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EXHIBIT 10.7
[Execution Copy]
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CERTIFICATE PURCHASE AGREEMENT
Dated as of June 16, 1999
among
NEXTCARD FUNDING CORP.,
as the Transferor,
NEXTCARD, INC.,
as the Servicer,
HOLLAND LIMITED SECURITIZATION, INC.,
as the Purchaser,
and
ING BARING (U.S.) CAPITAL MARKETS LLC,
as the Agent
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS 1
SECTION 1.01. Terms Defined in the Supplement and the Pooling and Servicing
Agreement; Certain Defined Terms 1
SECTION 1.02. Accounting Terms; Other Terms 12
SECTION 1.03. Other Rules of Construction 12
SECTION 1.04. Computation of Time Periods 13
ARTICLE II
PURCHASE AND SALE; PURCHASE COMMITMENT 13
SECTION 2.01. Purchase and Sale of the Certificates 13
SECTION 2.02. Purchase Price 13
SECTION 2.03. Increases and Decreases in the Invested Amount 13
SECTION 2.04. Commitment Fee 14
SECTION 2.05. Termination or Reduction of the Facility Limit 14
SECTION 2.06. Calculation and Payment of Monthly Interest and Fees; Selection
of Commercial Paper Note Maturities 15
SECTION 2.07. Increased Costs 15
SECTION 2.08. Increased Capital 17
SECTION 2.09. Taxes 18
ARTICLE III
CLOSING 22
SECTION 3.01. Closing 22
SECTION 3.02. Transactions to be Effected at the Closing 23
ARTICLE IV
PURCHASER CONDITIONS PRECEDENT 23
SECTION 4.01. Conditions Precedent to the Purchase of the Certificates 23
SECTION 4.02. Conditions Precedent to Invested Amount Increases 25
ARTICLE V
TRANSFEROR CONDITIONS PRECEDENT 25
SECTION 5.01. Conditions Precedent to the Sale of the Certificates 25
ARTICLE VI
REPRESENTATIONS AND WARRANTIES 27
SECTION 6.01. Corporate Existence 27
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SECTION 6.02. Corporate Authority 27
SECTION 6.03. No Consents Required 28
SECTION 6.04. No Violation 28
SECTION 6.05. Financial Statements 28
SECTION 6.06. No Proceeding 29
SECTION 6.07. Trust Indenture Act; Investment Company Act 29
SECTION 6.08. No Pay Out Event or Other Default 29
SECTION 6.09. The Certificates 30
SECTION 6.10. Absence of Material Adverse Change 30
SECTION 6.11. Taxes, Etc 30
SECTION 6.12. Disclosure 30
SECTION 6.13. Year 2000 Plan 30
SECTION 6.14. FICO Scores 31
SECTION 6.15. Location of Offices 31
SECTION 6.16. Pooling and Servicing Representations and Warranties 31
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND THE AGENT 31
SECTION 7.01. Organization 32
SECTION 7.02. Authority 32
SECTION 7.03. Securities Act 32
SECTION 7.04. Investment Company Act 32
ARTICLE VIII
COVENANTS OF THE TRANSFEROR 33
SECTION 8.01. Access to Information 33
SECTION 8.02. Reporting Requirements of the Transferor 33
SECTION 8.03. Optional Xxxxxxxxxx 00
SECTION 8.04. Location of Chief Executive Office 35
ARTICLE IX
[RESERVED] 35
ARTICLE X
INDEMNIFICATION 35
SECTION 10.01. Indemnification by the Transferor and the Servicer 35
SECTION 10.02. Costs and Expenses 36
ARTICLE XI
THE AGENT 37
SECTION 11.01. Authorization and Action 37
SECTION 11.02. Agent's Reliance, Etc. 37
SECTION 11.03. Agent and Affiliates 38
SECTION 11.04. Purchase Decision 38
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SECTION 11.05. Indemnification 39
SECTION 11.06. Successor Agent 39
ARTICLE XII
MISCELLANEOUS 40
SECTION 12.01. Amendments, Etc. 40
SECTION 12.02. Notices, Etc. 40
SECTION 12.03. No Waiver; Remedies 41
SECTION 12.04. Binding Effect; Assignability 42
SECTION 12.05. Certificates as Evidence of Indebtedness 44
SECTION 12.06. Governing Law 44
SECTION 12.07. No Proceedings 45
SECTION 12.08. Execution in Counterparts 46
SECTION 12.09. No Recourse 46
SECTION 12.10. Confidentiality 47
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CERTIFICATE PURCHASE AGREEMENT dated as of June 16, 1999, among NEXTCARD
FUNDING CORP., a Delaware corporation, as the Transferor, NEXTCARD, INC., a
Delaware corporation ("NextCard"), as the Servicer, HOLLAND LIMITED
SECURITIZATION, INC., a Delaware corporation (the "Purchaser") and ING BARING
(U.S.) CAPITAL MARKETS LLC, ("ING Capital"), as agent (in such capacity, the
"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:
ARTICLE I
DEFINITIONS
SECTION 1.01. Terms Defined in the Supplement and the Pooling and Servicing
Agreement; Certain Defined Terms. Unless otherwise defined herein, terms defined
in the Supplement (as defined below) or the Pooling and Servicing Agreement (as
defined below) are used herein with the meanings ascribed to them therein. In
addition, as used herein, the following terms shall have the following meanings:
"Act" shall mean the Securities Act of 1933.
