Document:

exhibit10_27.htm

    

      Exhibit
10.27

      

      

      

      March 4,
2008

      

      

      Joseph R.
Mele, Jr.

      83 Gerber
Road West

      South
Windsor, CT 06074

      

      Dear
Joe:

      

      Gerber Scientific, Inc. (the “Company”)
considers it essential to the best interests of its stockholders to foster the
continuous employment of key management personnel.  In this
connection, should the Company face a possible Change in Control (as defined in
Section 2 of this Agreement), such as the acquisition of a substantial share of
the equity or voting securities of the Company, the Board of Directors of the
Company (the “Board”) has determined that it is imperative that it and the
Company be able to rely upon your continued services without concern that you
might be distracted by the personal uncertainties and risks that the possibility
of a Change in Control might entail.

      

      Accordingly, the Board has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company's management to their
assigned duties without distraction in the face of potentially disturbing
circumstances that could arise out of a possibility for a Change in Control of
the Company.

      

      In order to induce you to remain in the
employ of the Company and its subsidiaries and in consideration of your
agreement set forth in Section 2(B) hereof, the Company agrees that you shall
receive the severance benefits set forth in this letter agreement (“Agreement”)
in the event your employment with the Company and its subsidiaries is terminated
subsequent to a Change in Control under the circumstances described
below.

      

      1. Term of
Agreement

       

      This Agreement shall commence on the
date hereof and shall continue in effect through April 30, 2008 provided, however,
the term of this Agreement shall automatically be extended for one additional
year commencing on May 1, 2008 and on each May 1 thereafter, unless, not later
than 90 days before end of term, the Company shall have given notice that it
does not wish to extend this Agreement; provided further
that, notwithstanding any such notice by the Company not to extend, if a Change
in Control shall have occurred during the original or any extended term of this
Agreement, this Agreement shall continue in effect for a period of twenty-four
(24) months beyond the expiration of the term in effect immediately before such
Change in Control; provided further
that, notwithstanding anything herein to the contrary, if at any time prior to a
Change in Control you, for whatever reason, cease to be Senior Vice President of
the Company, then this Agreement shall automatically terminate and, at all times
thereafter, shall be

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      null and
void and of no further force and effect and you shall not be entitled to any
benefits whatsoever hereunder.

       

      2. Change in
Control

       

      (A) No
benefits shall be payable hereunder unless there shall have been a Change in
Control of the Company, as set forth below. For purposes of this Agreement a
“Change in Control” of the Company shall mean the occurrence of any one or more
of the following events:

       

      (i) the
Company shall (1) merge or consolidate with or into another corporation or
entity or enter into a share exchange between the Company or stockholders of the
Company and another individual, corporation or other entity and as a result of
such merger, consolidation or share exchange less than fifty percent (50%) of
the outstanding voting securities of the surviving or resulting corporation or
entity shall then be owned in the aggregate by the former stockholders of the
Company; or (2) sell, lease, exchange or otherwise dispose of all or
substantially all of the Company’s property and assets in one transaction or a
series of related transactions to one or more individuals, corporations or other
entities that are not subsidiaries of the Company, assuming that if consummation
of such transaction is subject, at the time of such approval by stockholders, to
the consent of any government or governmental agency, such consent by the
government or governmental agency is obtained (either explicitly or implicitly
by consummation of the transaction);

       

      (ii) the
stockholders of the Company adopt a plan of complete liquidation of the
Company;

       

      (iii) any
“person” (as such term is used in Sections 13(d) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) (other than the Employee,
the Company, any of the Company’s subsidiaries, any employee benefit plan of the
Company and/or one or more of its subsidiaries or any person or entity
organized, appointed or established pursuant to the terms of any such employee
benefit plan) becomes the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of voting securities of the Company representing thirty
percent (30%) or more of the total number of votes eligible to be cast at any
election of directors of the Company; provided, however,
that no Change in Control shall be deemed to have occurred under this
subparagraph (iii) if such "person" becomes a holder of the Company's securities
in one or more transactions initiated or pursued by the Company unless after
such transaction(s) less than fifty percent (50%) of the outstanding voting
securities of the Company shall be owned in the aggregate by the former
stockholders of the Company; or

       

      (iv)  as
a result of, or in connection with, any tender offer or exchange offer, share
exchange, merger, consolidation or other business combination, sale, lease,
exchange or other disposition of all or substantially all of the Company’s
assets, a contested election, or any combination of the foregoing transactions,
the persons who are directors of the Company on the date hereof (the “Incumbent
Board”) shall cease to constitute a majority of the Board of Directors of the
Company or any successor to the Company; provided that any
person becoming a director subsequent to the date hereof whose election or
nomination for election by the Company’s stockholders was approved by a vote of
at least three-quarters (3/4) of the directors

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      comprising
the Incumbent Board (either by a specific vote or by approval of a proxy
statement of the Company in which such person is named as a nominee for director
without any objection to such nomination) shall be, for purposes herein,
considered as though such person were a member of the Incumbent
Board.

       

      (B) In
exchange for the benefits under this Agreement, you agree that, subject to the
terms and conditions herein, in the event of a potential Change in Control of
the Company occurring after the date hereof, you will not voluntarily terminate
your employment with the Company and its subsidiaries until the earlier of (i)
the date which is six months after the occurrence of such potential Change in
Control of the Company or (ii) the occurrence of a Change in Control of the
Company.  If more than one potential Change in Control occurs during
the term of this Agreement, the provisions of the preceding sentence shall be
applicable to each potential Change in Control occurring prior to an actual
Change in Control.   For the purposes of this Agreement, a
"potential Change in Control" of the Company shall be deemed to have occurred
if: (i) the Company enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control; (ii) any person (including the
Company) publicly announces an intention to take or to consider taking actions
which if consummated would constitute a Change in Control; or (iii) the Board
adopts a resolution to the effect that, for purposes of this Agreement, a
potential Change in Control of the Company has occurred.

