LIQUIDITY AGREEMENT, dated as of July 30, 1998, among
METRIS OWNER TRUST, a Delaware business trust (the "Borrower"),
the several banks and other financial institutions parties to
this Agreement (each, a "Lender") and THE CHASE MANHATTAN BANK, a
New York banking corporation, as administrative agent for the
Lenders.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"ABR" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the
Base CD Rate in effect on such day plus 1% and (c) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof: "Prime Rate" shall mean the rate of interest
per annum publicly announced from time to time by the
Administrative Agent as its prime rate in effect at its principal
office in New York City (the Prime Rate not being intended to be
the lowest rate of interest charged by the Administrative Agent
in connection with extensions of credit to debtors); "Base CD
Rate" shall mean the sum of (a) the product of (i) the Three-
Month Secondary CD Rate and (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the C/D
Reserve Percentage and (b) the C/D Assessment Rate; "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market
rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day shall not be a Business Day,
the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board,
be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not
be so reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York
City received at approximately 10:00 A.M., New York City time, on
such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Administrative Agent from
three New York City negotiable certificate of deposit dealers of
recognized standing selected by it; and "Federal Funds Effective
Rate" shall mean, for any day, 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 on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of
recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to
ascertain the Base CD Rate or the Federal Funds Effective Rate,
or both, for any reason, including the inability or failure of
the Administrative Agent to obtain sufficient quotations in
accordance with the terms hereof, the ABR shall be determined
without regard to clause (b) or (c), or both, of the first
sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any
change in the ABR due to a change in the Prime Rate, the Three-
Month Secondary CD Rate or the Federal Funds Effective Rate shall
be effective as of the opening of business on the effective day
of such change in the Prime Rate, the Three-Month Secondary CD
Rate or the Federal Funds Effective Rate, as the case may be.
"ABR Interest Payment Date" shall have the meaning set
forth in Section 2.13(b).
"ABR Loans" shall mean Loans the rate of interest
applicable to which is based upon the ABR.
"Addendum" shall mean an addendum to this Agreement,
substantially in the form of Exhibit B.
"Administration Agreement" shall mean the
Administration Agreement, substantially in the form of Exhibit C
to this Agreement, between the Borrower and the Administrator, as
the same may from time to time be amended, supplemented or
modified.
"Administrative Agent" shall mean The Chase Manhattan
Bank, together with its affiliates, as the arranger of the
Commitments and as the agent for the Lenders under this
Agreement, and any successor or assign in such capacity appointed
pursuant to Section 9.9.
"Administrator" shall mean Metris, in its capacity as
Administrator under the Administration Agreement, and any
successor or assign in such capacity.
"Administrator Termination Event" shall have the
meaning set forth in Section 6(c) of the Administration
Agreement.
"Aggregate Available Commitments" shall mean, at any
time, the aggregate amount of the Available Commitments at such
time.
"Aggregate Commitment" shall mean at any time, the sum
of the Commitments at such time of all Lenders (other than, after
its Expiry Date, any Non-Extending Lender).
"Aggregate Principal Receivables" shall have the
meaning set forth in Section 1.1 of the Metris Pooling and
Servicing Agreement.
"Agreement" shall mean this Liquidity Agreement, as the
same may from time to time be amended, supplemented or otherwise
modified.
"Applicable Margin" shall mean, with respect to any
LIBOR Loan, (a) on any date when the aggregate principal amount
of the Loans (other than Non-Pro Rata Reserve Account Loans)
outstanding is less than or equal to 50% of the Aggregate
Commitment, a rate per annum equal to 0.4250% and (b) on any date
(i) when the aggregate principal amount of the Loans (other than
Non-Pro Rata Reserve Account Loans) outstanding is greater than
50% of the Aggregate Commitment or (ii) on or after the
Expiration Date, a rate per annum equal to 0.5500%.
"Assignment and Acceptance" shall have the meaning set
forth in Section 10.6(c).
"Available Commitment" shall mean, as to any Lender at
any time, an amount equal to the excess, if any, of (a) the
amount of such Lender's Commitment over (b) the aggregate
principal amount of all Loans made by such Lender then
outstanding.
"Basic Documents" shall mean the Series 1998-1
Supplement, the Metris Pooling and Servicing Agreement, the
Master Trust Purchase Agreement and the Series 1998-1 Securities.
"Benefitted Lender" shall have the meaning set forth in
Section 10.7.
"Board" shall mean the Board of Governors of the
Federal Reserve System (or any successor thereto).
"Borrower" shall have the meaning set forth in the
preamble.
"Borrowing" shall mean the incurrence of Loans of a
single Type on a single date and, for LIBOR Loans, as to which a
single Interest Period is in effect.
"Borrowing Base" shall mean, on any Business Day, the
sum of (a) the Series 1998-1 Class A Invested Amount and (b) the
excess, if any, of (i) the amount payable to the Series 1998-1
Class A Securityholder pursuant to clause (A) of Section
4.9(a)(i) of the Series 1998-1 Supplement on such Business Day
and on each prior Business Day over (ii) the amount which has
been paid to the Series 1998-1 Class A Securityholder with
respect thereto on such Business Day and on each prior Business
Day.
"Borrowing Date" shall mean any Business Day specified
in a notice complying with the requirements of Section 2.3, 2.6
or 2.7(b) as a date on which the Borrower requests the Lenders to
make Loans.
"Business Day" shall mean any day other than a
Saturday, a Sunday or any other day on which commercial banks in
New York City or Wilmington, Delaware are authorized or required
by law to close; provided, however, that for purposes of any
provision hereof relating to LIBOR Loans, "Business Day" shall
mean any such day on which banks in London, New York and
Wilmington, Delaware are open for the transaction of
international business.
"C/D Assessment Rate" shall mean for any day as applied
to any ABR Loan, the annual assessment rate in effect on such day
which is payable by a member of the Bank Insurance Fund
classified as well-capitalized and within supervisory subgroup
"B" (or a comparable successor assessment risk classification)
within the meaning of 12 C.F.R. 327.3(d) (or any successor
provision) to the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's (or such successor's) insuring
time deposits at offices of such institution in the United
States.
"C/D Reserve Percentage" shall mean for any day as
applied to any ABR Loan, that percentage (expressed as a decimal)
which is in effect on such day, as prescribed by the Board, for
determining the maximum reserve requirement for a Depositary
Institution (as defined in Regulation D of the Board) in respect
of new non-personal time deposits in Dollars having a maturity of
30 days or more.
"Class A Percentage" shall mean, on any date, the
quotient (expressed as a percentage) of (a) the Class A Invested
Amount (as defined in the Series 1998-1 Supplement) and (b) the
Invested Amount (as defined in the Series 1998-1 Supplement).
"Closing Date" shall have the meaning set forth in
Section 5.1, which date is July 30, 1998.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral" shall have the meaning set forth in
Section 4.1 of the Collateral Trust Agreement.
"Collateral Account" shall have the meaning set forth
in Section 5.1 of the Collateral Trust Agreement.
"Collateral Trust Agreement" shall mean the Collateral
Trust Agreement, dated as of July 30, 1998, between the Borrower
and the Collateral Trustee, substantially in the form of Exhibit
D, as the same may from time to time be amended, supplemented or
otherwise modified.
"Collateral Trustee" shall mean US Bank Trust National
Association, not in its individual capacity but solely as
Collateral Trustee under the Collateral Trust Agreement and its
successors and assigns in such capacity.
"Commercial Paper" or "Commercial Paper Notes" shall
mean any note issued or to be issued by the Borrower pursuant to
the Depositary Agreement.
"Commercial Paper Account" shall have the meaning set
forth in Section 2 of the Depositary Agreement.
"Commercial Paper Agreement" shall mean each agreement
between a Commercial Paper Dealer and the Borrower providing for
the placement of Commercial Paper Notes, in each case in form and
substance reasonably satisfactory to the Administrative Agent, as
the same may from time to time be amended, supplemented or
otherwise modified.
"Commercial Paper Dealer" shall mean, initially, each
of Xxxxxxx Xxxxx Money Markets Inc. and NationsBanc Xxxxxxxxxx
Securities LLC, and thereafter each Person appointed by the
Borrower, with the consent of the Depositary, as its commercial
paper dealer.
"Commercial Paper Deficit" shall have the meaning set
forth in Section 2.7(a).
"Commercial Paper Memorandum" shall mean any
information memorandum, credit report or offering memorandum
prepared for use by any Commercial Paper Dealer in connection
with the offer and sale of the Commercial Paper Notes, as the
same may be amended, supplemented or otherwise modified from time
to time.
"Commitment" shall mean, with respect to any Lender,
the obligation of such Lender to make Loans to the Borrower
hereunder in an aggregate principal amount at any one time
outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule I, as such amount may be increased or
reduced from time to time in accordance with the terms hereof.
"Commitment Percentage" shall mean, as to any Lender at
any time, the percentage which such Lender's Commitment then
constitutes of the Aggregate Commitment (or, at any time after
the Commitments have expired or terminated, the percentage which
the aggregate principal amount of such Lender's Loans then
outstanding constitutes of the aggregate principal amount of the
Loans then outstanding).
"Commonly Controlled Entity" shall mean an entity,
whether or not incorporated, which is under common control with
the Borrower within the meaning of Section 4001 of ERISA or is
part of a group that includes the Borrower and which is treated
as a single employer under Section 414 of the Code.
"Contractual Obligation" shall mean, as to any Person,
any provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.
"CP Advances" shall have the meaning set forth in
Section 2(b) of the Depositary Agreement.
"Credits Outstanding" means, as of the close of
business on any day, (a) the Principal Component of all
outstanding Commercial Paper, plus (b) the aggregate principal
amount of outstanding Loans and outstanding 364-Day Liquidity
Loans, minus (c) all funds then on deposit in the Principal
Subaccount, the Reserve Account and the Non-Pro Rata Funding
Account, except to the extent that such funds are then subject to
any writ, order, stay, judgment, warrant of attachment or
execution or similar process.
"Credit Utilization" shall mean the issuance by the
Borrower of Commercial Paper or the making of a Revolving Loan by
any Lender or the making of any Non-Pro Rata Reserve Account Loan
by any Lender (other than (a) the initial Non-Pro Rata Reserve
Account Loans of such Lender and (b) any continuation or
conversion of a Loan pursuant to Section 2.11).
"Default" shall mean any of the events specified in
Section 8 hereof, whether or not any requirement for the giving
of notice, the lapse of time, or both, or any other condition,
has been satisfied.
"Depositary" shall mean US Bank, N.A., in its capacity
as Depositary under the Depositary Agreement, and its successors
and assigns in such capacity.
"Depositary Agreement" shall mean the Depositary
Agreement between the Borrower and the Depositary, and
substantially in the form of Exhibit E and any replacement
Depositary Agreement in form and substance reasonably
satisfactory to the Administrative Agent, in each case as the
same may from time to time be amended, supplemented or otherwise
modified.
"Deposited Funds" shall have the meaning set forth in
Section 5.2 of the Collateral Trust Agreement.
"Determination Date" shall have the meaning set forth
in Section 1.1 of the Metris Pooling and Servicing Agreement.
"Distribution Date" shall have the meaning set forth in
Section 2 of the Series 1998-1 Supplement.
"DMCCB" shall mean Direct Merchants Credit Card Bank,
N.A.
"Dollars" or "$" shall mean lawful currency of the
United States of America.
"Downgraded Lender" shall mean (a) any Lender that has
its commercial paper or short-term deposit rating lowered below X-
0 by S&P, P-1 by Moody's or the equivalent rating by any other
Rating Agency, or withdrawn by any Rating Agency, and (b) any
Lender as to which any Rating Agency has publicly announced that
it has placed such rating under review with negative
implications.
"Eligible Assignee" shall mean a Person with commercial
paper or short-term deposit ratings from S&P, Moody's and any
other Rating Agency which, on the effective date of the proposed
assignment, are equal to or higher than those of the ratings
assigned by such Rating Agencies to the Commercial Paper.
"Equity Securities" shall mean any and all shares,
interests, participations or other equivalents (however
designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a
corporation), including, without limitation, any partnership
interest in any partnership or equity interest in any business
trust, and any and all warrants or options to purchase any of the
foregoing.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as the same may from time to time be
amended or supplemented.
"Eurocurrency Reserve Requirements" shall mean, for any
day as applied to a LIBOR Loan, the aggregate (without
duplication) of the rates (expressed as a decimal fraction) of
reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves
under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the
Federal Reserve System.
"Event of Default" shall mean any of the events
specified in Section 8; provided, that any requirement for the
giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Excluded Downgraded Lender" shall mean any Downgraded
Lender which either (a) has its commercial paper or short-term
deposit rating lowered below A-1 by S&P, P-1 by Moody's, or the
equivalent rating by any other Rating Agency, and such Rating
Agency has publicly announced that it has placed such rating
under review with negative implications, or (b) has its
commercial paper or short-term deposit rating lowered below A-2
by S&P, P-2 by Moody's, or the equivalent rating by any other
Rating Agency, or withdrawn by any Rating Agency.