"Additional Amounts" shall mean, for each Interest Period, an amount equal
to the sum of (a) 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 (b) the
aggregate of such amounts with respect to prior Interest Periods which remain
unpaid.
"Affected Party" shall mean the Purchaser, the Agent, ING Bank, each
Liquidity Provider, any permitted assignee of the Purchaser or any Liquidity
Provider, any Enhancement Provider and any assignee of any Enhancement Provider.
"Agreement" shall mean this agreement and any supplements, amendments,
exhibits and schedules hereto.
"Alternative Rate" shall mean, with respect to any Interest Period (or
portion thereof), an interest rate per annum equal to the Eurodollar Rate
(Reserve Adjusted) unless the Transferor, following consultation with the Agent,
specifies in writing that the "Alternative Rate" for any
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Interest Period shall be the Alternate Base Rate; provided, however, that:
(a) if the Required Owners shall notify the Agent prior to the related
rate determination date that a Eurodollar Rate Disruption Event has
occurred and is continuing, then the "Alternative Rate" for such Interest
Period (or portion thereof) shall be an interest rate per annum equal to
the Alternate Base Rate in effect from time to time during such Interest
Period (or portion thereof) unless the Agent and the Transferor agree in
writing to a different rate;
(b) if any Owner shall have notified the 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), then the "Alternative Rate"
with respect to such Owner's share of the outstanding principal balance of
the Certificates for such Interest Period (or portion thereof) shall be an
interest rate per annum equal to the Alternate Base Rate in effect from
time to time during such Interest Period (or portion thereof) unless (i)
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 F-1 from Fitch for reasons unrelated to the
investment of the Purchaser in the Certificates or (ii) the Agent and the
Transferor agree in writing to a different rate; and
(c) if for any reason the Alternative Rate becomes applicable on
notice to the Agent of less than three Business Days (determined giving
effect to clause (b) of the definition of "Business Day"), the "Alternative
Rate" shall be the Alternate Base Rate in effect from time to time during
the period prior to the satisfaction of such three Business Days' notice
requirement (determined giving effect to clause (b) of the definition of
"Business Day").
"Alternate Base Rate" shall mean, on any date, a fluctuating rate of
interest per annum equal to the sum of (a) the Applicable Margin and (b) the
highest of:
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(i) the arithmetic average of the rates of interest publicly
announced by The Chase Manhattan Bank, Citibank, N.A. and Xxxxxx
Guaranty Trust Company of New York (or their respective successors) as
their respective prime commercial lending rates (or, as to any such
bank that does not announce such a rate, such bank's "base" or other
rate determined by the Agent to be the equivalent rate announced by
such bank), except that, if any such bank shall, for any period, cease
to announce publicly its prime commercial lending (or equivalent)
rate, the Agent shall, during such period, determine a rate for
purposes of this clause (a) based upon the prime commercial lending
(or equivalent) rates announced publicly by the other such banks; it
being understood, further, that (A) the prime commercial lending (or
equivalent) rates used in computing a rate for purposes of this clause
(i) are not intended to be the lowest rates of interest charged by
such banks in connection with extensions of credit to debtors and (B)
the rate determined pursuant to this clause (i) shall change as and
when such banks' prime commercial lending (or equivalent) rates
change; and
(ii) the Federal Funds Rate plus 0.50%.
"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 (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 over (b) the 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.
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"Business Day" shall mean a day that is (a) a "Business Day" under and as
defined in the Pooling and Servicing Agreement and (b) 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 Agent's Eurodollar Office.
"Certificate Documents" shall mean the Pooling and Servicing Agreement, the
Series 1999-1 Supplement, each Receivables Purchase Agreement and the
Certificates.