       

      3. Termination Following Change
in Control. If any of the events
described in Section 2 hereof constituting a Change in Control shall have
occurred, you shall be entitled to the benefits provided in Section 4 hereof
upon the subsequent termination of your employment with the Company and its
subsidiaries during the term of this Agreement and within two (2) years of the
Change in Control, unless such
termination is (x) a result of your death, Disability, or Retirement; (y) by you
for other than Good Reason (as defined in Section 3(A)); or (z) by the Company
or any of its subsidiaries for Cause (as defined in Section
3(C)).  The benefits provided in Section 4 shall be in lieu of any
termination, separation, severance or similar benefits under your employment
agreement, if any, or under the Company’s termination, separation, severance or
similar plans or policies, if any (other than benefit plans of the Company which
incidentally provide for benefits in the event of a change in control, as such
term is defined in such plans). If your employment is terminated as a result of
your death, Disability or Retirement, by you for other than Good Reason or by
the Company or any of its subsidiaries for Cause, then you shall not be entitled
to any termination, separation, severance or similar benefits under this
Agreement, and you shall be entitled to benefits under your employment
agreement, if any, and/or under the Company’s termination, separation, severance
or similar plans or policies, if any, only in accordance with the terms of any
such employment agreement, plans and policies.

       

      (A) Good
Reason. You shall be entitled to terminate your employment for Good
Reason.  For the purposes of this Agreement, “Good Reason” shall mean
the occurrence, without your express written consent, of any Good Reason
circumstance as detailed below (“Good Reason Circumstance”); provided, however,
that within ninety (90) days of the initial existence of the Good Reason
Circumstance, you must provide a Notice of Termination (as defined below)
setting forth a summary of the facts and circumstances which provide the basis
for termination of your employment with Company and the citing the particular
Good Reason Circumstance, and the Company shall then be provided a period of
thirty (30) days by which to remedy the Good

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Reason
Circumstance.  You shall only be entitled to terminate your employment
for Good Reason upon the completion of your providing timely notice to the
Company and the Company subsequently not remedying your stated Good Reason
Circumstance within the thirty-day (30-day)
remedy period.  For the purposes of this Agreement, Good Reason shall
mean any of the following Good Reason Circumstances:

       

      (i) a
material diminution in the nature or scope of your authorities, duties or
responsibilities from those applicable to you immediately prior to the date on
which a Change in Control occurs;

       

      (ii) a
reduction in your base annual salary from that provided to you immediately prior
to the date on which a Change in Control occurs;

       

      (iii) a
diminution in your eligibility to participate in compensation plans and employee
benefits and perquisites which provide opportunities to receive overall
compensation and benefits and perquisites from the greater of:

       

      (a)           the
opportunities provided by the Company (including its subsidiaries) for
executives with comparable duties; or

       

      (b)           the
opportunities under any such plans and perquisites under which you were
participating immediately prior to the date on which a Change in Control
occurs;

       

      (iv) a change
in the location of your principal place of employment by the Company (including
its subsidiaries) by more than fifty (50) miles from the location where you were
principally employed immediately prior to the date on which a Change in Control
occurs;

       

      (v) a
significant increase in the frequency or duration of your business
travel;

       

      (vi) or a
reasonable determination by the Board of Directors of the Company that, as a
result of a Change in Control and a change in circumstances thereafter
significantly affecting your position, you are unable to exercise the
authorities, powers, functions or duties attached to your position immediately
prior to the date on which a Change in Control occurs.

       

      (B) Disability;
Retirement.

       

      (i) For
purposes of this Agreement, “Disability” shall mean permanent and total
disability as such term is defined under Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended (the “Code”).  Any question as to the
existence of your Disability upon which you and the Company cannot agree shall
be determined by a qualified independent physician selected by you (or, if you
are unable to make such selection, such selection shall be made by any adult
member of your immediate family or your legal representative) and approved by
the Company, said approval not to be unreasonably withheld.  The
determination of such physician shall be made in writing to the Company and to
you and shall be final and conclusive for all purposes of this
Agreement.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (ii) For
purposes of this Agreement, “Retirement” shall mean your voluntary termination
of employment with the Company at or after the age of 65 in accordance with the
Company's retirement policies (excluding early retirement) generally applicable
to its salaried employees or in accordance with any retirement arrangement
established with your consent with respect to you.

       

      (C) Cause.  For
purposes of this Agreement, “Cause” shall mean (a) the willful and continued
failure by you to substantially perform your duties with the Company (other than
any such failure from your incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice of Termination
in the manner provided for in Section 3(D) by you for Good Reason) after written
demand for substantial performance is delivered to you by the Board, which
demand specifically identifies the manner in which the Board believes that you
have not substantially performed your duties, or (b) the willful engaging by you
in conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise.  For purposes of this Section 3(C), no act,
or failure to act, on your part shall be deemed “willful” unless done, or
omitted to be done, by you not in good faith and without reasonable belief that
your action or omission was in the best interest of the
Company.  Notwithstanding the foregoing, you shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered
to you a copy of a resolution duly adopted by the affirmative vote of not less
than three-quarters (3/4) of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice to you and
an opportunity for you, together with your counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board you were guilty of
conduct set forth above in this Section 3(C) and specifying the particulars
thereof.

