trust hereby acknowledges its acceptance of all right, title and
interest to the property, now existing and hereafter created, conveyed to the
Trust pursuant to Section 2.01. The Trust further acknowledges that, prior to or
simultaneously with the execution and delivery of this Agreement, the Transferor
delivered to the Owner Trustee the computer file or microfiche list relating to
the Initial Designated Accounts described in the penultimate paragraph of
Section 2.01. The Owner Trustee shall maintain a copy of Schedule 1, as
delivered from time to time, at its Corporate Trust Office.
(b) The Owner Trustee and the Trust each hereby agrees not to disclose to
any Person any of the account numbers or other information contained in the
computer files or microfiche lists marked as Schedule 1 and delivered to the
Owner Trustee or the Trust, from time to time, except (i) to a Successor
Servicer or as required by a Requirement of Law applicable to the Owner Trustee,
(ii) in connection with the performance of the Owner Trustee's or the Trust's
duties hereunder, (iii) to the Indenture Trustee in connection with its duties
in enforcing the rights of Noteholders or (iv) to bona fide creditors or
potential creditors of any Account Owner, ABC or any Transferor for the limited
purpose of enabling any such creditor to identify Receivables or Accounts
subject to this
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Agreement or the Receivables Purchase Agreement. The Owner Trustee and the Trust
each agrees to take such measures as shall be reasonably requested by any
Transferor to protect and maintain the security and confidentiality of such
information and, in connection therewith, shall allow each Transferor or its
duly authorized representatives to inspect the Owner Trustee's security and
confidentiality arrangements as they specifically relate to the administration
of the Trust from time to time during normal business hours upon prior written
notice. The Owner Trustee and the Trust shall provide the applicable Transferor
with notice five (5) Business Days prior to disclosure of any information of the
type described in this subsection 2.02(b).
Section 2.03. Representations and Warranties of Each Transferor Relating to
Such Transferor. Each Transferor hereby severally represents and warrants to the
Trust (and agrees that the Owner Trustee and the Indenture Trustee may
conclusively rely on each such representation and warranty in accepting the
Receivables in trust and in authenticating the Notes, respectively) as of each
Closing Date (but only if it was a Transferor on such date) that:
(a) Organization and Good Standing. Such Transferor is a corporation
validly existing under the laws of the jurisdiction of its organization or
incorporation and has, in all material respects, full power and authority to own
its properties and conduct its business as presently owned or conducted, and to
execute, deliver and perform its obligations under this Agreement and the
applicable Receivables Purchase Agreement, if any.
(b) Due Qualification. Such Transferor is duly qualified to do business and
is in good standing as a foreign corporation 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 (i) render any Credit Card Agreement
relating to any Receivable conveyed to the Trust by such Transferor
unenforceable by such Transferor or the Trust or (ii) have a material adverse
effect on the Noteholders.
(c) Due Authorization. The execution and delivery of this Agreement and the
applicable Receivables Purchase Agreement by such Transferor and the order to
the Owner Trustee to have the Notes authenticated and delivered and the
consummation by such Transferor of the transactions provided for in this
Agreement and the Receivables Purchase Agreement have been duly authorized by
such Transferor by all necessary corporate action on the part of such
Transferor.
(d) No Conflict. The execution and delivery by such Transferor of this
Agreement and the applicable Receivables Purchase Agreement, and the performance
of the transactions contemplated by this Agreement and the fulfillment of the
terms hereof and thereof applicable to such Transferor, will not conflict with
or violate any Requirements of Law applicable to such Transferor or 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 its properties
are bound.
(e) No Proceedings. There are no proceedings or investigations, pending or,
to the best knowledge of such Transferor, threatened against such Transferor
before any Governmental
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Authority (i) asserting the invalidity of this Agreement or the applicable
Receivables Purchase Agreement, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or the applicable Receivables
Purchase Agreement, (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
the applicable Receivables Purchase Agreement, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or enforceability
of this Agreement or the applicable Receivables Purchase Agreement or (v)
seeking to affect adversely the income or franchise tax attributes of the Trust
under the United States Federal or any State income or franchise tax systems.
(f) All Consents. All authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by such Transferor in connection with the execution
and delivery by such Transferor of this Agreement, the applicable Receivables
Purchase Agreement, and the performance of the transactions contemplated by this
Agreement, the applicable Receivables Purchase Agreement by such Transferor have
been duly obtained, effected or given and are in full force and effect.
Section 2.04. Representations and Warranties of each Transferor Relating to
the Agreement and the Receivables.
(a) Representations and Warranties. Each Transferor hereby severally
represents and warrants to the Trust as of the Initial Issuance Date, each
Closing Date and, with respect to Additional Designated Accounts, as of the
related Addition Date (but only if, in either case, it was a Transferor on such
date and only with respect to Accounts it has transferred on such date) that:
(i) this Agreement, the applicable Receivables Purchase Agreement, and,
in the case of Additional Designated Accounts, the related Assignment, 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 affecting creditors' rights
generally from time to time in effect or general principles of equity;
(ii) as of the Initial Cut-Off Date with respect to the Initial
Designated Accounts (and the Receivables arising therein), and as of the related
Additional Cut-Off Date with respect to Additional Designated Accounts (and the
Receivables arising therein), the portion of Schedule 1 to this Agreement under
such Transferor's name, as supplemented to such date, is an accurate and
complete listing in all material respects of all the Accounts the Receivables in
which were transferred by such Transferor as of the Initial Cut-Off Date or such
Additional Cut-Off Date, as the case may be, and the information contained
therein with respect to the identity of such Accounts and the Receivables
existing thereunder is true and correct in all material respects as of the
Initial Cut-Off Date or such Additional Cut-Off Date, as the case may be;
(iii) each Receivable conveyed to the Trust by such Transferor has been
conveyed to the Trust free and clear of any Lien and each underlying receivable
is free and clear of all Liens;
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(iv) all authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by such Transferor in connection with the conveyance
by such Transferor of Receivables to the Trust have been duly obtained, effected
or given and are in full force and effect;
(v) either this Agreement or, in the case of Additional Designated
Accounts, the related Assignment constitutes a valid sale, transfer and
assignment to the Trust of all right, title and interest of such Transferor in
the Receivables conveyed to the Trust by such Transferor and the proceeds
thereof and Recoveries and Interchange identified as relating to the Receivables
conveyed to the Trust by such Transferor which have become Defaulted Receivables
or, if this Agreement or, in the case of Additional Designated Accounts, the
related Assignment does not constitute a sale of such property, it constitutes a
grant of a first priority perfected "security interest" (as defined in the UCC)
in such property to the Trust, which, in the case of existing Receivables and
the proceeds thereof and said Recoveries and Interchange, is enforceable upon
execution and delivery of this Agreement, or, with respect to then existing
Receivables in Additional Designated Accounts, as of the applicable Addition
Date, and which will be enforceable with respect to such Receivables hereafter
and thereafter created and the proceeds thereof upon such creation. Upon the
filing of the financing statements and, in the case of Receivables hereafter
created 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;
(vi) as of the Initial Cut-Off Date, each Initial Designated Account
specified in Schedule 1 with respect to such Transferor is an Eligible Account
and, as of the applicable Additional Cut-Off Date, each related Additional
Designated Account specified in Schedule 1 with respect to such Transferor is an
Eligible Account;
(vii) on the Initial Cut-Off Date, each Receivable then existing and
conveyed to the Trust by such Transferor is an Eligible Receivable and, on the
applicable Additional Cut-Off Date, each Receivable contained in the related
Additional Designated Accounts and conveyed to the Trust by such Transferor is
an Eligible Receivable;
(viii) as of the date of the creation of any new Receivable in an
Account, such Receivable is an Eligible Receivable; and
(ix) no selection procedures believed by such Transferor to be
materially adverse to the interests of the Noteholders have been used in
selecting such Accounts.
(b) Notice of Breach. The representations and warranties set forth in
Section 2.03, this Section 2.04 and subsection 2.09(f) shall survive the
transfers and assignments of the Receivables to the Trust, the pledge of the
Receivables to the Indenture Trustee pursuant to the Indenture, and the issuance
of the Notes. Upon discovery by any Transferor, the Servicer or the Owner
Trustee of a breach of any of the representations and warranties set forth in
Section 2.03, this Section 2.04 or subsection 2.09(f), the party discovering
such breach shall give notice to the other parties and to the Indenture Trustee
within three (3) Business Days following such discovery; provided that the
failure to give notice within three (3) Business Days does not preclude
subsequent notice.
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Section 2.05. Reassignment of Ineligible Receivables.
(a) Reassignment of Receivables. In the event (i) any representation or
warranty contained in subsection 2.04(a)(ii), (iii), (iv), (vi), (vii) or (viii)
is not true and correct in any material respect as of the date specified therein
with respect to any Receivable or the related Account and such breach has a
material adverse effect on the Noteholders' Interest in any Receivable (which
determination shall be made without regard to whether funds are then available
pursuant to any Series Enhancement) unless cured within sixty (60) days (or such
longer period, not in excess of 120 days, as may be agreed to by the Indenture
Trustee and the Servicer) after the earlier to occur of the discovery thereof by
the Transferor which conveyed such Receivables to the Trust or receipt by such
Transferor of written notice thereof given by the Owner Trustee, the Indenture
Trustee or the Servicer, or (ii) it is so provided in subsection 2.07(a) with
respect to any Receivables conveyed to the Trust by such Transferor, then such
Transferor shall accept reassignment of all Receivables in the related Account
("Ineligible Receivables") on the terms and conditions set forth in paragraph
(b) below.
(b) Price of Reassignment. The Servicer shall deduct the portion of such
Ineligible Receivables reassigned to each Transferor which are Principal
Receivables from the aggregate amount of the Principal Receivables used to
calculate the Transferor Interest. In the event that, following the exclusion of
such Principal Receivables from the calculation of the Transferor Interest, the
Transferor Interest would be less than the Required Transferor Interest, not
later than 1:00 p.m., New York City time, on the first Payment Date following
the Monthly Period in which such reassignment obligation arises, the applicable
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
Interest would be below the Required Transferor Interest (up to the amount of
such Principal Receivables).
Upon reassignment of any Ineligible Receivable, the Trust shall
automatically and without further action be deemed to transfer, assign, set over
and otherwise convey to the applicable Transferor or its designee, without
recourse, representation or warranty, all the right, title and interest of the
Trust in and to such Ineligible Receivable, all Interchange and Recoveries
related thereto, all monies and amounts due or to become due and all proceeds
thereof and such reassigned Ineligible Receivable shall be treated by the Trust
as collected in full as of the date on which it was transferred. The obligation
of each Transferor to accept reassignment of any Ineligible Receivables conveyed
to the Trust by such Transferor, 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 the Trust, the Noteholders (or the Owner Trustee on behalf of the
Noteholders) or any Series Enhancer. Notwithstanding any other provision of this
subsection 2.05(b), a reassignment of an Ineligible Receivable in excess of the
amount that would cause the Transferor Interest to be less than the Required
Transferor Interest shall not occur if the applicable Transferor fails to make
any deposit required by this subsection 2.05(b) with respect to such Ineligible
Receivable. The Trust shall execute such documents and instruments of transfer
or assignment and take such other actions as shall reasonably be requested and
provided by the applicable Transferor to effect the conveyance of such
Ineligible Receivables pursuant to this
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subsection 2.05(b), but only upon receipt of an Officer's Certificate from such
Transferor that states that all conditions set forth in this Section 2.05 have
been satisfied.
Section 2.06. Reassignment of 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) or (v) is not true and correct in any material
respect and such breach has a material adverse effect on the Receivables
conveyed to the Trust by such Transferor or the availability of the proceeds
thereof to the Trust (which determination shall be made without regard to
whether funds are then available pursuant to any Series Enhancement), then
either the Owner Trustee, the Indenture Trustee or the Holders of Notes
evidencing not less than 50% of the aggregate unpaid principal amount of all
outstanding Notes, by notice then given to such Transferor and the Servicer (and
to the Owner Trustee and Indenture Trustee if given by the Noteholders), may
direct such Transferor to accept a reassignment of the Receivables conveyed to
the Trust by such Transferor if such breach and any material adverse effect
caused by such breach is not cured within sixty (60) days of such notice (or
within such longer period, not in excess of 120 days, as may be specified in
such notice), and upon those conditions such Transferor shall be obligated to
accept such reassignment on the terms set forth below; provided, however, that
such 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 Owner Trustee a
certificate of an authorized officer describing the nature of such breach and
the manner in which the relevant representation and warranty has become true and
correct.