"Certificate Rate" shall mean, for any Interest Period, the Cost of Funds
for such Interest Period, adjusted, as necessary, to yield, when applied to the
outstanding principal balance of the Certificates, 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(n) or (o) of the 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)
2.00% 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
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" shall mean 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" shall mean short-term promissory notes issued or
to be issued by the Purchaser to
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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" shall mean, 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: (a) to the extent such Owner is the
Purchaser and funds its share of the outstanding principal balance of the
Certificates for such Interest Period by issuing Commercial Paper Notes, a rate
equal to the CP Rate for such Interest Period and (b) to the extent such Owner
either (i) is not the Purchaser or (ii) 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 Agent and the Transferor shall agree to in writing.
"CP Rate" shall mean 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" (as defined below) related to
the issuance of Commercial Paper Notes that are allocated, in whole or in part
by the Purchaser (or by the 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" (as defined
below), 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. As used in this definition, (a) the Purchaser's "weighted
average cost" for any Interest Period means the sum of (i) the actual interest
paid to purchasers of the applicable Commercial Paper Notes, (ii) the
commissions of placement agents and dealers in respect of such Commercial Paper
Notes; provided, however, that such commissions shall not exceed [*] of the
outstanding face amount of such Commercial Paper Notes from time to time unless
the Agent shall have provided the Transferor with prior notice that such
commissions will exceed such amount, 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
"An asterisk [*] indicates that certain information has been omitted from this
agreement pursuant to a request for confidential treatment and has been filed
separately with the Securities and Exchange Commission."
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in the commercial paper market and (b) "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; 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.
"Discount Amount" shall mean at any time an amount equal to:
FL - FL
---------------
Discount Factor
where:
FL = the Facility Limit in effect on the
date of determination
Discount
Factor = [*], or such other number (equal to
or greater than 1.00) designated by
the Agent to the Transferor.
"Dollars" or "$" shall mean lawful money of the
United States.
"Enhancement Agreement" shall mean and include 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 receivable or other financial assets, in each case, as
amended, supplemented or otherwise modified from time to time.
"Enhancement Provider" shall mean and include ING Capital, ING Bank 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
"An asterisk [*] indicates that certain information has been omitted from this
agreement pursuant to a request for confidential treatment and has been filed
separately with the Securities and Exchange Commission."
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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 incurrence of a commitment to extend such credit, ING Capital, ING Bank 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" shall mean such office or offices through which the
Agent determines the Eurodollar Rate. A Eurodollar Office of the Agent may be,
at the option of the Agent, either a domestic or foreign office.
"Eurodollar Rate" shall mean, with respect to any Interest Period (or
portion thereof), a per annum rate of interest equal to the rate shown on page
3750 of the Dow Xxxxx & Company Telerate screen or any successor page as the
composite offered rate for London interbank deposits for a period approximating
such Interest Period (or portion thereof), as shown under the heading "USD" as
of 11:00 A.M. (London time) on the second Business Day before (and for value on)
the first day of such Interest Period (or portion thereof). In the event no such
rate appears, the Eurodollar Rate shall be, with respect to any Interest Period,
the per annum rate of interest at which Dollar deposits in immediately available
funds are offered to the Eurodollar Office of the Agent by prime banks in the
interbank eurodollar market at or about 10:00 a.m., London time, on the second
Business Day before (and for value on) the first day of such Interest Period (or
portion thereof) and in an amount of not less than $1,000,000 for such Interest
Period (or portion thereof).
"Eurodollar Rate (Reserve Adjusted)" shall mean, with respect to any
Interest Period (or portion thereof), the sum of (a) the Applicable Margin and
(b) 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 (i)
the Eurodollar Rate for such Interest Period (or portion thereof) by (ii) one
minus the Eurodollar Reserve Percentage (expressed as a decimal) applicable
during such Interest Period (or portion thereof).
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"Eurodollar Rate Disruption Event" shall mean, for any Owner for any
Interest Period, any of the following: (a) a determination by such Owner that it
would be contrary to law or to the directive of any central bank or other
Governmental Authority to obtain Dollars in the London interbank market to fund
or maintain its investment in the Certificates for such Interest Period or (b)
the inability of such Owner by reason of circumstances affecting the London
interbank market generally, to obtain Dollars in such market to fund its
investment in the Certificates for such Interest Period.
"Eurodollar Reserve Percentage" shall mean, 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 banks or other financial institutions subject to such regulations 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).
"Facility Limit" shall mean, at any time, $150,000,000, as such amount may
be reduced from time to time pursuant to Section 2.05.
"Federal Bankruptcy Code" shall mean the bankruptcy code of the United
States of America codified in Title 11 of the United States Code.