"Exit Percentage" shall mean, with respect to any Non-
Extending Lender, the percentage equivalent of a fraction, the
numerator of which is the Commitment of such Non-Extending Lender
and the denominator of which is the sum of the Commitments of all
Non-Extending Lenders that have the same Expiry Date as such Non-
Extending Lender.
"Expiration Date" shall mean the later of (a) the date
that is three years after the Closing Date and (b) the last day
of any extension of the Expiration Date pursuant to Section 2.22,
or, if such day is not a Business Day, the next preceding
Business Day, provided, however, that the Expiration Date shall
be deemed to have occurred on any earlier date on which the
Commitments are terminated pursuant to Section 2.10 or 8.
"Expiry Date" shall mean, with respect to any Lender,
the later of (a) the date that is three years after the Closing
Date and (b) the last day of any extension of any Lender's
Commitment pursuant to Section 2.22, or if such last day is not a
Business Day, the next preceding Business Day, provided, however,
that the Expiry Date of such Lender shall be deemed to have
occurred on any earlier date on which the Commitments are
terminated pursuant to Section 2.10 or 8.
"Extending Lender" shall mean a Lender other than a Non-
Extending Lender.
"Face Amount" shall mean, with respect to any
Commercial Paper Note, (a) if issued on a discount basis, the
face amount thereof, or (b) if issued on an interest-bearing
basis, the principal amount thereof, together with the aggregate
amount of interest thereon to its stated maturity date (in each
case including, in any event, Commercial Paper Dealer fees
payable in connection with the issuance of such Commercial Paper
Note).
"Facility Documents" shall mean the collective
reference to the Basic Documents and the Program Documents.
"Facility Fee" shall have the meaning set forth in
Section 2.9.
"Facility Percentage" shall mean, at any time, the
quotient (expressed as a percentage) of (a) the Aggregate
Available Commitments at such time divided by (b) the sum of the
Aggregate Available Commitments at such time and the 364-Day
Aggregate Available Commitments at such time.
"GAAP" shall mean generally accepted accounting
principles in the United States of America in effect from time to
time.
"Governmental Authority" shall mean any nation or
government, any state or other political subdivision thereof, and
any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Guarantee" of or by any Person shall mean, without
duplication, any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing
any Indebtedness of any other Person (the "primary obligor") (or
any other obligation of a primary obligor if the anticipated
liability of such guarantor shall have been reserved against in
the financial statements of such guarantor or quantified in the
notes thereto), including third party mortgages or third party
security interests, in any manner, whether directly or
indirectly, and including any obligation of such Person, direct
or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other
obligation or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Indebtedness or
other obligation, (b) to purchase property, securities or
services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment of such
Indebtedness or other obligation or (c) to maintain working
capital, equity capital or other financial statement condition or
liquidity of the primary obligor for purposes of enabling the
primary obligor to pay such Indebtedness or other obligation;
provided, however, that the term Guarantee shall not include
endorsements for collection or deposit, in either case, in the
ordinary course of business.
"Indebtedness" shall mean, of any Person at any date,
(a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than trade
liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such
Person under capitalized leases, (d) all obligations of such
Person in respect of acceptances issued or created for the
account of such Person and (e) all liabilities secured by any
Lien on any property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment
thereof.
"Interest Accrual Period" shall have the meaning set
forth in Section 2 of the Series 1998-1 Supplement.
"Interest Component" shall mean, with respect to
Commercial Paper outstanding at any time, the sum of (a) the
portion of the Face Amount of outstanding Commercial Paper issued
on a discount basis representing the discount incurred in respect
thereof and (b) the amount of interest that would accrue from the
date of issuance to the date of maturity in respect of
outstanding Commercial Paper issued on an interest-bearing basis
(in each case including, in any event, Commercial Paper Dealer
fees payable in connection with the issuance of such Commercial
Paper).
"Interest Period" shall mean, with respect to any LIBOR
Loan:
(a) initially, the period commencing on the Borrowing
Date or conversion date, as the case may be, with respect to
such LIBOR Loan and ending one, two or three months
thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given
with respect thereto; and
(b) thereafter, each period commencing on the last day
of the immediately preceding Interest Period applicable to
such LIBOR Loan and ending one, two or three months
thereafter, as selected by the Borrower by irrevocable
notice to the Administrative Agent not less than three
Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided, however, that the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a
day which is not a Business Day, that Interest Period shall
be extended to the next succeeding Business Day, unless the
result of such extension would be to carry such Interest
Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that would otherwise extend
beyond the Scheduled Termination Date shall end on the
Scheduled Termination Date, or if the Scheduled Termination
Date shall not be a Business Day, on the immediately
preceding Business Day;
(iii) if the Borrower shall fail to give notice that
it wishes a LIBOR Loan to be continued as such as provided
above in clause (b), it shall be deemed to have selected a
conversion of a LIBOR Loan into an ABR Loan (which
conversion shall occur automatically and without need for
compliance with the conditions for conversion set forth in
Section 2.11);
(iv) any Interest Period that begins on the last day
of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business
Day of a calendar month; and
(v) notwithstanding anything to the contrary in this
definition, any Interest Period that begins on a
Distribution Date shall end on a Distribution Date.
"Interest Reserve Subaccount" shall have the meaning
set forth in Section 5.1 of the Collateral Trust Agreement.
"Lender" shall have the meaning set forth in the
preamble.
"LIBOR Base Rate" shall mean, for any Interest Period,
the rate for deposits in Dollars for a period equal to such
Interest Period (commencing on the first day of the relevant
Interest Period) which appears on Page 3750 of the Dow Xxxxx
screen as of 11:00 A.M., London time, on the LIBOR Determination
Date for such Interest Period. If such rate does not appear on
Page 3750 of the Dow Xxxxx screen (or otherwise on such service),
the rate for such Interest Period will be determined on the basis
of the rates at which deposits in Dollars are offered by the
Reference Banks (as defined below) at approximately 11:00 A.M.,
London time, on such LIBOR Determination Date to prime banks in
the London interbank market for a period equal to such Interest
Period (commencing on the first day of such Interest Period) and
in an amount comparable to the amount of the relevant Borrowing.
The Administrative Agent will request the principal London office
of each of the Reference Banks to provide a quotation of its
rate. If at least two such quotations are provided, the rate for
such Interest Period will be the arithmetic mean of the
quotations. If fewer than two quotations are provided, the rate
for such Interest Period will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the
Administrative Agent, at approximately 11:00 A.M., New York City
time, on the first day of such Interest Period for loans in
United States dollars to leading European banks for a period
equal to such Interest Period (commencing on the first day of
such Interest Period) and in an amount comparable to the amount
of the relevant Borrowing. As used in this definition,
"Reference Banks" means four major banks in the London interbank
market selected by the Administrative Agent (with the consent of
the Borrower, which consent shall not be unreasonably withheld or
delayed).
"LIBOR Determination Date" shall mean the second
Business Day prior to the commencement of any Interest Period.
"LIBOR Loan" shall mean each Loan the rate of interest
applicable to which is based on a LIBOR Rate.
"LIBOR Rate" shall mean, with respect to each day
during each Interest Period pertaining to a LIBOR Loan, a rate
per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
LIBOR Base Rate
1.00 - Eurocurrency Reserve Requirements
"LIBOR Tranche" shall mean LIBOR Loans the Interest
Periods with respect to all of which begin on the same date and
end on the same later date (whether on not such LIBOR Loans shall
have been originally made on the same date).
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge or other security interest, or any preference,
priority or other security agreement or preferential arrangement
of any kind or nature whatsoever (including, without limitation,
any conditional sale or other title retention agreement and any
capitalized lease having substantially the same economic effect
as any of the foregoing).
"Loans" shall have the meaning set forth in
Section 2.1.
"Majority Lenders" shall mean, at any time, Lenders
holding Voting Percentages that aggregate more than 50%.
"Master Trust Daily Report" shall have the meaning
given to the term "Daily Report" set forth in Section 1.1 of the
Metris Pooling and Servicing Agreement.
"Master Trust Investor Certificate" shall have the
meaning given to the term "Investor Certificate" set forth in
Section 1.1 of the Metris Pooling and Servicing Agreement.
"Master Trust Purchase Agreement" shall have the
meaning given to the term "Purchase Agreement" set forth in
Section 1.1 of the Metris Pooling and Servicing Agreement.
"Master Trust Servicer" shall mean DMCCB, in its
capacity as Servicer under the Metris Pooling and Servicing
Agreement, and any successor or assign in such capacity.
"Master Trust Servicer Default" shall have the meaning
given to the term "Servicer Default" set forth in Section 1.1 of
the Metris Pooling and Servicing Agreement.
"Master Trust Settlement Statement" shall have the
meaning given to the term "Settlement Statement" set forth in
Section 1.1 of the Metris Pooling and Servicing Agreement.
"Master Trust Trustee" shall mean The Bank of New York
(Delaware), not in its individual capacity but solely as trustee
of Metris Master Trust, and any successor or assign in such
capacity.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the business, operations, property or condition
(financial or otherwise) of the Borrower, (b) the ability of the
Borrower to perform its obligations under this Agreement or the
other Program Documents, or (c) the validity or enforceability of
this Agreement or any of the other Facility Documents or the
rights or remedies of the Administrative Agent or the Lenders
hereunder or thereunder.
"Maximum Aggregate Commitment" shall mean $300,000,000
as such amount may be increased from time to time as provided in
Section 2.8 or reduced or terminated from time to time as
provided in Sections 2.5(j), 2.10, 2.22, 2.23 and 8.
"Metris" shall mean Metris Companies Inc., a Delaware
corporation.
"Metris Master Trust" shall mean the Metris Master
Trust created pursuant to the Metris Pooling and Servicing
Agreement.
"Metris Pooling and Servicing Agreement" shall mean the
Amended and Restated Pooling and Servicing Agreement, dated as of
July 30, 1998, among MRI, DMCCB and the Metris Master Trust
Trustee, as the same may from time to time be amended,
supplemented or otherwise modified; provided, however, that,
unless the context otherwise requires, the term "Metris Pooling
and Servicing Agreement" shall be deemed not to include any
Supplement (as defined in the Metris Pooling and Servicing
Agreement) other than the Series 1998-1 Supplement.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. or
its successors.
"MRI" shall mean Metris Receivables, Inc., a Delaware
corporation, as Transferor under each of the Metris Pooling and
Servicing Agreement and the Series 1998-1 Supplement.
"Non-Consenting Lender" shall mean any Lender that has
not delivered a written consent in connection with a Specified
Consent Request within the time period specified for delivery of
such consent pursuant to the documentation governing such
Specified Consent Request.
"Non-Extending Lender" shall have the meaning set forth
in Section 2.4.
"Non-Pro Rata Funding Account" shall have the meaning
set forth in Section 5.1 of the Collateral Trust Agreement.
"Non-Pro Rata Reserve Account Loan" shall have the
meaning set forth in Section 2.5.
"Non-Pro Rata Revolving Loan" shall have the meaning
set forth in Section 2.4.
"Note" shall have the meaning set forth in Section
10.6(g).
"Obligations" shall have the meaning set forth in
Section 2 of the Collateral Trust Agreement.
"Owner Trust Agreement" means the Owner Trust
Agreement, dated as of July 30, 1998, between MRI and the Owner
Trustee, as the same may be amended, supplemented or otherwise
modified from time to time.
"Owner Trustee" shall mean Wilmington Trust Company,
not in its individual capacity but solely as trustee under the
Owner Trust Agreement, or any successor in such capacity.
"Participant" shall have the meaning set forth in
Section 10.6(b).
"PBGC" shall mean the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of
ERISA.
"Person" shall mean an individual, partnership,
corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority
or other entity of whatever nature.
"Plan" shall mean, at a particular time, any employee
benefit plan which is covered by ERISA and in respect of which
the Borrower or a Commonly Controlled Entity is (or, if such plan
were terminated at such time, would under Section 4069 of ERISA
be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Principal Component" shall mean, with respect to
Commercial Paper outstanding at any time, (a) the difference
between the Face Amount of outstanding Commercial Paper issued on
a discount basis and the Interest Component thereof, and (b) the
principal amount of outstanding Commercial Paper issued on an
interest-bearing basis.
"Principal Subaccount" shall have the meaning set forth
in Section 5.1 of the Collateral Trust Agreement.
"Program Documents" shall mean this Agreement, the
Notes, the Owner Trust Agreement, the Collateral Trust Agreement,
the Administration Agreement, the Commercial Paper Notes, any
Commercial Paper Agreement, the Series 1998-1 Class A Security
Purchase Agreement and the Depositary Agreement.
"Program Parties" shall mean the collective reference
to the Borrower, Metris Master Trust, MRI, the Administrator, the
Master Trust Servicer, Metris, the Master Trust Trustee, the
Collateral Trustee and the Owner Trustee.