       

      (D) Any
termination of your employment by the Company or any of its subsidiaries or by
you shall be made by written notice of termination to the other
party.  Such “Notice of Termination” shall mean a written document
specifying the provision in this Agreement being relied upon and setting forth a
summary of the facts and circumstances which provide the basis for termination
of your employment.  The “Date of Termination” shall be the date of
your “Separation from Service” (as defined under Internal Revenue Code Section
409A)..

       

      4. Compensation upon
Termination Following a Change in Control

       

      (A)   If
your employment shall be terminated for any reason otherwise than (x) as a
result of your death, Disability or Retirement; (y) by you for other than Good
Reason; or (z) by the Company or any of its subsidiaries for Cause, within two
(2) years following a Change in Control (as defined in Section 2), then, if you
sign a General Release in a form generally acceptable to the Company that
releases the Company and its subsidiaries from any and all claims you may have
against them and certifies your willingness to comply with Sections 6 and 7 of
this Agreement, you shall be entitled to the benefits provided
below:

       

      (i)  The
Company or one of its subsidiaries shall pay you, not later than the fifth
business day following the Date of Termination (“Payment Date”), the sum of your
full base salary through the Date of Termination, as earned by you but not yet
paid to you, at the salary level in effect on (x) the Date of Termination or (y)
the day immediately preceding the date of

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      the
Change in Control, whichever is higher (“full base salary”), and your pro rata
share of your annual incentive bonus payment in effect on the Date of
Termination.  The Company or one of its subsidiaries shall also pay
you all other amounts to which you are entitled under any compensation plan of
the Company applicable to you, at the time such payments are due; provided,
however, that if such payments are nonqualified deferred compensation (as
defined under Internal Revenue Code Section 409A) and you are a “Specified
Employee” (as defined under Internal Revenue Code Section 409A) as of your date
of Separation From Service, such payments shall not commence prior to the date
six (6) months after the date of your Separation from Service (“Specified
Employee Payment Date”).  For purposes of this Section 4 and the other
provisions of this Agreement, “your annual incentive bonus payment in effect on
the Date of Termination” shall mean the target amount of your annual incentive
bonus payment (under the Company’s Annual Incentive Bonus Plan or any successor
plan) for the year in which the Notice of Termination is given.  Your
pro rata share of your annual incentive bonus payment in effect on the Date of
Termination shall be that percentage of your annual incentive bonus payment in
effect on the Date of Termination that is equal to the number of days in the
fiscal year completed prior to the Date of Termination divided by
365.

       

      (ii) On the
Payment Date, or if you are a Specified Employee as of your date of Separation
from Service, on the Specified Employee Payment Date, the Company shall also pay
you a severance payment equal to two and one-half (2 and 1⁄2) times the sum of (x)
your full base salary and (y) your annual incentive bonus payment in effect on
the Date of Termination.

       

      (iii) The
Company shall cause (x) all unvested stock options or other stock grants held by
you on the Date of Termination immediately to vest and be fully exercisable as
of the Date of Termination, (y) any restrictions on all restricted stock held by
you on the Date of Termination immediately to lapse and all shares of such stock
to fully vest as of the Date of Termination, and (z) any accrued benefit or
deferred arrangement of the Company that you otherwise would become entitled to
if you continued employment with the Company immediately to vest as of the Date
of Termination.

       

      (iv) On the
Payment Date, or if you are a Specified Employee as of your date of Separation
from Service, on the Specified Employee Payment Date, the Company shall also pay
you a lump sum cash payment equivalent to 30 monthly payments or, if
less, the number of full monthly payments until you reach age 65, that would
have been paid by the Company for the cost of all life insurance, health
(medical and dental), accidental death and dismemberment, and disability plans
and programs in which you are entitled to participate immediately prior to the
Date of Termination.

       

      There shall be no limit on the amount
of payments due you under Section 4(A) unless, after taking into account all
amounts or benefits you have received or have a right to receive from the
Company which are defined as “Excess Parachute Payments,” within the meaning of
Section 280G of the Internal Revenue Code, or any successor provision thereto,
but for the application of this sentence, then the payments and benefits to be
so paid or provided under this Agreement will be reduced to the minimum extent
necessary (but in no event to less than zero) so that no portion of any such
payment or benefit, as so reduced, constitutes an Excess Parachute Payment;
provided, that the foregoing reduction will be made only if and to the
extent

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      that such
reduction would result in an increase in the aggregate payments and benefits to
be provided, determined on an after-tax basis (taking into account the excise
tax imposed pursuant to Section 4999 of the Internal Revenue Code, or any
successor provision thereto, any tax imposed by any comparable provision of
state law, any applicable federal, state, and local income taxes). The
determination of whether any reduction in such payments or benefits to be
provided under this Agreement is required pursuant to the preceding sentence
will be made at the expense of the Company, if requested by you or the Company,
or by the Company’s independent accountants. The fact that your right to
payments or benefits may be reduced by reason of the limitations contained in
this Section 4(B) will not of itself limit or otherwise affect any other of your
rights other than pursuant to this Agreement.

       

      (B) The
Company shall also pay to you all legal fees and expenses, if any, reasonably
incurred by you in connection with seeking to obtain or enforce any right or
benefit provided by this Agreement during the term of this Agreement (including
the extension of the Agreement for reason of a Change in Control as provided in
Section 1) and for two (2) years thereafter; provided, the amount of expenses
eligible for reimbursement during one taxable year will not affect the expenses
eligible for reimbursement in another taxable year.