"Federal Funds Rate" shall mean, for any period, a fluctuating per annum
interest rate for each day during such period equal to (a) the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such no such rate is published
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for such day because such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York; or (b) if such rate is
not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
federal funds brokers of recognized standing selected by it.
"Fee Letter" shall mean the letter agreement of even date herewith, among
the Transferor, NextCard, the Purchaser and the Agent, regarding certain 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.
"Governmental Actions" shall mean 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 Authority" shall mean the United States of America, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, whether of the United States of America, any state or other
political subdivision thereof or any other domestic or foreign jurisdiction.
"Governmental Rules" shall mean 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.
"ING Bank" shall mean ING Bank, N.V.
"ING Capital" shall have the meaning set forth in the preamble hereto.
"Interpretation" as used in Sections 2.07 and 2.08 hereof with respect to
any law or regulation shall mean the interpretation or application of such law
or regulation by any Governmental Authority (including, without limitation, any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government),
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central bank, accounting standards board, financial services industry advisory
body or any comparable entity.
"Liquidity Agreement" shall mean and include (a) the Liquidity Agreement of
even date herewith among the Purchaser, ING Capital, 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
(b) 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" shall mean 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 incurrence of a commitment to extend such support, such financial
institution is ING Capital, ING Bank or a Person consented to in writing by the
Transferor (such consent not to be unreasonably withheld).
"Losses" shall have the meaning set forth in Section 10.01.
"Monthly Interest" shall mean with respect to any Distribution Date, an
amount equal to the sum of (a) the product of (i) the Certificate Rate in effect
with respect to the Interest Period ending immediately prior to such
Distribution Date, (ii) the average daily principal balance of the Certificates
during such Interest Period, and (iii) a fraction the numerator of which is the
actual number of days in such Interest Period and the denominator of which is
360, plus (b) all Breakage Costs incurred by Owners during the immediately
preceding Interest Period.
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"Other Taxes" shall mean 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" shall mean the Purchaser and all other owners by assignment,
participation or otherwise of a Certificate or any interest therein.
"Pooling and Servicing Agreement" shall mean 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" shall mean the commitment of the Purchaser to acquire
interests in the Certificates in a maximum aggregate principal amount
outstanding from time to time not to exceed the excess of the Facility Limit at
such time (as such amount may be reduced from time to time pursuant to Section
2.05) over the Discount Amount at such time.
"Purchase Commitment Termination Date" shall mean the earlier of (a) the
Business Day preceding the day on which the Scheduled Amortization Period
commences and (b) 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" shall mean, at any time, those Owners owning interests in
Certificates aggregating 66-2/3% of the aggregate unpaid principal balance of
the Certificates at such time.
"Supplement" shall mean the Series 1999-1 Supplement dated as of June 16,
1999, among the Transferor, the Servicer and the Trustee.
"Taxes" shall have the meaning set forth in Section 2.09(a).
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"Transferor" shall have the meaning specified in the preamble hereto.
"UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction.
"Year 2000 Plan" shall have the meaning set forth in Section 6.13.
"Year 2000 Problem" shall have the meaning set forth in Section 6.13.
SECTION 1.02. Accounting Terms; Other Terms. Any 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 (a) to any Person shall be deemed to include such
Person's successors and assigns and (b) 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,
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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."
ARTICLE II
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 IV and V, the Purchase Price is to be remitted to the
Transferor in immediately available funds by wire transfer pursuant to written
instructions to be provided to the 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
aggregate outstanding principal amount of the Certificates allocable to the
Purchaser exceed the Purchase Commitment. On the date of the applicable Invested
Amount Increase, the Purchaser shall remit to the Agent, in immediately
available funds, the amount of such Invested Amount Increase, whereupon
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the Agent will remit such amount, in immediately available funds, to the
Transferor in accordance with such payment instructions as the Transferor shall
have delivered in writing to the 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 equal to the product of (a) the average daily amount of the
excess of (i) the Purchase Commitment over (ii) the aggregate outstanding
principal amount of all Certificates held by or for the benefit of the Purchaser
and (b) the Commitment Fee Rate, payable in arrears on each Distribution Date.
SECTION 2.05. Termination or Reduction of the Facility Limit. 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 Facility Limit; provided,
however, that (i) 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 Facility Limit would be less than
$100,000,000, such reduction shall be either in such smaller amount as will not
cause the Facility Limit to be less than $100,000,000, or in an amount
sufficient to reduce the Facility Limit to zero.