"Purchasing Lender" shall have the meaning set forth in
Section 10.6(c).
"Rating Agency" shall mean S&P, Moody's and any other
rating agency rating the Commercial Paper at the request of the
Borrower.
"Refunding Loan" shall mean, with respect to any
Lender, any Loan made by such Lender in accordance with, and
under the circumstances described in, Section 2.7.
"Register" shall have the meaning set forth in Section
10.6(d).
"Regulation U" shall mean Regulation U of the Board, as
from time to time in effect.
"Remaining Commercial Paper Deficit" shall have the
meaning set forth in Section 2.7(a).
"Required Reserve Account Funded Amount" shall have the
meaning set forth in Section 2.5.
"Requirement of Law" shall mean, as to any Person, the
certificate of incorporation and by-laws or other organizational
or governing documents of such Person, and any law, treaty, rule
or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such
Person or any of its property is subject.
"Reserve Account" shall have the meaning set forth in
Section 5.1 of the Collateral Trust Agreement.
"Reserve Account Pre-Funded Amount" shall have the
meaning set forth in Section 2.5(b).
"Responsible Officer" of any Person shall mean any
executive officer of such Person or the chief financial officer,
principal accounting officer, treasurer, assistant treasurer or
controller of such Person and any other officer or similar
official thereof responsible for the administration of the
obligations of such Person in respect of this Agreement or any
other Facility Document.
"Revolving Loan" shall mean, with respect to any
Lender, any Loan made by such Lender in accordance with, and
under the circumstances described in, Section 2.3.
"Revolving Period" shall have the meaning set forth in
Section 2 of the Series 1998-1 Supplement.
"S&P" shall mean Standard & Poor's Ratings Services, or
its successor.
"Scheduled Termination Date" shall mean the Scheduled
Series 1998-1 Termination Date, as such term is defined in
Section 2 of the Series 1998-1 Supplement.
"Secured Parties" shall have the meaning set forth in
Section 4.1 of the Collateral Trust Agreement.
"Securities Act" shall mean the United States
Securities Act of 1933, as amended from time to time.
"Series 1998-1 Amortization Period Commencement Date"
shall have the meaning given to the term "Amortization Period
Commencement Date" set forth in Section 2 of the 1998-1
Supplement.
"Series 1998-1 Class A Invested Amount" shall have the
meaning given to the term "Class A Invested Amount" set forth in
Section 2 of the Series 1998-1 Supplement.
"Series 1998-1 Class A Investor Charge-Offs" shall have
the meaning given to the term "Class A Investor Charge-Offs" set
forth in Section 2 of the Series 1998-1 Supplement.
"Series 1998-1 Class A Maximum Invested Amount" shall
have the meaning given to the term "Class A Maximum Invested
Amount" set forth in Section 2 of the Series 1998-1 Supplement.
"Series 1998-1 Class A Pay Down Period" shall have the
meaning given to the term "Class A Pay Down Period" set forth in
Section 8A of the Series 1998-1 Supplement.
"Series 1998-1 Class A Security" shall have the meaning
given to the term "Class A Security" set forth in Section 2 of
the Series 1998-1 Supplement.
"Series 1998-1 Class A Security Purchase Agreement"
shall mean the purchase agreement pursuant to which the Borrower
shall purchase the Series 1998-1 Class A Security.
"Series 1998-1 Pay Out Event" shall mean any "Series
1998-1 Pay Out Event" as defined in Section 2 of the Series 1998-
1 Supplement and any "Trust Pay Out Event" as defined in Section
1.1 of the Metris Pooling and Servicing Agreement.
"Series 1998-1 Securities" shall have the meaning set
forth in Section 1 of the Series 1998-1 Supplement.
"Series 1998-1 Supplement" shall mean the Series 1998-1
Supplement, dated as of July 30, 1998, to the Metris Pooling and
Servicing Agreement, as the same may from time to time be
amended, supplemented or otherwise modified.
"Specified Consent Request" shall mean any request made
by the Borrower for a consent pursuant to clause (i) of Section
7.7(b) which has not been approved in writing by the Majority
Lenders.
"364-Day Aggregate Available Commitments" shall mean
the "Aggregate Available Commitments", as such term is defined in
the 364-Day Liquidity Agreement.
"364-Day Liquidity Agreement" shall mean the 364-Day
Liquidity Agreement, dated as of July 30, 1998, among the
Borrower, the several banks and other financial institutions
parties thereto and The Chase Manhattan Bank, as administrative
agent, as the same may from time to time be amended, supplemented
or modified.
"364-Day Liquidity Commitment" shall mean any
"Commitment", as such term is defined in the 364-Day Liquidity
Agreement.
"364-Day Liquidity Loans" shall mean the "Loans", as
such term is defined in the 364-Day Liquidity Agreement.
"364-Day Maximum Aggregate Commitment" shall mean the
"Maximum Aggregate Commitment", as such term is defined in the
364-Day Liquidity Agreement.
"364-Day Non-Downgraded Aggregate Available
Commitments" shall mean the aggregate "Available Commitments" of
non-"Downgraded Lenders", as each such term is defined in the 364-
Day Liquidity Agreement.
"Transferee" shall have the meaning set forth in
Section 10.6(f).
"Type" shall mean, as to any Loan, its nature as an ABR
Loan or a LIBOR Loan.
"UCC" shall mean the Uniform Commercial Code, as in
effect in the relevant jurisdiction, as amended from time to
time.
"Unutilized Available Commitments" shall mean, at any
time, the Aggregate Available Commitments at such time minus the
Utilized Available Commitments at such time.
"Utilized Available Commitments" shall mean, at any
time, the Facility Percentage of the Face Amount of outstanding
Commercial Paper at such time.
"Voting Percentage" shall mean the percentage
equivalent of a fraction the numerator of which equals (a) in the
case of a Non-Extending Lender which has made a Non-Pro Rata
Revolving Loan, the outstanding principal amount of such Non-Pro
Rata Revolving Loan, (b) in the case of a Downgraded Lender, the
sum of the outstanding principal amount of any Non-Pro Rata
Reserve Account Loan made by such Downgraded Lender and the
outstanding principal amount of any Revolving Loans and Refunding
Loans of such Downgraded Lender, and (c) in the case of any other
Lender, such Lender's Commitment (or, at any time after the
Commitments have expired or terminated, the aggregate outstanding
principal amount of such Lender's Loans) and the denominator of
which equals the sum of the numerators used to calculate the
Voting Percentage for all Lenders (including Non-Extending
Lenders and Downgraded Lenders).
1.2 Other Definitional Provisions. (a) As used
herein and in the other Program Documents to which the Borrower
is a party, and in any certificate or other document made or
delivered pursuant hereto, accounting terms relating to the
Borrower not defined in Section 1.1, and accounting terms partly
defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(b) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and Section, Schedule and Exhibit references
are to this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitment. (a) Subject to the terms and
conditions hereof, each Lender agrees, severally and not jointly,
to make loans to the Borrower from time to time during the period
from the Closing Date to and including the Expiry Date of such
Lender's Commitment in an aggregate principal amount at any one
time outstanding not to exceed the amount of such Lender's
Commitment, which loans shall be Revolving Loans, Refunding
Loans, Non-Pro Rata Revolving Loans or Non-Pro Rata Reserve
Account Loans (collectively, "Loans"), as designated by the
Borrower in accordance with the terms hereof. During the period
from the Closing Date to the Expiry Date of any Commitment the
Borrower may use such Commitment by borrowing, prepaying the
Loans in whole or in part and, in the case of Revolving Loans and
Refunding Loans, reborrowing, all in accordance with the terms
and conditions hereof.
(b) The Revolving Loans may from time to time be (i)
LIBOR Loans or (ii) ABR Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with Sections
2.3 and 2.11. Any Revolving Loan made by a Lender that is
outstanding on such Lender's Expiry Date (unless such Expiry Date
shall also be the Expiration Date) shall be converted as of such
day to, and be treated for all purposes thereafter as, a Non-Pro
Rata Revolving Loan.
(c) The Refunding Loans shall be ABR Loans. The
Borrower shall pay each Refunding Loan in accordance with the
provisions of the Collateral Trust Agreement to the extent that
funds are available therefor; provided, however, that the final
maturity date of each Refunding Loan shall be the Scheduled
Termination Date. Refunding Loans may be converted to Revolving
Loans pursuant to Section 2.11(a).
(d) The Non-Pro Rata Revolving Loans and Non-Pro Rata
Reserve Account Loans may from time to time be (i) LIBOR Loans or
(ii) ABR Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.6 and 2.11.
The Borrower shall pay each Non-Pro Rata Revolving Loan in
accordance with the provisions of the Collateral Trust Agreement
to the extent that funds are available therefor; provided,
however, that the final maturity date of each Non-Pro Rata
Revolving Loan shall be the Scheduled Termination Date. All or a
portion of each Non-Pro Rata Reserve Account Loan may be
converted to a Non-Pro Rata Revolving Loan in accordance with
Section 2.5(f).
(e) Each Refunding Loan, each Non-Pro Rata Revolving
Loan and the initial Non-Pro Rata Reserve Account Loan of each
Lender shall be made by the relevant Lender or Lenders
notwithstanding (i) any set-off, counterclaim or defense to
payment that any Lender may have against the Borrower or (ii)
except as set forth in Section 5.3, the occurrence of a Default
or Event of Default.
2.2 Evidence of Indebtedness. (a) The Borrower
hereby unconditionally promises to pay to each Lender on the
Scheduled Termination Date the unpaid principal amount of each
Loan made by such Lender. The Borrower hereby further agrees to
pay interest in immediately available funds at the office of the
Administrative Agent on the unpaid principal amount of such Loans
from time to time from the date hereof until payment in full
thereof at the rates per annum, and on the dates, set forth in
Section 2.13.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness
of the Borrower to the appropriate lending office of such Lender
resulting from each Loan made by such lending office of such
Lender from time to time, including amounts of principal and
interest payable and paid to such lending office of such Lender
from time to time under this Agreement.
(c) The Administrative Agent shall maintain the
Register pursuant to Section 10.6(d), and a subaccount for each
Lender, in which Register and subaccounts (taken together) shall
be recorded (i) the amount of each Loan made hereunder, the Type
of each Loan made and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each
Lender's share thereof.
(d) The entries made in the Register and accounts
maintained pursuant to paragraphs (b) and (c) of this Section 2.2
shall, to the extent permitted by applicable law, be prima facie
evidence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the failure of
any Lender or the Administrative Agent to maintain such account,
such Register or such subaccount, as applicable, or any error
therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this
Agreement.
2.3 Procedure for Revolving Loan Borrowings.
Borrowings of Revolving Loans may be made on any Business Day.
When the Borrower wishes to borrow Revolving Loans, it shall give
the Administrative Agent (a) in the case of a Borrowing of ABR
Loans, irrevocable written or telephonic notice (confirmed in
writing) not later than 12:00 Noon (New York City time) on the
requested Borrowing Date, or (b) in the case of a Borrowing of
LIBOR Loans, irrevocable written notice not later than 12:00 Noon
(New York City time) three Business Days prior to the requested
Borrowing Date, in each case specifying (i) the requested
Borrowing Date, (ii) the amount to be borrowed, which shall be in
an aggregate principal amount equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof (in the case of LIBOR
Loans) or a whole multiple of $1,000,000 (in the case of ABR
Loans), (iii) that the Borrowing is to be of Revolving Loans and
whether the Borrowing is to be initially maintained as ABR Loans
or LIBOR Loans and (iv) in the case of LIBOR Loans, the length of
the Interest Period applicable thereto. Upon receipt of such
notice from the Borrower, the Administrative Agent shall promptly
notify each Lender thereof. Except as otherwise provided in
Sections 2.4 and 2.5 with respect to Non-Extending Lenders and
Downgraded Lenders, each Lender will make its Commitment
Percentage of all Revolving Loans requested to be made on any
Borrowing Date available to the Administrative Agent for the
account of the Borrower at the office of the Administrative Agent
specified in Section 10.2 prior to 2:00 P.M., New York City time
(in the case of ABR Loans), or 11:00 A.M., New York City time (in
the case of LIBOR Loans), in each case on the Borrowing Date
requested by the Borrower and in funds immediately available to
the Administrative Agent. Subject to satisfaction of the
applicable conditions set forth in Section 5.2, and except as
otherwise provided in Sections 2.4 and 2.5, the Administrative
Agent will make each Borrowing of Revolving Loans available to
the Borrower by directly depositing in the Collateral Account,
for application in accordance with the Collateral Trust Agreement
on the relevant Borrowing Date, the amounts made available to the
Administrative Agent by the Lenders and in like funds as received
by the Administrative Agent.
