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EXHIBIT 10.37
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CERTIFICATE PURCHASE AGREEMENT
Dated as of November 10, 1999
among
NEXTBANK, N.A.,
as the Transferor and the Servicer,
VARIABLE FUNDING CAPITAL CORPORATION,
as the Purchaser,
and
FIRST UNION SECURITIES, INC.,
as the Administrative Agent
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TABLE OF CONTENTS
Page
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ARTICLE ONE
DEFINITIONS
Section 1.01. Defined Terms.............................................................. 2
Section 1.02. Accounting Terms; Other Terms.............................................. 8
Section 1.03. Other Rules of Construction................................................ 9
Section 1.04. Computation of Time Periods................................................ 9
ARTICLE TWO
PURCHASE AND SALE; PURCHASE COMMITMENT
Section 2.01. Purchase and Sale of the Certificates...................................... 10
Section 2.02. Purchase Price............................................................. 10
Section 2.03. Increases and Decreases in the Invested Amount............................. 10
Section 2.04. Commitment Fee............................................................. 10
Section 2.05. Termination or Reduction of the Purchase Commitment; Scheduled
Liquidity Termination Date.............................................. 11
Section 2.06. Calculation and Payment of Monthly Interest and Fees; Selection of
Commercial Paper Note Maturities........................................ 11
Section 2.07. Increased Costs............................................................ 12
Section 2.08. Increased Capital.......................................................... 13
Section 2.09. Taxes...................................................................... 14
ARTICLE THREE
CLOSING
Section 3.01. Closing.................................................................... 17
Section 3.02. Transactions to be Effected at the Closing................................. 17
ARTICLE FOUR
PURCHASER CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to the Purchase of the Certificates................... 18
Section 4.02. Conditions Precedent to Invested Amount Increases.......................... 19
ARTICLE FIVE
TRANSFEROR CONDITIONS PRECEDENT
Section 5.01. Conditions Precedent to the Sale of the Certificates....................... 20
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ARTICLE SIX
REPRESENTATIONS AND WARRANTIES
Section 6.01. Representations and Warranties of the Transferor and Servicer.............. 21
Section 6.02. Representations and Warranties of the Purchaser and the Administrative
Agent................................................................... 24
ARTICLE SEVEN
COVENANTS OF THE TRANSFEROR
Section 7.01. Access to Information...................................................... 26
Section 7.02. Reporting Requirements of the Transferor................................... 26
Section 7.03. Optional Repurchase........................................................ 27
Section 7.04. Location of Chief Executive Office......................................... 27
ARTICLE EIGHT
INDEMNIFICATION
Section 8.01. Indemnification by the Transferor and the Servicer......................... 28
Section 8.02. Costs and Expenses......................................................... 28
ARTICLE NINE
THE ADMINISTRATIVE AGENT
Section 9.01. Authorization and Action................................................... 30
Section 9.02. Administrative Agent's Reliance, Etc....................................... 30
Section 9.03. Administrative Agent and Affiliates........................................ 31
Section 9.04. Purchase Decision.......................................................... 31
Section 9.05. Indemnification............................................................ 31
Section 9.06. Successor Administrative Agent............................................. 32
ARTICLE TEN
MISCELLANEOUS
Section 10.01. Amendments, Etc........................................................... 33
Section 10.02. Notices, Etc.............................................................. 33
Section 10.03. No Waiver; Remedies....................................................... 34
Section 10.04. Binding Effect; Assignability............................................. 34
Section 10.05. Certificates as Evidence of Indebtedness.................................. 36
Section 10.06. Governing Law............................................................. 36
Section 10.07. No Proceedings............................................................ 36
Section 10.08. Execution in Counterparts................................................. 37
Section 10.09. No Recourse............................................................... 37
Section 10.10. Confidentiality........................................................... 38
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THIS CERTIFICATE PURCHASE AGREEMENT dated as of November 10, 1999, is
among NEXTBANK, N.A., a national banking association ("NextBank"), as Transferor
and Servicer, VARIABLE FUNDING CAPITAL CORPORATION, a Delaware corporation (the
"Purchaser"), and FIRST UNION SECURITIES, INC, a Delaware corporation ("First
Union Securities"), as administrative agent (the "Administrative Agent") for the
Purchaser and the other "Owners" (as defined below).
In consideration of the representations, warranties and agreements
herein contained, the parties agree as follows:
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ARTICLE ONE
DEFINITIONS
Section 1.01. Defined Terms. As used herein, the following terms shall
have the meanings specified below. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the Pooling and
Servicing Agreement or the Supplement, as the case may be.
"Act" means the Securities Act of 1933, as amended.
"Additional Amounts" means, for each Interest Period, an amount equal to
the sum of (i) the aggregate amount payable to all Affected Parties pursuant to
Sections 2.07, 2.08 and 2.09 in respect of such Interest Period and (ii) the
aggregate of such amounts with respect to prior Interest Periods which remain
unpaid.
"Affected Party" means the Purchaser, the Administrative Agent, First
Union, each Liquidity Provider, any permitted assignee of the Purchaser or any
Liquidity Provider, any Enhancement Provider and any assignee of any Enhancement
Provider.
"Agreement" means this agreement and any supplements, amendments,
exhibits and schedules hereto.
"Alternate Base Rate" means, on any date, a fluctuating rate of interest
per annum equal to the greater of (i) the rate of interest most recently
announced by First Union National Bank at its principal office in Charlotte,
North Carolina as its prime rate; and (ii) the Federal Funds Rate plus the
Federal Funds Margin.
"Alternative Rate" means, with respect to any Interest Period (or
portion thereof), an interest rate per annum equal to the Eurodollar Rate
(Reserve Adjusted); provided, however, (i) upon the occurrence of an Alternative
Rate Date, the Alternative Rate with respect to the Purchaser will be the
Alternate Base Rate for a period of three Business Days commencing on the
Alternative Rate Date and (ii) upon the occurrence of the Alternative Rate
Event, the Alternative Rate will be the Alternate Base Rate.
"Alternative Rate Date" means, if the Purchaser is the Owner, the date
on which the Owner commences funding its share of the Invested Amount through
means other than the issuance of Commercial Paper Notes.
"Alternative Rate Event" means the occurrence or existence of any of the
following events or conditions:
(i) on or before the first day of such Interest Period, the
Purchaser notifies the Administrative Agent that a Eurodollar Rate
Disruption Event has occurred;
(ii) the outstanding Certificate Principal Balance is less than
$100,000;
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(iii) any Owner has notified the Administrative Agent on or
before the applicable rate determination date that the Eurodollar Rate
for any Interest Period (or portion thereof) does not accurately reflect
the cost to such Owners of funding their respective investments in the
Certificates for such Interest Period (or portion thereof), unless (a)
such Owner is the Purchaser and the commercial paper rating on the
Commercial Paper Notes has been downgraded to a level less than A-1 from
Standard & Poor's and P-1 from Moody's for reasons unrelated to the
investment of the Purchaser in the Certificates or (b) the Agent and the
Transferor agree in writing to a different rate.
"Applicable Margin" shall have the meaning specified in the Fee Letter.
"Breakage Costs" means, for each Owner for each funding period, to the
extent that an Owner is funding the maintenance of its investment in the
Invested Amount during such funding period through the issuance of Commercial
Paper Notes or at the Eurodollar Rate (Reserve Adjusted), during which the
amount of such investment is reduced (in whole or in part) prior to the end of
the period for which it was originally scheduled to remain outstanding, whether
as a result of the commencement of a Limited Amortization Period or otherwise
(the amount of such reduced investment being referred to as the "Allocated
Amount"), the excess of (i)the sum of (a) the discount or interest that would
have accrued on the Allocated Amount during the remainder of such funding period
if such reduction had not occurred and (b) other costs and expenses incurred by
such owner as a result of such reduction (including costs incurred due to the
related early termination of any agreement entered into for the purpose of
hedging such Owner's obligations under this Agreement) over (ii) the net income
scheduled to be received by such Owner from investing the Allocated Amount for
the remainder of such funding period, it being understood that in investing such
Allocated Amount such Owner will, but without limitation to its discretion,
endeavor to minimize the associated Breakage Costs.
"Business Day" means a day that is (i) a "Business Day" as such term is
defined in the Pooling and Servicing Agreement and (ii) when used in connection
with the Eurodollar Rate, a day on which dealings in Dollars are carried on in
the London interbank market and, if the Eurodollar Rate is being determined
pursuant to the second sentence of the definition of "Eurodollar Rate," in the
eurodollar interbank market of the Administrative Agent's Eurodollar Office.
"Certificate Documents" means the Pooling and Servicing Agreement, the
Series 1999-3 Supplement, each Receivables Purchase Agreement and the
Certificates.
"Certificate Principal Balance" means, as of any date, the difference
between (i) the sum of (a) the Initial Invested Amount, and (b) the aggregate
principal amount of Invested Amount Increases pursuant to Section 4.10 on or
prior to such date, and (ii) the aggregate amount of principal payments made to
the Certificateholders on or prior to such date.
"Certificate Rate" means, for any Interest Period, the Cost of Funds,
adjusted, as necessary, to yield, when applied to the Certificate Principal
Balance, an amount sufficient to pay interest on the incremental effective
principal balance of any funding resulting from the capitalization of interest
during such Interest Period; provided, however, to the extent that a Pay Out
Event (other than a Pay Out Event occurring pursuant to Section 6.01(m) or (n)
of the
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Supplement) is continuing for all or any portion of any Interest Period, the
Certificate Rate for such Interest Period shall be increased by a percentage
equal to the product of (a) [*] and (b) a fraction having as its numerator,
the number of days in such Interest Period that such Pay Out Event was
continuing, and as its denominator, 360. On the Business Day immediately
preceding each Determination Date, the Administrative Agent shall notify the
Servicer and the Trustee of the Certificate Rate for the related Interest
Period.
"Closing" shall have the meaning set forth in Section 3.01.
"Closing Date" shall have the meaning set forth in Section 3.01.
"Collection Date" means the earliest Business Day following the
termination (as opposed to suspension) of the Revolving Period on which the
Invested Amount shall have been reduced to zero and all other amounts due to the
Owners shall have been paid in full.
"Commercial Paper Notes" means short-term promissory notes issued or to
be issued by the Purchaser to fund its investments in accounts receivable and
other financial assets.
"Commitment Fee Rate" shall have the meaning specified in the Fee
Letter.
"Cost of Funds" means, for any Interest Period, the weighted average
(based upon time and dollar amount) of the following rates applicable during
such Interest Period for each Owner, to the extent such Owner (i) is the
Purchaser and funds its share of the Certificate Principal Balance for such
Interest Period by issuing Commercial Paper Notes, a rate equal to the CP Rate
for such Interest Period and (ii) either (a) is not the Purchaser or (b) is the
Purchaser and funds its share of the Invested Amount for such Interest Period
other than by issuing Commercial Paper Notes, a rate equal to the Alternative
Rate for such Interest Period or such other rate as the Administrative Agent and
the Transferor shall agree to in writing.