       

      (C) You shall
not be required to mitigate the amount of any payment provided for in this
Section 4 by seeking other employment or otherwise, nor shall the amount of any
payment or benefit provided for in this Section 4 be reduced by any compensation
earned by you as the result of employment by another employer or by retirement
benefits received after the Date of Termination or otherwise.

       

      5. Successors; Binding
Agreement

       

      (A) The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no succession had taken place.  Failure of
the Company to obtain such assumption and agreement within thirty days following
the effectiveness of any such succession shall be a breach of this Agreement and
shall entitle you to compensation from the Company in the same amount and on the
same terms as you would be entitled hereunder if you had terminated your
employment for Good Reason following a Change in Control, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.  As used in
this Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

       

      (B) This
Agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.  If you should die while any
amount would still be payable to you hereunder if you had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to your devisee, legatee or other designee or, if
there is no such designee, to your estate.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      6. Confidential
Information. You shall hold in fiduciary capacity for the benefit of the
Company or its subsidiaries all secret or confidential information, knowledge or
data relating to the Company, the subsidiaries and their respective businesses,
which shall have been obtained during your employment by the Company or its
subsidiary and which shall not be public knowledge (other than by acts by you or
your representatives in violation of this Agreement). After termination of your
employment with the Company or its subsidiaries, you shall not, without prior
written consent of the Company or its subsidiaries, communicate or divulge any
such information, knowledge or data to anyone other than the Company or its
subsidiaries or those designated by them.  The preceding two sentences
shall not apply with respect to any information you are required to disclose
pursuant to a valid and effective subpoena or order issued by a court of
competent jurisdiction or with respect to any information you are reasonably
required to disclose in enforcing the terms of this Agreement.  In no
event shall an asserted violation of this Section 6 constitute a basis for
deferring or withholding any amounts otherwise payable to you under this
Agreement, nor will any asserted violation of this Section 6 relieve you of your
responsibilities under this Agreement.

       

      7. Agreement Not to Compete.
You agree that for a period of one year following the Date of
Termination, you will not engage, directly or indirectly, whether as a
principal, agent, distributor, representative, consultant, employee, partner,
stockholder, limited partner or other investor (other than an investment of not
more than two percent (2%) of the stock or equity of any corporation the capital
stock of which is publicly traded) or otherwise, in the same or a substantially
similar business as that conducted and carried on by the Company or any of its
subsidiaries and being directly competitive with the Company or any of its
subsidiaries on the Date of Termination or at any time during such one-year
period.

       

      8. Notice. For the
purpose of this Agreement, notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed to the address set forth on the first page
of this Agreement with respect to the Company and on the signature page with
respect to you, provided that all
notices to the Company shall be directed to the attention of the President of
the Company, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt.

       

      9. Miscellaneous.  No
provision of this Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is agreed to in writing and signed by you and
such officer as may be specifically designated by the Board.  No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any conditions or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.  Further, the validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Connecticut.  All references to sections of the Code or Exchange Act
shall be deemed also to refer to any successor provisions to such
sections.  Any payments provided for hereunder shall be paid net of
any applicable withholding required under federal, state or local
law.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      10. Employment
Status.  This Plan is not, and nothing herein shall be deemed
to create, an employment contract between you and the Company or any of its
subsidiaries. You acknowledge that the rights of the Company remain wholly
intact to change or reduce at any time and from time to time your compensation,
title, responsibilities, location, and all other aspects of the employment
relationship, or to discharge you prior to a Change in Control.

       

      11. Integration.  This
Agreement contains the entire agreement of the parties hereto and supersedes all
previous agreements between the parties, written or oral, express or implied,
covering the subject matter hereof.

       

      12. Validity.  The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

       

      13. Counterparts.  This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
instrument.

       

      If this letter sets forth our agreement
on the subject matter hereof, kindly sign and return to the Company the enclosed
copy of this letter which will then constitute our agreement on this
subject.

      

      Sincerely,

      

      GERBER SCIENTIFIC, INC.

      

      

      By: _/s/ William V.
Grickis__________

            William V.
Grickis, Jr.

            Senior
Vice President and General Counsel

      

      

      

      

      

      Agreed to
this 13th day
of March, 2008

      

      

      

      By:
_/s/ Joseph R.
Mele____

           Joseph
R. Mele, Jr.

           Senior
Vice President, Operations

           83
Gerber Road West

           South
Windsor, CT 06074exv4w1

Exhibit 4.1

EXECUTED VERSION

      

ADVANTA BUSINESS CARD MASTER TRUST

as Issuer

and

DEUTSCHE BANK TRUST COMPANY AMERICAS

as Indenture Trustee

CLASS A(2008-A3) TERMS DOCUMENT

dated as of June 27, 2008

to

ADVANTASERIES INDENTURE SUPPLEMENT

dated as of November 1, 2004

to

INDENTURE

dated as of August 1, 2000

      

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I

	Definitions and Other Provisions of General Application

	 	 	 
	 	 	 	 
	Section 1.01	 	Definitions
	 	 	1	 
	 
	Section 1.02	 	Governing Law
	 	 	5	 
	 
	Section 1.03	 	Counterparts
	 	 	5	 
	 
	Section 1.04	 	Ratification of Master Indenture
and AdvantaSeries Indenture
Supplement
	 	 	5	 
	 	 	 
	 	 	 	 
	ARTICLE II

	The Class A(2008-A3) Asset Backed Notes

	 	 	 
	 	 	 	 