2.4 Non-Pro Rata Revolving Loans by Non-Extending
Lenders. Subject to the limitations imposed by Section 2.1, if
any Lender shall not have consented to the extension of its
Expiry Date pursuant to Section 2.22 (such Lender, a "Non-
Extending Lender"), unless the Borrower shall have replaced or
removed such Non-Extending Lender pursuant to Section 2.23 or
shall have reduced the Face Amount of outstanding Commercial
Paper to an amount less than or equal to the sum of (i) the
aggregate Available Commitments of the Extending Lenders
(including any replacement Lenders for Non-Extending Lenders) and
(ii) the 364-Day Aggregate Available Commitments, on the fifth
Business Day immediately preceding such Non-Extending Lender's
Expiry Date, the Borrower shall request such Non-Extending Lender
to make, and on such Expiry Date such Non-Extending Lender shall
make in accordance with the provisions hereof, a Loan (a "Non-Pro
Rata Revolving Loan") in an amount equal to the lesser of the (i)
Available Commitment of such Non-Extending Lender and (ii) the
product of (A) the Exit Percentage of such Non-Extending Lender
and (B) the positive difference of the Face Amount of outstanding
Commercial Paper minus the sum of (i) the aggregate Available
Commitments of the Extending Lenders (including any replacement
Lenders for Non-Extending Lenders) and (ii) the 364-Day Aggregate
Available Commitments; provided, however, that if the Borrower
shall have requested written confirmation from each of the Rating
Agencies that the failure to request such a Loan will not result
in the reduction or withdrawal of its then current rating, if
any, of the Commercial Paper, and if such written confirmation is
received by the Borrower prior to the fifth Business Day
immediately preceding such Non-Extending Lender's Expiry Date,
the Borrower shall not be obligated to request, and such Non-
Extending Lender shall not be obligated to make, such Loan. The
Borrower shall make any such request to the Rating Agencies at
least fifteen days prior to such fifth Business Day. Any failure
of any Rating Agency to respond to such request shall not be
deemed to constitute a confirmation of the type described above.
After such Borrowing or, if there is no such Borrowing, after
such Non-Extending Lender's Expiry Date, such Non-Extending
Lender shall have no further obligation under its Commitment to
make Loans. The proceeds of any such Non-Pro Rata Revolving Loan
shall be deposited in the Non-Pro Rata Funding Account and, in
accordance with Section 6(b) of the Depositary Agreement, shall
be applied, to the extent of such proceeds, by the Depositary,
prior to its application of any other funds then available to it,
to pay maturing Commercial Paper. The Borrower shall cause the
Administrator to use its best efforts to replace, on behalf of
the Borrower, a Non-Extending Lender which would be obligated to
make a Non-Pro Rata Revolving Loan prior to such Non-Extending
Lender's Expiry Date.
2.5 Non-Pro Rata Reserve Account Loans by Downgraded
Lenders. (a) On the 60th day (or if such day is not a Business
Day, the next succeeding Business Day) after any Lender becomes a
Downgraded Lender (or on such earlier day as may be necessary to
prevent a reduction in the ratings of the Commercial Paper), and
on each Business Day thereafter, the Borrower (i) unless the
Borrower shall have replaced such Downgraded Lender pursuant to
Section 2.23 or shall have reduced the Face Amount of outstanding
Commercial Paper to an amount less than or equal to the sum of
(i) the aggregate Available Commitments of all Lenders that are
not Downgraded Lenders (including any replacement Lenders for the
Downgraded Lenders) and (ii) the 364-Day Non-Downgraded Aggregate
Available Commitment, shall request such Downgraded Lender to
make, and if such request is made, such Downgraded Lender shall
make in accordance with the provisions hereof, a Loan (a "Non-Pro
Rata Reserve Account Loan") in an amount such that the aggregate
outstanding amount of such Downgraded Lender's Non-Pro Rata
Reserve Account Loans equals the lesser of (A) such Downgraded
Lender's Commitment Percentage of the Utilized Available
Commitment (such Downgraded Lender's "Required Reserve Account
Funded Amount") and (B) the excess, if any, of the Commitment of
such Downgraded Lender over the aggregate principal amount of
such Lender's Loans then outstanding and (ii) may request such
Downgraded Lender to make, and if such request is made, such
Downgraded Lender shall make, a Non-Pro Rata Reserve Account Loan
in an amount such that the aggregate outstanding amount of such
Downgraded Lender's Non-Pro Rata Reserve Account Loans equals the
lesser of (A) the Reserve Account Pre-Funded Amount notified to
such Downgraded Lender by the Borrower pursuant to paragraph (b)
of this Section and (B) the excess, if any, of the Commitment of
such Downgraded Lender over the aggregate principal amount of
such Lender's Loans then outstanding; provided, however, that the
Borrower shall request written confirmation from each of the
Rating Agencies that the failure to request Non-Pro Rata Reserve
Account Loans as provided in clauses (i) and (ii) of this
paragraph (a) will not result in the reduction or withdrawal of
its then current rating, if any, of the Commercial Paper, and if
such written confirmation is received by the Borrower prior to
such 60th day, the Borrower shall not request, and such
Downgraded Lender shall not be obligated to make, such Non-Pro
Rata Reserve Account Loans. The Borrower shall make such request
to the Rating Agencies at least fifteen days prior to such 60th
day. The Borrower shall cause the Administrator to use its best
efforts to replace, on behalf of the Borrower, any Downgraded
Lender.
(b) In accordance with the provisions of Section 2.6,
the Borrower may request that, on any Business Day, each
Downgraded Lender make a Non-Pro Rata Reserve Account Loan in an
amount such that the aggregate outstanding amount of such
Downgraded Lender's Non-Pro Rata Reserve Account Loans equals
such Downgraded Lender's Commitment Percentage of the Borrower's
good faith estimate of the maximum amount of the Utilized
Available Commitment for the 30-day period commencing on such
Business Day (such amount, including such Downgraded Lender's Non-
Pro Rata Reserve Account Loans made pursuant to Section
2.5(a)(i), being referred to herein as such Downgraded Lender's
"Reserve Account Pre-Funded Amount").
(c) The Borrower may increase the Utilized Available
Commitment as often as otherwise permitted hereunder and under
the other Program Documents so long as the Required Reserve
Account Funded Amount of each Downgraded Lender does not exceed
the Reserve Account Pre-Funded Amount of such Downgraded Lender.
(d) All proceeds of such Non-Pro Rata Reserve Account
Loans shall be remitted by the Administrative Agent to the
Collateral Trustee and deposited by the Collateral Trustee in the
Reserve Account.
(e) After any Downgraded Lender makes a Non-Pro Rata
Reserve Account Loan, (i) all Refunding Loans that such Lender
would otherwise have been required to make on or prior to its
Expiry Date (A) shall be made by withdrawing funds on deposit in
the Reserve Account with respect to such Downgraded Lender, (B)
will increase the Refunding Loans of such Downgraded Lender and
(C) will reduce the Non-Pro Rata Reserve Account Loan of such
Downgraded Lender by the amount so withdrawn, and (ii) any amount
which would have otherwise been applied to repay the principal
amount of any outstanding Refunding Loans of such Downgraded
Lender prior to such Downgraded Lender's Expiry Date or, if
earlier, the date the Commitments shall have been terminated
pursuant hereto, (A) will be deposited in the Reserve Account,
(B) will reduce the Refunding Loans of such Downgraded Lender and
(C) will increase the Non-Pro Rata Reserve Account Loan of such
Downgraded Lender by the amount so deposited.
(f) The Borrower shall instruct the Collateral Trustee
to withdraw the entire amount on deposit in the Reserve Account
with respect to any Downgraded Lender in accordance with Section
5.7 of the Collateral Trust Agreement and to pay such amount to
such Downgraded Lender as a repayment of the Non-Pro Rata Reserve
Account Loan of such Downgraded Lender on the Expiry Date of such
Downgraded Lender (unless such Downgraded Lender would be
required to make a Non-Pro Rata Revolving Loan pursuant to
Section 2.4, in which case, a portion of such amount equal to the
amount of such required Non-Pro Rata Revolving Loan shall be
deposited in the Non-Pro Rata Funding Account and be treated as a
Non-Pro Rata Revolving Loan hereunder) or, if earlier, the date
on which the Commitments are terminated pursuant hereto.
(g) If, on any Business Day, the amount on deposit in
the Reserve Account with respect to any Downgraded Lender exceeds
the greater of (i) the Reserve Account Pre-Funded Amount with
respect to such Downgraded Lender and (ii) the Required Reserve
Account Funded Amount with respect to such Downgraded Lender,
then the Borrower shall instruct the Collateral Trustee, in
accordance with Section 5.7 of the Collateral Trust Agreement, to
withdraw from the Reserve Account and pay to such Downgraded
Lender such excess as a repayment of the Non-Pro Rata Reserve
Account Loans of such Downgraded Lender.
(h) If the commercial paper or short term deposit
ratings of any Downgraded Lender are restored to or confirmed at
A-1 by S&P and P-1 by Moody's, then (i) the Borrower shall
instruct the Collateral Trustee to withdraw the entire amount on
deposit in the Reserve Account with respect to such Lender from
the Reserve Account in accordance with Section 5.7 of the
Collateral Trust Agreement and to pay such amount to such Lender
as repayment of its Non-Pro Rata Reserve Account Loans and (ii)
such Lender shall no longer be a Downgraded Lender hereunder.
(i) If, on any Business Day following the expiration
of the 60-day period (or any shorter period referred to in
Section 2.5(a)) occurring after any Lender became a Downgraded
Lender and before such Downgraded Lender has been replaced in
accordance with Section 2.23, such Downgraded Lender becomes an
Excluded Downgraded Lender, then the Borrower shall instruct the
Collateral Trustee to withdraw the entire amount on deposit in
the Reserve Account with respect to such Excluded Downgraded
Lender from the Reserve Account in accordance with Section 5.7 of
the Collateral Trust Agreement and to pay such amount to such
Excluded Downgraded Lender as a repayment of the Non-Pro Rata
Reserve Account Loan of such Excluded Downgraded Lender on such
Business Day (unless such Excluded Downgraded Lender would be
required to make a Non-Pro Rata Revolving Loan (assuming, for
purposes of this paragraph (i), that the Expiry Date of such
Excluded Downgraded Lender shall be deemed to occur on such
Business Day) pursuant to Section 2.4, in which case, a portion
of such amount equal to the amount of such required Non-Pro Rata
Revolving Loan shall (without any requirement for five Business
Days' advance notice as specified in Section 2.4) be deposited in
the Non-Pro Rata Funding Account and be treated as a Non-Pro Rata
Revolving Loan hereunder).
(j) The Borrower may at any time, and from time to
time, elect to make a non-pro rata reduction of the amount of the
Maximum Aggregate Commitment by making a pro rata reduction or
termination of the Commitments of the Downgraded Lenders which
are obligated to make Non-Pro Rata Reserve Account Loans. If the
Borrower shall make such election, the Borrower shall instruct
the Collateral Trustee to withdraw from the Reserve Account and
pay, and the Collateral Trustee shall withdraw from the Reserve
Account, in accordance with Section 5.7 of the Collateral Trust
Agreement, and pay, to each Downgraded Lender which has made Non-
Pro Rata Reserve Account Loans, as a repayment of the Non-Pro
Rata Reserve Account Loans of such Downgraded Lender, the amount
by which the amount on deposit in the Reserve Account with
respect to such Downgraded Lender exceeds the greater of (i) the
Reserve Account Pre-Funded Amount with respect to such Downgraded
Lender and (ii) the Required Reserve Account Funded Amount with
respect to such Downgraded Lender (in each case determined after
giving effect to such Commitment reduction), provided, however,
that in no event shall the amount remaining in the Reserve
Account with respect to such Downgraded Lender exceed the
Commitment of such Downgraded Lender as so reduced.
2.6 Procedures for Non-Pro Rata Revolving Loans and
Non-Pro Rata Reserve Account Loans. With respect to a Non-Pro
Rata Revolving Loan to be made by a Non-Extending Lender or a Non-
Pro Rata Reserve Account Loan to be made by a Downgraded Lender
pursuant to Section 2.4 or 2.5, the Borrower shall give the
Administrative Agent, (a) in the case of an ABR Loan, irrevocable
written or telephonic notice (confirmed in writing) not later
than 12:00 Noon (New York City time) on the requested Borrowing
Date or (b) in the case of a LIBOR Loan, irrevocable written
notice not later than 12:00 Noon (New York City time) three
Business Days prior to the requested Borrowing Date, in each case
specifying (i) the requested Borrowing Date, (ii) the name of the
Lender from which such Loan is being requested, (iii) the
principal amount of the Non-Pro Rata Revolving Loan or Non-Pro
Rata Reserve Account Loan to be made pursuant to Section 2.4 or
2.5, (iv) whether such Non-Pro Rata Revolving Loan or Non-Pro
Rata Reserve Account Loan is to be initially maintained as an ABR
Loan or a LIBOR Loan and (v) in the case of LIBOR Loans, the
length of the Interest Period applicable thereto. Upon receipt
of such notice from the Borrower, the Administrative Agent will
promptly notify such Non-Extending Lender or Downgraded Lender.