"CP Rate" means with respect to any Interest Period (or portion
thereof), the sum of (a) the Applicable Margin and (b) the per annum rate
calculated to yield the Weighted Average Cost related to the issuance of
Commercial Paper Notes that are allocated, in whole or in part by the Purchaser
(or by the Administrative Agent) to fund or maintain its interest in the
Certificates during such Interest Period (or portion thereof) and all interests
in receivables or other financial assets of Other Pool Transferors, if any, held
by the Purchaser; provided, however, that if any component of such rate is a
discount rate, in calculating the "CP Rate" for such Interest Period (or portion
thereof) the Purchaser shall for such component use the rate resulting from
converting such discount rate to an interest-bearing equivalent rate per annum,
and provided, further, that at all times following the occurrence of a Pay Out
Event, the "CP Rate" for any Interest Period (or portion thereof) shall be the
Alternative Rate in effect from time to time.
"Enhancement Agreement" means and includes any agreement (other than any
Liquidity Agreement) outstanding from time to time for the benefit of the
Purchaser providing for the issuance of one or more letters of credit or surety
bonds for the account of the Purchaser, the making of loans to the Purchaser or
any other extensions of credit to or for the account of the Purchaser to support
all or any part of the Purchaser's payment obligations under its Commercial
Paper Notes or to provide an alternate means of funding the Purchaser's
investments in accounts
*Confidential treatment requested.
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receivable or other financial assets, in each case, as amended, supplemented or
otherwise modified from time to time.
"Enhancement Provider" means and includes First Union, First Union
Securities and any other or additional bank, financial guaranty insurance
company or other financial institution now or hereafter extending credit or
having a commitment to extend credit to or for the account of the Purchaser
under an Enhancement Agreement so long as such other or additional bank,
financial guaranty insurance company or other financial institution is, at the
time of each extension of such credit and each occurrence of a commitment to
extend such credit, First Union, First Union Securities or a Person consented to
in writing by the Transferor (such consent not to be unreasonably withheld).
"Eurocurrency Liabilities" shall have the meaning assigned to that term
in Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Office" means such office or offices through which the
Administrative Agent determines the Eurodollar Rate, which office or offices
may, at the option of the Administrative Agent, be either domestic or foreign.
"Eurodollar Rate (Reserve Adjusted)" means, with respect to any Interest
Period (or portion thereof), the sum of (i) the Applicable Margin and (ii) the
per annum rate of interest (rounded upward, if necessary, to the nearest whole
multiple of 1/16th of one percent per annum) determined by dividing (a) the
LIBOR Rate by (b) one minus the Eurodollar Reserve Percentage (expressed as a
decimal).
"Eurodollar Rate Disruption Event" means, for any Owner for any Interest
Period, (i) a determination by such Owner that it would be contrary to law or to
the directive of any central bank or other Governmental Authority (whether or
not having the force of law) to obtain Dollars in the London interbank market to
fund or maintain its investment in the Certificates for such Interest Period or
(ii) the inability of such Owner to obtain United States Dollars in such market
to fund its investment in the Certificates for such Interest Period.
"Eurodollar Reserve Percentage" means, with respect to any Interest
Period (or portion thereof), the reserve percentage (rounded upwards, if
necessary, to the nearest 1/16th of one percent per annum) applicable during
such Interest Period (or portion thereof) (or, if more than one such percentage
shall be so applicable during such Interest Period, the daily average of such
percentages for those days in such Interest Period (or portion thereof) during
which any such percentages shall be in effect) under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for First Union with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period (or portion
thereof).
"Excluded Taxes" shall have the meaning specified in Section 2.09(a).
"Federal Bankruptcy Code" means the bankruptcy code of the United States
of America codified in Title 11 of the United States Code.
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"Federal Funds Margin" shall have the meaning in the Fee Letter.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
federal funds rates as quoted by First Union and confirmed in Federal Reserve
Board Statistical Release H.15 (519) or any successor or substitute publication
selected by First Union (or, if such day is not a Business Day, for the next
preceding Business Day), or, if, for any reason, such rate is not available on
any day, the rate determined, in the sole opinion of First Union, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (New York City time).
"Fee Letter" means the letter agreement, dated as of the Closing Date,
among the Transferor, NextBank, the Purchaser and the Administrative Agent,
setting forth, among other things, the Commitment Fee Rate, Federal Funds
Margin, the Applicable Margin and certain other fees payable by the Transferor
under or in connection with this Agreement, as the same may be amended, restated
or otherwise modified from time to time.
"First Union" means First Union National Bank, a national banking
association, and its successors or assigns.
"First Union Securities" means First Union Securities, Inc., a North
Carolina corporation, and its successors.
"Governmental Actions" means any and all consents, approvals, permits,
orders, authorizations, waivers, exceptions, variances, exemptions or licenses
of, or registrations, declarations or filings with, any Governmental Authority
required under any Governmental Rules.
"Governmental Rules" means any and all laws, statutes, codes, rules,
regulations, ordinances, orders, writs, decrees and injunctions of any
Governmental Authority and any and all legally binding conditions, standards,
prohibitions, requirements and judgments of any Governmental Authority.
"Interpretation" as used in Sections 2.07 and 2.08 with respect to any
law or regulation, means the interpretation or application of such law or
regulation by any Governmental Authority (including any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government), central bank, accounting standards board, financial
services industry advisory body or any comparable entity.
"LIBOR Rate" means, with respect to any Interest Period (or portion
thereof), an interest rate per annum equal to the average (rounded upward to the
nearest one-sixteenth (1/16) of one percent) per annum rate of interest
determined by First Union on the basis of the offered rates for deposits in
dollars for a term equal to the Interest Period (or portion thereof), and
commencing on the first day of such Interest Period, appearing on Telerate Page
3750 (or, if, for any reason, Telerate Page 3750 is not available, the Reuters
Screen LIBO Page) as of 11:00 A.M. (London time) on the Business Day which is
the second Business Day immediately preceding the first day of the applicable
Interest Period. If neither Telerate Page 3750 nor the Reuters Screen LIBO Page
is available, then the LIBOR Rate shall be the rate determined by First Union at
its principal office in Charlotte, North Carolina as its LIBOR Rate (each such
determination, absent
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manifest error, to be conclusive and binding on all parties hereto and their
assignees) as of two Business Days prior to the applicable Interest Period as
the rate at which deposits in same day funds in U.S. dollars are being, have
been, or would be offered or quoted by First Union to major banks in the
applicable interbank market for Eurodollar deposits at or about 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day which is the second
Business Day immediately preceding the first day of the applicable Interest
Period for delivery on the first day of such Interest Period for a term equal to
such Interest Period.
"Liquidity Agreement" means and include (i) the Liquidity Agreement of
even date herewith among the Purchaser, First Union Securities and the Liquidity
Providers supporting the Purchaser's payment obligations with respect to the
Commercial Paper Notes issued to fund its purchase or maintenance of the
Certificates hereunder, as amended, supplemented or otherwise modified from time
to time, and (ii) any other agreement outstanding from time to time for the
benefit of the Purchaser providing for the sale by the Purchaser of undivided
percentage interests in the Certificates or the making of loans or other
extensions of credit to support all or part of the Purchaser's payment
obligations under the Commercial Paper Notes issued to fund its purchase or
maintenance of the Certificates or to provide an alternate means of funding the
Purchaser's investment in the Certificates hereunder, and under which the amount
available from such sale or such extension of credit is limited to an amount
calculated by reference to the value or eligible unpaid balance of such
Certificates or any portion thereof or the level of credit enhancement available
with respect thereto, in each case as amended, supplemented or otherwise
modified from time to time.
"Liquidity Provider" means a financial institution providing liquidity
support to or for the account of the Purchaser pursuant to or in connection with
a Liquidity Agreement, so long as, at the time of each extension of such support
and each occurrence of a commitment to extend such support, such financial
institution is First Union, First Union Securities or a Person consented to in
writing by the Transferor (such consent not to be unreasonably withheld).
"Liquidity Reduction Date" means either (a) unless the applicable
Liquidity Provider is earlier replaced by the Administrative Agent with a
commercial bank satisfactory to the Administrative Agent having a commercial
paper or short-term deposit rating of A-1+ from Standard & Poor's and P1 from
Moody's, the latest of (i) the day on which any portion of the commitment of any
Liquidity Provider to provide liquidity support to the Purchaser in connection
with the Certificates shall be terminated, (ii) such later date as the
Administrative Agent may specify and (iii) the first Business Day that is at
least 90 days after delivery by the Administrative Agent to the Transferor of
written notice that the commitment of any Liquidity Provider to provide
liquidity support to the Purchaser in connection with the Certificates shall be
terminated or (b) unless the applicable Liquidity Provider is earlier replaced
by the Administrative Agent with a commercial bank satisfactory to the
Administrative Agent having a commercial paper or short-term deposit rating of
A-1+ from Standard & Poor's and P1 from Moody's the latest of (i) the first
Business Day that is 30 days after the date on which a Liquidity Provider is
downgraded to a level less than that required by the rating agencies rating the
commercial paper notes of the Purchaser (a "Downgrade Event"), (ii) such later
date as the Administrative Agent may specify and (iii) the first Business Day
that is at least 30 days after delivery by the Administrative Agent to the
Transferor of written notice of the applicable Downgrade Event.
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"Losses" shall have the meaning set forth in Section 8.01(a).
"Monthly Interest" means with respect to any Distribution Date, an
amount equal to the sum of (i) the product of (a) the Certificate Rate in effect
with respect to the Interest Period ending immediately prior to such
Distribution Date, (b) the average daily Certificate Principal Balance during
such Interest Period and (c) a fraction the numerator of which is the actual
number of days in such Interest Period and the denominator of which is 360, plus
(ii) all Breakage Costs incurred by Owners during the immediately preceding
Interest Period.
"NextCard" means NextCard, Inc., a Delaware corporation.
"Other Pool Transferors" means all other Persons that transfer interests
(including security interests) in receivables or other financial assets to the
Purchaser to the extent that such interests in receivables or other financial
assets are aggregated with the interest of the Purchaser in the Certificates and
funded on a pooled basis by the Purchaser.
"Other Taxes" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies that arise from
any payment or deposit required to be made hereunder, under the Pooling and
Servicing Agreement or the Supplement or from the execution, delivery or
registration of, or otherwise with respect to, any of the foregoing.
"Owner" means the Purchaser and all other owners by assignment,
participation or otherwise of a Certificate or any interest therein.
"Pooling and Servicing Agreement" means the Amended and Restated Pooling
and Servicing Agreement, dated as of May 21, 1999, among the Transferor, the
Servicer and the Trustee, as amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof.
"Purchase Commitment" means the commitment of the Purchaser to acquire
interests in the Certificates at a maximum Certificate Principal Balance
outstanding from time to time not to exceed $220,000,000 (as such amount may be
reduced from time to time pursuant to Section 2.05).
"Purchase Commitment Termination Date" means the earlier of the Business
Day preceding the day on which the Scheduled Amortization Period commences and
the Business Day preceding the day on which the Early Amortization Period
commences.
"Purchase Price" shall have the meaning set forth in Section 2.02.