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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 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 Agent for each
Interest Period as contemplated in Section 11.01(b), the 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 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 (i) no such Commercial Paper Note shall
in any event mature more than 90 days after the date it is issued and (ii)
notwithstanding the Agent's agreement to consult with the Transferor in
selecting maturities for such Commercial Paper Notes, the 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
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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 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 (a) the first full Interest Period immediately succeeding the date
on which the certificate specifying the amount owing was delivered and (b) to
the extent remaining outstanding, each Interest Period thereafter until paid in
full. The Agent shall, out of amounts received by it (as contemplated in Section
11.01(b)) in respect of the Additional Amounts on any Distribution Date (as
contemplated in Section 11.01(b)), pay to each Affected Party, any increased
costs due pursuant to this Section 2.07, 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
2.07 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 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 2.07 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
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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 Agent and the Transferor; provided, however, that the
Purchaser shall be under no obligation to so replace a Liquidity Provider
requesting any amount under this Section 2.07, and shall in no event
replace such Liquidity Provider if it is ING Capital.
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 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 (a) the first full Interest Period immediately succeeding the date on which
the certificate specifying the amount owing was delivered and (b) to the extent
remaining outstanding, each Interest Period thereafter until paid in full. The
Agent shall, out of amounts received by it in respect of the Additional Amounts
on any Distribution Date (as contemplated in Section 11.01(b)), pay to each
Affected Party any amount due pursuant to this Section 2.08, provided, however,
that if
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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 2.08 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 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 2.08 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 2.08 and makes a demand hereunder, the Purchaser may
replace such Liquidity Provider with another commercial bank satisfactory
to the Purchaser, the Agent and the Transferor; provided, however, that the
Purchaser shall be under no obligation to so replace a Liquidity Provider
requesting any amount under this Section 2.08, and shall in no event
replace such Liquidity Provider if it is ING Capital.
SECTION 2.09. Taxes. (a) Subject to subsection 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 the 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,
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excluding, in the case of each Owner and the Agent, (x) taxes, levies, imposts,
deductions, charges or withholdings imposed on, or measured by reference to, the
net income of such Owner or the Agent, as applicable, franchise taxes imposed on
such Owner or the Agent, as applicable (including, without limitation, 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 Agent, as applicable, in
each case, by any of (i) the United States or any State thereof, (ii) the state
or foreign jurisdiction under the laws of which such Owner or the 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 (iii) any political subdivision thereof; (y) any taxes,
levies, imposts, duties, charges or fees to the extent of any credit or other
benefit actually realized by such Agent or Owner, as applicable, as a result
thereof; and (z) any taxes, levies, imposts, duties, charges or fees imposed as
a result of a change by the 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 Agent, then, to the extent provided in subsection 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 2.09), such Owner or the 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 subsection 2.09(d), each Owner and the
Agent shall be reimbursed for the full
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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 2.09) paid by such Owner or the Agent (as the case may be) and
any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. Each Owner and the Agent agrees to
promptly notify the Transferor and the 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 2.09, then,
to the extent provided in subsection 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 subsection 2.09(b) submitted
to the Transferor by such Owner or the 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 Agent the original or a certified
receipt evidencing payment thereof.
(d) Any amounts payable to an Owner or the Agent pursuant to this
Section 2.09 shall be included in the Additional Amounts for (i) in the
case of amounts payable pursuant to subsection 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 subsection 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 Agent shall, out of amounts received by it in respect of the
Additional Amounts on any Distribution Date (as contemplated in Section
11.01(b)), pay to each Owner and itself, as applicable, any reimbursement
due pursuant to this Section 2.09, provided, however, that if the amount
distributable in respect of the Additional Amounts on any
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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 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 Agent and each
Owner agrees to provide like additional subsequent duly executed forms on
or before the 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 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 (x) 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 (y) 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 Agent and each Owner further agrees that compliance with this
subsection 2.09(e) (including by
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reason of subsection 12.04(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 subsections 2.09(a) and 2.09(b) hereof.
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 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 2.09 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 2.09 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
Agent and the Transferor; provided, however, that the Purchaser shall be
under no obligation to so replace such Liquidity Provider if it is ING
Capital.
(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 2.09 shall survive the termination of this
Agreement.
ARTICLE III
CLOSING
SECTION 3.01. Closing. The Closing (the "Closing") of the purchase and sale
of the Certificates shall take place at the offices of Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m.
(Eastern Daylight Time), on June 23, 1999, or, if the conditions to closing set
forth in Articles IV and V of this Agreement 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
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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,
(a) the Purchaser will deliver to the Transferor (by wire transfer of
immediately available funds to a bank account designated by the Transferor at
least two Business Days prior to the Closing Date) an amount equal to $0,
representing full and complete payment of the Purchase Price and (b) the
Transferor shall deliver the Certificates to the Agent on behalf of the
Purchaser.