On the requested Borrowing Date, each such Non-Extending Lender
or Downgraded Lender will make the requested Non-Pro Rata
Revolving Loan or Non-Pro Rata Reserve Account Loan, as the case
may be, available to the Administrative Agent for the account of
the Borrower at the office of the Administrative Agent specified
in Section 10.2 in funds immediately available to the
Administrative Agent. The Administrative Agent will make each
Borrowing of Non-Pro Rata Revolving Loans and Non-Pro Rata
Reserve Account Loans available to the Borrower by directly
depositing in the Non-Pro Rata Funding Account and the Reserve
Account, respectively, the amounts so made available to the
Administrative Agent and in like funds as received by the
Administrative Agent.
2.7 Refunding Loans; Procedure for Refunding
Loan Borrowings. (a) If, on any Business Day that Commercial
Paper matures, the sum of (i) all amounts on deposit in the Non-
Pro Rata Funding Account and (ii) the aggregate net amount of
proceeds received by the Borrower from the issuance of additional
Commercial Paper is insufficient to repay in full the Face Amount
of all Commercial Paper maturing on such day (the excess of the
amount required to pay in full the Face Amount of all such
Commercial Paper maturing on such day over the net amount
obtained by the issuance of Commercial Paper on such day and the
amount of funds to be applied from the Non-Pro Rata Funding
Account on such day, a "Commercial Paper Deficit"), the Borrower
shall request (pursuant to Section 5.3(a)(iii)(B) of the
Collateral Trust Agreement) the Collateral Trustee to transfer on
such day funds to satisfy the Commercial Paper Deficit from the
Collateral Account to the Commercial Paper Account. The Facility
Percentage of the excess, if any, of the Commercial Paper Deficit
for any day over the aggregate amount to be applied to the
Commercial Paper Deficit from a transfer from the Collateral
Account on such day, is referred to herein as the "Remaining
Commercial Paper Deficit." If, on any Business Day that
Commercial Paper matures, a Remaining Commercial Paper Deficit
exists, each Lender shall, upon the request of the Borrower or
the Depositary, as the case may be, to the Administrative Agent
pursuant to paragraph (c) below, as attorney-in-fact for the
Borrower, and subject to the limitations imposed by Section 2.1,
make a Refunding Loan in an aggregate principal amount equal to
the product of such Lender's Commitment Percentage and the
Remaining Commercial Paper Deficit.
(b) Borrowings of Refunding Loans may be made on any
Business Day under the circumstances set forth in paragraph (a)
above; provided, that the Borrower or the Depositary, as attorney-
in-fact of the Borrower, shall give irrevocable written or
telephonic notice to the Administrative Agent (confirmed in
writing) prior to 12:30 P.M. (New York City time) on the
requested Borrowing Date, specifying (i) the requested Borrowing
Date, (ii) the amount to be borrowed and (iii) that the Borrowing
is to be of Refunding Loans. The Administrative Agent shall
promptly prior to 1:15 P.M. (New York City time) notify each
Lender of the receipt of such notice. Each Lender will make its
Commitment Percentage of each Borrowing of Refunding Loans
available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in
Section 10.2 in funds immediately available to the Administrative
Agent prior to 2:00 P.M. (New York City time) on the requested
Borrowing Date. Subject to satisfaction of the applicable
conditions set forth in Section 5.3, such Borrowing will then be
made available by the Administrative Agent to the Borrower by
directly depositing the amounts made available to the
Administrative Agent by the Lenders and in like funds as received
by the Administrative Agent in the Commercial Paper Account.
(c) If at any time (i) there are ten or more Lenders
with Commitments to make Loans hereunder and (ii) with respect to
any Borrowing of Refunding Loans, one or more Lenders fails to
fund its Commitment Percentage of the Refunding Loans to be
provided by the Lenders by 2:15 P.M., New York City time, on any
Business Day then, the Administrative Agent shall notify each of
the other Lenders which are committed to lend on such day not
later than 2:30 P.M., New York City time, on such Business Day
and each of such other Lenders shall, before 3:15 P.M., New York
City time, on such Business Day, make available to the
Administrative Agent at the office of the Administrative Agent
set forth in Section 10.2, in immediately available funds, a
Refunding Loan in a principal amount equal to the lesser of (A)
such unfunded amount multiplied by a fraction, the numerator of
which is the Commitment of such Lender and the denominator of
which is the aggregate Commitments with respect to the Lenders
committed to lend on such day (less the Commitments of the non-
performing Lenders) and (B) the Available Commitment of such
Lender. After the Administrative Agent's receipt of such funds,
the Administrative Agent will make such funds available to the
Borrower by 3:45 P.M., New York City time, by transferring such
funds to the Commercial Paper Account. If the Lender which shall
have so failed to fund shall subsequently pay such amount, the
Administrative Agent shall apply such amount to repay the
additional Refunding Loans made by the other Lenders pursuant to
such subsequent notice from the Administrative Agent.
(d) In the event that a Remaining Commercial Paper
Deficit exists on any Business Day that Commercial Paper matures,
the Lenders shall make Refunding Loans in accordance with
paragraphs (a), (b) and (c) above.
2.8 Additional Commitments. (a) Subject to Section
7.10, during the Revolving Period, the Borrower may, with the
consent of the Administrative Agent, add additional Persons which
would be Eligible Assignees as Lenders or cause an existing
Lender to increase its Commitment; provided, however, that (i)
the Commitment of a Lender may only be increased with the consent
of such Lender; (ii) no Person shall be added as a Lender unless
such Person delivers to the Rating Agencies and each Commercial
Paper Dealer such opinions of counsel as may be required by the
Rating Agencies as to the enforceability of this Agreement
against such Person and each Rating Agency confirms the ratings
of the outstanding Commercial Paper; and (iii) the aggregate
amount of increases effected during the Revolving Period pursuant
to this Section 2.8 and Section 2.8 of the 364-Day Liquidity
Agreement shall not exceed $200,000,000. Each new Lender and
each Lender increasing its Commitment shall become a party hereto
or increase its Commitment, as the case may be, by executing and
delivering to the Administrative Agent and the Borrower an
Addendum.
(b) To the extent that Non-Extending Lenders shall
have outstanding Non-Pro Rata Revolving Loans on the date an
additional Person becomes a Lender or an existing Lender
increases its Commitment pursuant to Section 2.8(a), such
additional Person or, to the extent of the amount of its increase
in Commitment, such existing Lender shall be deemed a replacement
bank, in whole or in part, pursuant to Section 2.23 for such Non-
Extending Lenders. If there is more than one such Non-Extending
Lender at such time and such additional Person or existing Lender
cannot replace such Non-Extending Lenders in whole, then the
Borrower shall pay the principal amount of such Non-Extending
Lenders' Loans pro rata according to the outstanding amounts
thereof.
(c) If all Non-Pro Rata Revolving Loans, if any, shall
have been repaid pursuant to Section 2.8(b), to the extent that
Downgraded Lenders shall have outstanding Non-Pro Rata Reserve
Account Loans on the date an additional Person becomes a Lender
or an existing Lender increases its Commitment pursuant to
Section 2.8(a), such additional Person or, to the extent of the
amount of its increase in Commitment, such existing Lender shall
be deemed a replacement bank, in whole or in part, pursuant to
Section 2.23 for such Downgraded Lender. If there is more than
one Downgraded Lender at such time and such additional Person or
existing Lender cannot replace such Downgraded Lenders in whole,
then it shall pay the principal amount of such Downgraded
Lenders' Loans pro rata according to the outstanding amounts
thereof.
2.9 Facility Fees. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a facility
fee (the "Facility Fee") for the period from and including the
date of this Agreement to but excluding the date the Commitment
of such Lender terminates, computed at the rate of 0.3250% per
annum on the average daily amount of the Commitment of such
Lender (whether or not utilized) (or, if any Loans of such Lender
remain outstanding after such Commitment is terminated, on the
amount of such Loans) during the period for which payment is made
and payable in arrears on (a) each Distribution Date for the
period from and including the immediately preceding Distribution
Date to but excluding such current Distribution Date and (b) the
date on which the Commitment of such Lender terminates (or, if
later, the date such Loans are paid in full) for the period from
and including the Distribution Date immediately preceding such
date to but excluding such date, provided, however, that in each
case the Facility Fee in respect of the Unutilized Available
Commitments shall be paid by the Borrower only to the extent (i)
amounts, if any, are available to make such payments pursuant to
Section 5.3(a)(ii)(D) or 5.3(b)(i), as the case may be, of the
Collateral Trust Agreement or (ii) amounts are paid by MRI to the
Borrower for the purpose of making such payments pursuant to
Section 2.4 of the Series 1998-1 Class A Security Purchase
Agreement.
2.10 Termination or Reduction of Commitments. The
Borrower shall have the right, upon not less than five Business
Days' notice to the Administrative Agent and not less than
fifteen days' notice to the Rating Agencies, to terminate or,
from time to time, reduce the amount of the Maximum Aggregate
Commitment; provided, however, that no such termination or
reduction shall be permitted if (a) after giving effect thereto
and to all transactions to occur on the effective date thereof,
the sum of (i) the Credits Outstanding and (ii) the Interest
Component with respect to outstanding Commercial Paper on such
date would exceed the sum of the Maximum Aggregate Commitment and
the 364-Day Maximum Aggregate Commitment or (b) such termination
or reduction would result in a downgrading, suspension or
withdrawal by any Rating Agency of the ratings of the outstanding
Commercial Paper Notes referred to in Section 5.2(c). Any such
reduction shall be in an amount equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and shall reduce
permanently the Maximum Aggregate Commitment then in effect and,
subject to Section 2.5(j), any such termination or reduction
shall be pro rata among the Lenders and shall be effective on the
date specified in the Borrower's notice.
If for any reason the full amount of the Facility Fee
payable on any Distribution Date in respect of the Unutilized
Available Commitments shall not be paid in full within five
Business Days after such Distribution Date (whether or not funds
are available to make such payment as described in clauses (i)
and (ii) of Section 2.9), then the Majority Lenders may, by
written notice to the Administrative Agent and the Borrower,
permanently reduce the Maximum Aggregate Commitment, effective on
the date specified in such notice, by an amount equal to the
Unutilized Available Commitments as of such effective date.
If at any time the principal amount of the MRI Note
shall be less than the MRI Note Required Amount (as each such
term is defined in the Series 1998-1 Supplement), then
automatically the Maximum Aggregate Commitment shall immediately
be permanently reduced by an amount equal to the Unutilized
Available Commitments at such time.
2.11 Conversions and Continuations. (a) The Borrower
may elect from time to time to convert Revolving Loans, Non-Pro
Rata Revolving Loans and Non-Pro Rata Reserve Account Loans
bearing interest at the LIBOR Rate to ABR Loans, by giving the
Administrative Agent at least one Business Day's prior
irrevocable notice of such election; provided, however, that any
such conversion of LIBOR Loans may only be made on the last day
of an Interest Period with respect thereto. The Borrower may
elect from time to time to convert Revolving Loans or Refunding
Loans bearing interest at the ABR to Revolving Loans bearing
interest at the LIBOR Rate or convert Non-Pro Rata Revolving
Loans or Non-Pro Rata Reserve Account Loans bearing interest at
the ABR to LIBOR Loans, in each case by giving the Administrative
Agent at least three Business Days' prior irrevocable notice of
such election, provided, however, that any such conversion of ABR
Loans may be made only on a Business Day. Upon receipt of any
such notice of conversion the Administrative Agent shall promptly
notify each Lender thereof. All or any part of outstanding LIBOR
Loans or ABR Loans may be converted as provided herein, provided,
however, that (i) no Loans bearing interest at the ABR may be
converted into LIBOR Loans when any Default or Event of Default
has occurred and is continuing and the Majority Lenders have
determined in their sole discretion not to permit such a
conversion, (ii) after giving effect to such conversion, each
LIBOR Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (iii) no Loans bearing interest
at the ABR may be converted into LIBOR Loans after the date that
is one month prior to the Scheduled Termination Date.
(b) Any LIBOR Loans may be continued as such upon the
expiration of the then Interest Period with respect thereto by
the Borrower giving notice to the Administrative Agent, in
accordance with the applicable provisions of the definition of
"Interest Period" set forth in Section 1.1; provided, however,
that no LIBOR Loans may be continued at such rate (i) when any
Default or Event of Default has occurred and is continuing and
the Majority Lenders have determined in their sole discretion not
to permit such a continuation or (ii) after the date that is one
month prior to the Scheduled Termination Date; provided, further,
that if the Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not
permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR Loans on the last day of such then
expiring Interest Period.
2.12 Prepayments. (a) The Borrower may, at its
option, on any Business Day, prepay the Loans, in whole or in
part, without premium or penalty; provided, that, in accordance
with Section 2.19, the Borrower shall reimburse each Lender for
any loss or expense incurred as a result of any prepayment of a
LIBOR Loan on any day other than the last day of an Interest
Period. The Borrower shall give the Administrative Agent
irrevocable written notice of its intention to prepay any Loan
not later than 10:00 A.M. (New York City time) on the date of
such prepayment, specifying the date and amount of prepayment and
whether the prepayment is of Revolving Loans or Refunding Loans,
or a combination thereof, and, if of a combination thereof, the
amount allocable to each. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof.