"Required Owners" means, at any time, those Owners owning interests in
Certificates aggregating 66-2/3% of the Certificate Principal Balance at such
time.
"Scheduled Liquidity Termination Date" means November 8, 2000, as such
date may be extended pursuant to Section 2.05(b).
"Supplement" means the Series 1999-3 Supplement, dated as of November
10, 1999, among the Transferor, the Servicer and the Trustee.
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"Taxes" shall have the meaning set forth in Section 2.09(a).
"Transferee" shall have the meaning set forth in Section 10.04(d).
"Transferor" shall have the meaning specified in the preamble hereto.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction.
"Weighted Average Cost" means, for any Interest Period, the sum of (i)
the amounts paid or payable by the Purchaser as interest or otherwise (by means
of interest rate ▇▇▇▇▇▇ or otherwise) in respect of the Commercial Paper Notes
(ii) the commissions of placement agents and dealers in respect of such
Commercial Paper Notes, and (iii) other borrowings by the Purchaser (other than
under any Liquidity Agreement), including to fund small or odd dollar amounts
that are not easily accommodated in the commercial paper market.
"Year 2000 Plan" shall have the meaning set forth in Section 6.01(m).
"Year 2000 Problem" shall have the meaning set forth in Section 6.01(m).
Section 1.02. Accounting Terms; Other Terms. All accounting terms used
in this Agreement shall, unless otherwise specifically provided, have the
meanings customarily given to them in accordance with generally accepted United
States accounting principles or United States regulatory accounting principles,
as applicable, as in effect from time to time, and all financial computations
hereunder shall, unless otherwise specifically provided, be computed in
accordance with generally accepted United States accounting principles or United
States regulatory accounting principles, as applicable, as in effect from time
to time, consistently applied. All terms used in Article 9 of the UCC in the
State of New York, and not specifically defined herein, are used herein as
defined in such Article 9.
Section 1.03. Other Rules of Construction. References in this Agreement
to sections, schedules and exhibits are to sections of and schedules and
exhibits to this Agreement unless otherwise indicated. The words "hereof",
"herein", "hereunder" and comparable terms refer to the entirety of this
Agreement and not to any particular article, section or other subdivision hereof
or attachment hereto. Words in the singular include the plural and in the plural
include the singular. Unless the context otherwise requires, the word "or" is
not exclusive. The word "including" shall be deemed to mean "including, without
limitation". The section and article headings and table of contents contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Except as otherwise specified
herein, all references herein (i) to any Person shall be deemed to include such
Person's successors and assigns and (ii) to any Governmental Rule or contract
specifically defined or referred to herein shall be deemed references to such
Governmental Rule or contract as the same may be supplemented, amended, waived,
consolidated, replaced or modified from time to time, but only to the extent
permitted by, and effected in accordance with, the terms thereof.
Section 1.04. Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."
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ARTICLE TWO
PURCHASE AND SALE; PURCHASE COMMITMENT
Section 2.01. Purchase and Sale of the Certificates. On the terms and
subject to the conditions set forth in this Agreement, and in reliance on the
covenants, representations, warranties and agreements herein set forth, the
Transferor agrees to sell, transfer and deliver to the Purchaser, at the
Closing, and the Purchaser agrees to purchase from the Transferor, at the
Closing, the Certificates.
Section 2.02. Purchase Price. The Certificates are to be purchased at an
initial purchase price (the "Purchase Price") of $0, representing 100% of the
Initial Invested Amount. Upon satisfaction of the conditions to Closing set
forth in Articles Four and Five, the Purchase Price is to be remitted to the
Transferor in same day funds by wire transfer pursuant to written instructions
to be provided to the Administrative Agent at least five Business Days prior to
the Closing Date.
Section 2.03. Increases and Decreases in the Invested Amount.
(a) Subject to the terms and conditions of Section 4.10 of the
Supplement, the Purchaser hereby agrees from the Closing Date to (but not
including) the Purchase Commitment Termination Date to fund any Invested Amount
Increase requested by the Transferor from the Purchaser in accordance with the
procedures described in Section 4.10 of the Supplement; provided, however, that
at no time shall the Certificate Principal Balance allocable to the Purchaser
exceed the Purchase Commitment. On the date of the applicable Invested Amount
Increase, the Purchaser shall remit to the Administrative Agent, in same day
funds, the amount of such Invested Amount Increase, whereupon the Administrative
Agent will remit such amount, in same day funds, to the Transferor in accordance
with such payment instructions as the Transferor shall have delivered in writing
to the Administrative Agent at least one Business Day prior to the date of such
Invested Amount Increase.
(b) The Invested Amount may be decreased from time to time in accordance
with the procedures described in the Supplement and, so long as the Purchase
Commitment Termination Date has not occurred, subsequently increased in
accordance with the requirements of this Agreement and Section 4.10 of the
Supplement.
(c) Notwithstanding anything to the contrary contained herein, if any
Invested Amount Increase is not made on the date specified by the Transferor in
its written request therefor delivered pursuant to Section 4.10 of the
Supplement, the Transferor shall indemnify each Affected Party against any
reasonable loss, cost or expense incurred by such Affected Party as a result of
such occurrence, including, without limitation, any reasonable loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Affected Party to fund such anticipated Invested
Amount Increase.
Section 2.04. Commitment Fee. From and after the Closing Date until the
Purchase Commitment Termination Date, the Transferor shall pay to the Purchaser
a commitment fee
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equal to the product of (i) the Purchase Commitment and (ii) the Commitment Fee
Rate, payable in arrears on each Distribution Date.
Section 2.05. Termination or Reduction of the Purchase Commitment;
Scheduled Liquidity Termination Date.
(a) Upon at least five Business Days' notice to the Purchaser, the
Transferor may terminate in whole or reduce in part the unused portion of the
Purchase Commitment; provided, however, that any such reduction in part shall be
in a minimum amount of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and (ii) if, after giving effect to such reduction, the Purchase
Commitment would be less that $100,000,000, such reduction shall be either in
such smaller amount as will not cause the Purchase Commitment to be less than
$100,000,000 or in a amount sufficient to reduce the Purchase Commitment
hereunder to zero.
(b) If the Scheduled Liquidity Termination Date in effect at any time
will not be extended, the Administrative Agent agrees that it will so notify the
Transferor and the Servicer in writing at least 90 days prior to such Scheduled
Liquidity Termination Date. To the extent that the Administrative Agent has not
delivered a notice of nonextension as contemplated in the preceding sentence,
the Administrative Agent will, on or before the Scheduled Liquidity Termination
Date then in effect, notify the Transferor and the Servicer of the new Scheduled
Liquidity Termination Date, whereupon such new date shall be the effective
Scheduled Liquidity Termination Date.
Section 2.06. Calculation and Payment of Monthly Interest and Fees;
Selection of Commercial Paper Note Maturities.
(a) The amount of interest payable on each Distribution Date in respect
of Certificates shall equal the Monthly Interest for such Distribution Date. The
Administrative Agent shall notify the Servicer, the Trustee and the Purchaser,
on the Business Day preceding each Determination Date, of the Monthly Interest
for the related Distribution Date and the Certificate Rate for the related
Interest Period.
(b) Out of the Monthly Interest received by the Administrative Agent for
each Interest Period as contemplated in Section 9.01(b), the Administrative
Agent shall remit to each Owner an amount of interest equal to the product of
(i) such Owner's cost of funds and (ii) such Owner's allocable share of the
Invested Amount during such Interest Period, plus the amount of any Breakage
Costs applicable to such Owner in respect of such Distribution Date.
(c) All computations of interest, fees and other amounts under this
Agreement shall be made on the basis of a year of 360 days and the actual number
of days elapsed. Whenever any payment or deposit to be made hereunder shall be
due on a day other than a Business Day, such payment or deposit shall be made on
the next succeeding Business Day and such extension of time shall be included in
the computation of such payment or deposit.
(d) The Purchaser (or the Administrative Agent on its behalf) shall
select the maturities of Commercial Paper Notes allocated to fund or maintain
the Purchaser's interest in the Certificates in consultation with the
Transferor; provided, however, that notwithstanding the Administrative Agent's
agreement to consult with the Transferor in selecting maturities for such
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Commercial Paper Notes, the Administrative Agent, on behalf of the Purchaser,
shall retain full and absolute discretion to select such maturities.
Section 2.07. Increased Costs.
(a) If due to the introduction of or any change (including, without
limitation, any change by way of imposition or increase of reserve requirements)
in or in the Interpretation of any law or regulation or the imposition of any
guideline or request from any central bank or other Governmental Authority after
the date hereof, there shall be an increase in the cost to an Affected Party of
making, funding or maintaining any investment in the Certificates or any
interest therein or of agreeing to purchase or invest in the Certificates or any
interest therein, as the case may be (other than by reason of any Interpretation
of or change in laws or regulations relating to Taxes or Excluded Taxes), such
Affected Party shall promptly submit to the Transferor, the Servicer and the
Administrative Agent a certificate setting forth in reasonable detail, the
calculation of such increased costs incurred by such Affected Party. In
determining such amount, such Affected Party may use any reasonable averaging
and attribution methods, consistent with the averaging and attribution methods
generally used by such Affected Party in determining amounts of this type. The
amount of increased costs set forth in such certificate (which certificate
shall, in the absence of manifest error, be prima facie evidence as to such
amount) shall be included in the Additional Amounts for (i) the first full
Interest Period immediately succeeding the date on which the certificate
specifying the amount owing was delivered and (ii) to the extent remaining
outstanding, each Interest Period thereafter until paid in full. The
Administrative Agent shall, out of amounts received by it (as contemplated in
Section 9.01(b)) in respect of the Additional Amounts on any Distribution Date
(as contemplated in Section 9.01(b)), pay to each Affected Party, any increased
costs due pursuant to this Section; provided, however, that if the amount
distributable in respect of the Additional Amounts on any Distribution Date is
less than the aggregate amount payable to all Affected Parties pursuant to
Sections 2.07, 2.08 and 2.09 for the corresponding Interest Period, the
resulting shortfall shall be allocated among such Affected Parties on a pro rata
basis (determined by the amount owed to each). Failure on the part of any
Affected Party to demand compensation for any amount pursuant to this Section
for any period shall not constitute a waiver of such Affected Party's right to
demand compensation for such period; provided, however, that no Affected Party
shall be entitled to compensation for any such amount relating to any period
ending more than six months prior to the date that such Affected Party notifies
the Transferor, the Servicer and the Administrative Agent in writing thereof.
(b) Each Owner agrees that it shall use its best efforts to take (or
cause any Affected Party claiming through such Owner to take) such steps as
would eliminate or reduce the amount of any increased costs described in this
Section incurred by such Owner or Affected Party; provided that no such steps
shall be required to be taken if, in the reasonable judgment of such Owner or
Affected Party, such steps would be disadvantageous to such Owner or Affected
Party or inconsistent with its internal policy and legal and regulatory
restrictions. To the extent that, notwithstanding such efforts, any Owner that
is a Liquidity Provider (or any Affected Party claiming through an Owner that is
a Liquidity Provider) is unable to eliminate such increased costs and makes a
demand hereunder, the Purchaser may replace such Liquidity Provider with another
commercial bank satisfactory to the Purchaser, the Administrative Agent and the
Transferor; provided, however, that the Purchaser shall be under no obligation
to so replace a
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Liquidity Provider requesting any amount under this Section, and shall in no
event replace such Liquidity Provider if it is First Union Securities.