ARTICLE IV
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. 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 Agent shall have received from the
Transferor, in form and substance reasonably satisfactory to the Purchaser
and the Agent, an Officer's Certificate, dated the Closing Date, certifying
as to the satisfaction of the conditions set forth in subsections 4.01(a)
and 4.01(b).
(d) Certain Opinions of Counsel. The Agent shall have received from
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, acting
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as counsel to 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 Agent and their
counsel.
(e) Opinion of Counsel to the Trustee. The Agent shall have received
from McGuire, Woods, Battle & Xxxxxx LLP, counsel to the Trustee, a
favorable opinion, dated the Closing Date and reasonably satisfactory in
form and substance to the Purchaser, the Agent and their counsel.
(f) Financing Statements. The Agent shall have received evidence
reasonably satisfactory to the Purchaser and the 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
subsection 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) Ratings. Each of Fitch and Standard & Poor's shall have confirmed
in writing to the Purchaser that the purchase by the Purchaser of its
interest in the Certificates would not result in the reduction or
withdrawal of the then current rating of the Commercial Paper Notes.
(h) Reserve Account. The Reserve Account shall have been established
in accordance with the requirements of Section 4.11 of the Supplement.
(i) Pooling and Servicing Agreement et al. The 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 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.
(j) 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
Agent or the Purchaser
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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.
(k) Approvals and Consents. All Governmental Actions of Governmental
Authorities required by the 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.
(l) Commercial Paper Market. The commercial paper market shall be
available to the Purchaser at the time of the Closing.
(m) Payment of Fees. All fees required to be paid to the Agent or the
Purchaser in connection with the Closing pursuant to the Fee Letter shall
have been paid.
(n) Other Documents. The Transferor shall have furnished to the
Purchaser or the Agent, as the case may be, such other information,
certificates and documents as the Purchaser, the 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.
ARTICLE V
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 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 Agent. All the terms,
covenants, agreements and conditions of this Agreement to be complied with
and performed by the Purchaser
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or the 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 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
subsections 5.01(a) and 5.01(b).
(d) Opinions of Counsel to the Purchaser and the Agent. The Transferor
shall have received from (i) Sidley & Austin, counsel to the Purchaser, a
favorable opinion, dated the Closing Date and reasonably satisfactory in
form and substance to the Transferor and its counsel and (ii) from internal
counsel to the Agent, a favorable opinion, dated the Closing Date and
reasonably satisfactory in form and substance to the Transferor and its
counsel.
(e) Opinion of Counsel to the Trustee. The Transferor shall have
received from McGuire, Woods, Battle & Xxxxxx LLP, counsel to the Trustee,
a favorable opinion, dated the Closing Date and reasonably satisfactory in
form and substance to the Transferor and its counsel.
(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
Agent or the Purchaser of, or to invalidate, the transactions contemplated
by this Agreement in any material respect.
(i) Approvals and Consents. All Governmental Actions of Governmental
Authorities required by the Purchaser, the Agent or the Transferor with
respect to the transactions contemplated by this Agreement shall have been
obtained or made.
(j) Other Documents. The Purchaser or the Agent, as applicable, shall
have furnished to the Transferor such
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other information, certificates and documents as the Transferor or its
counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each of the Transferor and the Servicer hereby represents and warrants to
the Owners and the 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 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 6.05), in each case with reference to the facts and
circumstances then existing, as follows:
SECTION 6.01. Corporate Existence. The Transferor is a corporation validly
existing and in good standing under the laws of the State of Delaware, 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. The Servicer is
a corporation validly existing and in good standing under the laws of the State
of Delaware, 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.
SECTION 6.02. Corporate Authority. The Transferor or the Servicer, as
applicable, 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
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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 of general applicability relating to or affecting
creditors' rights generally 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.
SECTION 6.03. 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 not be in full force and effect
on the Closing Date or the relevant Increase Date, as applicable.
SECTION 6.04. 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).
SECTION 6.05. Financial Statements. Prior to the Closing Date, the
Transferor has delivered or caused to be delivered to the Agent complete and
correct copies of, (a) the audited consolidated balance sheet of NextCard and
its
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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's independent
certified public accountants and (b) the unaudited consolidated balance sheet of
NextCard and its subsidiaries as of March 31, 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.
SECTION 6.06. 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.
SECTION 6.07. 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 neither the Trust nor the Transferor
is required to be registered under the Investment Company Act of 1940, as
amended.
SECTION 6.08. 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 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
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of time, the giving of notice, or both, would constitute a Pay Out Event or
Servicer Default.