If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together
with accrued interest to such date on the amount prepaid.
Partial prepayments shall be in an aggregate principal amount of
$5,000,000 or whole multiples of $1,000,000 in excess thereof.
(b) In the event that the Credits Outstanding shall at
any time exceed the then applicable Borrowing Base, then the
Borrower, without notice or demand, shall immediately reduce the
Credits Outstanding by an aggregate amount equal to such excess
by either setting aside funds in the Principal Subaccount to pay
maturing Commercial Paper or prepaying the Loans and the 364-Day
Liquidity Loans together with interest earned to such date on the
amount prepaid; provided, that any such prepayment of the Loans
shall be applied, first, to any outstanding Non-Pro Rata
Revolving Loans and, second, to any outstanding ABR Loans.
2.13 Interest Rates and Payment Dates. (a) Each
LIBOR Loan shall bear interest for each day during each Interest
Period with respect thereto, from and including the first day
thereof to but excluding the last day thereof, at a rate per
annum equal to the LIBOR Rate determined for such day plus the
Applicable Margin. Interest on each LIBOR Loan shall be payable
in arrears on the last day of each Interest Period applicable to
such Loan, on the date of any prepayment or conversion (on the
amount prepaid or converted) of any such Loan and at maturity;
provided, however, that interest accruing pursuant to paragraph
(c) of this Section shall be payable on demand .
(b) (i) Each ABR Loan that is a Revolving Loan, a Non-
Pro Rata Revolving Loan or a Non-Pro Rata Reserve Account Loan
shall bear interest at a rate per annum equal to the ABR, from
and including the date such Loan (or portion thereof) is made or
converted into an ABR Rate Loan to but excluding the date of
payment or conversion into a LIBOR Loan and (ii) each ABR Loan
that is a Refunding Loan shall bear interest at a rate per annum
equal to the ABR plus 1.0%, from and including the date such Loan
(or portion thereof) is made to but excluding the date of payment
or conversion into a Revolving Loan. Interest on each ABR Loan
shall be payable monthly in arrears on each Distribution Date and
at maturity (each, an "ABR Interest Payment Date") for the period
from and including the immediately preceding ABR Interest Payment
Date to but excluding such later ABR Interest Payment Date;
provided, however, that interest accruing pursuant to paragraph
(c) of this Section 2.13 shall be payable on demand.
(c) If an Event of Default has occurred and is
continuing, then (i) the principal amount of any Loan and (ii) to
the extent permitted by applicable law, any interest payable
thereon not paid on the date such interest became due (in each
case with respect to clauses (i) and (ii) above, whether at the
stated maturity, by acceleration or otherwise), shall bear
interest at a rate per annum which is (x) in the case of
principal, the rate that would be otherwise applicable thereto
pursuant to the foregoing provisions of this Section plus 1% from
the date of the occurrence of such Event of Default to but
excluding the earlier of the date on which such amount is paid in
full and the date on which such Event of Default is no longer
continuing or (y) in the case of overdue interest, the rate
otherwise applicable to the Loan to which such interest relates
plus 1% from the date of such non-payment to but excluding the
date on which such amount is paid in full (as well after as
before judgment).
2.14 Computation of Facility Fees and Interest.
Facility Fees, interest on LIBOR Loans and interest on ABR Loans
the interest rate of which is calculated by reference to the
Federal Funds Effective Rate or the Base CD Rate shall be
calculated on the basis of the actual days elapsed over a 360-day
year. Interest on ABR Loans the interest rate of which is
calculated by reference to the Prime Rate shall be calculated on
the basis of the actual days elapsed over a 365- (or 366-, as the
case may be) day year. The Administrative Agent shall promptly
notify the Borrower and the Lenders of each determination of a
LIBOR Rate. Any change in the interest rate on any Loan
resulting from a change in the ABR or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business
on the day on which such change in the ABR is announced or such
change in the Eurocurrency Reserve Requirements becomes
effective, as the case may be. The Administrative Agent shall
promptly notify the Borrower and the Lenders of the effective
date and the amount of each such change in the interest rate.
Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the
absence of manifest error. The Administrative Agent shall, at
the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.13(a).
2.15 Pro Rata Treatment and Payments. (a) Except as
otherwise provided in Sections 2.4, 2.5 and 2.22 with respect to
Non-Extending Lenders and Downgraded Lenders and Section 2.23
with respect to the replacement of Lenders, each Borrowing by the
Borrower from the Lenders hereunder, each payment (including each
prepayment) by the Borrower on account of the principal of and
interest on the Loans and on account of any Facility Fee
hereunder and any reduction of the Commitments of the Lenders
hereunder pursuant to a reduction of the Maximum Aggregate
Commitment shall be made pro rata according to the Commitment
Percentages of the Lenders. All payments (including prepayments)
to be made by the Borrower on account of principal, interest,
fees or otherwise shall be made without set-off or counterclaim
and shall be made prior to 12:00 Noon (New York City time) on the
due date thereof to the Administrative Agent, for the account of
the Lenders, at the Administrative Agent's office specified in
Section 10.2. All payments shall be made in Dollars and in
immediately available funds. The Administrative Agent shall
apply such funds in the manner set forth in Section 5 of the
Collateral Trust Agreement. If any payment hereunder (other than
payments on LIBOR Loans) becomes due and payable on a day other
than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a LIBOR Loan becomes
due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day
unless the result of such extension would be to extend such
payment into another calendar month, in which event such payment
shall be made on the immediately preceding Business Day. In the
case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable during
such extension at the rate applicable at the time such principal
became due and payable.
(b) Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a Borrowing Date that
such Lender will not make the amount which would constitute its
share of the Borrowing on such Borrowing Date available to the
Administrative Agent, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative
Agent on such Borrowing Date, and the Administrative Agent may
(but it shall not be required to), in reliance upon such
assumption, make available to the Borrower or the Depositary a
corresponding amount. If such amount is made available to the
Administrative Agent on a date after such Borrowing Date, such
Lender shall pay to the Administrative Agent on demand an amount
equal to the product of (i) the daily average Federal Funds
Effective Rate during such period, times (ii) such Lender's share
of such Borrowing, times (iii) a fraction the numerator of which
is the number of days that elapse from and including such
Borrowing Date to the date on which such Lender's share of such
Borrowing shall have become immediately available to the
Administrative Agent and the denominator of which is 360. If
such Lender's share of such Borrowing is not in fact made
available to the Administrative Agent by such Lender within three
Business Days of such Borrowing Date, then, notwithstanding
anything to the contrary in this Agreement, the Administrative
Agent shall be entitled to recover such amount with interest
thereon as described above by applying amounts of any kind
otherwise from time to time payable by the Borrower to such
Lender hereunder ("Other Amounts") to satisfy such Lender's
obligations pursuant to this paragraph (b) until such obligations
have been paid in full. Such application shall be deemed to
constitute payment in full of such Other Amounts and the Borrower
shall have no further obligation to pay such Other Amounts to
such Lender. A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts owing under this
Section 2.15(b) shall be conclusive, in the absence of manifest
error but subject to rebuttal. Nothing in this Section 2.15(b)
shall prejudice any claims otherwise available to the Borrower
against any Lender as a result of such Lender's failure to make
its share of any Borrowing available to the Administrative Agent
in accordance with this Agreement.
(c) Notwithstanding anything to the contrary in this
Agreement, (i) no borrowing of Revolving Loans or Refunding Loans
may be made on any date unless, on such date, a pro rata
borrowing (determined on the basis of the respective amounts of
the Aggregate Available Commitments and the 364-Day Aggregate
Available Commitments) of "Revolving Loans" or "Refunding Loans",
as the case may be, is made under (and as defined in) the 364-Day
Liquidity Agreement and (ii) no optional reduction of Commitments
or prepayment of Loans may be made on any date unless, on such
date, a pro rata reduction or prepayment (determined on the basis
of the respective amounts of the Aggregate Available Commitments
and the 364-Day Aggregate Available Commitments) of 364-Day
Liquidity Commitments or 364-Day Liquidity Loans, as the case may
be, is made.
2.16 Inability to Determine Interest Rate. In the
event that, with respect to a proposed or any outstanding LIBOR
Loan, prior to the first day of any Interest Period (including,
without limitation, the initial Interest Period):
(a) the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest
error) that, by reason of circumstances affecting the London
interbank market generally, adequate and reasonable means do
not exist for ascertaining the LIBOR Rate for such Interest
Period; or
(b) the Administrative Agent shall have received
notice from the Majority Lenders that the LIBOR Rate
determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest
Period;
then the Administrative Agent shall give telex, telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon
as practicable thereafter. If such notice is given (x) any LIBOR
Loans requested to be made on the first day of such Interest
Period shall be made as ABR Loans, (y) any Loans that were to
have been converted to or continued as LIBOR Loans on the first
day of such Interest Period shall be converted to or continued as
ABR Loans and (z) any outstanding LIBOR Loans shall be converted,
on the first day of such Interest Period, to ABR Loans. Until
such notice has been withdrawn by the Administrative Agent, no
further LIBOR Loans shall be made or continued as such, nor shall
the Borrower have the right to convert ABR Loans to LIBOR Loans.
The Administrative Agent agrees to give written notice to the
Borrower promptly after it determines that the conditions giving
rise to any notice under paragraph (a) of this Section 2.16 shall
no longer be in effect.
2.17 Reserve Requirements; Change in Circumstances.
(a) (_) Notwithstanding any other provision herein, if after the
Closing Date, any change in applicable law or regulation or in
the interpretation of administration thereof by any Governmental
Authority charged with the interpretation or administration
thereof (whether or not having the force of law) shall change the
basis of taxation of payments to any Lender of the principal of
or interest on any LIBOR Loan made by such Lender or any fees or
other amounts payable hereunder (other than changes in respect of
taxes imposed on the overall net income of such Lender by the
jurisdiction in which such Lender has its principal office or by
any political subdivision or taxing authority therein), or shall
impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the
account of or credit extended by such Lender that is not
otherwise reflected in the determination of the LIBOR Rate
hereunder, or shall impose on such Lender or the London interbank
market any other condition affecting this Agreement or any LIBOR
Loan made by such Lender, and the result of any of the foregoing
shall be to increase the cost to such Lender of making or
maintaining any LIBOR Loan or to reduce the amount of any sum
received or receivable by such Lender hereunder (whether of
principal, interest or otherwise) in respect thereof by an amount
deemed by such Lender to be material, then the Borrower will pay
to such Lender upon demand such additional amount or amounts as
will compensate such Lender for such additional costs incurred or
reduction suffered. Any Lender claiming any additional amounts
payable pursuant to this Section 2.17(a) shall use reasonable
efforts (consistent with legal and regulatory restrictions) to
file any certificate or document requested by the Borrower or to
change the jurisdiction of its applicable lending office if the
making of such a filing or change would avoid the need for or
reduce the amount of any additional amount which may thereafter
accrue and would not, in the sole determination of such Lender,
be otherwise disadvantageous to such Lender.
(_) (b) If any Lender shall have determined that the
adoption after the Closing Date of any other law, rule,
regulation or guideline regarding capital adequacy, or any change
in any of the foregoing or in the interpretation or
administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender (or any lending office of such Lender) or any Lender's
holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on such Lender's
capital or on the capital of such Lender's holding company, if
any, as a consequence of this Agreement or the Loans made by such
Lender pursuant hereto to a level below that which such Lender or
such Lender's holding company could have achieved but for such
adoption, change or compliance (taking into consideration such
Lender's policies and the policies of such Lender's holding
company with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time the Borrower
shall pay to such Lender such additional amount or amounts as
will compensate such Lender or such Lender's holding company for
any such reduction suffered after the date hereof.
(_) (c) A certificate of a Lender setting forth such
amount or amounts, along with the Lender's method of computation
of such amounts, as shall be necessary to compensate such Lender
(or participating banks or other entities pursuant to Section
10.6) as specified in paragraph (a) or (b) above, as the case may
be, shall be delivered to the Borrower and the Administrator and
shall be conclusive absent manifest error. The Borrower shall
pay each Lender the amount shown as due on any such certificate
delivered by it no later than the Distribution Date immediately
succeeding the date of delivery of such certificate.
(_) (d) Failure on the part of any Lender to demand
compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital with
respect to any period shall not constitute a waiver of such
Lender's right to demand compensation with respect to such period
or any other period; provided, however, that no Lender shall be
entitled to compensation for any such increased costs or
reductions unless it shall have submitted a certificate under
paragraph (c) above with respect thereto not more than 90 days
after the date that such Lender knows that such increased costs
have been incurred or such reduction suffered. Notwithstanding
any other provision of this Section 2.17, no Lender shall demand
compensation for any increased cost or reduction referred to
above if it shall not at the time be the general policy of such
Lender to demand such compensation in similar circumstances under
comparable provisions of other credit agreements, and each Lender
shall in good faith endeavor to allocate increased costs or
reductions fairly among all of its affected commitments and
credit extensions (whether or not it seeks compensation from all
affected borrowers). The protection of this Section 2.17 shall
be available to each Lender regardless of any possible contention
of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition which shall
have occurred or been imposed.