Section 2.08. Increased Capital.
(a) If the introduction of or any change in or in the Interpretation of
any law or regulation or the imposition of any guideline or request from any
central bank or other Governmental Authority, in each case, after the date
hereof, affects or would affect the amount of capital required or expected to be
maintained by any Affected Party, and such Affected Party determines that the
amount of such capital is increased as a result of (i) the existence of the
Purchaser's agreement to make or maintain an investment in the Certificates or
any interest therein and other similar agreements or facilities or (ii) the
existence of any agreement by Affected Parties to make or maintain an investment
in the Certificates or any interest therein or to fund any such investment and
any other commitments of the same type, such Affected Party shall promptly
submit to the Transferor, the Servicer and the Administrative Agent a
certificate setting forth the additional amounts required to compensate such
Affected Party in light of such circumstances. In determining such amount, such
Affected Party may use any reasonable averaging and attribution methods,
consistent with the averaging and attribution methods generally used by such
Affected Party in determining amounts of this type. The amount set forth in such
certificate (which certificate shall, in the absence of manifest error, be prima
facie evidence as to such amount) shall be included in the Additional Amounts
for (i) the first full Interest Period immediately succeeding the date on which
the certificate specifying the amount owing was delivered and (ii) to the extent
remaining outstanding, each Interest Period thereafter until paid in full. The
Administrative Agent shall, out of amounts received by it in respect of the
Additional Amounts on any Distribution Date (as contemplated in Section
9.01(b)), pay to each Affected Party any amount due pursuant to this Section,
provided, however, that if the amount distributable in respect of the Additional
Amounts on any Distribution Date is less than the aggregate amount payable to
all Affected Parties pursuant to Sections 2.07, 2.08 and 2.09 for the
corresponding Interest Period, the resulting shortfall shall be allocated among
such Affected Parties on a pro rata basis (determined by the amount owed to
each). Failure on the part of any Affected Party to demand compensation for any
amount pursuant to this Section for any period shall not constitute a waiver of
such Affected Party's right to demand compensation for such period; provided,
however, that no Affected Party shall be entitled to compensation for any such
amount relating to any period ending more than six months prior to the date that
such Affected Party notifies the Transferor, the Servicer and the Administrative
Agent in writing thereof.
(b) Each Owner agrees that it shall use its best efforts to take (or
cause any Affected Party claiming through such Owner to take) such steps as
would eliminate or reduce the amount of any increased costs described in this
Section incurred by such Owner or Affected Party; provided that no such steps
shall be required to be taken if, in the reasonable judgment of such Owner or
Affected Party, such steps would be disadvantageous to such Owner or Affected
Party or inconsistent with its internal policy and legal and regulatory
restrictions. To the extent that, notwithstanding such efforts, any Owner that
is a Liquidity Provider (or any Affected Party claiming through an Owner that is
a Liquidity Provider) is unable to eliminate such amount in respect of which
compensation is payable pursuant to this Section and makes a demand hereunder,
the Purchaser may replace such Liquidity Provider with another commercial bank
satisfactory to the Purchaser, the Administrative Agent and the Transferor;
provided, however,
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that the Purchaser shall be under no obligation to so replace a Liquidity
Provider requesting any amount under this Section, and shall in no event replace
such Liquidity Provider if it is First Union Securities, Inc.
Section 2.09. Taxes.
(a) Subject to Section 2.09(d), any and all payments and deposits
required to be made hereunder or under the Pooling and Servicing Agreement or
the Supplement by the Transferor or the Trustee to or for the benefit of the
Administrative Agent or any Owner shall be made, to the extent allowed by law,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto imposed by any Governmental Authority, excluding, in the case of
each Owner and the Administrative Agent, (i) taxes, levies, imposts, deductions,
charges or withholdings imposed on, or measured by reference to, the net income
of such Owner or the Administrative Agent, as applicable, franchise taxes
imposed on such Owner or the Administrative Agent, as applicable (including,
branch profits taxes, minimum taxes and taxes computed under alternative
methods, at least one of which is based on net income), and any other taxes
(other than withholding taxes not imposed by Section 1446 of the Code and Other
Taxes), levies, imposts, deductions, charges or withholdings based or imposed on
income or the receipts or gross receipts of such Owner or the Administrative
Agent, as applicable, in each case, by any of (A) the United States or any State
thereof, (B) the state or foreign jurisdiction under the laws of which such
Owner or the Administrative Agent, as applicable, is organized, with which it
has a present or former connection (other than solely by reason of this
Agreement), or in which it is otherwise doing business or (C) any political
subdivision thereof; (ii) any taxes, levies, imposts, duties, charges or fees to
the extent of any credit or other benefit actually realized by such
Administrative Agent or Owner, as applicable, as a result thereof; and (iii) any
taxes, levies, imposts, duties, charges or fees imposed as a result of a change
by the Administrative Agent or Owner, as applicable, of the office in which all
or any part of its interest in the Certificates is acquired, accounted for or
booked (all such excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being referred to herein as "Excluded Taxes" and
all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being referred to herein as "Taxes"). If the Transferor or the
Trustee shall be required by law to deduct any Taxes from or in respect of any
sum required to be paid or deposited hereunder to or for the benefit any Owner
or the Administrative Agent, then, to the extent provided in Section 2.09(d),
(i) such sum shall be increased as may be necessary so that, after making all
required deductions (including deductions applicable to additional sums payable
under this Section), such Owner or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Transferor or the Trustee (as appropriate) shall
make such deductions and (iii) the Transferor or the Trustee (as appropriate)
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) To the extent provided in Section 2.09(d), each Owner and the
Administrative Agent shall be reimbursed for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts otherwise payable under this Section) paid by such Owner
or the Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
Each Owner and the Administrative Agent agrees to promptly notify the Transferor
and the
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Servicer of any payment of such Taxes or Other Taxes made by it and, if
practicable, any request, demand or notice received in respect thereof prior to
such payment. In addition, in the event any Owner is required, in accordance
with and pursuant to the terms of any agreement or other document providing
liquidity support, credit enhancement or other similar support to such Owner in
connection with the Certificates or the funding or maintenance of an interest
therein, to compensate a bank or other financial institution in respect of taxes
under circumstances similar to those described in this Section, then, to the
extent provided in Section 2.09(d), such Owner shall be reimbursed for any such
compensation so paid by it. A certificate as to the amount of any
indemnification pursuant to this Section submitted to the Transferor by such
Owner or the Administrative Agent, as the case may be, setting forth in
reasonable detail the basis for and the calculation thereof, shall (absent
manifest error) be prima facie evidence as to such amount.
(c) Within 30 days after the date of any payment of Taxes or Other
Taxes, the Transferor will furnish to the Administrative Agent the original or a
certified receipt evidencing payment thereof.
(d) Any amounts payable to an Owner or the Administrative Agent pursuant
to this Section shall be included in the Additional Amounts for (i) in the case
of amounts payable pursuant to Section 2.09(a), the Interest Period in respect
of which the payment subject to withholding is made, (ii) in the case of amounts
payable pursuant to Section 2.09(b), the first full Interest Period immediately
succeeding the date on which the certificate specifying the amount owing was
delivered and (iii) in either case, to the extent remaining outstanding, each
Interest Period thereafter until paid in full. The Administrative Agent shall,
out of amounts received by it in respect of the Additional Amounts on any
Distribution Date (as contemplated in Section 9.01(b)), pay to each Owner and
itself, as applicable, any reimbursement due pursuant to this Section, provided,
however, that if the amount distributable in respect of the Additional Amounts
on any Distribution Date is less than the aggregate amount payable to all
Affected Parties pursuant to Sections 2.07, 2.08 and 2.09 for the corresponding
Interest Period, the resulting shortfall shall be allocated among such Affected
Parties on a pro rata basis (determined by the amount owed to each).
(e) The Administrative Agent and each Owner (i) that is organized under
the laws of a jurisdiction outside the United States hereby agrees to complete,
execute and deliver to the Trustee from time to time prior to the initial
Distribution Date on which such Person will be entitled to receive distributions
pursuant to the Supplement and this Agreement, Internal Revenue Service form
4224 (or any successor form), (ii) at the request of the Transferor, hereby
agrees to complete, execute and deliver to the Trustee from time to time prior
to the initial Distribution Date on which such Person will be entitled to
receive distributions pursuant to the Supplement and this Agreement, Internal
Revenue Service form W-9 (or any successor form), and (iii) hereby agrees to
complete, execute and deliver to the Trustee from time to time prior to the
initial Distribution Date on which such Person will be entitled to receive
distributions pursuant to the Supplement and this Agreement, such other forms or
certificates as may be required under the laws of any applicable jurisdiction in
order to permit the Transferor or the Trustee to make payments to, and deposit
funds to or for the account of, such Person hereunder and under the Pooling and
Servicing Agreement and the Supplement without any deduction or withholding for
or on account of any United States tax. Each of the Administrative Agent and
each Owner agrees to provide like additional subsequent duly executed forms on
or before the
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date that any such form expires or becomes obsolete, or upon the occurrence of
any event requiring an amendment, resubmission or change in the most recent form
previously delivered by it and to provide such extensions or renewals as may be
reasonably requested by the Transferor or the Trustee. Each of the
Administrative Agent and the Owner certifies, represents and warrants that as of
the date of this Agreement, or in the case of an Owner which is an assignee as
of the date of such assignment, that (i) it is entitled (A) to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes (other than taxes subject to withholding pursuant to Code
Section 1446) and (B) to an exemption from United States backup withholding tax
and (ii) it will pay any taxes attributable to its ownership of an interest in
the Certificates. Each of the Administrative Agent and each Owner further agrees
that compliance with this Section 2.09(e) (including by reason of Section
10.04(c) in the case of any sale or assignment of any interest in Certificates)
is a condition to the payment of any amount otherwise due pursuant to Sections
2.09(a) and 2.09(b). Notwithstanding anything to the contrary herein, each of
the Paying Agent, Servicer and Trustee shall be entitled to withhold any amount
that it reasonably determines in its sole discretion is required to be withheld
pursuant to Section 1446 of the Code and such amount shall be deemed to have
been paid to the Administrative Agent or Owner, as applicable, for all purposes
of the Agreement.
(f) Any Owner entitled to the payment of any additional amount pursuant
to this Section shall use its reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to take such steps as would
eliminate or reduce the amount of such payment; provided that no such steps
shall be required to be taken if, in the reasonable judgment of such Owner, such
steps would be materially disadvantageous to such Owner. To the extent that,
notwithstanding such efforts, any Owner that is a Liquidity Provider is unable
to eliminate an amount payable under this Section and makes a demand hereunder,
the Purchaser shall use its reasonable efforts to replace such Liquidity
Provider with another commercial bank satisfactory to the Purchaser, the
Administrative Agent and the Transferor; provided, however, that the Purchaser
shall be under no obligation to so replace such Liquidity Provider if it is
First Union Securities.