	Section 2.01	 	Creation and Designation
	 	 	6	 
	 
	Section 2.02	 	Interest Payment
	 	 	6	 
	 
	Section 2.03	 	Determination of One-Month LIBOR
	 	 	6	 
	 
	Section 2.04	 	Required Deposits of Available Principal
Collections to the Principal Funding Account;
Payment of Principal
	 	 	7	 
	 
	Section 2.05	 	Holders’ Rights to Payments of Interest and Principal
	 	 	8	 
	 
	Section 2.06	 	Cash Collateral Account
	 	 	8	 
	 
	Section 2.07	 	Spread Account
	 	 	8	 
	 
	Section 2.08	 	Delivery and Payment for the Class A(2008-A3)
Notes; Form and Denomination
	 	 	9	 
	 
	Section 2.09	 	Manner of Payment of Class A(2008-A3) Notes
	 	 	9	 
	 
	Section 2.10	 	Monthly Servicing Fee
	 	 	9	 
	 

i  

 

     CLASS A(2008-A3) TERMS DOCUMENT, dated as of June 27, 2008 (the “Terms Document”),
between WILMINGTON TRUST COMPANY, as Owner Trustee of ADVANTA BUSINESS CARD MASTER TRUST, a common
law trust organized and existing under the laws of the State of Delaware (herein, the
“Issuer” or the “Trust”), and DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly known
as Bankers Trust Company), a banking corporation organized and existing under the laws of the State
of New York, not in its individual capacity, but solely as indenture trustee (herein, together with
its successors in the trusts thereunder as provided in the Master Indenture, the “Indenture
Trustee”) under the Master Indenture, dated as of August 1, 2000, as amended by Amendment No. 1
to the Master Indenture, dated as of May 9, 2006 (as amended and supplemented from time to time,
the “Master Indenture”), between the Issuer and the Indenture Trustee. This Terms Document
supplements the AdvantaSeries Indenture Supplement, dated as of November 1, 2004 (as amended and
supplemented from time to time, the “AdvantaSeries Indenture Supplement”) between the
Issuer and the Indenture Trustee, which supplements the Indenture.

     Pursuant to this Terms Document, the Issuer shall create a new tranche of Class A Notes and
shall specify the principal terms thereof.

ARTICLE I

Definitions and Other Provisions of General Application

     Section 1.01 Definitions. For all purposes of this Terms Document, except as otherwise
expressly provided or unless the context otherwise requires:

     (1) the terms defined in this Article have the meanings assigned to them in this Article, and
include the plural as well as the singular;

     (2) all other terms used herein which are defined in the AdvantaSeries Indenture Supplement or
the Master Indenture, either directly or by reference therein, have the meanings assigned to them
therein;

     (3) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles and, except as otherwise herein expressly
provided, the term “generally accepted accounting principles” with respect to any computation
required or permitted hereunder means such accounting principles as are generally accepted in the
United States of America at the date of such computation;

     (4) all references in this Terms Document to designated “Articles,” “Sections” and other
subdivisions are to the designated Articles, Sections and other subdivisions of this Terms
Document;

     (5) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to
this Terms Document as a whole and not to any particular Article, Section or other subdivision;

 1 

 

     (6) in the event that any term or provision contained herein shall conflict with or be
inconsistent with any term or provision contained in the AdvantaSeries Indenture Supplement, the
Master Indenture or the Transfer and Servicing Agreement, the terms and provisions of this Terms
Document shall be controlling;

     (7) each capitalized term defined herein shall relate only to the Class A(2008-A3) Notes and
no other Tranche of Notes issued by the Issuer; and

     (8) “including” and words of similar import will be deemed to be followed by “without
limitation.”

     “Accumulation Amount” shall mean, for any Payment Date occurring during the
Accumulation Period, $18,750,000; provided, however, that if the Accumulation
Period Length is determined to be less than 8 months pursuant to Section 2.04(b), the Accumulation
Amount for each Payment Date with respect to the Accumulation Period will be equal to (i) the
Outstanding Principal Balance of the Class A(2008-A3) Notes divided by (ii) the Accumulation Period
Length.

     “Accumulation Deposit Amount” means, for any Payment Date occurring during the
Accumulation Period, an amount equal to the sum of the Accumulation Amount for such Payment Date
and any existing Accumulation Shortfall.

     “Accumulation Period” shall mean, unless a Pay Out Event shall have occurred prior
thereto, the period commencing at the close of business on October 31, 2008, or such later date as
is determined in accordance with Section 2.04(b), and ending on the first to occur of (a) the
commencement of the Early Amortization Period, (b) the payment in full of the Outstanding Principal
Balance of the Class A(2008-A3) Notes and (c) the Class A(2008-A3) Final Maturity Date.

     “Accumulation Period Factor” shall mean, for the purpose of calculating the
Accumulation Period Length for the Class A(2008-A3) Notes, with respect to any Monthly Period, a
fraction, the numerator of which is equal to the sum of the initial invested amounts (or, if no
initial invested amount is defined in the applicable Indenture Supplement, then the initial
principal balance) of all outstanding Series, and the denominator of which is equal to the sum of
(a) the Initial Principal Balance of Class A(2008-A3) Notes, (b) the initial invested amounts (or,
if no initial invested amount is defined in the applicable Indenture Supplement, then the initial
principal balance) of all other Outstanding Classes and Tranches (without duplication) (other than
the Class A(2008-A3) Notes) which are not expected to be in their revolving periods, and (c) the
initial invested amounts (or, if no initial invested amount is defined in the applicable Indenture
Supplement, then the initial principal balance) of all other Outstanding Classes and Tranches
(without duplication) (other than the Class A(2008-A3) Notes) which are not allocating Shared
Principal Collections to other Series and are in their revolving periods; provided,
however, that this definition may be changed at any time if the Rating Agency Condition is
satisfied.