SECTION 6.09. 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
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.
SECTION 6.10. 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 that has not been disclosed in writing by the Transferor
or NextCard to the Agent.
SECTION 6.11. 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.
SECTION 6.12. Disclosure. All written factual information heretofore
furnished by the Transferor, the Servicer or any of their respective
representatives to the 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 (a) date
such information was furnished by the Transferor or the Servicer, as applicable,
or (b) if such information specifically relates to an earlier date, on such
earlier date.
SECTION 6.13. 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
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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.
SECTION 6.14. 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 [*].
SECTION 6.15. 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 8.05 hereof have been satisfied.
SECTION 6.16. 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).
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER AND THE AGENT
Each of the Purchaser and the 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:
"An asterisk [*] indicates that certain information has been omitted from this
agreement pursuant to a request for confidential treatment and has been filed
separately with the Securities and Exchange Commission."
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SECTION 7.01. 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 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.
SECTION 7.02. Authority. The Purchaser or the 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.
SECTION 7.03. Securities Act. The Certificates purchased by the Agent for
the benefit of the Purchaser pursuant to this Agreement will be acquired for
investment only and not with a view to any public distribution thereof, and
neither the Purchaser nor the Agent will 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 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 Agent for the benefit of
the Purchaser or any other Owner pursuant to this Agreement. Each of the Agent
and 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.
SECTION 7.04. Investment Company Act. Neither the Purchaser nor the Agent
is subject to registration as an
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"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
ARTICLE VIII
COVENANTS OF THE TRANSFEROR
SECTION 8.01. 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 Agent or any Owner, or its agents or
representatives, at the 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), (a) 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 Credit Card Agreements under which
such Receivables arise, and (b) to visit the offices and properties of the
Transferor or the Servicer, as applicable, for the purpose of examining such
materials described in clause (a) above.
SECTION 8.02. Reporting Requirements of the Transferor. From the Closing
Date until the Collection Date, the Transferor will furnish to the 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
1999-1), concurrently therewith, and promptly after receipt thereof, a copy
of each notice, demand or other communication received by or
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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 1999-1);
(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 fiscal quarter of NextCard, beginning with the fiscal
quarter ending June 30, 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; and
(e) such publicly 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 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
Agent or any Owner may from time to time reasonably request;
SECTION 8.03. 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 Agent have been paid, or will be paid upon such repurchase, the outstanding
principal balance of the
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Certificates, all interest thereon and all other amounts owing hereunder in
full.
SECTION 8.04. 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 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
Agent deems reasonably necessary to maintain the Trustee's perfected security
interest in the Receivables.
ARTICLE IX
[RESERVED]
ARTICLE X
INDEMNIFICATION
SECTION 10.01. Indemnification by the Transferor and the Servicer. (a) The
Transferor shall indemnify and hold harmless each Owner, the 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.
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(b) The Servicer shall indemnify and hold harmless each Owner, the
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 10.02. Costs and Expenses. The Transferor agrees to pay on demand
to (a) the 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 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 Agent and the Purchaser, with respect thereto and with
respect to advising each of the 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 the Purchaser of the Certificates,
and (iii) other reasonable fees, costs and expenses incurred by the Purchaser or
the Agent in connection with the purchase by the Purchaser of the Certificates
(including trustee's fees, costs and expenses), and (b) to the 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 XI
THE AGENT
SECTION 11.01. Authorization and Action. (a) Each of the Owners hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and any related agreement,
instrument and document as are delegated to the Agent by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto. The
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. Notwithstanding anything herein or elsewhere to the contrary, the Agent
shall not be required to take any action which exposes the 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 Agent on behalf of the Owners, and the 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 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 Agent shall be conclusive and binding for all
purposes absent manifest error).
SECTION 11.02. Agent's Reliance, Etc. Neither the 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 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 Agent: (a) may consult with legal counsel (including counsel for
the Transferor, the
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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 such
counsel, accountants or experts; (b) 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; (c) 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; (d) 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; (e) 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 (f) 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 11.03. Agent and Affiliates. To the extent that the Agent or any of
its Affiliates shall become an Owner, the 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 Agent or such Affiliate, as the case may be.
The 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 Agent or such Affiliate, as the case may
be, and without any duty to account therefor to the Owners.