(g) Without prejudice to the survival of any other agreement of the
Transferor hereunder, the agreements and obligations of the Transferor contained
in this Section shall survive the termination of this Agreement.
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ARTICLE THREE
CLOSING
Section 3.01. Closing. The closing of the purchase and sale of the
Certificates (the "Closing") shall take place at the offices of ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, at
10:00 a.m. (Pacific Standard Time), on November 12, 1999, or, if the conditions
to closing set forth in Articles Four and Five shall not have been satisfied or
waived by such date, as soon as practicable after such conditions shall have
been satisfied or waived, or at such other time, date and place as the parties
shall agree upon (the date of the Closing being referred to herein as the
"Closing Date").
Section 3.02. Transactions to be Effected at the Closing. At the
Closing, (i) the Purchaser will deliver to the Transferor (by wire transfer of
same day funds to a bank account designated by the Transferor at least two
Business Days prior to the Closing Date) an amount equal to the Purchase Price
and (ii) the Transferor shall deliver the Certificates to the Administrative
Agent on behalf of the Purchaser.
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ARTICLE FOUR
PURCHASER CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to the Purchase of the Certificates.
The obligation of the Purchaser to purchase and pay for the Certificates on the
Closing Date is subject to the satisfaction at the time of the Closing of the
following conditions:
(a) Performance by the Transferor. All the terms, covenants,
agreements and conditions of this Agreement, the Pooling and Servicing
Agreement and the Supplement to be complied with and performed by the
Transferor by the Closing shall have been complied with and performed in
all material respects.
(b) Representations and Warranties of the Transferor. Each of the
representations and warranties of the Transferor made in this Agreement,
the Pooling and Servicing Agreement and the Supplement shall be true and
correct in all material respects as of the time of the Closing as though
made as of such time (except to the extent they expressly relate to an
earlier time).
(c) Officers' Certificate. The Administrative Agent shall have
received from the Transferor, in form and substance reasonably
satisfactory to the Purchaser and the Administrative Agent, an Officer's
Certificate, dated the Closing Date, certifying as to the satisfaction
of the conditions set forth in Sections 4.01(a) and 4.01(b).
(d) Certain Opinions of Counsel. The Administrative Agent shall
have received from ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, acting as counsel
for the Transferor, the Servicer and/or certain other parties, as
applicable, favorable opinions, dated the Closing Date and reasonably
satisfactory in form and substance to the Purchaser, the Administrative
Agent and their counsel.
(e) Opinion of Counsel for the Trustee. The Administrative Agent
shall have received from McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP, counsel
for the Trustee, a favorable opinion, dated the Closing Date and
reasonably satisfactory in form and substance to the Purchaser, the
Administrative Agent and their counsel.
(f) Financing Statements. The Administrative Agent shall have
received evidence reasonably satisfactory to the Purchaser and the
Administrative Agent that, on or before the Closing Date, UCC-1
financing statements have been filed in the offices of the Secretary of
State or comparable offices of the applicable states and in the
appropriate office or offices in such other locations as may be
specified in the relevant opinions of counsel delivered pursuant to
Section 4.01(d) and in such other jurisdictions as its counsel deems
appropriate, reflecting the assignments contemplated by such opinions of
counsel and the respective interests of the applicable parties.
(g) Receipt of Certain Documents. The Administrative Agent and
the Purchaser shall have received a fully executed copy of each of the
Pooling and Servicing Agreement, the Supplement and the other
instruments, documents and agreements
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required to be delivered thereunder. Each of the Pooling and Servicing
Agreement and the Supplement shall have been duly authorized, executed
and delivered by the Transferor, the Servicer, and the Trustee, and
shall be in full force and effect on the Closing Date.
(h) No Actions or Proceedings. No action, suit, proceeding or
investigation by or before any Governmental Authority shall have been
instituted to restrain or prohibit the consummation by the Transferor,
the Administrative Agent or the Purchaser of, or to invalidate, the
transactions contemplated by this Agreement, the Supplement or any of
the Liquidity Agreements or Enhancement Agreements in any material
respect.
(i) Approvals and Consents. All Governmental Actions of
Governmental Authorities required by the Administrative Agent, the
Purchaser or the Transferor with respect to the transactions
contemplated by this Agreement, the Supplement and the Liquidity
Agreements and Enhancement Agreements shall have been obtained or made.
(j) Commercial Paper Market. The commercial paper market shall be
available to the Purchaser at the time of the Closing.
(k) Payment of Fees. All fees required to be paid to the
Administrative Agent or the Purchaser in connection with the Closing
pursuant to the Fee Letter shall have been paid.
(l) Other Documents. The Transferor shall have furnished to the
Purchaser or the Administrative Agent, as the case may be, such other
information, certificates and documents as the Purchaser, the
Administrative Agent or their counsel may reasonably request.
Section 4.02. Conditions Precedent to Invested Amount Increases. The
obligation of the Purchaser to make any Invested Amount Increase is subject to
the satisfaction, as of the applicable Increase Date, of each of the applicable
Increase Conditions and the other applicable conditions specified herein.
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ARTICLE FIVE
TRANSFEROR CONDITIONS PRECEDENT
Section 5.01. Conditions Precedent to the Sale of the Certificates. The
obligation of the Transferor to sell the Certificates to the Administrative
Agent on the Closing Date for the benefit of the Purchaser and the subsequent
Owners from time to time is subject to the satisfaction at the time of the
Closing of the following conditions:
(a) Performance by the Purchaser and the Administrative Agent.
All the terms, covenants, agreements and conditions of this Agreement to
be complied with and performed by the Purchaser or the Administrative
Agent, as the case may be, by the Closing shall have been complied with
and performed in all material respects.
(b) Representations and Warranties. Each of the representations
and warranties of each of the Purchaser and the Administrative Agent
made in this Agreement shall be true and correct in all material
respects as of the time of the Closing as though made as of such time
(except to the extent they expressly relate to an earlier time).
(c) Officer's Certificate. The Transferor shall have received
from the Purchaser, in form and substance reasonably satisfactory to the
Transferor, a certificate signed by an officer of the Purchaser, dated
the Closing Date, certifying as to the satisfaction of the conditions
set forth in Sections 5.01(a) and 5.01(b).
(d) Opinion of Counsel for the Trustee. The Transferor shall have
received from McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP, counsel for the
Trustee, a favorable opinion, dated the Closing Date and reasonably
satisfactory in form and substance to the Transferor and its counsel.
(e) No Actions or Proceedings. No action, suit, proceeding or
investigation by or before any Governmental Authority shall have been
instituted to restrain or prohibit the consummation by the Transferor,
the Administrative Agent or the Purchaser of, or to invalidate, the
transactions contemplated by this Agreement in any material respect.
(f) Approvals and Consents. All Governmental Actions of
Governmental Authorities required by the Purchaser, the Administrative
Agent or the Transferor with respect to the transactions contemplated by
this Agreement shall have been obtained or made.
(g) Other Documents. The Purchaser or the Administrative Agent,
as applicable, shall have furnished to the Transferor such other
information, certificates and documents as the Transferor or its counsel
may reasonably request.
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ARTICLE SIX
REPRESENTATIONS AND WARRANTIES
Section 6.01. Representations and Warranties of the Transferor and
Servicer. Each of the Transferor and the Servicer hereby represents and warrants
to the Owners and the Administrative Agent with respect to itself (giving
effect, in the case of any Successor Servicer, any successor to the Transferor
or any Additional Transferor, to such changes to Section 6.01(a) as may be
necessary to reflect accurately the incorporation or other formation of such
Successor Servicer, successor to the Transferor or Additional Transferor) as of
the date of this Agreement, as of the Closing Date, and as of (and as a
condition to any Invested Amount Increase occurring on) each Increase Date (but
excluding, in the case of any Increase Date, Section 6.01(e)), in each case with
reference to the facts and circumstances then existing, as follows:
(a) Corporate Existence. Each of the Transferor and the Servicer
is a national banking association organized, validly existing and in
good standing under the federal laws of the United States, with full
power and authority under such laws to own its properties and conduct
its business as such properties are presently owned and such business is
presently conducted and to execute, deliver and perform its obligations
under this Agreement and each Certificate Document to which it is a
party.
(b) Corporate Authority. Each of the Transferor and the Servicer
has the corporate power, authority and right to make, execute, deliver
and perform this Agreement and each Certificate Document to which it is
a party and all the transactions contemplated hereby and thereby and has
taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement and each Certificate Document
to which it is a party; and, when executed and delivered, each of this
Agreement and the Certificate Documents to which it is a party will
constitute its legal, valid and binding obligation, enforceable in
accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium, receivership, conservatorship
and other laws relating to or affecting the enforcement of rights of
creditors of banking institutions the accounts of which are insured by
the Federal Deposit Insurance Corporation or any other instrumentality
of the federal government from time to time in effect. The
enforceability of its obligations under such agreements is also subject
to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and no
representation or warranty is made with respect to the enforceability of
its obligations under any indemnification provisions in such agreements
to the extent that indemnification is sought in connection with
securities laws violations and is contrary to public policy.
(c) No Consents Required. No consent, license, approval or
authorization of, or registration with, any Governmental Authority is
required to be obtained by the Transferor or the Servicer, as
applicable, in connection with the execution, delivery or performance by
the Transferor or the Servicer, as applicable, of each of this Agreement
and the Certificate Documents that has not been duly obtained and which
is not and will
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not be in full force and effect on the Closing Date or the relevant
Increase Date, as applicable.
(d) No Violation. The execution, delivery and performance of each
of this Agreement and the Certificate Documents do not violate any
provision of any existing law or regulation applicable to the Transferor
or the Servicer, as applicable, any order or decree of any court or
other judicial authority to which it is subject, its charter or By-laws
or any mortgage, indenture, contract or other agreement to which it is a
party or by which it or any significant portion of its properties is
bound (other than violations of such laws, regulations, orders, decrees,
mortgages, indentures, contracts and other agreements which,
individually or in the aggregate, would not have a material adverse
effect on the Transferor's or the Servicer's, as applicable, ability to
perform its obligations under, or the validity or enforceability of,
this Agreement or the Certificate Documents).
(e) Financial Statements. Prior to the Closing Date, the
Transferor has delivered or caused to be delivered to the Administrative
Agent complete and correct copies of, (i) the audited consolidated
balance sheet of NextCard and its subsidiaries as of December 31, 1998,
and the related audited consolidated statements of income and cash flows
of NextCard and its subsidiaries for the fiscal year then ended,
accompanied by the opinion of NextCard independent certified public
accountants and (ii) the unaudited consolidated balance sheet of
NextCard and its subsidiaries as of September 30, 1999, and the related
unaudited consolidated statements of income and cash flows of NextCard
and its subsidiaries for the fiscal quarter then ended. Such financial
statements are complete and correct in all material respects and fairly
present the financial condition of NextCard and its subsidiaries as of
their respective dates and the results of operations of NextCard and its
subsidiaries for the applicable periods then ended, subject to year-end
adjustments in the case of unaudited information, all in accordance with
generally accepted accounting principles or regulatory accounting
principles, as applicable, consistently applied.