The applicable Transferor shall deposit in the Collection Account in
immediately available funds not later than 1:00 p.m., New York City time, on the
first Payment 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 Indenture Supplement. Notwithstanding anything to the contrary in this
Agreement, such amounts shall be distributed to the Noteholders on such Payment
Date in accordance with the terms of each Indenture Supplement. If the Owner
Trustee, the Indenture Trustee or the Noteholders give notice directing the
applicable Transferor to accept a reassignment of the Receivables as provided
above, the obligation of such Transferor to accept such reassignment pursuant to
this Section 2.06 and to make the deposit required to be made to the Collection
Account as provided in this paragraph shall constitute the sole remedy
respecting an event of the type specified in the first sentence of this Section
2.06 available to the Noteholders (or the Owner Trustee or Indenture Trustee on
behalf of the Noteholders) or any Series Enhancer. Upon reassignment of the
Receivables on such Payment Date, the Trust shall automatically and without
further action be deemed to sell, transfer, assign, set-over and otherwise
convey to the applicable Transferor, without recourse, representation or
warranty, all the right, title and interest of the Trust in and to the
Receivables, all Interchange and Recoveries allocable to the Trust, and all
monies and amounts due or to become due with respect thereto and all proceeds
thereof. The Trust shall execute such documents and instruments of transfer or
assignment and take such other actions as shall reasonably be requested by the
applicable Transferor to effect the conveyance of such property pursuant to this
subsection.
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Section 2.07. Covenants of each Transferor. Each Transferor hereby
severally covenants that:
(a) Receivables Not To Be Evidenced by Promissory Notes. Except in
connection with its enforcement or collection of an Account, such Transferor
will take no action to cause any Receivable conveyed by it to the Trust to be
evidenced by any instrument (as defined in the UCC) and if any such Receivable
(or any underlying receivable) is so evidenced it shall be deemed to be an
Ineligible Receivable in accordance with subsection 2.05(a) and shall be
reassigned to such Transferor in accordance with subsection 2.05(b).
(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 Receivable (or
any underlying receivable) conveyed by it to the Trust, whether now existing or
hereafter created, or any interest therein, and such Transferor shall defend the
right, title and interest of the Trust and the Indenture Trustee in, to and
under the Receivables, whether now existing or hereafter created, against all
claims of third parties claiming through or under such Transferor.
(c) Transferor Certificate. Except for (i) the conveyances hereunder, in
connection with any transaction permitted by subsection 4.02(a)(i) and as
provided in subsection 2.09(g) of this Agreement or Section 2.12 of the
Indenture or (ii) conveyances permitted under the Trust Agreement, such
Transferor agrees not to transfer, sell, assign, exchange or otherwise convey or
pledge, hypothecate or otherwise grant a security interest in its Transferor
Beneficial Interest or Transferor Certificate or any Supplemental Beneficial
Interest or Supplemental Certificate and any such attempted transfer,
assignment, exchange, conveyance, pledge, hypothecation, grant or sale shall be
void; provided, however, that: (i) nothing in this subsection 2.07(c) shall
prevent the holder of a Transferor Beneficial Interest or a Transferor
Certificate from granting to an Affiliate a participation interest or other
beneficial interest in the rights to receive cash flows related to such
Transferor Beneficial Interest or Transferor Certificate, if (A) such interest
does not grant such Affiliate any rights hereunder or delegate to such Affiliate
any obligations or duties hereunder, (B) the transferor of such interest obtains
the prior written consent of such Transferor and (C) after giving effect to such
transfer, the Transferor Beneficial Interest or Transferor Certificate owned
directly by such Transferor represents an undivided ownership interest in two
percent (2.0%) or more of the Trust Assets; and (ii) the holder of a Transferor
Certificate may pledge, hypothecate or otherwise grant a security interest in
all or any portion of such Transferor Certificate to a Federal Reserve Bank or a
Federal Home Loan Bank, provided, that (x) such pledge, hypothecation or grant
may not be used as an artifice or device to avoid or limit the foregoing
prohibition on transfer and (y) under no circumstances may such holder pledge,
hypothecate or otherwise grant a security interest in any of its rights in a
Transferor Certificate other than the right to receive cash payments in respect
of such Transferor Certificate as provided in the Trust Agreement and the
Transaction Documents.
(d) Delivery of Collections or Recoveries. In the event that such
Transferor receives Collections or Recoveries, such Transferor agrees to pay the
Servicer all such Collections and Recoveries as soon as practicable after
receipt thereof.
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(e) Notice of Liens. Such Transferor shall notify the Owner Trustee, the
Indenture Trustee and each Series Enhancer promptly after becoming aware of any
Lien on any Receivable (or on the underlying receivable) conveyed by it to the
Trust other than the conveyances hereunder and under the applicable Receivables
Purchase Agreement, Transferor Purchase Agreement, if any, and the Indenture.
(f) Amendment of the Certificate of Incorporation. Such Transferor will not
amend in any material respect its certificate of incorporation without providing
the Rating Agency with notice no later than the fifth Business Day prior to such
amendment (unless the right to such notice is waived by the Rating Agency) and
satisfying the Rating Agency Condition.
(g) Other Indebtedness. Such Transferor shall not incur any additional
debt, unless (i) such debt is contemplated by the Transaction Documents or (ii)
the Rating Agency is provided with notice no later than the fifth Business Day
prior to the incurrence of such additional debt (unless the right to such notice
is waived by the Rating Agency) and the Rating Agency Condition is satisfied
with respect to the incurrence of such debt.
(h) Separate Corporate Existence. Such Transferor shall:
(i) Maintain in full effect its existence, rights and franchises as a
corporation under the laws of the state of its incorporation and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement and the applicable Receivables Purchase
Agreement and each other instrument or agreement necessary or appropriate to
proper administration hereof and permit and effectuate the transactions
contemplated hereby.
(ii) Except as provided herein, maintain its own deposit, securities
and other account or accounts, separate from those of any Affiliate of such
Transferor, with financial institutions. The funds of such Transferor shall not
be commingled with those of any other person or entity.
(iii) Ensure that all material transactions between such Transferor and
any of its Affiliates shall be only on an arm's-length basis.
(iv) Maintain a principal executive and administrative office through
which its business is conducted separate from those of its stockholders and
Affiliates.
(v) Conduct its affairs strictly in accordance with its Articles of
Incorporation and observe all necessary, appropriate and customary corporate
formalities, including, but not limited to, holding all regular and special
stockholders' and directors' meetings appropriate to authorize all corporate
action, keeping separate and accurate minutes of such meetings, passing all
resolutions or consents necessary to authorize actions taken or to be taken, and
maintaining accurate and separate books, records and accounts, including, but
not limited to, intercompany transaction accounts. Regular stockholders' and
directors' meetings shall be held at least annually.
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(vi) Ensure that its board of directors shall at all times include at
least [two] "Independent Directors" (as defined in such Transferor's Articles of
Incorporation).
(vii) Act solely in its own corporate name and through its own
authorized officers and agents.
(viii) Ensure that no Affiliate of such Transferor shall advance funds
to such Transferor, and no Affiliate of such Transferor will otherwise guaranty
debts of, such Transferor, unless on an arm's-length basis.
(ix) Other than organizational expenses and as expressly provided
herein, pay all expenses, indebtedness and other obligations incurred by it
using its own funds.
(x) Not enter into any guaranty, or otherwise become liable, with
respect to or hold its assets or creditworthiness out as being available for the
payment of any obligation of any Affiliate of such Transferor nor shall the
Transferor make any loans to any Person.
(xi) Ensure that at all times it is adequately capitalized to engage in
the transactions contemplated in its Articles of Incorporation.
(i) Interchange. With respect to any Payment Date, on or prior to the
immediately preceding Determination Date, the Transferor shall notify the
Servicer of the amount of Interchange required to be included as Collections of
Finance Charge and Administrative Receivables with respect to such Monthly
Period, which amount for any Series shall be specified in the related Indenture
Supplement. Not later than 1:00 p.m., New York City time, on the related Payment
Date, the Transferor shall deposit, or cause to be deposited, into the
Collection Account, 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.
Section 2.08. Covenants of each Transferor with Respect to the Applicable
Receivables Purchase Agreement. Each Transferor, in its capacity as purchaser of
Receivables from ABC pursuant to the applicable Receivables Purchase Agreement,
hereby covenants that such Transferor will at all times enforce the covenants
and agreements of ABC in the Receivables Purchase Agreement, including covenants
that ABC will at all times enforce the covenants and agreements of any other
Account Owner, as the case may be, in any Receivables Purchase Agreements,
including covenants substantially to the effect set forth below:
(a) Periodic Rate Finance Charges. Except (x) as otherwise required by any
Requirements of Law or (y) as is deemed by ABC or any other Account Owner, as
the case may be, 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 which would have the effect of reducing the Net Portfolio
Yield to a level that could be reasonably expected to cause any Series to
experience any Pay Out Event or Event of Default based on the insufficiency of
the Net Portfolio Yield or any similar test.
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(b) Credit Card Agreements and Guidelines. Subject to compliance with all
Requirements of Law and paragraph (a) above, ABC or other Account Owner, as the
case may be, may change the terms and provisions of the applicable Credit Card
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 Rate
Finance Charges to be assessed thereon). Notwithstanding the above, unless
required by Requirements of Law or as permitted by paragraph (a) above, ABC or
other Account Owner, as the case may be, will not take any action unless (i) at
the time of such action, ABC or other Account Owner, as the case may be,
reasonably believes that such action will not cause a Pay Out Event or Event of
Default to occur, and (ii) is made applicable to the comparable segment of the
revolving credit card accounts owned by ABC or other Account Owner which have
characteristics the same as, or substantially similar to, the Accounts that are
the subject of such change, except as otherwise restricted by an endorsement,
sponsorship, or other agreement between ABC or other Account Owner, as the case
may be, and an unrelated third party or by the terms of the Credit Card
Agreements.
Section 2.09. Addition of Accounts.
(a) Required Additional Designated Accounts. (i) If, as of the close of
business on the last Business Day of any calendar month, the product of (A) the
total amount of Principal Receivables and (B) one minus the Discount Percentage
is less than the Required Minimum Principal Balance (as adjusted for any Series
having a Paired Series as described in the Indenture Supplement for such Series)
on such date, the Transferor shall on or prior to the close of business on the
tenth Business Day of the next succeeding Monthly Period (the "Required
Designation Date"), unless the product of (A) the total amount of Principal
Receivables and (B) one minus the Discount Percentage exceeds the Required
Minimum Principal Balance as of the close of business on any day after the last
Business Day of such calendar month and prior to the Required Designation Date,
cause to be designated additional Eligible Accounts to be included as Designated
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
constituting MasterCard [and VISA] revolving credit card accounts then available
to the Transferor under the applicable Receivables Purchase Agreement, if any)
such that, after giving effect to such addition and the addition by each other
Transferor, the product of (A) the aggregate principal balance of Principal
Receivables and (B) one minus the Discount Percentage is at least equal to the
Required Minimum Principal Balance on such date.
(ii) Any Additional Designated Accounts designated to be included as
Trust Assets pursuant to clause (i) above may only be so included if the
applicable conditions specified in paragraph (c) below have been satisfied.
(b) Permitted Additional Designated Accounts. Each Transferor may from time
to time, in its sole discretion, subject to the conditions specified in
paragraph (c) below, voluntarily cause the designation of additional Eligible
Accounts to be included as Designated Accounts to be included as Trust Assets,
in either case as of the applicable Addition Date.