SECTION 11.04. Purchase Decision. Each Owner acknowledges that it has,
independently and without reliance upon the 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
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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 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 11.05. Indemnification. Each Owner (other than the Purchaser)
agrees to indemnify the Agent (to the extent not reimbursed by any the
Transferor), ratably according to its share of the aggregate outstanding
principal balance of the Certificates 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 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 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 Agent's gross negligence or
willful misconduct. 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 Agent,
ratably according to its share of the aggregate outstanding principal balance of
the Certificates from time to time, promptly upon demand, for any out-of-pocket
expenses (including reasonable counsel fees) incurred by the 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 11.06. Successor Agent. The Agent may resign at any time by giving
thirty 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 Agent as described below. Upon any such resignation, the Owners shall
have the right to appoint a successor Agent approved by the Transferor (which
approval
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will not be unreasonably withheld or delayed). If no successor Agent shall have
been so appointed by the Owners and accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Owners, appoint a successor Agent approved by the
Transferor (which approval will not be unreasonably withheld or delayed), which
successor Agent shall be (a) either (i) a commercial bank having a combined
capital and surplus of at least $250,000,000 or (ii) an Affiliate of such bank
and (b) experienced in the types of transactions contemplated by this Agreement.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article XI shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent hereunder.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. 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 (a) the same shall be
in writing and signed by the Transferor, the Servicer, the Required Owners and
the Agent, and (b) 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 12.02. 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
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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:
Holland Limited Securitization, Inc.
c/o ING Baring (U.S.) Capital Markets LLC
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With a copy to the Agent;
If to the Agent:
ING Baring (U.S.) Capital Markets LLC
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to the Transferor:
NextCard Funding Corp.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer; and
If to the Servicer:
NextCard, Inc.
000 Xxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000.
SECTION 12.03. 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
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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 12.04. Binding Effect; Assignability. (a) This Agreement shall be
binding upon each of and inure to the benefit of the Transferor, the Servicer,
the 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 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 ING Capital 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 ING Capital) or Affected Party claiming through a
participant (other than the Purchaser, a Liquidity Provider, an Enhancement
Provider or ING Capital) shall be entitled to receive any payment pursuant
to Sections 2.07, 2.08, 2.09 or 10.02 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
subsections 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 Agent shall have
first consented thereto in writing, such consent being required for the
purpose of assuring compliance with the requirements of this subsection
12.04(c). Any assignment or grant of a
"An asterisk [*] indicates that certain information has been omitted from this
agreement pursuant to a request for confidential treatment and has been filed
separately with the Securities and Exchange Commission."
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participation interest by an Owner pursuant to this subsection 12.04(c)
shall be effected pursuant to documentation satisfactory in form and
substance to the 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
Agent shall promptly notify the Transferor of any sale, assignment or
participation under this Section 12.04. 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 12.10.
(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 Agent may assign at any time its rights and obligations
hereunder and interests herein as Agent (i) without the consent of the
Owners or the Transferor, to any
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Affiliate of ING Capital 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 10.01, 10.02, 12.07, 12.09 and
12.10 shall be continuing and shall survive any termination of this
Agreement.
(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
Agent or any Owner, and the Person proposed to be replaced is either ING
Capital 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 ING Capital 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 Agent hereby
agrees to take all actions necessary to permit a replacement to succeed to
its respective rights and obligations hereunder.
SECTION 12.05. 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 12.06. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
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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 12.07. No Proceedings. (a) The Transferor, each Owner and the 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 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 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, 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 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-
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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 12.07 shall survive the termination
of this Agreement.
SECTION 12.08. 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 12.09. 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,
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
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to the extent that such personal liability of any such Person arises from the
gross negligence or willful misconduct of such Person.
(b) The provisions of this Section 12.09 shall survive the termination
of this Agreement.
SECTION 12.10. Confidentiality. Each Owner and the 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
Agent (as the case may be) as confidential information; provided, however, that
none of the Owners or the 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
Agent, as the case may be, (a) be inconsistent with any Requirement of Law or
compliance by such Owner or the Agent with any binding request of any regulatory
body having jurisdiction over such Owner or the Agent, as the case may be or (b)
materially and adversely affect the ability of such Owner or the 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.
NEXTCARD FUNDING CORP.
By: /s/ XXXXXX XXXXXXXXX
--------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: General Counsel
and Secretary
NEXTCARD, INC.
By: /s/ XXXXXX XXXXXXXXX
--------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: General Counsel
and Secretary
HOLLAND LIMITED SECURITIZATION, INC.
By: ING Baring (U.S.) Capital
Markets LLC, as attorney-in-fact
By: /s/ XXXXXX XXXXXX
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
ING BARING (U.S.) CAPITAL
MARKETS LLC, as the Agent
By: /s/ XXXXXX XXXXXX
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
Signature Page -- 1
to
Certificate Purchase Agreement
Dated as of June 16, 1999
(NextCard Master Trust, Series 1999-1)