(f) No Proceeding. There is no action, litigation or proceeding
before any court, tribunal or governmental body presently pending or, to
the knowledge of the Transferor or the Servicer, as applicable,
threatened against the Transferor or the Servicer, as applicable, with
respect to this Agreement, the Certificate Documents, the transactions
contemplated hereby or thereby or the issuance of the Certificates, and
there is no such litigation or proceeding against it or any significant
portion of its properties which would have a material adverse effect on
the transactions contemplated by, or its ability to perform its
obligations under, this Agreement or any Certificate Document to which
it is a party.
(g) Trust Indenture Act; Investment Company Act. Neither the
Pooling and Servicing Agreement nor the Supplement is required to be
qualified under the Trust Indenture Act of 1939, and the Trust is not
required to be registered under the Investment Company Act of 1940, as
amended.
(h) No Pay Out Event or Other Default. No Pay Out Event or
Servicer Default has occurred and is continuing, both before and
immediately after giving effect to
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the purchase or issuance of the Certificates or the relevant Invested
Amount Increase, as applicable, and no event, act or omission has
occurred and is continuing which, with the lapse of time, the giving of
notice, or both, would constitute a Pay Out Event or Servicer Default.
(i) The Certificates. The Certificates have been duly and validly
authorized, and, when executed and authenticated in accordance with the
terms of the Pooling and Servicing Agreement and the Supplement and
delivered to the Administrative Agent in accordance with this Agreement,
will be duly and validly issued and outstanding, and will be entitled to
the benefits of, as applicable, this Agreement and the applicable
Certificate Documents.
(j) Absence of Material Adverse Change. Since December 31, 1998,
there has not been any material adverse change in the condition
(financial or otherwise) of NextCard or NextBank that has not been
disclosed in writing by the Transferor to the Administrative Agent.
(k) Taxes, Etc. Any taxes, fees and other charges of Governmental
Authorities imposed upon the Transferor or the Servicer, as applicable,
in connection with the execution, delivery and performance by the
Transferor or the Servicer, as applicable, of this Agreement, the
Pooling and Servicing Agreement, the Supplement and, the Certificates or
otherwise in connection with the Trust have been paid or will be paid by
the Transferor or the Servicer, as applicable, at or prior to the
Closing Date or the relevant Increase Date, as applicable, to the extent
then due.
(l) Disclosure. All written factual information heretofore
furnished by the Transferor, the Servicer or any of their respective
representatives to the Administrative Agent or any Owner or any of their
representatives for purposes of or in connection with this Agreement,
including, without limitation, information relating to the Accounts and
Receivables and the Transferor's credit card businesses, was true and
correct in all material respects on the (i) date such information was
furnished by the Transferor or the Servicer, as applicable, or (ii) if
such information specifically relates to an earlier date, on such
earlier date.
(m) Year 2000 Plan. Each of the Transferor and the Servicer have
reviewed the areas within its business and operations that could
reasonably be expected to be adversely affected by, and have developed a
plan (the "Year 2000 Plan") to address on a timely basis, the risk that
computer applications used to process any data related to this Agreement
(whether by the Transferor, the Servicer or any of their respective
suppliers or vendors) may produce materially adverse consequences in
performing date-sensitive functions involving certain dates prior to and
any date after December 31, 1999 (such risk being referred to herein as
the "Year 2000 Problem"). Each of the Transferor and the Servicer is
taking or causing to be taken reasonable measures to address the Year
2000 Problem on a timely basis. To the best of the Transferor's and the
Servicer's knowledge, the Year 2000 Problem will not materially and
adversely affect the interests of the Owners under this Agreement, the
Supplement and the Pooling and Servicing Agreement.
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(n) FICO Scores. As of the Closing Date, no more than [*] of the
Accounts (calculated on the basis of the amount of outstanding Principal
Receivables relating to the Accounts on the dates they became Accounts)
have related Obligors with FICO Scores as of the date of the origination
of their Accounts of less than [*].
(o) Location of Offices. The Transferor's principal place of
business and chief executive office is located in the State of
California, or such other jurisdiction with respect to which the
requirements specified in Section 7.04 have been satisfied.
(p) Pooling and Servicing Representations and Warranties. Its
representations and warranties in Sections 2.03 and 2.04 (in the case of
a Transferor) or Section 3.03 (in the case of the Servicer) of the
Pooling and Servicing Agreement are true and correct in all material
respects as of the dates they were made (unless they specifically refer
to an earlier date, in which case they were true and correct on such
earlier date).
Section 6.02. Representations and Warranties of the Purchaser and the
Administrative Agent. Each of the Purchaser and the Administrative Agent hereby
represents and warrants to the Transferor as to itself as of the date of this
Agreement and as of the Closing Date as follows:
(a) Organization. The Purchaser has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Delaware. The Administrative Agent has been duly organized and
is validly existing as a limited liability company in good standing
under the laws of the State of Delaware.
(b) Authority. The Purchaser or the Administrative Agent, as
applicable, has the corporate power, authority and right to make,
execute, deliver and perform this Agreement and all the transactions
contemplated hereby and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement;
and, when executed and delivered, this Agreement will constitute its
legal, valid and binding obligation, enforceable in accordance with its
terms, subject to applicable bankruptcy, reorganization, insolvency,
moratorium, receivership, conservatorship and other laws of general
applicability relating to or affecting creditors' rights generally from
time to time in effect. The enforceability of its obligations under this
Agreement is also subject to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or
at law, and no representation or warranty is made with respect to the
enforceability of its obligations under any indemnification provisions
in such agreements to the extent that indemnification is sought in
connection with securities laws violations and is contrary to public
policy.
(c) Act. The Certificates purchased by the Purchaser pursuant to
this Agreement will be acquired for investment only and not with a view
to any public distribution thereof, and the Purchaser will not offer to
sell or otherwise dispose of any Certificates so acquired by it (or any
interest therein) in violation of any of the registration requirements
of the Act or any applicable state or other securities laws. Each of the
Purchaser and the Administrative Agent acknowledges that it has no right
to require the Transferor to register under the Act or any other
securities law any Certificates to be acquired by the Purchaser or any
other Owner pursuant to this
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*Confidential treatment requested.
28
Agreement. The Purchaser will execute and deliver to the Transferor on
or before the Closing Date an Investment Letter with respect to the
purchase of the Certificates.
(d) Investment Company Act. Neither the Purchaser nor the
Administrative Agent is subject to registration as an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
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ARTICLE SEVEN
COVENANTS OF THE TRANSFEROR
Section 7.01. Access to Information. From the Closing Date until the
Collection Date, each of the Transferor and the Servicer will, at any time and
from time to time during regular business hours, on at least five Business Days'
(or if a Pay Out Event or Servicer Default or event that with the giving of
notice or lapse of time or both would constitute a Pay Out Event or Servicer
Default, has occurred, one Business Day's) notice to the Transferor or the
Servicer, as the case may be, permit the Administrative Agent or any Owner, or
its agents or representatives, at the Administrative Agent's or such Owner's
expense (or if a Pay Out Event or Servicer Default or event that with the giving
of notice or lapse of time or both would constitute a Pay Out Event or Servicer
Default, has occurred, at the expense of the Transferor in the case of a Pay Out
Event or the Servicer in the case of a Servicer Default), (i) to examine all
books, records and documents (including computer tapes and disks) in the
possession or under the control of the Transferor or the Servicer, as the case
may be, relating to the Receivables (other than names of account holders and
strategic plans for the Servicer's credit card business), including the forms of
Cardholder Agreements under which such Receivables arise, and (ii) to visit the
offices and properties of the Transferor or the Servicer, as applicable, for the
purpose of examining such materials described in clause (i) above.
Section 7.02. Reporting Requirements of the Transferor. From the Closing
Date until the Collection Date, the Transferor will furnish to the
Administrative Agent:
(a) a copy of each certificate, report, statement, notice or
other communication furnished by or on behalf of the Transferor or the
Servicer to the Trustee or any Rating Agency, or any Series Enhancer
(other than investment instructions or any such item furnished to the
Trustee or any Rating Agency relating solely to one or more Series other
than Series 1999-3), concurrently therewith, and promptly after receipt
thereof, a copy of each notice, demand or other communication received
by or on behalf of the Transferor or the Servicer under the Pooling and
Servicing Agreement or the Supplement (other than any such item relating
solely to one or more Series other than Series 1999-3);
(b) copies of all material amendments to any Receivables Transfer
Agreement;
(c) prompt notice of any failure on the part of any party thereto
to observe or perform any material term of any Receivables Transfer
Agreement;
(d) (i) within 90 days following the end of each fiscal year of
NextCard, beginning with the fiscal year ending December 31, 1999, the
audited consolidated balance sheet of NextCard and its subsidiaries as
of the end of such fiscal year, and the related audited consolidated
statements of income and cash flows of NextCard and its subsidiaries for
such fiscal year, accompanied by the opinion of nationally-recognized
independent certified public accountants and (ii) within 45 days
following the end of each
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fiscal quarter of NextCard, beginning with the fiscal quarter
ending December 31, 1999, the unaudited consolidated balance sheet of
NextCard and its subsidiaries as of the end of such fiscal quarter, and
the related unaudited consolidated statements of income and cash flows
of NextCard and its subsidiaries for such fiscal quarter;
(e) such other available information, documents, records or
reports respecting NextCard, the Transferor, any Account Owner or the
condition or operations, financial or otherwise, of NextCard, the
Transferor or any Account Owner as the Administrative Agent or any Owner
may from time to time reasonably request; and
(f) such other information, documents, records or reports
respecting the Accounts, the Receivables or the servicing thereof or the
Trust as the Administrative Agent or any Owner may from time to time
reasonably request.
Section 7.03. Optional Repurchase. The Transferor shall not exercise its
right to repurchase the Certificates pursuant to Section 7.01 of the Supplement
and Section 12.05 of the Pooling and Servicing Agreement unless the Owners and
the Administrative Agent have been paid, or will be paid upon such repurchase,
the Certificate Principal Balance, all interest thereon and all other amounts
owing hereunder in full.
Section 7.04. Location of Chief Executive Office. The Transferor shall
not move its principal place of business and chief executive office to a
location outside the State of California unless it shall have given the
Administrative Agent at least 30 days' prior written notice of such relocation
and shall have executed and filed such UCC financing statements and other items
and delivered such opinions as the Administrative Agent deems reasonably
necessary to maintain the Trustee's perfected security interest in the
Receivables.
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ARTICLE EIGHT
INDEMNIFICATION
Section 8.01. Indemnification by the Transferor and the Servicer.