(c) Conditions to Aggregate Additions. On the Addition Date with respect to
any Aggregate Additions, the Trust shall acquire the Receivables in Additional
Designated Accounts
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(and such Additional Designated Accounts shall be deemed to be Designated
Accounts for purposes of this Agreement), subject to the satisfaction of the
following conditions:
(i) on or before the eighth Business Day immediately preceding the
Addition Date, the applicable Transferor shall have given the Owner Trustee, the
Indenture Trustee, the Servicer and each Rating Agency notice (unless such
notice requirement is otherwise waived) that the Additional Designated Accounts
will be included and specifying the applicable Addition Date and Additional
Cut-Off Date;
(ii) as of the applicable Additional Cut-Off Date, such Additional
Designated Accounts shall be Eligible Accounts;
(iii) such Transferor shall have delivered to the Owner Trustee and
Indenture Trustee copies of UCC-1 financing statements covering such Additional
Designated Accounts, if necessary to perfect the Trust's interest in the
Receivables arising therein and a schedule of such Additional Designated
Accounts;
(iv) to the extent required by Section 8.04 of the Indenture, such
Transferor shall have deposited in the Collection Account all Collections with
respect to such Additional Designated Accounts since the Additional Cut-Off
Date;
(v) as of each of the Additional Cut-Off Date and the Addition Date, no
Insolvency Event with respect to ABC or any other Account Owner, as applicable,
ABRC or such Transferor shall have occurred nor shall the transfer to the Trust
of the Receivables arising in the Additional Designated Accounts have been made
in contemplation of the occurrence thereof;
(vi) solely with respect to Aggregate Additions designated pursuant to
subsection 2.09(b), the Rating Agency Condition shall have been satisfied;
(vii) such Transferor shall have delivered to the Owner Trustee and the
Indenture Trustee an Officer's Certificate, dated the Addition Date, confirming,
to the extent applicable, the items set forth in clauses (ii) through (vi) above
and clause (x) below;
(viii) the acquisition by the Trust of the Receivables arising in the
Additional Designated Accounts will not result in an Adverse Effect and, in the
case of Aggregate Additions, such Transferor shall have delivered to the Owner
Trustee and the Indenture Trustee an Officer's Certificate, dated the Addition
Date, stating that such Transferor reasonably believes that the acquisition by
the Trust of the Receivables arising in the Additional Designated Accounts will
not have an Adverse Effect; and
(ix) such Transferor shall have delivered to the Owner Trustee, the
Indenture Trustee and each Rating Agency an Opinion of Counsel, dated the
Addition Date, in accordance with subsection 9.02(d)(ii) or (iv), as applicable.
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(x) unless each Rating Agency otherwise consents, the number of
Additional Designated Accounts designated pursuant to subsection 2.09(b) with
respect to any of the three (3) consecutive Monthly Periods commencing in
December, March, June and September of each calendar year, commencing [June
2000], shall not exceed 15% of the number of Accounts as of the first day of the
calendar year during which such Monthly Periods commence and the number of
Additional Designated Accounts designated pursuant to subsection 2.09(b) during
any calendar year shall not exceed 20% of the number of Accounts as of the first
day of such calendar year.
(d) [Reserved.
(e) [Reserved].
(f) Representations and Warranties. Each Transferor conveying Additional
Designated Accounts hereby represents and warrants to the Trust as of the
related Addition Date as to the matters set forth in clauses (v) and (viii) of
subsection 2.09(c) above and that, in the case of Additional Designated
Accounts, the list delivered pursuant to subsection 2.09(h) is, as of the
applicable Additional Cut-Off Date, true and complete in all material respects.
(g) Additional Transferors. The Transferor may designate Affiliates of the
Transferor to be included as Transferors ("Additional Transferors") under this
Agreement in an amendment hereto pursuant to subsection 9.01(a) and, in
connection with such designation, the Transferor shall surrender the Transferor
Certificate, if any, to the Owner Trustee in exchange for a newly issued
Transferor Certificate modified to reflect such Additional Transferor's interest
in the Trust. Any such designation and exchange shall be in accordance with
Section 3.06 of the Trust Agreement.
(h) Delivery of Documents. In the case of the designation of Additional
Designated Accounts, the Transferor designating such Accounts shall deliver to
the Owner Trustee (i) the computer file or microfiche list required to be
delivered pursuant to Section 2.01 with respect to such Additional Designated
Accounts on the date such file or list is required to be delivered pursuant to
Section 2.01 (the "Document Delivery Date") and (ii) a duly executed, written
Assignment (including an acceptance by the Owner Trustee), substantially in the
form of Exhibit A (the "Assignment"), on the Document Delivery Date. In
addition, in the case of the designation of Additional Designated Accounts, the
Transferor designating such Accounts shall deliver to the Owner Trustee on the
Document Delivery Date an Officer's Certificate confirming, to the extent
applicable, the items set forth in clauses (i) through (v) of subsection 2.09(e)
above.
Section 2.10. Removal of Accounts.
On any day of any Monthly Period each Transferor shall have the right to
require the reassignment to it or its designee of all the Trust's right, title
and interest in, to and under the Receivables then existing and thereafter
created, all Interchange and Recoveries related thereto, all monies due or to
become due and all amounts received or receivable with respect thereto and all
proceeds thereof in or with respect to the Accounts (the "Removed Accounts")
(unless otherwise set
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forth in the applicable Indenture Supplement) and designated for removal by the
Transferor, upon satisfaction of the conditions in clauses (i) through (vi)
below;
(i) on or before the eighth Business Day immediately preceding the
Removal Date, such Transferor shall have given written notice to the Owner
Trustee, the Indenture Trustee, the Servicer, the Rating Agency and each Series
Enhancer (unless such notice requirement is otherwise waived) of such removal
and specifying the date for removal of the Removed Accounts (the "Removal
Date");
(ii) on or prior to the date that is five (5) Business Days on or
before the Removal Date, such Transferor shall amend Schedule 1 by delivering to
the Owner 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 date notice of the Removal Date is given, its account number, the aggregate
amount outstanding in such Account and the aggregate amount of Principal
Receivables outstanding in such Account;
(iii) such Transferor shall have represented and warranted as of the
Removal Date that the list of Removed Accounts delivered pursuant to paragraph
(ii) above, as of the Removal Date, is true and complete in all material
respects;
(iv) the Rating Agency Condition shall have been satisfied with respect
to the removal of the Removed Accounts;
(v) such Transferor shall have delivered to the Owner Trustee and the
Indenture Trustee an Officer's Certificate, dated the Removal Date, to the
effect that such Transferor reasonably believes that (A) such removal will not
have a material adverse effect on the Noteholders, (B) such removal will not
result in the occurrence of a Pay Out Event or Event of Default, and (C) no
selection procedures believed by such Transferor to be materially adverse to the
interests of the Noteholders have been used in selecting the Removed Accounts;
and
(vi) any other conditions specified in the related Indenture
Supplement.
Upon satisfaction of the above conditions, the Trust shall execute and deliver
to such Transferor a written reassignment in substantially the form of Exhibit B
(the "Reassignment") and shall, without further action, be deemed to 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 Receivables arising
in the Removed Accounts, all Interchange and Recoveries related thereto, all
monies due and to become due and all amounts received or receivable with respect
thereto and all proceeds thereof and any Insurance Proceeds relating thereto.
The Owner Trustee may conclusively rely on the Officer's Certificate delivered
pursuant to this Section 2.10 and shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no liability in so
relying.
In addition to the foregoing, on the date when any Receivable in an Account
becomes a Defaulted Receivable, the Trust shall automatically and without
further action or consideration be
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deemed to transfer, set over and otherwise convey to the Transferor with respect
to such Account, without recourse, representation or warranty, all right, title
and interest of the Trust in and to the Defaulted Receivables in such Account,
all Interchange and Recoveries related thereto all monies and amounts due or to
become due with respect thereto, all proceeds thereof and any Insurance Proceeds
relating thereto; provided that Recoveries of such Account shall be applied as
provided herein.
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 6.01 or any order of any Governmental Authority (a
"Transfer Restriction Event"), then, (a) such Transferor and the Servicer agree
(except as prohibited by any such order) to allocate and pay to the Trust, after
the date of such inability, all Collections, including Collections of
Receivables transferred to the Trust 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 Servicer agree that such amounts will be
applied as Collections in accordance with Article VIII of the Indenture and the
terms of each Indenture 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 charged off as uncollectible in accordance with this Agreement shall
continue to be allocated in accordance with Article VIII of the Indenture and
the terms of each Indenture Supplement. For the purpose of the immediately
preceding sentence, such Transferor and the Servicer shall treat the first
received Collections with respect to the Accounts as allocable to the Trust
until the Trust shall have been allocated and paid Collections in an amount
equal to the aggregate amount of Principal Receivables in the Trust as of the
date of the occurrence of such event. If such Transferor and the Servicer are
unable pursuant to any Requirements of Law to allocate Collections as described
above, such Transferor and the Servicer agree that, after the occurrence of such
event, payments on each Account 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
VIII of the Indenture and the terms of each Indenture 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 VIII of the Indenture and the terms of each Indenture Supplement.
[Section 2.12. Discount Option.
(a) The Transferor 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 Collections of Principal Receivables to be treated as
Collections of Finance Charge and Administrative Receivables
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("Discount Option Collections"). Subject to the conditions specified below, the
Transferor may, without notice to or the consent of any Noteholder, from time to
time, increase, reduce or eliminate the Discount Percentage for all or any
specified portion of Collections of Principal Receivables on or after a
specified date (each, a "Discount Option Date"). The Transferor shall provide
thirty (30) days prior written notice of any such change in the Discount
Percentage and the related Discount Option Date to the Servicer, the Owner
Trustee, the Indenture Trustee and any Rating Agency and such change in the
Discount Percentage shall become effective on such Discount Option Date (i)
unless such designation in the reasonable belief of the Transferor would cause a
Pay Out Event or Event of Default with respect to any Series to occur, or an
event which, with notice or lapse of time or both, would constitute a Pay Out
Event or Event of Default with respect to any Series and (ii) only if the Rating
Agency Condition shall have been satisfied with respect to such designation.
(b) On each Date of Processing, Discount Option Collections, if any,
shall be treated 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
Servicer.
(a) ABC agrees to act as the Servicer under this Agreement and the
Noteholders by their acceptance of Notes consent to ABC acting as Servicer.
(b) As agent for each Transferor and the Trust, the Servicer shall service
and administer the Receivables (including the underlying receivables), shall
collect and deposit into the Collection Account amounts received under the
Receivables (including the underlying receivables) and shall charge off as
uncollectible Receivables, all in accordance with its customary and usual
servicing procedures for servicing credit card receivables comparable to the
Receivables and in accordance with the Credit Card Guidelines. As agent for each
Transferor and the Trust, the 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; provided, however, that subject to the rights of
the Owner Trustee, the Indenture Trustee and the Noteholders hereunder, ABRC
shall have the absolute right to direct the Servicer with respect to any power
conferred on the Servicer hereunder in accordance with any such direction.
Without limiting the generality of the foregoing and subject to Section 7.01,
the Servicer or its designee is hereby authorized and empowered, unless such
power is revoked by the Indenture Trustee on account of the occurrence of a
Servicer Default pursuant to Section 7.01, (i) to instruct the Owner Trustee or
the Indenture Trustee to make withdrawals and payments from the Collection
Account, the Excess Funding Account and any Series Account, as set forth in this
Agreement, the Indenture or any Indenture Supplement, (ii) to take any action
required or permitted under any Series Enhancement, as set forth in this
Agreement, the Indenture or any Indenture Supplement, (iii) to execute and
deliver, on behalf of the Trust, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under and in
compliance with applicable Requirements of Law, to commence collection
proceedings with respect to such Receivables and (iv) to make any filings,
reports, notices, applications and registrations with, and to seek any consents
or authorizations from, 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 or reporting requirements or other laws or regulations. The
Owner Trustee and the Indenture Trustee shall furnish the Servicer with any
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder.
(c) The Servicer shall not, and no Successor Servicer shall, 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 Servicer or such Successor Servicer, as the case may be, in
connection with servicing other credit card receivables.
(d) The Servicer shall comply with and perform its servicing obligations
with respect to the Accounts and Receivables in accordance with the Credit Card
Agreements relating to the Accounts and the Credit Card Guidelines and all
applicable rules and regulations of MasterCard and
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VISA, except insofar as any failure to so comply or perform would not materially
and adversely affect the Trust or the Noteholders.
(e) The 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 the Owner Trustee and the Indenture Trustee (including the
reasonable fees and expenses of its outside counsel) and independent accountants
and all other fees and expenses, including the costs of filing UCC continuation
statements, the costs and expenses relating to obtaining and maintaining the
listing of any Notes on any stock exchange and any stamp, documentary, excise,
property (whether on real, personal or intangible property) or any similar tax
levied on the Trust or the Trust's assets that are not expressly stated in this
Agreement to be payable by the Trust or the Transferor (other than federal,
state, local and foreign income and franchise taxes, if any, or any interest or
penalties with respect thereto, assessed on the Trust).