 2 

 

     “Accumulation Period Length” means the number of whole months such that the sum of the
Accumulation Period Factors for each month during such period will be equal to or greater than the
Required Accumulation Factor Number; provided, however, that the Accumulation
Period Length will not be determined to be less than one month; provided further,
however, that the determination of the Accumulation Period Length may be changed at any
time if the Rating Agency Condition is satisfied.

     “Accumulation Shortfall” shall mean (a) on the first Payment Date during the
Accumulation Period, zero and (b) on each subsequent Payment Date during the Accumulation Period,
the excess, if any, of the Accumulation Deposit Amount for the previous Payment Date over the
amount deposited into the Principal Funding Account pursuant to Section 2.04(b) for the previous
Payment Date.

     “Class A(2008-A3) Final Maturity Date” means June 20, 2012.

     “Class A(2008-A3) Note” means any Note substantially in the form set forth in Exhibit
A-1 to the AdvantaSeries Indenture Supplement, designated therein as a Class A(2008-A3) Asset
Backed Note and duly executed and authenticated in accordance with the Master Indenture.

     “Class A(2008-A3) Noteholder” means a Person in whose name a Class A(2008-A3) Note is
registered in the Note Register.

     “Class A(2008-A3) Note Interest Rate” means a rate per annum equal to 1.50% in excess
of One-Month LIBOR as determined by the Indenture Trustee on each LIBOR Determination Date with
respect to each Interest Period.

     “Class A(2008-A3) Termination Date” means the earliest to occur of (a) the Principal
Payment Date on which the Outstanding Principal Balance of the Class A(2008-A3) Notes is paid in
full, (b) the Class A(2008-A3) Final Maturity Date and (c) the date on which the Master Indenture
is discharged and satisfied pursuant to Article XI thereof.

     “Closing Date” means June 27, 2008.

     “Eligible Institution” shall mean, with respect to any funds allocable to the Class
A(2008-A3) Notes in any Issuer Account, any “Eligible Institution” as defined in the Master
Indenture, except that all references in such definition to “a long-term unsecured debt rating as
required in each Indenture Supplement” shall mean long-term ratings of not less than AA- by
Standard & Poor’s and Al by Moody’s, except that no such rating shall be required of an institution
which maintains such Collection Account or such funds as a fully segregated trust account or
subaccount with the corporate trust department of such institution as long as such institution
maintains the credit rating of a Rating Agency in one of its generic credit rating categories which
signifies investment grade.

 3 

 

     “Eligible Investments” shall mean with respect to funds allocable to the Class
A(2008-A3) Notes in any Issuer Account, “Eligible Investments” as defined in the Master Indenture,
except that all references in such definition to the rating “required in each Indenture Supplement”
and “rating that satisfies the Rating Agency Condition” shall mean ratings of not less than A-1+ by
Standard & Poor’s and P-1 by Moody’s.

     “Expected Final Principal Payment Date” means July 20, 2009.

     “Initial Principal Balance” means $150,000,000.

     “Interest Payment Date” means the scheduled due date of any payment of interest on the
Class A(2008-A3) Notes, which shall be each Payment Date. The first Interest Payment Date shall be
July 21, 2008.

     “LIBOR Determination Date” shall mean (a) with respect to the first Interest Payment
Date, (i) June 25, 2008 for the period from and including the Closing Date to but excluding July
21, 2008 and (b) with respect to any Interest Payment Date after the first Interest Payment Date,
the second London Business Day prior to the commencement of the related Interest Period.

     “London Business Day” means any Business Day on which dealings in deposits in United
States Dollars are transacted in the London interbank market.

     “One-Month Index Maturity” means a maturity of one month commencing on the related
LIBOR Determination Date.

     “One-Month LIBOR” means, for any Interest Period, the London interbank offered rate
for one month United States dollar deposits determined by the Indenture Trustee on the LIBOR
Determination Date for such Interest Period in accordance with the provisions of Section 2.03.

     “Paying Agent” means Deutsche Bank Trust Company Americas.

     “Rating Agency” means, with respect to the Class A(2008-A3) Notes, each of Standard &
Poor’s, a division of The McGraw-Hill Companies, Inc., and Moody’s Investors Service, Inc.

     “Reference Banks” means three major banks in the London interbank market selected by
the Servicer.

     “Required Accumulation Factor Number” shall be equal to a fraction, rounded upwards to
the nearest whole number, the numerator of which is one and the denominator of which is equal to
the lowest monthly principal payment rate on the Accounts, expressed as a decimal, for the twelve
months preceding the date of such calculation; provided, however, that this
definition may be changed at any time if the Rating Agency Condition is satisfied.

 4 

 

     “Reuters Screen LIBOR01 Page” means the display page currently so designated on the
Reuters Monitor Money Rates Service (or such other page as may replace that page on that service
for the purpose of displaying comparable rates or prices).

     Section 1.02 Governing Law. THIS TERMS DOCUMENT WILL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATION LAW, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     Section 1.03 Counterparts. This Terms Document may be executed in any number of
counterparts, each of which so executed will be deemed to be an original, but all such counterparts
will together constitute but one and the same instrument.