(a) The Transferor shall indemnify and hold harmless each Owner, the
Administrative Agent, their respective Affiliates and their respective officers,
directors, employees, stockholders, agents and representatives, against any and
all losses, claims, damages, liabilities or reasonable expenses (including legal
and accounting fees) (collectively, "Losses"), as incurred (payable promptly
upon written request), for or on account of or arising from or in connection
with or otherwise with respect to any breach of any representation or warranty
of the Transferor set forth in this Agreement, the Supplement or the Pooling and
Servicing Agreement or in any certificate delivered pursuant hereto or thereto;
provided, however, that the Transferor shall not be so required to indemnify any
such Person or otherwise be liable to any such Person hereunder for (i) any
Losses incurred for or on account of or arising from or in connection with or
otherwise with respect to any breach of any representation or warranty set forth
in the Pooling and Servicing Agreement a remedy for the breach of which is
provided in Section 2.05 or 2.06 of the Pooling and Servicing Agreement or (ii)
any Losses asserted by any such Person constituting indirect or consequential
damages incurred by such Person.
(b) The Servicer shall indemnify and hold harmless each Owner, the
Administrative Agent, their respective Affiliates and their respective officers,
directors, employees, stockholders, agents and representatives, against any and
all Losses, as incurred (payable promptly upon written request), for or on
account of or arising from or in connection with or otherwise with respect to
any breach of any representation or warranty of the Servicer set forth in this
Agreement, the Supplement or the Pooling and Servicing Agreement or in any
certificate delivered pursuant hereto or thereto; provided, however, that the
Servicer shall not be so required to indemnify any such Person or otherwise be
liable to any such Person hereunder for (i) any Losses incurred for or on
account of or arising from or in connection with or otherwise with respect to
any breach of any representation or warranty set forth in the Pooling and
Servicing Agreement a remedy for the breach of which is provided in Section 3.03
of the Pooling and Servicing Agreement or (ii) any Losses asserted by any such
Person constituting indirect or consequential damages incurred by such Person.
Section 8.02. Costs and Expenses. The Transferor agrees to pay on demand
(a) to the Administrative Agent and the Purchaser all reasonable costs and
expenses in connection with the preparation, execution, delivery and
administration (including any amendments, waivers or consents, other than
amendments, waivers and consents made solely at the request of the Purchaser or
the Administrative Agent, as opposed to the Transferor or the Servicer) of this
Agreement and the other documents to be delivered hereunder or in connection
herewith, including, without limitation, (i) the reasonable fees and
out-of-pocket expenses of counsel for each of the Administrative Agent and the
Purchaser, with respect thereto and with respect to advising each of the
Administrative Agent and the Purchaser, as to its respective rights and remedies
under this Agreement and the other documents delivered hereunder or in
connection herewith, (ii) rating agency fees, costs and expenses incurred in
connection with the purchase by
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the Purchaser of the Certificates, and (iii) other reasonable fees, costs and
expenses incurred by the Purchaser or the Administrative Agent in connection
with the purchase by the Purchaser of the Certificates (including trustee's
fees, costs and expenses), and (b) to the Administrative Agent and any other
Affected Party, all reasonable costs and expenses, if any (including reasonable
counsel fees and expenses), in connection with the enforcement of this
Agreement, and the other documents delivered hereunder or in connection
herewith.
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ARTICLE NINE
THE ADMINISTRATIVE AGENT
Section 9.01. Authorization and Action.
(a) Each of the Owners hereby designates and appoints First Union
Securities as Administrative Agent hereunder, and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers as
are delegated to the Administrative Agent under this Agreement and any related
agreement, instrument and document as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such powers as are reasonably
incidental thereto. The Administrative Agent reserves the right, in its sole
discretion to exercise any rights and remedies under this Agreement or any
related agreement, instrument or document executed and delivered pursuant
hereto, or pursuant to applicable law, and also to agree to any amendment,
modification or waiver of this Agreement or any related agreement, instrument
and document, in each instance, on behalf of the Owners. The Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Owner, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities on
the part of the Administrative Agent shall be read into this Agreement or
otherwise exist for the Administrative Agent. In performing its functions and
duties hereunder, the Administrative Agent does not assume nor shall be deemed
to have assumed any obligation or relationship of trust or agency with or for
the Transferor or any of its successors or assigns. Notwithstanding anything
herein or elsewhere to the contrary, the Administrative Agent shall not be
required to take any action which exposes the Administrative Agent to personal
liability or which is contrary to this Agreement or applicable law.
(b) The Purchaser and each subsequent Owner from time to time hereby
acknowledges and agrees that all payments in respect of any Certificates and in
respect of fees and other amounts owing to the Owners under this Agreement
shall, except as otherwise expressly provided herein, be remitted by the
applicable payor to the Administrative Agent on behalf of the Owners, and the
Administrative Agent shall distribute all such amounts, promptly following
receipt thereof, to the applicable parties in interest according to their
respective interests therein, determined by reference to the terms of the
Pooling and Servicing Agreement, the Supplement, this Agreement and the
Administrative Agent's books and records relating to such Certificates, the
Pooling and Servicing Agreement, the Supplement and this Agreement (it being
agreed that the entries made in such books and records of the Administrative
Agent shall be conclusive and binding for all purposes absent manifest error).
Section 9.02. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them as
Administrative Agent under or in connection with this Agreement or any related
agreement, instrument or document except for its or their own gross negligence
or willful misconduct. Without limiting the foregoing, the Administrative Agent:
(i) may consult with legal counsel (including counsel for the Transferor, the
Servicer or the Trustee), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of
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such counsel, accountants or experts; (ii) makes no warranty or representation
to any Owner and shall not be responsible to any Owner for any statements,
warranties or representations made in or in connection with this Agreement or in
connection with any related agreement, instrument or document; (iii) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or any related
agreement, instrument or document on the part of the Transferor, the Servicer or
the Trustee or to inspect the property (including the books and records) of the
Transferor, the Servicer or the Trustee; (iv) shall not be responsible to any
Owner for the due execution, legality, validity, enforceability, genuineness or
sufficiency of value of this Agreement or any related agreement, instrument or
document; (v) shall not be deemed to be acting as any Owner's trustee or
otherwise in a fiduciary capacity hereunder or in connection with any related
agreement, instrument or document; and (vi) shall incur no liability under or in
respect of this Agreement or any related agreement, instrument or document by
acting upon any notice (including notice by telephone), consent, certificate or
other instrument or writing (which may be by telex or facsimile) believed by it
to be genuine and signed or sent by the proper party or parties.
Section 9.03. Administrative Agent and Affiliates. To the extent that
the Administrative Agent or any of its Affiliates shall become an Owner, the
Administrative Agent or such Affiliate, in such capacity, shall have the same
rights and powers under this Agreement and each related agreement, instrument
and document as would any Owner and may exercise the same as though it were not
the Administrative Agent or such Affiliate, as the case may be. The
Administrative Agent and its Affiliates may generally engage in any kind of
business with the Transferor or the Trustee, any Obligor or any of their
respective Affiliates and any Person who may do business with or own securities
of any of the foregoing, all as if it were not the Administrative Agent or such
Affiliate, as the case may be, and without any duty to account therefor to the
Owners.
Section 9.04. Purchase Decision. Each Owner acknowledges that it has,
independently and without reliance upon the Administrative Agent, any other
Owner or any of their respective Affiliates, and based on such documents and
information as it has deemed appropriate, made its own evaluation and decision
to enter into this Agreement and to invest in the Certificates (or such interest
therein as such Owner may hold). Each Owner also acknowledges that it will,
independently and without reliance upon the Administrative Agent, any other
Owner or any of their respective Affiliates, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under this Agreement or any related
agreement, instrument or other document.
Section 9.05. Indemnification. Each Owner (other than the Purchaser)
agrees to indemnify the Administrative Agent (to the extent not reimbursed by
any the Transferor), ratably according to its share of the Certificate Principal
Balance from time to time, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any related agreement,
instrument or document, or any action taken or omitted by the Administrative
Agent under this Agreement, or any related agreement, instrument or document;
provided, however, that an Owner shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct.
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Without limitation of the generality of the foregoing, each Owner (including the
Purchaser, but only to the extent the Purchaser is reimbursed by the Transferor
for such a expenses) agrees to reimburse the Administrative Agent, ratably
according to its share of the Certificate Principal Balance from time to time,
promptly upon demand, for any out-of-pocket expenses (including reasonable
counsel fees) incurred by the Administrative Agent in connection with the
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or and related agreement,
instrument or document.
Section 9.06. Successor Administrative Agent. The Administrative Agent
may resign at any time by giving 30 days' notice thereof to the Owners, the
Transferor and the Trustee and such resignation shall become effective upon the
appointment and acceptance of a successor Administrative Agent as described
below. Upon any such resignation, the Owners shall have the right to appoint a
successor Administrative Agent approved by the Transferor (which approval will
not be unreasonably withheld or delayed). If no successor Administrative Agent
shall have been so appointed by the Owners and accepted such appointment within
30 days after the retiring Administrative Agent's giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of the
Owners, appoint a successor Administrative Agent approved by the Transferor
(which approval will not be unreasonably withheld or delayed), which successor
Administrative Agent shall be (i) either (a) a commercial bank having a combined
capital and surplus of at least $250,000,000 or (b) an Affiliate of such bank
and (ii) experienced in the types of transactions contemplated by this
Agreement. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent hereunder.
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ARTICLE TEN
MISCELLANEOUS
Section 10.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement, and no consent to any departure by the Transferor or the
Servicer herefrom, shall in any event be effective unless (i) the same shall be
in writing and signed by the Transferor, the Servicer, the Required Owners and
the Administrative Agent, and (ii) each Rating Agency then rating the Commercial
Paper Notes shall have confirmed that such amendment, waiver or consent will not
result in a reduction or withdrawal of its then-current rating of such
Commercial Paper Notes. Any such amendment, waiver or consent shall be effective
in any event only in the specific instance and for the specific purpose for
which given.
Section 10.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telecopies, telegraphic, telex or cable communication) and mailed,
telecopied, telegraphed, telexed, cabled or delivered, as to each party hereto,
at its address set forth below or at such other address as shall be designated
by such party in a written notice to the other party hereto. All such notices
and communications shall, when mailed, telecopied, telegraphed, telexed or
cabled, be effective when deposited in the mails, telecopied, delivered to the
telegraph company, confirmed by telex answer back or delivered to the cable
company, respectively.
If to the Purchaser:
Variable Funding Capital Corporation
c/o First Union Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Conduit Administration
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to the Administrative Agent;
If to the Administrative Agent:
First Union Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Transferor or the Servicer:
NextBank, N.A.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 10.03. No Waiver; Remedies. No failure on the part of any party
hereto to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 10.04. Binding Effect; Assignability.
(a) This Agreement shall be binding upon each of and inure to the
benefit of the Transferor, the Servicer, the Administrative Agent, the Owners
and their respective successors and permitted assigns.
(b) Neither the Transferor nor the Servicer may assign any of its rights
and obligations hereunder or any interest herein without the prior written
consent of the Required Owners and the Administrative Agent.