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 Servicer shall be entitled to receive a
servicing fee (the "Servicing Fee") prior to the termination of the Trust
pursuant to Section 8.01 of the Trust Agreement. The share of the Servicing Fee
allocable to the Noteholders' Interest of a particular Series with respect to
any Monthly Period (the "Monthly Servicing Fee") will each be determined in
accordance with the relevant Indenture Supplement. The portion of the Servicing
Fee with respect to any Monthly Period not so paid by the Noteholders' Interest
of any particular Series shall be paid by the holder of the Transferor
Beneficial Interest on the related Payment Date and in no event shall the Trust,
the Owner Trustee, the Indenture Trustee, the Noteholders 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 holder of the Transferor Beneficial Interest.
Section 3.03. Representations, Warranties and Covenants of the Servicer.
ABC, as initial Servicer, hereby makes, and any Successor Servicer by its
appointment hereunder shall make, with respect to itself, on each Closing Date
(and on the date of any such appointment), the following representations,
warranties and covenants on which the Trust and the Indenture Trustee shall be
deemed to have relied in accepting the Receivables in trust and in entering into
the Indenture:
(a) Organization and Good Standing. The Servicer is a corporation validly
existing under the laws of the jurisdiction of its organization or incorporation
and has, in all material respects, full power and authority to own its
properties and conduct its credit card servicing business as presently owned or
conducted, and to execute, deliver and perform its obligations under this
Agreement.
(b) Due Qualification. The Servicer is duly qualified to do business and is
in good standing as a foreign corporation or other foreign entity (or is exempt
from such requirements) and has obtained all necessary licenses and approvals in
each jurisdiction in which the servicing of the Receivables (including the
underlying receivables) as required by this Agreement requires such
qualification except where the failure to so qualify or obtain licenses or
approvals would not have a material adverse effect on its ability to perform its
obligations as Servicer under this Agreement.
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(c) Due Authorization. The execution, delivery, and performance of this
Agreement and the other agreements and instruments executed or to be executed by
the Servicer as contemplated hereby, have been duly authorized by the Servicer
by all necessary action on the part of the Servicer.
(d) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Servicer, enforceable 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 or by general principles
of equity.
(e) No Conflict. The execution and delivery of this Agreement by the
Servicer, and the performance of the transactions contemplated by this Agreement
and the fulfillment of the terms hereof and thereof applicable to the Servicer,
will not conflict with, violate or 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 the Servicer is a party or by which
it or its properties are bound.
(f) No Violation. The execution and delivery of this Agreement by the
Servicer, the performance of the transactions contemplated by this Agreement and
the fulfillment of the terms hereof and thereof applicable to the Servicer will
not conflict with or violate any Requirements of Law applicable to the Servicer.
(g) No Proceedings. There are no proceedings or investigations pending or,
to the best knowledge of the Servicer, threatened against the Servicer before
any Governmental Authority seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or seeking any determination or
ruling that, in the reasonable judgment of the Servicer, would materially and
adversely affect the performance by the Servicer of its obligations under this
Agreement.
(h) Compliance with Requirements of Law. The Servicer shall duly satisfy
all obligations on its part to be fulfilled under or in connection with each
Receivable (and the underlying receivable) and the related Account, if any, will
maintain in effect all qualifications required under Requirements of Law in
order to service properly each Receivable and the related Account, if any, and
will comply in all material respects with all other Requirements of Law in
connection with servicing each Receivable and the related Account the failure to
comply with which would have an Adverse Effect.
(i) No Rescission or Cancellation. The Servicer shall take no action to
permit any rescission or cancellation of any Receivable (or the underlying
receivable) except in accordance with the Credit Card Guidelines or as ordered
by a court of competent jurisdiction or other Governmental Authority.
(j) Protection of Rights. The Servicer shall take no action which, nor omit
to take any action the omission of which, would impair the rights of the Trust,
the Indenture Trustee or the Noteholders in any Receivable (or the underlying
receivable) or the related Account, if any, nor shall
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it reschedule, revise or defer payments due on any Receivable except in
accordance with the Credit Card Guidelines.
(k) Receivables Not To Be Evidenced by Promissory Notes. Except in
connection with its enforcement or collection of an Account, the Servicer shall
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 Servicer as provided in this Section.
(l) All Consents. All authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by the Servicer in connection with the execution and
delivery of this Agreement by the Servicer and the performance of the
transactions contemplated by this Agreement by the Servicer, have been duly
obtained, effected or given and are in full force and effect.
In the event (x) any of the representations, warranties or covenants of the
Servicer contained in subsection 3.03(h), (i) or (j) with respect to any
Receivable or the related Account is breached, and such breach has a material
adverse effect on the Noteholders' Interest in such Receivable (which
determination shall be made without regard to whether funds are then available
to any Noteholders pursuant to any Series Enhancement) and is not cured within
sixty (60) days (or such longer period, not in excess of 150 days, as may be
agreed to by the Indenture Trustee and the Transferor) of the earlier to occur
of the discovery of such event by the Servicer, or receipt by the Servicer of
notice of such event given by the Indenture Trustee or the Transferor, or (y) as
provided in subsection 3.03(k) with respect to any Receivable, all Receivables
in the Account or Accounts to which such event relates shall be assigned and
transferred to the Servicer on the terms and conditions set forth below.
The Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds on the Payment Date following
the Monthly Period in which such assignment obligation arises in an amount equal
to the amount of such Receivables.
Upon each such reassignment or assignment to the Servicer, the Trust shall
automatically and without further action be deemed to sell, transfer, assign,
set over and otherwise convey to the Servicer, without recourse, representation
or warranty, all right, title and interest of the Trust in and to such
Receivables, all Interchange and Recoveries related thereto all monies due or to
become due and all amounts received or receivable with respect thereto and all
proceeds thereof. The Trust shall execute such documents and instruments of
transfer or assignment and take such other actions as shall be reasonably
requested by the Servicer to effect the conveyance of any such Receivables
pursuant to this Section but only upon receipt of an Officer's Certificate of
the Servicer that states that all conditions set forth in this section have been
satisfied. The obligation of the Servicer to accept reassignment or assignment
of such Receivables, and to make the deposits, if any, required to be made to
the Collection Account as provided in the preceding paragraph, shall constitute
the sole remedy respecting the event giving rise to such obligation available to
Noteholders (or the Indenture Trustee on behalf of Noteholders) or any Series
Enhancer, except as provided in Section 5.04.
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Section 3.04. Reports and Records for the Owner Trustee.
(a) Daily Records. On each Business Day, the Servicer shall make or cause
to be made available at the office of the Servicer for inspection by the Owner
Trustee upon request a record setting forth (i) the Collections in respect of
Principal Receivables and in respect of Finance Charge and Administrative
Receivables processed by the Servicer on the second preceding Business Day in
respect of each Account and (ii) the amount of Receivables as of the close of
business on the second preceding Business Day in each Account. The 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 and shall make
available to the Owner Trustee at the office of the Servicer on any Business Day
any computer programs necessary to make such identification. The Owner Trustee
shall enter into such reasonable confidentiality agreements as the Servicer
shall deem necessary to protect its interests and as are reasonably acceptable
in form and substance to the Owner Trustee.
(b) Monthly Servicer's Certificate. Not later than the second Business Day
preceding each Payment Date, the Servicer shall, with respect to each
outstanding Series, deliver to the Owner Trustee, the Indenture Trustee and each
Rating Agency a certificate of an Authorized Officer in substantially the form
set forth in the related Indenture Supplement.
Section 3.05. Annual Certificate of Servicer.
The Servicer shall deliver to the Owner Trustee, the Indenture Trustee and
each Rating Agency on or before April 30 of each calendar year, beginning with
April 30, 2001, an Officer's Certificate substantially in the form of Exhibit C.
Section 3.06. Annual Servicing Report of Independent Public Accountants;
Copies of Reports Available.
(a) On or before [September 30] of each calendar year, beginning with
[September 30], 2001, the Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer or the Transferor) to furnish a report covering the one-year period
ending [June 30] of such calendar year (addressed to the Owner Trustee) to the
Owner Trustee, the Indenture Trustee, the Servicer and each Rating Agency to the
effect that they have applied certain procedures agreed upon with the Servicer
and examined certain documents and records relating to the servicing of Accounts
under this Agreement, the Indenture and each Indenture Supplement and that, on
the basis of such agreed-upon procedures, nothing has come to the attention of
such accountants that caused them to believe that the servicing (including the
allocation of Collections) has not been conducted in compliance with the terms
and conditions as set forth in Article III and Section 5.08 of this Agreement
and the applicable provisions of the Indenture and each Indenture Supplement,
except for such exceptions as they believe to be immaterial and such other
exceptions as shall be set forth in such statement. Such report shall set forth
the agreed-upon procedures performed.
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(b) On or before [September 30] of each calendar year, beginning with
[September 30], 2001, the Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer or Transferor) to furnish a report covering the one-year period ending
[June 30] of such calendar year to the Owner Trustee, the Indenture Trustee, the
Servicer and each Rating Agency to the effect that they have applied certain
procedures agreed upon with the Servicer to compare the mathematical
calculations of certain amounts set forth in the Servicer's certificates
delivered pursuant to subsection 3.04(b) during the period covered by such
report with the Servicer's computer reports that 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. Such report shall set forth the
agreed-upon procedures performed.
(c) A copy of each certificate and report provided pursuant to subsection
3.04(b), or Section 3.05 or 3.06 may be obtained by any Noteholder or Note Owner
by a request in writing to the Owner Trustee addressed to the Corporate Trust
Office.
Section 3.07. Tax Treatment.
Unless otherwise specified in the Indenture or an Indenture Supplement with
respect to a particular Series, the Transferor has entered into this Agreement,
and the Notes will be issued, with the intention that, for federal, state and
local income and franchise tax purposes, (i) the Notes of each Series which are
characterized as indebtedness at the time of their issuance will qualify as
indebtedness secured by the Receivables and (ii) the Trust shall not be treated
as an association or publicly traded partnership taxable as a corporation. The
Transferor, by entering into this Agreement, and each Noteholder, by the
acceptance of any such Note (and each Note Owner, by its acceptance of an
interest in the applicable Note), agree to treat such Notes for federal, state
and local income and franchise tax purposes as indebtedness of the Transferor.
Each Holder of such Note agrees that it will cause any Note Owner acquiring an
interest in a Note through it to comply with this Agreement as to treatment as
indebtedness under applicable tax law, as described in this Section 3.07. The
parties hereto agree that they shall not cause or permit the making, as
applicable, of any election under Treasury Regulation Section 301.7701-3 whereby
the Trust or any portion thereof would be treated as a corporation for federal
income tax purposes and, except as required by Section 6.13 of the Indenture,
shall not file tax returns or obtain any federal employer identification number
for the Trust but shall treat the Trust as a security device for federal income
tax purposes. The provisions of this Agreement shall be construed in furtherance
of the foregoing intended tax treatment.
Section 3.08. Notices to ABC.
In the event that ABC is no longer acting as Servicer, any Successor
Servicer shall deliver or make available to ABC each certificate and report
required to be provided thereafter pursuant to subsection 3.04(b) and Sections
3.05 and 3.06.
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Section 3.09. Adjustments.
(a) If the Servicer adjusts downward the amount of any Receivable because
of a rebate, refund, unauthorized charge or billing error to a cardholder,
because such Receivable was created in respect of merchandise which was refused
or returned by a cardholder, then, in any such case, the amount of Principal
Receivables used to calculate the Transferor Interest, and (unless otherwise
specified) any other amount required herein or in the Indenture or any Indenture
Supplement to be calculated by reference to the amount of Principal Receivables,
will be reduced by the amount of the adjustment. Similarly, the amount of
Principal Receivables used to calculate the Transferor Interest and (unless
otherwise specified) any other amount required herein or in any Indenture
Supplement to be calculated by reference to the amount of Principal Receivables
will be reduced by the principal amount of any Receivable which was discovered
as having been created through a fraudulent or counterfeit charge or with
respect to which the covenant contained in subsection 2.07(b) was breached. 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 Interest, the Transferor
Interest would be less than the Required Transferor Interest, not later than
1:00 p.m., New York City time, on the Payment Date following the Monthly Period
in which such adjustment obligation arises, the 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 Interest would be less than the
Required Transferor Interest, due to adjustments with respect to Receivables
conveyed by such Transferor (up to the amount of such Principal Receivables).