(e) The amounts owing by the Borrower pursuant to this
Section 2.17 shall be payable solely from amounts, if any,
available therefor pursuant to Section 5.3(a)(ii)(E) or
5.3(b)(v), as the case may be, of the Collateral Trust Agreement.
2.18 Change in Legality. (a) Notwithstanding any
other provision herein contained, if any change in any law or
regulation or in the interpretation thereof by any Governmental
Authority charged with the administration or interpretation
thereof shall make it unlawful for any Lender to make or maintain
any LIBOR Loan or to give effect to its obligations as
contemplated hereby with respect to any LIBOR Loan, then, by
written notice to the Borrower and to the Administrative Agent,
such Lender may:
(i) declare that LIBOR Loans will not thereafter be
made by such Lender hereunder, whereupon any request by the
Borrower for a LIBOR Loan shall, as to such Lender only, be
deemed a request for an ABR Loan unless such declaration
shall be subsequently withdrawn; and
(ii) require that all outstanding LIBOR Loans made by
it be converted to ABR Loans, in which event all such LIBOR
Loans shall be automatically converted to ABR Loans as of
the effective date of such notice as provided in paragraph
(b) below.
In the event any Lender shall exercise its rights under (i) or
(ii) above, all payments and prepayments of principal which would
otherwise have been applied to repay the LIBOR Loans that would
have been made by such Lender or the converted LIBOR Loans of
such Lender shall instead be applied to repay the ABR Loans made
by such Lender in lieu of, or resulting from the conversion of,
such LIBOR Loans.
(b) For purposes of this Section 2.18, a notice to the
Borrower by any Lender shall be effective as to each LIBOR Loan,
if lawful, on the last day of the Interest Period currently
applicable to such LIBOR Loan; in all other cases such notice
shall be effective on the date of receipt by the Borrower. The
Administrative Agent agrees to give written notice to the
Borrower promptly after it determines that the conditions giving
rise to any notice under paragraph (a) above shall no longer be
in effect.
(c) Each Lender agrees to use reasonable efforts
(consistent with legal and regulatory restrictions) to file any
certificate or document requested by the Borrower or to change
the jurisdiction of its applicable lending office if the making
of such filing or change would enable such Lender to legally make
or maintain any LIBOR Loan referred to in paragraph (a) of this
Section 2.18; provided, however, that (i) such Lender shall not
be required to make such filing or change if, in the sole
determination of such Lender, such action would be otherwise
disadvantageous to such Lender and (ii) until such time as such
Lender shall have determined that it can make or maintain such
LIBOR Loan, the Lender may take the actions referred to in
Section 2.18(a).
2.19 Indemnity. The Borrower shall indemnify each
Lender against any loss or reasonable expense which such Lender
may sustain or incur as a consequence of (a) any failure by the
Borrower to fulfill on the date of any Borrowing hereunder the
applicable conditions set forth in Section 5, (b) any failure by
the Borrower to borrow or to convert or continue any Loan
hereunder after irrevocable notice of such Borrowing, conversion
or continuation has been given pursuant to Section 2.3, 2.6, 2.7
or 2.11, (c) any payment, prepayment or conversion of a LIBOR
Loan required by any other provision of this Agreement or
otherwise made or deemed made on a date other than the last day
of the Interest Period applicable thereto or (d) the occurrence
of any Event of Default, including, in each such case, any loss
or reasonable expense sustained or incurred or to be sustained or
incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof as a
LIBOR Loan. Such loss or reasonable expense shall include an
amount equal to the excess, if any, as reasonably determined by
such Lender, of (i) its cost of obtaining the funds for the Loan
being paid, prepaid, converted, continued or not borrowed (based
on the LIBOR Rate) for the period from the date of such payment,
prepayment or failure to borrow to the last day of the Interest
Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan which would have commenced on the
date of such failure) over (ii) the amount of interest (as
reasonably determined by such Lender) that would be realized by
such Lender in reemploying the funds so paid, prepaid or not
borrowed for such period or Interest Period, as the case may be.
A certificate of any Lender setting forth any amount or amounts
which such Lender is entitled to receive pursuant to this Section
2.19 and the method of calculation employed by such Lender shall
be delivered to the Borrower and the Administrator and shall be
presumed conclusive absent manifest error but subject to rebuttal
by the Borrower. The amounts owing by the Borrower pursuant to
this Section 2.19 shall be payable solely from amounts, if any,
available therefor pursuant to Section 5.3(a)(ii)(E) or
5.3(b)(iv), as the case may be, of the Collateral Trust
Agreement.
2.20 Taxes. (a) Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 2.15, 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 (excluding
taxes imposed on or measured by the net income or earnings of the
Administrative Agent or any Lender (or Transferee) and franchise
taxes imposed on the Administrative Agent or any Lender (or
Transferee) as a result of a present or former connection between
the Administrative Agent or such Lender (or Transferee) and the
jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from the
Administrative Agent or such Lender (or Transferee) having
executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement)) (all such
nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder to the
Lenders (or any Transferee) or the Administrative Agent, (i) the
sum payable shall be increased by the amount necessary so that
after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.20)
such Lender (or Transferee) or the Administrative Agent (as the
case may be) shall receive an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law;
provided, however, that no Transferee of any Lender shall be
entitled to receive any greater payment under this paragraph (a)
than such Lender would have been entitled to receive with respect
to the rights assigned, participated or otherwise transferred
unless such assignment, participation or transfer shall have been
made at a time when the circumstances giving rise to such greater
payment did not exist.
(b) In addition, the Borrower agrees to pay, indemnify
and hold the Administrative Agent and each Lender harmless from
any present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery
or registration of, or otherwise with respect to, this Agreement
or any other Program Document (hereinafter referred to as "Other
Taxes").
(c) The Borrower will indemnify each Lender (or
Transferee) and the Administrative Agent for the full amount of
Taxes and Other Taxes paid by such Lender (or Transferee) or the
Administrative Agent, as the case may be, and any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted by the relevant taxing
authority or other Governmental Authority. Such indemnification
shall be made within 30 days after the date any Lender (or
Transferee) or the Administrative Agent, as the case may be,
makes written demand therefor. If a Lender (or Transferee) or
the Administrative Agent shall become aware that it is entitled
to receive a refund in respect of Taxes or Other Taxes as to
which it has been indemnified by the Borrower pursuant to this
Section 2.20, it shall promptly notify the Borrower of the
availability of such refund and shall, within 30 days after
receipt of a request by the Borrower, apply for such refund at
the Borrower's expense. If any Lender (or Transferee) or the
Administrative Agent receives a refund in respect of any Taxes or
Other Taxes as to which it has been indemnified by the Borrower
pursuant to this Section 2.20, it shall promptly notify the
Borrower of such refund and shall, within 30 days after receipt
of a request by the Borrower (or promptly upon receipt, if the
Borrower has requested application for such refund pursuant
hereto), repay such refund to the Borrower (to the extent of
amounts that have been paid by the Borrower, under this Section
2.20 with respect to such refund), net of all out-of-pocket
expenses of such Lender and without interest; provided, however,
that the Borrower, upon the request of such Lender (or
Transferee), or the Administrative Agent, agrees to return such
refund (plus penalties, interest or other charges) to such Lender
(or Transferee) or the Administrative Agent in the event such
Lender (or Transferee) or the Administrative Agent is required to
repay such refund. Nothing contained in this paragraph (c) shall
require any Lender (or Transferee) or the Administrative Agent to
make available any of its tax returns (or any other information
relating to its taxes which it deems to be confidential).
(d) Within 30 days after the date of any payment of
Taxes or Other Taxes withheld by the Borrower in respect of any
payment to any Lender (or Transferee) or the Administrative
Agent, the Borrower will furnish to the Administrative Agent, at
its address referred to in Section 10.2, the original or a
certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other
agreement contained herein, the agreements and obligations
contained in this Section 2.20 shall survive the payment in full
of the principal of and interest on all Loans made hereunder.
(f) Upon the written request of the Borrower, each
Lender (or Transferee) that is organized under the laws of a
jurisdiction outside the United States shall, if legally able to
do so, prior to the immediately following due date of any payment
by the Borrower hereunder, deliver to the Borrower such
certificates, documents or other evidence, as required by the
Code or Treasury Regulations issued pursuant thereto, including
Internal Revenue Service Form 1001 or Form 4224 and any other
certificate or statement of exemption required by Treasury
Regulation Section 1.1441-1, 1.1441-4 or 1.1441-6(c) or any
subsequent version thereof or successors thereto, properly
completed and duly executed by such Lender (or Transferee)
establishing that such payment is (i) not subject to United
States Federal withholding tax under the Code because such
payment is effectively connected with the conduct by such Lender
(or Transferee) of a trade or business in the United States or
(ii) totally exempt from United States Federal withholding tax,
or subject to a reduced rate of such tax under a provision of an
applicable tax treaty. Unless the Borrower and the
Administrative Agent have received forms or other documents
satisfactory to them indicating that such payments hereunder are
not subject to United States Federal withholding tax or are
subject to such tax at a rate reduced by an applicable tax
treaty, the Borrower or the Administrative Agent shall withhold
taxes from such payments at the applicable statutory rate.
(g) The Borrower shall not be required to pay any
additional amounts to any Lender (or Transferee) in respect of
United States Federal withholding tax pursuant to paragraph (a)
above if the obligation to pay such additional amounts would not
have arisen but for a failure by such Lender (or Transferee) to
comply with the provisions of paragraph (f) above; provided,
however, that the Borrower shall be required to pay those amounts
to any Lender (or Transferee) it was required to pay hereunder
prior to the failure of such Lender (or Transferee) to comply
with the provisions of paragraph (f).
(h) Any Lender (or Transferee) claiming any additional
amounts payable pursuant to this Section 2.20 shall use
reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested by
the Borrower or to change the jurisdiction of its applicable
lending office if the making of such a filing or change would
avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to
such Lender (or Transferee).
(i) The amounts owing by the Borrower pursuant to this
Section 2.20 shall be payable solely from amounts, if any,
available therefor pursuant to Section 5.3(a)(ii)(E) or
5.3(b)(v), as the case may be, of the Collateral Trust Agreement.
2.21 Proceeds; Application of Funds. (a) The proceeds
of Commercial Paper shall be used by the Borrower only to (i)
purchase the Series 1998-1 Class A Security or increase the
Series 1998-1 Class A Invested Amount pursuant to the Series 1998-
1 Supplement, (ii) pay the Face Amount of matured Commercial
Paper, (iii) pay Loans, including interest thereon, (iv)
reimburse the Administrative Agent for amounts advanced by the
Administrative Agent pursuant to Section 2.15(b), (v) pay 364-Day
Liquidity Loans, including interest thereon and (vi) reimburse
the Administrative Agent for amounts advanced by the
Administrative Agent pursuant to Section 2.15(b) of the 364-Day
Liquidity Agreement.
(b) The proceeds of Revolving Loans shall be used by
the Borrower only to (i) purchase the Series 1998-1 Class A
Security or increase the Series 1998-1 Class A Invested Amount
pursuant to the Series 1998-1 Supplement, (ii) pay the Face
Amount of matured Commercial Paper, (iii) pay interest on Loans
and (iv) reimburse the Administrative Agent for amounts advanced
by the Administrative Agent pursuant to Section 2.15(b).
(c) The proceeds of Non-Pro Rata Revolving Loans shall
be used by the Borrower solely to pay the Face Amount of matured
Commercial Paper.
(d) The proceeds of Refunding Loans shall be used by
the Borrower only to pay the Face Amount of matured Commercial
Paper.
(e) The Borrower and the Administrative Agent agree
that whenever any provision of any Program Document (including,
without limitation, the provisions of Section 5.3 of the
Collateral Trust Agreement) provides for the application of funds
in reduction of the Loans such funds shall be applied, first, to
any outstanding Non-Pro Rata Revolving Loans, second, to any
outstanding Loans bearing interest at the rate referred to in
Section 2.13(c), third, to any outstanding ABR Loans, fourth, to
any LIBOR Loans having an Interest Period ending on the date of
such payment and, fifth, as a prepayment of other LIBOR Loans
outstanding, the allocation among such Loans to be as the
Borrower shall determine.
2.22 Extensions of Expiration Date and Expiry Dates.
(a) Subject to paragraph (b) of this Section and other
provisions of this Agreement permitting earlier termination, the
Commitments shall terminate on the Expiration Date.