(c) An Owner may, at any time, subject to the terms and conditions
hereinafter set forth and the terms and conditions of the Supplement, (i)
without the consent of the Transferor, assign, or grant undivided participation
interests in, any or all of its rights and obligations hereunder or under the
Certificates to the Purchaser, any Liquidity Provider, any Enhancement Provider
or First Union Securities and (ii) with the prior written consent of the
Transferor, such consent not to be unreasonably withheld, assign, or grant
undivided participation interests in, any or all of its rights and obligations
hereunder or under the Certificates to any other Person; provided, however, that
(A) without the prior written consent of the Transferor, such consent not to be
unreasonably withheld, no participant (other than the Purchaser, a Liquidity
Provider, any Enhancement Provider or First Union Securities) or Affected Party
claiming through a participant (other than the Purchaser, a Liquidity Provider,
an Enhancement Provider or First Union Securities) shall be entitled to receive
any payment pursuant to Sections 2.07, 2.08, 2.09 or 9.02 in excess of the
amount that the Owner granting such participation interest would have been
entitled to receive had such participation interest not been sold to such
participant; (B) in the case of any transfer by sale, assignment or
participation, the transferee as a condition of transfer shall be subject to
compliance with Sections 2.09(e) and (f) hereof; (C) the aggregate number of
Owners at any time shall not exceed [*] (excluding, if applicable, any Federal
Reserve Bank to which a pledge is made); and (D) no assignment or participation
hereunder shall be effective unless the Administrative Agent shall have first
consented thereto in writing, such consent being required for the purpose of
assuring compliance with the requirements of this Section. Any assignment or
grant of a participation interest by an Owner pursuant to this Section
*Confidential treatment requested.
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shall be effected pursuant to documentation satisfactory in form and substance
to the Administrative Agent. Upon the consummation of any such assignment or
sale hereunder, the assignee shall be subject to all of the obligations and
entitled to all of the rights and benefits of the assignor hereunder. The
Administrative Agent shall promptly notify the Transferor of any sale,
assignment or participation under this Section. The Purchaser hereby agrees that
promptly following the sale of any assignment or participation by any Liquidity
Provider or Enhancement Provider of all or any portion of its rights and
obligations under the applicable Liquidity Agreement or Enhancement Agreement,
the Purchaser, to the extent that the Transferor's prior consent to such
assignment or participation is not required hereunder, shall notify the
Transferor thereof, specifying the transferor, the transferee and the extent of
the applicable assignment or participation.
(d) It is expressly agreed that, in connection with any assignment, sale
or other transfer or any proposed assignment, sale or other transfer of any
Certificate or any interest therein, each Owner making or proposing to make such
assignment, sale or other transfer may provide such information regarding the
Receivables, the Trust, the Pooling and Servicing Agreement and the Supplement
as such Owner may deem appropriate to any such assignee, purchaser or other
transferee or proposed assignee, purchaser or other transferee, as applicable
(any such Person being a "Transferee"), of such Certificate or such interest
therein, provided that the Transferor shall have the right to review and
participate in the preparation of such information for distribution to any
Transferee and, provided, further, that prior to any such disclosure of such
information, such Transferee shall have agreed to maintain the confidentiality
of such information designated by the Transferor as confidential on
substantially the basis set forth in Section 10.10.
(e) Except as otherwise expressly provided herein, no owner shall
assign, sell or otherwise transfer any Certificates or any interest therein to
any Person unless such Person delivers to the Transferor a duly executed letter
substantially in the form of the Investment Letter.
(f) The Administrative Agent may assign at any time its rights and
obligations hereunder and interests herein as Administrative Agent (i) without
the consent of the Owners or the Transferor, to any Affiliate of First Union
Securities and (ii) with the prior written consent of the Transferor (such
consent not to be unreasonably withheld), to any other Person.
(g) Each Owner may assign and pledge all or a portion of such Owner's
interest in the Certificates to any Federal Reserve Bank as collateral to secure
any obligation of such Owner to such Federal Reserve Bank. Notwithstanding
anything to the contrary herein or in the Supplement, such assignment may be
made at any time without notice or other obligation with respect to the
assignment, including the delivery of an Investment Letter.
(h) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until the Collection Date; provided, however, that the
provisions of Sections 8.01, 8.02, 10.07, 10.09 and 10.10 shall be continuing
and shall survive any termination of this Agreement.
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(i) To the extent that pursuant to the terms of the Supplement or this
Agreement, the Transferor has the right to procure a replacement for the
Administrative Agent or any Owner, and the Person proposed to be replaced is
either First Union Securities or the Purchaser, the Transferor agrees that it
shall not be entitled to replace either such Person in any capacity under or in
connection with this Agreement or the Supplement unless each of the Purchaser
and First Union Securities is replaced in each and every capacity in which it
acts under or in connection with this Agreement and the Supplement. Without
limiting the foregoing, each of the Purchaser and the Administrative Agent
hereby agrees to take all actions necessary to permit a replacement to succeed
to its respective rights and obligations hereunder.
Section 10.05. Certificates as Evidence of Indebtedness. It is the
intent of the Transferor, the Purchaser and the other Owners that, for all
federal, state, local and foreign taxes, the Certificates will be evidence of
indebtedness of the Transferor. Each of the Transferor, the Purchaser and the
other Owners agrees to treat the Certificates for purposes of all federal,
state, local and foreign taxes as indebtedness of the Transferor secured by the
Receivables and other assets held in the Trust.
Section 10.06. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW PROVISIONS EXCEPT SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW.
Section 10.07. No Proceedings.
(a) The Transferor, each Owner and the Administrative Agent each hereby
agrees that it will not, prior to the date that is one year and one day after
the latest maturing commercial paper note, medium term note or other debt
instrument issued by the Purchaser has been issued, acquiesce, petition or
otherwise invoke or cause the Purchaser to invoke the process of any
Governmental Authority for the purpose of commencing or sustaining a case
against the Purchaser under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Purchaser or any substantial part
of its property or ordering the winding-up or liquidation of the affairs of the
Purchaser. The Transferor, each Owner and the Administrative Agent each hereby
further agrees that prior to the date that is one year and one day after the
latest maturing commercial paper note, medium term note or other debt instrument
issued by the Purchaser has been issued, amounts payable by the Purchaser under
or in connection with this Agreement as reimbursement for out-of-pocket expenses
or indemnification shall be payable only to the extent that payment thereof will
not render the Purchaser insolvent and is made from funds of the Purchaser that
are freely distributable by the Purchaser at the Purchaser's discretion.
(b) Each Owner and the Administrative Agent hereby agrees that it will
not, prior to the date that is one year and one day after the termination of the
Pooling and Servicing Agreement with respect to the Trust or the Transferor,
acquiesce, petition or otherwise invoke or cause the Trust or the Transferor to
invoke the process of any Governmental Authority for the purpose of commencing
or sustaining a case against the Trust or the Transferor under any Federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator,
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assignee, trustee, custodian, sequestrator or other similar official of the
Trust or the Transferor or any substantial part of its property or ordering the
winding-up or liquidation of the affairs of the Trust or the Transferor. Each
Owner and the Administrative Agent each further agrees that prior to the date
that is one year and one day after the termination of the Pooling and Servicing
Agreement with respect to the Transferor, amounts payable by the Transferor
under or in connection with this Agreement as reimbursement for out-of-pocket
expenses or indemnification shall be payable only to the extent that payment
thereof will not render the Transferor insolvent and is made from funds of the
Transferor that are freely distributable by the Transferor at the Transferor's
discretion.
(c) The provisions of this Section shall survive the termination of this
Agreement.
Section 10.08. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
Section 10.09. No Recourse.
(a) No recourse under or with respect to any obligation, covenant or
agreement (including, without limitation, the payment of any fees or any other
obligations) of the Purchaser (whether in its capacity as the Purchaser or as an
Owner under this Agreement) as contained in this Agreement or any other
agreement, instrument or document entered into by it pursuant hereto or in
connection herewith shall be had against any incorporator, affiliate,
stockholder, officer, employee or director of the Purchaser, as such, by the
enforcement of any assessment or by any legal or equitable proceeding, by virtue
of any statute or otherwise (except to the extent that recourse against any such
Person arises from the gross negligence or willful misconduct of such Person);
it being expressly agreed and understood that the agreements of the Purchaser
contained in this Agreement and all of the other agreements, instruments and
documents entered into by it pursuant hereto or in connection herewith are, in
each case, solely the corporate obligations of the Purchaser, provided that,
such obligations shall be paid only after the repayment in full of all
Commercial Paper Notes and all other liabilities contemplated in the program
documents with respect to the Purchaser, and that no personal liability
whatsoever shall attach to or be incurred by any incorporator, stockholder,
affiliate, officer, employee or director of the Purchaser, as such, or any of
them, under or by reason of any of the obligations, covenants or agreements of
the Purchaser contained in this Agreement or in any other such instruments,
documents or agreements, or which are implied therefrom, and that any and all
personal liability of each incorporator, stockholder, affiliate, officer,
employee or director of the Purchaser, or any of them, for breaches by the
Purchaser of any such obligations, covenants or agreements, which liability may
arise either at common law or at equity, or by statute or constitution, or
otherwise, is hereby expressly waived except to the extent that such personal
liability of any such Person arises from the gross negligence or willful
misconduct of such Person.
(b) Notwithstanding anything contained in this Agreement, the Purchaser
shall have no obligation to pay any amount required to be paid by it hereunder
to any of the Liquidity Provider, the Administrative Agent or any Owner, in
excess of any amount available to the Purchaser after paying or making provision
for the payment of its Commercial Paper Notes. All
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payment obligations of the Purchaser hereunder are contingent upon the
availability of funds in excess of the amounts necessary to pay Commercial Paper
Notes; and each of the Liquidity Provider, the Administrative Agent and each
Owner agrees that they shall not have a claim under Section 101(5) of the United
States Bankruptcy Code if and to the extent that any such payment obligation
exceeds the amount available to the Purchaser to pay such amounts after paying
or making provision for the payment of its Commercial Paper Notes.
(c) The provisions of this Section shall survive the termination of this
Agreement.
Section 10.10. Confidentiality. Each Owner and the Administrative Agent
hereby agrees to take such measures as shall be reasonably requested by the
Transferor to protect and maintain the confidentiality of such information
relating to the Receivables as such Transferor may from time to time expressly
identify to such Owner or the Administrative Agent (as the case may be) as
confidential information; provided, however, that none of the Owners or the
Administrative Agent shall be obligated to take or observe any such measure if
to do so would, in the reasonable judgment of such Owner or the Administrative
Agent, as the case may be, (i) be inconsistent with any Requirement of Law or
compliance by such Owner or the Administrative Agent with any binding request of
any regulatory body having jurisdiction over such Owner or the Administrative
Agent, as the case may be or (ii) materially and adversely affect the ability of
such Owner or the Administrative Agent to perform its obligations hereunder or
in connection herewith or to enforce its rights hereunder or in connection
herewith.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
NEXTBANK, N.A.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name:
Title:
VARIABLE FUNDING CAPITAL CORPORATION
By: FIRST UNION SECURITIES, INC., as
attorney-in-fact
By:[Illegible]
--------------------------------------------
Name:
Title:
FIRST UNION SECURITIES, INC.,
By:[Illegible]
--------------------------------------------
Name:
Title:
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