(b) If (i) the Servicer makes a deposit into the Collection Account in
respect of a Collection of a Receivable and such Collection was received by the
Servicer in the form of a check which is not honored for any reason or (ii) the
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 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. Notwithstanding the first two sentences of this
paragraph, adjustments made pursuant to this Section 3.09 shall not require any
change in any report previously delivered pursuant to subsection 3.04(a).
Section 3.10. Reports to the Commission.
The Servicer shall, on behalf of the Trust, cause to be filed with the
Commission any periodic reports required to be filed under the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder. The Transferor shall, at its own expense, cooperate
in any reasonable request of the Servicer in connection with such filings. The
Trust agrees to cooperate with the Servicer in connection with such filings.
[END OF ARTICLE III]
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ARTICLE IV
OTHER MATTERS RELATING TO EACH TRANSFEROR
Section 4.01. Liability of each Transferor.
Each Transferor shall be severally, and not jointly, liable for all
obligations, covenants, representations and warranties of such Transferor
arising under or related to this Agreement. Except as provided in the preceding
sentence, each Transferor shall be liable only to the extent of the obligations
specifically undertaken by it in its capacity as a Transferor.
Section 4.02. Merger or Consolidation of, or Assumption of the Obligations
of, a Transferor.
(a) No Transferor shall dissolve, liquidate, consolidate with or merge into
any other corporation or convey, transfer or sell its properties and assets
substantially as an entirety to any Person unless:
(i) (x) the corporation formed by such consolidation or into which such
Transferor is merged or the Person which acquires by conveyance, transfer or
sale the properties and assets of the Transferor substantially as an entirety
shall be, if such Transferor is not the surviving entity, 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 association, a national banking association, a
bank or other entity which is not eligible to be a debtor in a case under Title
11 of the United States Code or is a special purpose corporation whose powers
and activities are limited to substantially the same degree as provided in the
certificate of incorporation of ABRC and, if such Transferor is not the
surviving entity, shall expressly assume, by an agreement supplemental hereto,
executed and delivered to the Owner Trustee and the Indenture Trustee, in form
reasonably satisfactory to the Owner Trustee and the Indenture Trustee, the
performance of every covenant and obligation of such Transferor hereunder; and
(y) such Transferor or the surviving entity, as the case may be, has delivered
to the Owner Trustee and the Indenture Trustee (with a copy to each Rating
Agency) an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger, conveyance, transfer or sale 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 or general principles of 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.
(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,
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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 Servicer determine will not result in an Adverse Effect, (2) which meet the
requirements of clause (ii) of the preceding paragraph and (3) for which such
purchaser, transferee, pledgee or entity shall expressly assume, in an agreement
supplemental hereto, executed and delivered to the Owner Trustee and the
Indenture Trustee in writing in form satisfactory to the Owner Trustee and the
Indenture Trustee, the performance of every covenant and obligation of such
Transferor thereby conveyed.
Section 4.03. Limitations on Liability of Each Transferor.
Subject to Section 4.01, no Transferor nor any of the directors, officers,
employees, incorporators or agents of any Transferor acting in such capacities
shall be under any liability to the Trust, the Owner Trustee, the Indenture
Trustee, the Noteholders, any Series Enhancer or any other Person for any action
taken, or for refraining from the taking of any action, in good faith in such
capacities 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, the Indenture and any Indenture Supplement
and the issuance of the Notes; 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. Each Transferor and any director, officer,
employee or agent of such Transferor may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person (other than
such Transferor) respecting any matters arising hereunder.
[END OF ARTICLE IV]
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ARTICLE V
OTHER MATTERS RELATING TO THE SERVICER
Section 5.01. Liability of the Servicer.
The Servicer shall be liable under this Article V only to the extent of the
obligations specifically undertaken by the Servicer in its capacity as Servicer.
Section 5.02. Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer.
The Servicer shall not consolidate with or merge into any other corporation
or convey, transfer or sell its properties and assets substantially as an
entirety to any Person, unless:
(a) (i) the corporation formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance, transfer or sale
the properties and assets of the Servicer substantially as an entirety shall be,
if the Servicer 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, if the Servicer is not the surviving entity, such
corporation shall expressly assume, by an agreement supplemental hereto,
executed and delivered to the Owner Trustee and the Indenture Trustee, in form
satisfactory to the Owner Trustee and the Indenture Trustee, the performance of
every covenant and obligation of the Servicer hereunder;
(ii) the Servicer has delivered to the Owner Trustee and the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger, conveyance, transfer or sale comply with this
Section 5.02 and that all conditions precedent herein provided for relating to
such transaction have been complied with;
(iii) the Servicer shall have given the Rating Agencies notice of such
consolidation, merger or transfer of assets; and
(b) the corporation formed by such consolidation or into which the Servicer
is merged or the Person which acquires by conveyance or transfer the properties
and assets of the Servicer substantially as an entirety shall be an Eligible
Servicer.
Section 5.03. Limitation on Liability of the Servicer and Others.
Except as provided in Section 5.04, neither the Servicer nor any of the
directors, officers, employees or agents of the Servicer in its capacity as
Servicer shall be under any liability to the Trust, the Owner Trustee, the
Indenture Trustee, the Noteholders, any Series Enhancer or any other Person for
any action taken, or for refraining from the taking of any action, in good faith
in its capacity as Servicer pursuant to this Agreement; provided, however, that
this provision shall not protect the 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 Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie
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properly executed and submitted by any Person (other than the Servicer)
respecting any matters arising hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties as Servicer in accordance with this Agreement and which
in its reasonable judgment may involve it in any expense or liability. The
Servicer may, in its sole discretion, undertake any such legal action which it
may deem necessary or desirable for the benefit of the Noteholders with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Noteholders hereunder.
Section 5.04. Servicer Indemnification of the Trust, the Owner Trustee and
the Indenture Trustee.
The Servicer shall indemnify and hold harmless each of the Trust, the Owner
Trustee, the Indenture Trustee and any trustees predecessor thereto (including
the Indenture Trustee in its capacity as Transfer Agent and Registrar or as
Paying Agent) and their respective directors, officers, employees and agents
from and against any and all loss, liability, claim, expense, damage or injury
suffered or sustained by reason of (a) any acts or omissions of the Servicer
with respect to the Trust pursuant to this Agreement or (b) the administration
by the Owner Trustee of the Trust (in the case of clause (a) or (b), other than
such as may arise from the negligence or willful misconduct of the Owner Trustee
or the Indenture Trustee, as applicable), 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. Indemnification
pursuant to this Section 5.04 shall not be payable from the Trust Assets. The
Servicer's obligations under this Section 5.04 shall survive the termination of
this Agreement or the Trust or the earlier removal or resignation of the Owner
Trustee or the Indenture Trustee, as applicable.
Section 5.05. Resignation of the Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) upon determination that (i) the performance of its
duties hereunder is no longer permissible under applicable law and (ii) there is
no reasonable action which the Servicer could take to make the performance of
its duties hereunder permissible under applicable law or (b) upon the
assumption, by an agreement supplemental hereto, executed and delivered to the
Owner Trustee and the Indenture Trustee, in form satisfactory to the Owner
Trustee and the Indenture Trustee, of the obligations and duties of the Servicer
hereunder by any of its Affiliates or by any other entity the appointment of
which shall have satisfied the Rating Agency Condition and, in either case,
qualifies as an Eligible Servicer. Any determination permitting the resignation
of the Servicer shall be evidenced as to clause (a) above by an Opinion of
Counsel to such effect delivered to the Owner Trustee and the Indenture Trustee.
No resignation shall become effective until the Indenture Trustee or a Successor
Servicer shall have assumed the responsibilities and obligations of the Servicer
in accordance with Section 7.02 hereof. If within 120 days of the date of the
determination that the Servicer may no longer act as Servicer under clause (a)
above the Indenture Trustee is unable to appoint a Successor Servicer, the
Indenture Trustee shall serve as Successor Servicer. Notwithstanding the
foregoing, the Indenture 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 Trust shall give prompt notice to each Rating
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Agency and each Series Enhancer upon the appointment of a Successor Servicer.
Notwithstanding anything in this Agreement to the contrary, ABC may assign part
or all of its obligations and duties as Servicer under this Agreement to an
Affiliate of ABC so long as ABC shall have fully guaranteed the performance of
such obligations and duties under this Agreement.
Section 5.06. Access to Certain Documentation and Information Regarding the
Receivables.
The Servicer shall provide to the Owner Trustee or the Indenture Trustee,
as applicable, access to the documentation regarding the Accounts and the
Receivables in such cases where the Owner Trustee or the Indenture Trustee, as
applicable, is required in connection with the enforcement of the rights of
Noteholders 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
Servicer's normal security and confidentiality procedures and (d) at reasonably
accessible offices in the continental United States designated by the Servicer.
Nothing in this Section shall derogate from the obligation of the Transferor,
the Owner Trustee, the Indenture Trustee and the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Servicer to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section.
Section 5.07. Delegation of Duties.
In the ordinary course of business, the Servicer may at any time delegate
its duties hereunder with respect to the Accounts and the Receivables to any
Person that agrees to conduct such duties in accordance with the Credit Card
Guidelines and this Agreement. Such delegation shall not relieve the Servicer of
its liability and responsibility with respect to such duties, and shall not
constitute a resignation within the meaning of Section 5.05.
Section 5.08. Examination of Records.
Each Transferor and the Servicer shall indicate generally in their computer
files or other records that the Receivables arising in the Accounts have been
conveyed to the Trust, pursuant to this Agreement. Each Transferor and the
Servicer shall, prior to the sale or transfer to a third party of any receivable
held in its custody, examine its computer records and other records to determine
that such receivable is not, and does not include, a Receivable.
[END OF ARTICLE V]
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ARTICLE VI
INSOLVENCY EVENTS
Section 6.01. Rights upon the Occurrence of an Insolvency Event.
If any Transferor shall consent or fail to object to the appointment of a
bankruptcy trustee or conservator, receiver or liquidator in any bankruptcy
proceeding or other insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to any Transferor of or
relating to all or substantially all of such Transferor's property, or the
commencement of an action seeking a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the appointment of
a bankruptcy trustee or conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up, insolvency, bankruptcy, reorganization,
conservatorship, receivership or liquidation of such entity's affairs, or
notwithstanding an objection by such Transferor any such action shall have
remained undischarged or unstayed for a period of sixty (60) days or upon entry
of any order or decree providing for such relief; or such Transferor shall admit
in writing its inability to pay its debts generally as they become due, file, or
consent or fail to object (or object without dismissal of any such filing within
sixty (60) days of such filing) to the filing of, a petition to take advantage
of any applicable bankruptcy, insolvency or reorganization, receivership or
conservatorship statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations (any such act or occurrence with
respect to any Person being an "Insolvency Event"), such Transferor 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 Indenture Trustee and the Owner 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, 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
Assets and shall be allocated and distributed to Noteholders in accordance with
the terms of the Indenture and each Indenture Supplement.
[END OF ARTICLE VI]
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ARTICLE VII
SERVICER DEFAULTS
Section 7.01. Servicer Defaults. If any one of the following events (a "Servicer
Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer or deposit or
to give instructions or to give notice to the Indenture Trustee to make such
payment, transfer or deposit on or before the date occurring five (5) 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, the Indenture or any Indenture Supplement;
(b) failure on the part of the Servicer duly to observe or perform in any
material respect any other covenants or agreements of the Servicer set forth in
this Agreement which has an Adverse Effect and which continues unremedied for a
period of sixty (60) days after the date on which notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by the
Owner Trustee or the Indenture Trustee, or to the Servicer, the Owner Trustee
and the Indenture Trustee by Holders of Notes evidencing not less than 10% of
the aggregate unpaid principal amount of all Notes (or, with respect to any such
failure that does not relate to all Series, 10% of the aggregate unpaid
principal amount of all Series to which such failure relates); or the Servicer
shall assign or delegate its duties under this Agreement, except as permitted by
Sections 5.02 and 5.07;
(c) any representation, warranty or certification made by the Servicer in
this Agreement or in any certificate delivered pursuant to this Agreement shall
prove to have been incorrect when made, which has an Adverse Effect on the
rights of the Noteholders of any Series (which determination shall be made
without regard to whether funds are then available pursuant to any Series
Enhancement) and which Adverse Effect continues for a period of sixty (60) days
after the date on which notice thereof, requiring the same to be remedied, shall
have been given to the Servicer by the Owner Trustee or the Indenture Trustee,
or to the Servicer, the Owner Trustee and the Indenture Trustee by the Holders
of Notes evidencing not less than 10% of the aggregate unpaid principal amount
of all Notes (or, with respect to any such representation, warranty or
certification that does not relate to all Series, 10% of the aggregate unpaid
principal amount of all Series to which such representation, warranty or
certification relates);
(d) the Servicer shall consent to the appointment of a bankruptcy trustee
or conservator or receiver or liquidator in any bankruptcy proceeding or other
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Servicer or of or relating to all or
substantially all 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 bankruptcy trustee or a conservator or receiver or liquidator in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of sixty (60)
days; or the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage
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of any applicable bankruptcy, insolvency or reorganization statute, make any
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations; or
(e) any other Servicer Default described in the related Indenture
Supplement.