     Section 1.04 Ratification of Master Indenture and AdvantaSeries Indenture Supplement.
As supplemented by this Terms Document, each of the Master Indenture and the AdvantaSeries
Indenture Supplement is in all respects ratified and confirmed and the Master Indenture as so
supplemented by the AdvantaSeries Indenture Supplement and this Terms Document shall be read, taken
and construed as one and the same instrument.

[END OF ARTICLE I]

 5 

 

ARTICLE II

The Class A(2008-A3) Asset Backed Notes

     Section 2.01 Creation and Designation. There is hereby created a tranche of Class A
Notes to be issued pursuant to the Master Indenture and the AdvantaSeries Indenture Supplement to
be known as the “AdvantaSeries Class A(2008-A3) Asset Backed Notes.”

     Section 2.02 Interest Payment. For each Interest Payment Date, the amount of interest
due and payable with respect to the Class A(2008-A3) Notes shall be an amount equal to the product
of (i) (A) a fraction, the numerator of which is the actual number of days in the related Interest
Period and the denominator of which is 360, multiplied by (B) the Class A(2008-A3) Note Interest
Rate in effect with respect to the related Interest Period, multiplied by (ii) the Outstanding
Principal Balance of the Class A(2008-A3) Notes determined as of the Record Date preceding the
related Interest Payment Date. Any interest on the Class A(2008-A3) Notes will be calculated on the
basis of the actual number of days in the related Interest Period and a 360-day year.

     Section 2.03 Determination of One-Month LIBOR. 

     (a) On each LIBOR Determination Date, the Indenture Trustee shall determine One-Month LIBOR on
the basis of the rate for deposits in United States dollars having a One-Month Index Maturity which
appears on Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, on such date. If such rate
does not appear on Reuters Screen LIBOR01 Page, One-Month LIBOR for that LIBOR Determination Date
shall be determined on the basis of the rates at which deposits in United States dollars, having a
One-Month Index Maturity and in an amount of not less than $1,000,000, are offered by the Reference
Banks at approximately 11:00 a.m., London time, on that day to prime banks in the London interbank
market. The Indenture Trustee shall request the principal London office of each of the Reference
Banks to provide a quotation of its rate. If at least two (2) such quotations are provided,
One-Month LIBOR for that LIBOR Determination Date shall be the arithmetic mean of the quotations.
If fewer than two (2) quotations are provided as requested, One-Month LIBOR for that LIBOR
Determination Date will be the arithmetic mean of the rates quoted by major banks in New York City,
selected by the Servicer, at approximately 11:00 a.m., New York City time, on that day for loans in
United States dollars to leading European banks having a One-Month Index Maturity and in an amount
of not less than U.S.$1,000,000; provided, that, if the banks selected by the Servicer are not
quoting such rates, One-Month LIBOR in effect for the applicable Interest Period will be the same
as One-Month LIBOR for the immediately preceding Interest Period.

     (b) The Class A(2008-A3) Note Interest Rate applicable to the then current and the immediately
preceding Interest Periods may be obtained by telephoning the Indenture Trustee at its corporate
trust office at (800) 735-7777 or such other telephone number as shall be designated by the
Indenture Trustee for such purpose by prior written notice by the Indenture Trustee to each
Noteholder from time to time.

 6 

 

     (c) On each LIBOR Determination Date, the Indenture Trustee shall send to the Transferor, by
facsimile or electronic transmission, notification of One-Month LIBOR for the following Interest
Period.

     Section 2.04 Required Deposits of Available Principal Collections to the Principal Funding
Account; Payment of Principal. With respect to any Payment Date, the amount to be deposited in
the Principal Funding Sub-Account pursuant to Section 4.16 of the AdvantaSeries Indenture
Supplement will be the amount determined pursuant to clause (a), (b), (c) or (d) below for such
Payment Date, as applicable, or if more than one such clause is applicable, the highest amount
determined pursuant to any one of such clauses; provided, however, in no case shall
the amount required to be deposited exceed the Class A(2008-A3) Adjusted Invested Amount
(calculated immediately before giving effect to such deposit but after giving effect to any
Investor Charge-Offs and any reallocations of principal on such date).

     (a) Revolving Period. On each Payment Date during the Revolving Period, the required
deposit to the Principal Funding Sub-Account for the Class A(2008-A3) Notes will be zero.

     (b) Accumulation Period. On each Payment Date during the Accumulation Period, the
required deposit to the Principal Funding Sub-Account for the Class A(2008-A3) Notes will be the
Accumulation Deposit Amount for such Payment Date. The Accumulation Period is scheduled to
commence at the close of business on October 31, 2008, provided, however, that, if
the Accumulation Period Length is less than 8 months, the date on which the Accumulation Period
actually commences will be delayed to the close of business on the last day of the month prior to
the month that is the number of whole months prior to the Expected Final Principal Payment Date
which is at least equal to the Accumulation Period Length and, as a result, the number of Monthly
Periods in the Accumulation Period will at least equal the Accumulation Period Length. On the
Determination Date twelve (12) months prior to the Expected Final Principal Payment Date and each
Determination Date thereafter until the Accumulation Period begins, the Servicer shall determine
the Accumulation Period Length.

     (c) Early Amortization Period. On each Payment Date during an Early Amortization
Period, the required deposit to the Principal Funding Sub-Account for the Class A(2008-A3) Notes
will be the Adjusted Invested Amount for the Class A(2008-A3) Notes as of the close of business on
the last day of the preceding Monthly Period (after taking into account any reductions or increases
occurring on such date).