Then, in the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied, either the Indenture Trustee or the Holders of
Notes evidencing more than 50% of the aggregate unpaid principal amount of all
Notes, by notice then given to the Servicer and the Owner Trustee (and to the
Indenture Trustee if given by the Noteholders) (a "Termination Notice"), may
terminate all but not less than all the rights and obligations of the Servicer
as Servicer under this Agreement; provided, however, if within sixty (60) days
of receipt of a Termination Notice the Indenture Trustee does not receive any
bids from Eligible Servicers in accordance with subsection 7.02(c) to act as a
Successor Servicer and receives an Officer's Certificate of the Servicer to the
effect that the Servicer cannot in good faith cure the Servicer Default which
gave rise to the Termination Notice, the Indenture Trustee shall grant a right
of first refusal to the Transferor which would permit the Transferor at its
option to acquire the Noteholders' Interest on the Payment Date in the next
calendar month.
The price for the Noteholders' Interest shall be equal to the sum of the
amounts specified therefor with respect to each outstanding Series in the
related Indenture Supplement. The Transferor shall notify the Indenture Trustee
prior to the Record Date for the Payment Date of the acquisition if it is
exercising such right of first refusal. If the Transferor exercises such right
of first refusal, the Transferor shall deposit the price into the Collection
Account not later than 1:00 p.m., New York City time, on such Payment Date in
immediately available funds. The price shall be allocated and distributed to
Noteholders in accordance with the terms of the Indenture and each Indenture
Supplement.
After receipt by the Servicer of a Termination Notice, and on the date that
a Successor Servicer is appointed by the Indenture Trustee pursuant to Section
7.02, all authority and power of the Servicer under this Agreement shall pass to
and be vested in the Successor Servicer (a "Servicing Transfer"); and, without
limitation, the Indenture Trustee is hereby authorized and empowered (upon the
failure of the Servicer to cooperate) to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, all documents and other instruments
upon the failure of the 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 Servicing Transfer. The Servicer
agrees to cooperate with the Indenture Trustee and such Successor Servicer in
effecting the termination of the responsibilities and rights of the Servicer to
conduct servicing hereunder, including the transfer to such Successor Servicer
of all authority of the Servicer to service the Receivables provided for under
this Agreement, including all authority over all Collections which shall on the
date of transfer be held by the Servicer for deposit, or which have been
deposited by the Servicer, in the Collection Account, or which shall thereafter
be received with respect to the Receivables, and in assisting the Successor
Servicer. The Servicer shall within twenty (20) 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
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the manner and at such times as the Successor Servicer shall reasonably request.
To the extent that compliance with this Section shall require the Servicer to
disclose to the Successor Servicer information of any kind which the Servicer
deems to be confidential, the Successor Servicer shall be required to enter into
such customary licensing and confidentiality agreements as the Servicer shall
deem reasonably necessary to protect its interests.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in paragraph (a) above for a period of ten (10) Business Days after
the applicable grace period or under paragraph (b) or (c) above for a period of
sixty (60) Business Days after the applicable grace period, shall not constitute
a Servicer Default if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Servicer and such delay or failure was
caused by an act of God or the public enemy, acts of declared or undeclared war,
public disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence shall
not relieve the Servicer from using all commercially reasonable efforts to
perform its obligations in a timely manner in accordance with the terms of this
Agreement and the Servicer shall provide the Indenture Trustee, Owner Trustee,
each Transferor and any Series Enhancer with an Officer's Certificate giving
prompt notice of such failure or delay by it, together with a description of its
efforts so to perform its obligations.
Section 7.02. Indenture Trustee To Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 7.01, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Indenture Trustee or until a date mutually
agreed upon by the Servicer and the Indenture Trustee. The Indenture 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 Indenture Trustee. In the event that a Successor
Servicer has not been appointed or has not accepted its appointment at the time
when the Servicer ceases to act as Servicer, the Indenture Trustee without
further action shall automatically be appointed the Successor Servicer. The
Indenture Trustee may delegate any of its servicing obligations to an Affiliate
or agent in accordance with subsection 3.01(b) and Section 5.07. Notwithstanding
the foregoing, the Indenture Trustee shall, if it is legally unable so to act,
petition at the expense of the Servicer a court of competent jurisdiction to
appoint any established institution qualifying as an Eligible Servicer as the
Successor Servicer hereunder. The Indenture Trustee shall give prompt notice to
each Rating Agency and each Series Enhancer upon the appointment of a Successor
Servicer.
(b) Upon its appointment, the Successor Servicer shall be the successor in
all respects to the 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 Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be deemed to
refer to the Successor Servicer.
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(c) In connection with any Termination Notice, the Indenture 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 plus the sum of the amounts with respect to each Series and with respect
to each Payment Date equal to any Collections of Finance Charge and
Administrative Receivables allocable to Noteholders of such Series which are
payable to the holders of Trust Beneficial Interests or Certificates after
payment of all amounts owing to the Noteholders of such Series with respect to
such Payment Date or required to be deposited in the applicable Series Accounts
with respect to such Payment Date and any amounts required to be paid to any
Series Enhancer for such Series with respect to such Payment Date pursuant to
the terms of any Enhancement Agreement; provided, however, that the holder of
the Transferor Beneficial Interest shall be responsible for payment of the
Transferor's portion of such aggregate Servicing Fees and all other such amounts
in excess of such aggregate Servicing Fees. Each Holder of the Transferor's
Certificates agrees that, if ABC (or any Successor Servicer) is terminated as
Servicer hereunder, the portion of the Collections in respect of Finance Charge
and Administrative Receivables that the Transferor is entitled to receive
pursuant to this Agreement, the Indenture or any Indenture Supplement shall be
reduced by an amount sufficient to pay the Transferor's share 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 8.01 of the Trust Agreement, and shall pass to and be vested
in the Transferor and, without limitation, the Transferor is 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 Transferor in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct servicing of
the Receivables. The Successor Servicer shall transfer its electronic records
relating to the Receivables to the Transferor or its designee in such electronic
form as it may reasonably request and shall transfer all other records,
correspondence and documents to it in the manner and at such times as it shall
reasonably request. To the extent that compliance with this Section shall
require the Successor Servicer to disclose to the Transferor information of any
kind which the Successor Servicer deems to be confidential, the Transferor shall
be required to enter into such customary licensing and confidentiality
agreements as the Successor Servicer shall deem necessary to protect its
interests.
Section 7.03. Notification to Noteholders. Within five (5) Business Days
after the Servicer becomes aware of any Servicer Default, the Servicer shall
give notice thereof to the Owner Trustee, the Indenture Trustee, each Rating
Agency and each Series Enhancer and the Indenture Trustee shall give notice to
the Noteholders. Upon any termination or appointment of a Successor Servicer
pursuant to this Article, the Indenture Trustee shall give prompt notice thereof
to the Noteholders.
[END OF ARTICLE VII]
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ARTICLE VIII
TERMINATION
Section 8.01. Termination of Agreement. This Agreement and the respective
obligations and responsibilities of the Trust, the Transferor and the Servicer
under this Agreement shall terminate, except with respect to the duties
described in Section 5.04, on the Trust Termination Date.
[END OF ARTICLE VIII]
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ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment; Waiver of Past Defaults.
(a) This Agreement may be amended by the parties hereto from time to time
prior to, or in connection with, the issuance of the first Series of Notes
hereunder without the requirement of any consents or the satisfaction of any
conditions set forth below. This Agreement may be amended from time to time by
the Servicer, the Transferor and the Trust, by a written instrument signed by
each of them, without the consent of the Indenture Trustee or any of the
Noteholders; provided that (i) the Transferor shall have delivered to the
Indenture Trustee and the Owner Trustee an Officer's Certificate, dated the date
of any such Amendment, stating that the Transferor reasonably believes that such
amendment will not have an Adverse Effect and (ii) the Rating Agency Condition
shall have been satisfied with respect to any such amendment. Additionally,
notwithstanding the preceding sentence, this Agreement will be amended by the
Servicer and the Trust at the direction of the Transferor without the consent of
the Indenture Trustee or any of the Noteholders or Series Enhancers to add,
modify or eliminate such provisions as may be necessary or advisable in order to
enable all or a portion of the Trust (i) to qualify as, and to permit an
election to be made to cause the Trust to be treated as, a "financial asset
securitization investment trust" as described in the provisions of Section 860L
of the Code, and (ii) to avoid the imposition of state or local income or
franchise taxes imposed on the Trust's property or its income; provided,
however, that (i) the Transferor delivers to the Indenture Trustee and the Owner
Trustee an Officer's Certificate to the effect that the proposed amendments meet
the requirements set forth in this subsection, (ii) each Rating Agency will have
notified the Transferor, the Servicer, the Indenture Trustee and the Owner
Trustee in writing that the amendment will not result in a reduction or
withdrawal of the rating of any outstanding Series or Class as to which it is a
Rating Agency and (iii) such amendment does not affect the rights, duties or
obligations of the Indenture Trustee or the Owner Trustee hereunder. The
amendments which the Transferor may make without the consent of Noteholders or
Series Enhancers pursuant to the preceding sentence may include, without
limitation, the addition of a sale of Receivables.
(b) This Agreement may also be amended from time to time by the Servicer,
the Transferor and the Trust, with the consent of the Holders of Notes
evidencing not less than 66-2/3% of the aggregate unpaid principal amount of the
Notes of all affected Series for which the Transferor has not delivered an
Officer's Certificate stating that there is no Adverse Effect, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders; provided, however, that no such amendment shall (i) reduce in any
manner the amount of or delay the timing of any distributions (changes in Pay
Out Events or Events of Default that decrease the likelihood of the occurrence
thereof shall not be considered delays in the timing of distributions for
purposes of this clause) to be made to Noteholders or deposits of amounts to be
so distributed or the amount available under any Series Enhancement without the
consent of each affected Noteholder, (ii) change the definition of or the manner
of calculating the interest of any Noteholder without the consent of each
affected Noteholder, (iii) reduce the aforesaid percentage required to consent
to any such amendment without the consent of each Noteholder or (iv) adversely
affect the rating of any Series or Class by
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each Rating Agency without the consent of the Holders of Notes of such Series or
Class evidencing not less than 66-2/3% of the aggregate unpaid principal amount
of the Notes of such Series or Class.
(c) Promptly after the execution of any such amendment or consent (other
than an amendment pursuant to paragraph (a)), the Trust shall furnish
notification of the substance of such amendment to the Indenture Trustee and
each Noteholder, and the Servicer shall furnish notification of the substance of
such amendment to each Rating Agency and each Series Enhancer.
(d) It shall not be necessary for the consent of Noteholders under this
Section 9.01 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 of evidencing the authorization of the
execution thereof by Noteholders shall be subject to such reasonable
requirements as the Indenture Trustee may prescribe.
(e) Notwithstanding anything in this Section 9.01 to the contrary, no
amendment may be made to this Agreement which would adversely affect in any
material respect the interests of any Series Enhancer without the consent of
such Series Enhancer.
(f) Any Indenture Supplement executed in accordance with the provisions of
Article X of the Indenture shall not be considered an amendment of this
Agreement for the purposes of this Section 9.01.
(g) The Holders of Notes evidencing more than 66-2/3% of the aggregate
unpaid principal amount of the Notes of each Series or, with respect to any
Series with two (2) or more Classes, of each Class (or, with respect to any
default that does not relate to all Series, 66-2/3% of the aggregate unpaid
principal amount of the Notes 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 Noteholders, waive any default by the Transferor or the Servicer
in the performance of their obligations hereunder and its consequences, except
the failure to make any distributions required to be made to Noteholders or to
make any required deposits of any amounts to be so distributed. Upon any such
waiver of a past default, such default shall cease to exist, and any 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 impair any right consequent thereon except to the extent expressly so waived.
(h) The Owner Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Owner Trustee's rights, duties or immunities
under this Agreement or otherwise. In connection with the execution of any
amendment hereunder, the Owner Trustee shall be entitled to receive the Opinion
of Counsel described in subsection 9.02(d).
Section 9.02. Protection of Right, Title and Interest to Trust.
(a) The Transferor shall cause this Agreement, all amendments and
supplements hereto and all financing statements and continuation statements and
any other necessary documents covering the Indenture Trustee's and the Trust's
right, title and interest to the Trust to be promptly
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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 Indenture Trustee,
Noteholders and the Trust hereunder to all property comprising the Trust. The
Transferor shall deliver to the Owner Trustee and Indenture 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 Transferor shall cooperate fully with the 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 thirty (30) days after any Transferor 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 Owner Trustee and the Indenture
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 or ownership interest in the Receivables and the proceeds
thereof.
(c) Each Transferor shall give the Owner Trustee and the Indenture Trustee
prompt notice of any relocation of its chief principal executive office or any
change in the jurisdiction under whose laws it is organized and whether, as a
result of such relocation or change, 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 shall at all times maintain its chief
principal executive offices within the United States and shall at all times be
organized under the laws of a jurisdiction located within the United States.
(d) The Transferor shall deliver to the Owner Trustee and the Indenture
Trustee (i) upon the execution and delivery of each amendment of this Agreement,
an Opinion of Counsel to the effect specified in Exhibit D-1; (ii) on each date
specified in subsection 2.09(c)(ix) with respect to Aggregate Additions to be
designated as Accounts, an Opinion of Counsel substantially in the form of
Exhibit D-2; and (iii) on or before [June 30] of each year, beginning with
[June 30], 2001, an Opinion of Counsel substantially in the form of Exhibit D-3.
Section 9.03. GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS, AND
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 9.04. 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
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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., Attention: [_______________] facsimile no. [(___)
________]), with a copy to: [_________________________________________________]
Attention: [_______________] (facsimile no. [(___) ________]), (ii) in the case
of the Servicer, to Advanta Bank Corp., 00000 Xxxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxx
00000, Attention: [_______________] (facsimile no. [(___) ________]), (iii) in
the case of the Trust or the Owner Trustee, to
[_________________________________________________] Attention: [Corporate Trust
Administration] facsimile no. [(___) ________]), (iv) in the case of the Rating
Agency for a particular Series, the address, if any, specified in the Indenture
Supplement relating to such Series, and (v) to any other Person as specified in
the Indenture or any Indenture 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
Notes shall be given by first-class mail, postage prepaid, at the address of
such Holder as shown in the Note Register. No Notice shall be required to be
mailed to a Holder of Bearer Notes 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 Noteholder
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 Noteholders 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
Notes are outstanding, any Notice required or permitted to be given to
Noteholders of such Series or Class shall be published in an Authorized
Newspaper within the time period prescribed in this Agreement.
Section 9.05. 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 Notes or the rights of the Noteholders.
Section 9.06. Further Assurances.
The Transferor and the 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 Owner Trustee and the Indenture 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 9.07. No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the Owner
Trustee, the Indenture Trustee or the Noteholders, any right, remedy, power or
privilege under this Agreement
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shall operate as a waiver thereof; nor shall any single or partial 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 9.08. 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 9.09. Third-Party Beneficiaries.
This Agreement will inure to the benefit of and be binding upon the parties
hereto, the Indenture Trustee, the Noteholders, any holder of a Foreclosure
Certificate or Supplemental Certificate, any Series Enhancer 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 9.10. Actions by Noteholders.
(a) Wherever in this Agreement a provision is made that an action may be
taken or a Notice given by Noteholders, such action or Notice may be taken or
given by any Noteholder, unless such provision requires a specific percentage of
Noteholders.
(b) Any Notice, request, authorization, direction, consent, waiver or other
act by the Holder of a Note shall bind such Holder and every subsequent Holder
of such Note and of any Note 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 Owner Trustee, the Transferor or the Servicer in reliance
thereon, whether or not notation of such action is made upon such Note.
Section 9.11. Rule 144A Information.
For so long as any of the Notes of any Series or Class are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act, each
of the Transferor, the Owner Trustee, the Indenture Trustee, the Servicer and
any Series Enhancer agree to cooperate with each other to provide to any
Noteholders of such Series or Class and to any prospective purchaser of Notes
designated by such Noteholder, upon the request of such Noteholder 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 Securities Act.
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Section 9.12. 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 9.13. Headings.
The headings herein are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
Section 9.14. Limitation of Liability.
Notwithstanding any other provision herein or elsewhere, this Agreement has
been executed and delivered by [____________________], not in its individual
capacity, but solely in its capacity as Owner Trustee of the Trust, in no event
shall [____________________] in its individual capacity have any liability in
respect of the representations, warranties, or obligations of the Trust
hereunder or under any other document, as to all of which recourse shall be had
solely to the assets of the Trust, and for all purposes of this Agreement and
each other document, the Owner Trustee (as such or in its individual capacity)
shall be subject to, and entitled to the benefits of, the terms and provisions
of the Trust Agreement.
[END OF ARTICLE IX]
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IN WITNESS WHEREOF, the Transferor, the Servicer and the Trust have caused
this Transfer and Servicing Agreement to be duly executed by their respective
officers as of the day and year first above written.
ADVANTA BUSINESS RECEIVABLES CORP.,
Transferor
By:________________________________________
Name:
Title:
ADVANTA BANK CORP.,
Servicer
By:________________________________________
Name:
Title:
ADVANTA BUSINESS CARD MASTER
TRUST, Issuer
By: [___________________________________],
not in its individual capacity but solely as
Owner Trustee on behalf of the Trust,
By:________________________________________
Name:
Title:
Acknowledged and Accepted:
[__________________________],
not in its individual capacity but
solely as Indenture Trustee
By:__________________________________
Name:
Title:
[Signature Page to Transfer and Servicing Agreement]
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EXHIBIT A
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL DESIGNATED ACCOUNTS
(AS REQUIRED BY SECTION 2.09 OF THE TRANSFER AND SERVICING AGREEMENT)
ASSIGNMENT No. __ OF RECEIVABLES IN Additional Designated Accounts dated as
of _____________,* by and among ADVANTA BUSINESS RECEIVABLES CORP., a Nevada
corporation, as Transferor (the "Transferor"), ADVANTA BANK CORP., a Utah
industrial loan corporation, as Servicer (the "Servicer") and ADVANTA BUSINESS
CARD MASTER TRUST (the "Trust"), pursuant to the Transfer and Servicing
Agreement referred to below.
WITNESSETH
WHEREAS, the Transferor, the Servicer and the Trust are parties to the
Transfer and Servicing Agreement, dated as of ____________ __, 2000 (as amended
and supplemented, the "Agreement");
WHEREAS, pursuant to the Agreement, the Transferor wishes to designate
Additional Designated Accounts to be included as Accounts and to convey the
Receivables of such Additional Designated Accounts (as each such term is defined
in the Agreement), whether now existing or hereafter created, to the Trust; and
WHEREAS, the Trust is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, the Transferor, the Servicer and the Trust 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 Date" shall mean, with respect to the Additional Designated
Accounts designated hereby, ____________, ____.
"Additional Cut-Off Date" shall mean, with respect to the Additional
Designated Accounts designated hereby, ____________, ____.
----------
* To be dated as of the applicable Addition Date.
Exhibit A-1
60
2. Designation of Additional Designated Accounts. On or before the date
hereof, the Transferor will deliver to the Owner Trustee a computer file or
microfiche list containing a true and complete schedule identifying all such
Additional Designated Accounts (the "Additional Designated Accounts") specifying
for each such Additional Designated Account, as of the Additional Cut-Off Date,
its account number, the aggregate amount outstanding in such Account and the
aggregate amount of Principal Receivables outstanding in such Account, which
computer file or microfiche list shall supplement Schedule 1 to the Agreement.
3. Conveyance of Receivables. (a) The Transferor does hereby transfer,
assign, set over and otherwise convey, without recourse except as set forth in
the Transfer and Servicing Agreement, to the Trust, all its right, title and
interest in, to and under the Receivables of such Additional Designated Accounts
existing at the close of business on the Additional Cut-Off Date and thereafter
created from time to time until the termination of the Trust, all Interchange
and Recoveries related thereto, all monies due or to become due and all amounts
received or receivable with respect thereto and all proceeds (including
"proceeds" as defined in the UCC) thereof. The foregoing does not constitute and
is not intended to result in the creation or assumption by the Trust, the Owner
Trustee, the Indenture Trustee, any Noteholders or any Series Enhancer of any
obligation of the Servicer, the Transferor or any other Person in connection
with the Accounts, the Receivables or under any agreement or instrument relating
thereto, including any obligation to Obligors, merchant banks, merchants
clearance systems, MasterCard(R)1, [and VISA(R)(1)] or insurers.
(b) The Transferor agrees to record and file, at its own expense,
financing statements (and continuation statements when applicable) with respect
to the Receivables in Additional Designated Accounts existing on the Additional
Cut-Off Date and thereafter created meeting the requirements of applicable state
law in such manner and in such jurisdictions as are necessary to perfect, and
maintain perfection of, the sale and assignment of its interest in such
Receivables to the Trust, and to deliver a file-stamped copy of each such
financing statement or other evidence of such filing to the Owner Trustee on or
prior to the Addition Date. The Owner 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.
(c) In connection with such sale, the Transferor further agrees, at its
own expense, on or prior to the date of this Assignment, to indicate in the
appropriate computer files that Receivables created in connection with the
Additional Designated Accounts and designated hereby have been conveyed to the
Trust pursuant to the Agreement and this Assignment.
----------
(1) MasterCard and Visa are registered trademarks of MasterCard International
Incorporated and VISA USA, Inc., respectively.
Exhibit A-2
61
(d) The Transferor does hereby grant to the Trust a security interest
in all of its right, title and interest, whether now owned or hereafter
acquired, in and to the Receivables in the Additional Designated Accounts
existing on the Additional Cut-Off Date and thereafter created, all Interchange
and Recoveries related thereto, all monies due or to become due and all amounts
received or receivable with respect thereto, all money, accounts, general
intangibles, chattel paper, instruments, documents, goods, investment property,
deposit accounts, certificates of deposit, letters of credit, and advices of
credit consisting of, arising from or related to the foregoing, and all
"proceeds" (including "proceeds" as defined in the UCC) thereof. This Assignment
constitutes a security agreement under the UCC.
4. Acceptance by Trust. The Trust hereby acknowledges its acceptance of all
right, title and interest to the property, existing on the Additional Cut-Off
Date and thereafter created, conveyed to the Trust pursuant to Section 3(a) of
this Assignment. The Trust further acknowledges that, prior to or simultaneously
with the execution and delivery of this Assignment, the Transferor delivered to
the Owner Trustee the computer file or microfiche list described in Section 2 of
this Assignment.