     (d) Coverage Funding of the Principal Funding Account of Senior Classes. If the
Transferor determines as of the end of the related Monthly Period that, after giving effect to all
allocations and payments with respect to that Monthly Period, the Coverage Funding Required Amount
of the Class A(2008-A3) Notes will be greater than zero, the required deposit to the Principal
Funding Sub-Account for the Class A(2008-A3) Notes will be the Coverage Funding Required Amount for
such Class A(2008-A3) Notes.

 7 

 

     (e) Distributions to Paying Agent. On each Principal Payment Date, the Indenture
Trustee, acting in accordance with written instructions from the Servicer, shall withdraw from the
Principal Funding Sub-Account for the Class A(2008-A3) Notes and distribute to the Paying Agent for
payment to the Class A(2008-A3) Noteholders the amounts deposited into the Principal Funding
Sub-Account for the Class A(2008-A3) Notes pursuant to this Section 2.04.

     Section 2.05 Holders’ Rights to Payments of Interest and Principal.

     (a) Any installment of interest or principal, if any, payable on any Class A(2008-A3) Note
which is punctually paid or duly provided for by the Issuer and the Indenture Trustee on the
applicable Interest Payment Date or Principal Payment Date shall be paid by the Paying Agent to the
Person in whose name such Class A(2008-A3) Note is registered on the Record Date, by wire transfer
of immediately available funds to such Person’s account as has been designated by written
instructions received by the Paying Agent from such Person not later than the close of business on
the third Business Day preceding the date of payment or, if no such account has been so designated,
by check mailed first-class, postage prepaid to such Person’s address as it appears on the Note
Register on such Record Date, except that with respect to Notes registered on the Record Date in
the name of the nominee of Cede & Co., payment shall be made by wire transfer in immediately
available funds to the account designated by such nominee.

     (b) The right of the Class A(2008-A3) Noteholders to receive payments from the Issuer will
terminate on the first Business Day following the Class A(2008-A3) Termination Date.

     Section 2.06 Cash Collateral Account. In accordance with Section 4.22(a) of the
AdvantaSeries Indenture Supplement, on or prior to the Closing Date, the Transferor shall deposit,
cause to be deposited or maintain funds in the Cash Collateral Account such that, immediately after
giving effect to the issuance of the Class A(2008-A3) Notes, the amount on deposit in the Cash
Collateral Account for the AdvantaSeries is at least equal to the Required Cash Collateral Account
Amount.

     Section 2.07 Spread Account. In accordance with Section 4.24(a) of the AdvantaSeries
Indenture Supplement, on or prior to the Closing Date, the Transferor shall deposit, cause to be
deposited or maintain funds in the Spread Account such that immediately after the issuance of the
Class A(2008-A3) Notes, the ratio of the amount on deposit in the Spread Account to the Required
Spread Account Amount is equal to or greater than the same ratio immediately preceding such
issuance.

 8 

 

     Section 2.08 Delivery and Payment for the Class A(2008-A3) Notes; Form and
Denomination.

     (a) The Issuer shall execute and issue, and the Indenture Trustee shall authenticate, the
Class A(2008-A3) Notes in accordance with Section 2.03 of the Master Indenture. The Indenture
Trustee shall deliver the Class A(2008-A3) Notes to or upon the order of the Issuer when so
authenticated. The Class A(2008-A3) Notes shall be Book-Entry Notes.

     (b) The Depository for the Class A(2008-A3) Notes shall be The Depository Trust Company, and
the Class A(2008-A3) Notes shall initially be registered in the name of Cede & Co., its nominee.

     (c) The Class A(2008-A3) Notes will be issued in minimum denominations of $5,000 and integral
multiples of $1,000 in excess of that amount.

     Section 2.09 Manner of Payment of Class A(2008-A3) Notes. Except as provided in
Section 11.02 of the Master Indenture with respect to a final distribution, distributions to Class
A(2008-A3) Noteholders hereunder shall be made by (i) check mailed to each Class A(2008-A3)
Noteholder (at such Noteholder’s address as it appears in the Note Register), except that with
respect to any Class A(2008-A3) Notes registered in the name of the nominee of a Clearing Agency,
such payment shall be made in immediately available funds and (ii) without presentation or
surrender of any Class A(2008-A3) Note or the making of any notation thereon.

     Section 2.10 Monthly Servicing Fee. In accordance with Section 3.01(a) of the
AdvantaSeries Indenture Supplement, with respect to the July 21, 2008 Payment Date, the
AdvantaSeries Monthly Servicing Fee allocated to the Class A(2008-A3) Notes shall be $33,333.

[END OF ARTICLE II]

 9 

 

     IN WITNESS WHEREOF, the undersigned have caused this Terms Document to be duly executed and
delivered by their respective duly authorized officers on the day and year first above written.

	 	 	 	 	 	 	 
	 	 	WILMINGTON TRUST COMPANY,
	 	 	     as Owner Trustee of
	 	 	ADVANTA BUSINESS CARD MASTER TRUST
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jennifer A. Luce	 	 
	 

	 	Name:
	 	 

Jennifer A. Luce
	 	 
	 

	 	Title:
	 	Sr. Financial Services Officer	 	 
	 
	 	 	 	 	 	 
	 	 	DEUTSCHE BANK TRUST COMPANY AMERICAS,
	 	 	     as Indenture Trustee
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Irene Siegel	 	 
	 

	 	Name:
	 	 

Irene Siegel
	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Louis Bodi	 	 
	 

	 	Name:
	 	 
Louis Bodi
	 	 
	 

	 	Title:	 	Vice President	 	 

[Signature Page to Class A(2008-A3) Terms Document]

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