5. Representations and Warranties of the Transferor. The Transferor hereby
represents and warrants to the Trust, as the Addition Date that:
(a) Legal Valid and Binding Obligation. This Assignment constitutes a
legal, valid and binding obligation of the Transferor enforceable against the
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 except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity);
(b) Eligibility of Accounts. As of the Additional Cut-Off Date, each
Additional Designated Account designated hereby is an Eligible Account;
(c) Insolvency. As of each of the Additional Cut-Off Date and the
Addition Date, no Insolvency Event with respect to the Transferor has occurred
and the transfer by the Transferor of Receivables arising in the Additional
Designated Accounts to the Trust has not been made in contemplation of the
occurrence thereof;
(d) Pay Out Event; Event of Default. The Transferor reasonably believes
that (A) the transfer of the Receivables arising in the Additional Designated
Accounts will not, based on the facts known to the Transferor, then or
thereafter cause a Pay Out Event or Event of Default to occur with respect to
any Series and (B) no selection procedure was utilized by the Transferor which
would result in the selection of Additional Designated Accounts (from among the
available Eligible Accounts available to the Transferor) that would be
materially adverse to the interests of the Noteholders of any Series as of the
Addition Date;
(e) Security Interest. This Assignment constitutes a valid sale,
transfer and assignment to the Trust of all right, title and interest, whether
owned on the Additional Cut-Off Date
Exhibit A-3
62
or thereafter acquired, of the Transferor in the Receivables existing on the
Additional Cut-Off Date or thereafter created in the Additional Designated
Accounts, all Interchange and Recoveries related thereto, all monies due or to
become due and all amounts received or receivable with respect thereto and the
"proceeds" (including "proceeds" as defined in the applicable UCC) thereof, or,
if this Assignment does not constitute a sale of such property, it constitutes a
grant of a "security interest" (as defined in the applicable UCC) in such
property to the Trust, which, in the case of existing Receivables and the
proceeds thereof, is enforceable upon execution and delivery of this Assignment,
and which will be enforceable with respect to such Receivables hereafter created
and the proceeds thereof upon such creation. Upon the filing of the financing
statements described in Section 3 of this Assignment and, in the case of the
Receivables hereafter created and the proceeds thereof, upon the creation
thereof, the Trust shall have a first priority perfected security or ownership
interest in such property;
(f) No Conflict. The execution and delivery by the Transferor of this
Assignment, the performance of the transactions contemplated by this Assignment
and the fulfillment of the terms hereof applicable to the Transferor, will not
conflict with or violate any Requirements of Law applicable to the Transferor or
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 the Transferor is a party or by which it or its
properties are bound;
(g) No Proceedings. There are no proceedings or investigations, pending
or, to the best knowledge of the Transferor, threatened against the Transferor
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Assignment,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by this Assignment, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Transferor, would materially and adversely affect the
performance by the Transferor of its obligations under this Assignment or (iv)
seeking any determination or ruling that would materially and adversely affect
the validity or enforceability of this Assignment; and
(h) All Consents. All authorizations, consents, orders or approvals of
any court or other governmental authority required to be obtained by the
Transferor in connection with the execution and delivery of this Assignment by
the Transferor and the performance of the transactions contemplated by this
Assignment by the Transferor, have been obtained.
6. Ratification of Agreement. As supplemented by this Assignment, the
Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Assignment shall be read, taken and construed as one and
the same instrument.
7. Counterparts. This Assignment 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.
8. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE
Exhibit A-4
63
TO ITS CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
9. Limitation of Liability. Notwithstanding any other provision herein or
elsewhere, this Assignment has been executed and delivered by
[____________________], not in its individual capacity, but solely in its
capacity as Owner Trustee of the Trust, in no event shall [____________________]
in its individual capacity have any liability in respect of the representations,
warranties, or obligations of the Trust hereunder or under any other document,
as to all of which recourse shall be had solely to the assets of the Trust, and
for all purposes of this Assignment and each other document, the Owner Trustee
(as such or in its individual capacity) shall be subject to, and entitled to the
benefits of, the terms and provisions of the Trust Agreement.
[SIGNATURE PAGE FOLLOWS]
Exhibit A-5
64
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trust have caused
this Assignment to be duly executed by their respective officers as of the day
and year first above written.
ADVANTA BUSINESS RECEIVABLES CORP.,
Transferor
By:________________________________
Name:
Title:
ADVANTA BANK CORP.,
Servicer
By:________________________________
Name:
Title:
ADVANTA BUSINESS CARD MASTER TRUST,
Issuer
By: [____________________________
__________],
not in its individual capacity but
solely as Owner Trustee on behalf of
the Trust
By:________________________________
Name:
Title:
Exhibit A-6
65
EXHIBIT B
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(AS REQUIRED BY SECTION 2.10 OF THE TRANSFER AND SERVICING AGREEMENT)
REASSIGNMENT No. _______ OF RECEIVABLES dated as of _________,* by and
among ADVANTA BUSINESS RECEIVABLES CORP., a Nevada corporation, as Transferor
(the "Transferor"), ADVANTA BANK CORP., a Utah industrial loan corporation, as
Servicer and ADVANTA BUSINESS CARD MASTER TRUST (the "Trust"), pursuant to the
Transfer and Servicing Agreement referred to below.
WITNESSETH:
WHEREAS the Transferor, the Servicer and the Trust are parties to the
Transfer and Servicing Agreement, dated as of ___________ __, 20__ (as amended
and supplemented, the "Agreement");
WHEREAS pursuant to the Agreement, the Transferor wishes to remove from
the Trust all Receivables owned by the Trust in certain designated Accounts (the
"Removed Accounts") and to cause the Trust to reconvey the Receivables of such
Removed Accounts, whether now existing or hereafter created, from the Trust to
the Transferor; and
WHEREAS the Trust 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 Transferor and the Trust 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
______________, ____.
________________________________________
* To be dated as of the Removal Date.
Exhibit B-1
66
2. Designation of Removed Accounts. On or before the date that is 10
Business. Days after the Removal Date, the Transferor will deliver to the Owner
Trustee a computer file or microfiche list containing a true and complete
schedule identifying all Accounts the Receivables of which 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 Trust does hereby transfer, assign,
set over and otherwise convey to the 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 Notice Date and
thereafter created from time to time in the Removed Accounts designated hereby,
all Interchange and Recoveries related thereto, all monies due or to become due
and all amounts received or receivable with respect thereto and all proceeds
thereof.
(b) In connection with such transfer, the Trust agrees to execute and
deliver to the Transferor on or prior to the date this Reassignment is
delivered, applicable termination statements prepared by the Transferor with
respect to the Receivables existing at the close of business on the Removal
Notice 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 Transferor. The Transferor hereby
represents and warrants to the Trust as of the Removal Date:
(a) Legal Valid and Binding Obligation. This Reassignment constitutes a
legal, valid and binding obligation of the Transferor enforceable against the
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 except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity);
and
(b) Pay Out Event; Event of Default. The Transferor reasonably believes
that (A) the removal of the Receivables existing in the Removed Accounts will
not, based on the facts known to the Transferor, then or thereafter cause a Pay
Out Event or Event of Default to occur with respect to any Series and (B) no
selection procedure was utilized by the Transferor which would result in a
selection of Removed Accounts that would be materially adverse to the interests
of the Noteholders of any Series as of the Removal Date.
Exhibit B-2
67
(c) List of Removed Accounts. The list of Removed Accounts delivered
pursuant to subsection 2.09(c) 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 LAWS
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
8. Limitation of Liability. Notwithstanding any other provision herein or
elsewhere, this Reassignment has been executed and delivered by
[____________________], not in its individual capacity, but solely in its
capacity as Owner Trustee of the Trust, in no event shall [_________________]in
its individual capacity have any liability in respect of the representations,
warranties, or obligations of the Trust hereunder or under any other document,
as to all of which recourse shall be had solely to the assets of the Trust, and
for all purposes of this Reassignment and each other document, the Owner Trustee
(as such or in its individual capacity) shall be subject to, and entitled to the
benefits of, the terms and provisions of the Trust Agreement.
Exhibit B-3
68
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trust 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:________________________________
Name:
Title:
ADVANTA BANK CORP.,
Servicer
By:________________________________
Name:
Title:
ADVANTA BUSINESS CARD MASTER TRUST,
Issuer
By: [________________________________],
not in its individual capacity but
solely as Owner Trustee on behalf of
the Trust
By:________________________________
Name:
Title:
Exhibit B-4
69
EXHIBIT C
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before April 30 of each calendar year beginning with
April 30, 2001, pursuant to Section 3.05 of the Transfer and Servicing Agreement
referred to below)
ASSOCIATES CREDIT CARD MASTER NOTE TRUST
The undersigned, a duly authorized representative of Advanta Bank
Corp., Inc., as Servicer ("ABC"), pursuant to the Transfer and Servicing
Agreement, dated as of _____________ __, 2000 (as amended and supplemented, the
"Agreement"), among ADVANTA BUSINESS RECEIVABLES CORP., as transferor, ABC and
ADVANTA BUSINESS CARD MASTER TRUST, does hereby certify that:
1. ABC is, as of the date hereof, the Servicer under the Agreement.
Capitalized terms used in this Certificate have their respective meanings as set
forth in the Agreement.
2. The undersigned is an Authorized Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to the Trust.
3. A review of the activities of the Servicer during the year ended
December 31, ____, and of its performance under the Agreement was conducted
under my supervision.
4. Based on such review, the 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 Servicer's obligations under the provisions of the Agreement known to me to
have been made by the Servicer during the year ended December 31, ____ which
sets forth in detail (i) the nature of each such default, (ii) the action taken
by the Servicer, if any, to remedy each such default and (iii) the current
status of each such default: [If applicable, insert "None."]
Exhibit C-1
70
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this ____ day of __________________, 20__.
ADVANTA BANK CORP.,
Servicer
By:________________________________
Name:
Title:
Exhibit C-2
71
EXHIBIT D-1
FORM OF OPINION OF COUNSEL
WITH RESPECT TO AMENDMENTS
(Provisions to be included in Opinion of Counsel to be delivered pursuant to
subsection 9.02(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 Transfer and Servicing Agreement, attached
hereto as Schedule 1 (the "Amendment" ), has been duly authorized, executed and
delivered by the Transferor and constitutes the legal, valid and binding
agreement of the Transferor, 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. The enforceability of the Transferor's 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 9.01 of the Transfer and Servicing Agreement.
Exhibit X-0-0
00
XXXXXXX X-0
FORM OF OPINION OF COUNSEL
WITH RESPECT TO ACCOUNTS
(Provisions to be included in Opinion of Counsel to be delivered pursuant to
subsection 9.02(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. Except for any Receivable that is evidenced by an instrument, the
Receivables constitute accounts under Article 9 of the UCC.
2. The Assignment creates in favor of the Trust a security interest in
the rights of the Transferor in such of the Receivables arising in accounts
identified in Schedule 1 to the Assignment as constitute accounts. To the extent
that such security interest is not an interest of a buyer of accounts, then the
Assignment creates in favor of the Trust a security interest in the rights of
the Transferor in the proceeds of the Receivables.
3. To extent that transactions contemplated by the Assignment do not
constitute a sale by the Transferor to the Trust of such of the Receivables as
constitute general intangibles or the proceeds thereof, the Assignment creates
in favor of the Trust a security interest in the rights of the Transferor in
such of the Receivables as constitute general intangibles and the proceeds
thereof.
4. The applicable Receivables Purchase Agreement and related Conveyance
Papers creates in favor of the Transferor a security interest in the rights of
ABC in such of the Receivables arising in accounts identified in Schedule 1 to
the applicable Receivables Purchase Agreement and related Conveyance Papers as
constitute accounts. To the extent that such security interest is not an
interest of a buyer of accounts, then the Receivables Purchase Agreement and
related Conveyance Papers create in favor of the Transferor a security interest
in the rights of ABC in the proceeds of the Receivables.
5. To the extent that transactions contemplated by the applicable
Receivables Purchase Agreement and related Conveyance Papers do not constitute a
sale by ABC to the Transferor of such of the Receivables as constitute general
intangibles or the proceeds thereof, the applicable Receivables Purchase
Agreement and related Conveyance Papers creates in favor of the Transferor a
security interest in the rights of ABC in such of the Receivables as constitute
general intangibles and the proceeds thereof.
6. The security interests described in paragraphs 2, 3, 4 and 5 above
are perfected and of first priority.
Exhibit X-0-0
00
XXXXXXX X-0
PROVISIONS TO BE INCLUDED IN
ANNUAL OPINION OF COUNSEL
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. Unless otherwise indicated, all
capitalized terms used herein shall have the meanings ascribed to them in the
Transfer and Servicing Agreement and in the Assignment.
1. No filing or other action, other than such filing or other action
described in this opinion letter, is necessary from the date of this opinion
letter through [June 30] of the following year to continue the perfected status
of the security interest of the Trust in the Receivables described in the
financing statements referenced in this opinion letter.
2. No filing or other action, other than such filings or other action
described in this opinion letter, is necessary from the date of this opinion
letter through [June 30] of the following year to continue the perfected status
of the security interest of the Transferor in the Receivables described in the
financing statements referenced in this opinion letter.
Exhibit D-3-1
74
SCHEDULE 1
List of Accounts
[Original list delivered to Owner Trustee]
1-1