(b) If the Borrower desires to extend the Expiration
Date, then the Borrower shall notify the Administrative Agent at
least 180 days prior to the Expiration Date of its desire to
extend the Expiration Date for a period of at least one year,
whereupon the Administrative Agent shall notify each Lender of
the Borrower's desire to so extend the Expiration Date. Each
Lender shall notify the Administrative Agent whether it agrees to
such extension within 60 days after receipt of such request;
provided, however, that failure by a Lender to respond to such
request shall not be construed as a consent by such Lender to
such extension. The decision to extend or not extend shall be
made by each Lender in its sole discretion. Each consent by a
Lender to an extension shall be in a writing signed by such
Lender. The Administrative Agent shall periodically notify the
Borrower in writing of the decision of each Lender, which notice
shall separately set forth the name and the Commitment of each
Lender which shall have decided not to extend its Expiry Date to
the requested Expiration Date. If the Majority Lenders agree to
an extension, the Expiration Date shall be extended, and the
Expiry Date of each Lender which agrees to extend its Expiry Date
shall be extended for the period set forth in the foregoing
notice. No Downgraded Lender shall be permitted to extend its
Expiry Date. In the event that any Lender desires to extend its
Expiry Date for a commitment amount that is less than the amount
of its Commitment prior to the Borrower's request for an
extension of the Expiration Date, the Borrower, in its sole
discretion, may accept such extension; provided, however, that
such Lender (x) shall be deemed to be a Non-Extending Lender for
purposes of Section 2.23 and (y) for purposes of Section 2.4
shall be deemed to be both (i) a Non-Extending Lender with a
Commitment equal to the portion of its Commitment that will not
be available after the extension of its Expiry Date and (ii) an
Extending Lender with a Commitment equal to the portion of its
Commitment that will be available after the extension of its
Expiry Date. The Maximum Aggregate Commitment shall be reduced
by the Commitment of each Non-Extending Lender on the Expiry Date
of such Non-Extending Lender (except to the extent that such Non-
Extending Lender has been replaced on such Expiry Date pursuant
to Section 2.23). The Borrower shall provide the Rating Agencies
notice of the extension of the Expiration Date.
2.23 Replacement of a Lender. In the event that (i) a
Lender becomes a Downgraded Lender, (ii) a Lender becomes a Non-
Extending Lender, (iii) a Lender becomes a Non-Consenting Lender,
(iv) a Lender requests compensation pursuant to Section 2.17 or
2.20, (v) a Lender's obligation to make LIBOR Loans has been
suspended pursuant to Section 2.18 or (vi) a Lender shall have
defaulted in its obligation to make any Loan required to be made
by it hereunder, the Borrower shall have the right to either (a)
subject to compliance with Section 10.6(c) (including the
requirement of at least 10 days' advance notice to the Rating
Agencies), replace such Lender, in whole or in part, with a
Person which would be an Eligible Assignee or (b) except in the
case of clause (iii) above, terminate such Lender's Commitment,
in whole, in each case by giving three Business Days prior
written notice to the Administrative Agent and such Lender,
specifying the effective date of such replacement or termination;
provided, however, that, (x) in the case of clause (iii) above,
all Non-Consenting Lenders with respect to any Specified Consent
Request must be concurrently replaced in accordance with this
Section 2.23 with replacement banks or financial institutions
having aggregate Commitments equal to the aggregate Commitments
of all such Non-Consenting Lenders, (y) no such replacement or
termination shall be deemed to be a waiver of any rights which
the Borrower, the Administrative Agent or any other Lender shall
have against the replaced or terminated Lender and (z) no
Commitment shall be terminated pursuant to this Section 2.23 to
the extent that, after giving effect to such termination, the sum
of the Commitments of the remaining Lenders and the 364-Day
Liquidity Commitments would be less than the sum of (a) the
Credits Outstanding on such day and (b) the Interest Component of
all Commercial Paper Notes outstanding on such day. In the event
of the replacement of a Lender, such Lender agrees to assign,
without recourse, its rights and obligations hereunder (or a
portion thereof, as the case may be) to a replacement bank
selected by the Borrower upon payment by the replacement bank to
such Lender of the principal amount of such Lender's outstanding
Loans and any accrued and unpaid interest thereon, accrued
Facility Fee and any other amounts owed to such Lender (or, in
each case, the pro rata portion thereof being acquired by the
replacement bank) and to execute and deliver an Assignment and
Acceptance evidencing such assignment. In the event of the
termination of a Lender, the Borrower shall, on the effective
date thereof, pay to such Lender the principal amount of such
Lender's outstanding Loans and any accrued and unpaid interest
thereon, accrued Facility Fees and any other amounts owed to such
Lender. Prior to adding any replacement bank or financial
institution as a Lender under this Section 2.23, the replacement
bank shall have (i) paid to the Administrative Agent an
administrative fee for processing such replacement in the amount
of $3,000 and (ii) delivered to the Rating Agencies and each
Commercial Paper Dealer such opinions of counsel as may be
required by the Rating Agencies as to the enforceability of this
Agreement against such bank.
SECTION 3. ISSUANCE OF COMMERCIAL PAPER
The Borrower shall not issue or deliver any Commercial
Paper Notes except in accordance with the following provisions:
(a) Each Commercial Paper Note shall (i) be in the
form established in the Depositary Agreement and be
completed in accordance with this Agreement and the
Depositary Agreement, (ii) be dated the date of issuance
thereof, (iii) be payable to the order of a named payee or
bearer, (iv) have a maturity date that is a Business Day and
that is not later than the fifth Business Day prior to the
Expiration Date in effect on the date of issuance thereof,
(v) have a maturity date of no more than 180 days after the
date of issuance thereof and (vi) be in a face amount of
$100,000 or an integral multiple of $1,000 in excess
thereof.
(b) Such issuance and delivery of Commercial Paper
Notes shall be as provided in, and in accordance with, the
Depositary Agreement.
(c) Prior to the time of such issuance or delivery,
neither the Borrower nor the Depositary shall have received
notice from the Administrative Agent not to issue or deliver
Commercial Paper Notes because (i) an Event of Default has
occurred and is continuing, (ii) the applicable conditions
precedent specified in Section 5.2 shall have not been
satisfied, (iii) the Commitments shall have been terminated
in whole for any reason in accordance herewith or (iv) the
issuance of Commercial Paper Notes is prohibited by the
provisions of paragraph (e) below, which notice shall
specify one or more of the events described in clauses (i)
through (iv) above as being the reason(s) to cease issuing
and delivering Commercial Paper Notes.
(d) On or prior to the date of such issuance or
delivery, the Borrower shall have no actual knowledge that
one or more of the events described in clauses (i) through
(iv) in paragraph (c) above have occurred, unless the
Borrower shall have notified the Administrative Agent of the
occurrence of any such event and the Majority Lenders shall
have given their consent in writing to the Depositary to
continue issuing and delivering Commercial Paper Notes.
(e) Prior to the date of the initial issuance of
Commercial Paper Notes, the Administrative Agent, each
Lender and the Collateral Trustee shall have received a copy
of the Commercial Paper Agreement, the Commercial Paper
Memorandum and all other offering materials proposed to be
used in connection with the offering, issuance, sale or
delivery thereof (including the forms of the Commercial
Paper Notes), and the Commercial Paper Memorandum with
respect to such sale and other materials, if any, prepared
in connection therewith (i) shall be reasonably satisfactory
to the Administrative Agent, (ii) shall be reasonably
satisfactory to each Lender with respect to the description
therein of such Lender and its obligations in connection
with the transactions contemplated hereby, and (iii) shall
be reasonably satisfactory to the Collateral Trustee with
respect to any description therein of the Collateral Trustee
and its obligations under the Collateral Trust Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and
to make the Loans, the Borrower hereby represents and warrants to
the Administrative Agent and each Lender that:
4.1 Trust Existence; Compliance With Law. The
Borrower (a) is a statutory business trust duly formed and
validly existing under the laws of the State of Delaware, (b) has
the power and authority, and the legal right, to own its assets
and to transact the business in which it is engaged and is
contemplated to engage pursuant to the Facility Documents, (c) is
duly qualified to do business and, to the extent applicable, is
in good standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business
requires such qualification and (d) is in compliance with all
Requirements of Law, except to the extent that the failure to
comply therewith, in the aggregate, would not be materially
likely to have a Material Adverse Effect.
4.2 Power; Authorization; Enforceable Obligations.
The Borrower has the power and authority, and the legal right, to
execute, deliver and perform the Program Documents to which it is
a party and to borrow hereunder and has taken all necessary
action required by applicable Requirements of Law and the Owner
Trust Agreement to authorize the Borrowings on the terms and
conditions of this Agreement and to authorize the execution,
delivery and performance of the Program Documents to which it is
a party. No consent or authorization of, filing with, or other
act by or in respect of, any Governmental Authority or any other
Person (including, without limitation, equity holders or
creditors of the Borrower) is required in connection with the
Borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Program Documents
to which the Borrower is a party (other than the filing of UCC-1
Financing Statements pursuant to the Collateral Trust Agreement).
This Agreement has been, and each other Program Document to which
it is a party will be, duly executed and delivered on behalf of
the Borrower. This Agreement constitutes, and each other Program
Document, when executed and delivered, will constitute, a legal,
valid and binding obligation of the Borrower enforceable against
the Borrower in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by
proceedings in equity or at law).
4.3 No Legal Bar. The execution, delivery and
performance of the Program Documents to which it is a party, the
Borrowings hereunder and use of the proceeds thereof (a) will not
violate any Requirement of Law or Contractual Obligation
applicable to the Borrower or any of its assets, and (b) will not
result in, or require, the creation or imposition of any Lien on
any of its property, assets or revenues pursuant to any such
Requirement of Law or Contractual Obligation other than the Liens
contemplated by the Collateral Trust Agreement and the Depositary
Agreement.
4.4 No Material Litigation. No litigation,
investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the
Borrower, threatened by or against the Borrower or against any of
its properties or revenues (a) with respect to any of the
Facility Documents or any of the transactions contemplated
thereby or (b) which would be materially likely to have a
Material Adverse Effect.
4.5 No Default. The Borrower is not in default under
or with respect to any of its Contractual Obligations which would
be materially likely to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.6 Security Interest. No Lien exists upon any of the
Borrower's property, assets or revenues, except for Liens created
pursuant to the Collateral Trust Agreement and the Depositary
Agreement; the Borrower is and will be the lawful owner of, and
has and will have good title to, all Collateral and, at the date
of each deposit thereof, Deposited Funds, in each case free and
clear of all Liens except the lien and security interest granted
pursuant to the Collateral Trust Agreement and the Depositary
Agreement.
4.7 Taxes. The Borrower has filed or caused to be
filed all tax returns which are required to be filed by the
Borrower and has paid all taxes shown to be due and payable on
said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it
or any of its property by any Governmental Authority (other than
any the amount or validity of which is currently being contested
in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the
books of the Borrower); no tax Lien has been filed and, to the
knowledge of the Borrower, no claim is being asserted against the
Borrower or any of its property (other than claims which, in the
good faith judgment of the Borrower, are invalid), with respect
to any such tax, fee or other charge.
4.8 Federal Regulations. No part of the proceeds of
any Loans or the sale of any Commercial Paper will be used for
"purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation
U or for any purpose that violates the provisions of the
Regulations of the Board. The Borrower is not engaged,
principally or as one of its important primary activities, in the
business of extending credit for the purpose of purchasing or
carrying any margin stock. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1
referred to in Regulation U.
4.9 ERISA. No Plan is maintained or participated in
by the Borrower, and neither the Borrower nor any Commonly
Controlled Entity of the Borrower has any liability to PBGC under
ERISA.
4.10 Securities Laws. The Borrower is not an
"investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of
1940, as amended. Pursuant to the exemption set forth in Section
3(a)(3) of the Securities Act, it is not necessary in connection
with the offer, sale and delivery of the Commercial Paper Notes
to register the Commercial Paper Notes under the Securities Act.
The Collateral Trust Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as amended, and the
creation of the Lien in favor of the Secured Parties under the
Collateral Trust Agreement does not require an indenture to be
qualified under the Trust Indenture Act of 1939, as amended.
4.11 Ownership of Securities, etc. The Borrower owns
no Equity Securities or debt securities of, or other interest in,
any Person, except as expressly permitted by Section 7.4.
4.12 Collateral Trust Agreement. The Collateral Trust
Agreement is effective to create in favor of the Collateral
Trustee for the benefit of the Secured Parties a valid Lien on
the Collateral and, in the case of the Collateral described in
paragraphs (i), (ii) and (iii) of Section 4.1 of the Collateral
Trust Agreement and the proceeds thereof, when the Series 1998-1
Class A Security is delivered to the Collateral Trustee or
financing statements in appropriate form are filed with the
Secretary of State of Delaware, the Collateral Trust Agreement
shall constitute a first priority perfected Lien on such
Collateral, in each case enforceable as such against creditors of
and purchasers from the Borrower, except to the extent
enforceability of such Lien may be limited by applicable
bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at
law).
4.13 Financial Condition of the Borrower. The
Borrower is solvent and is not the subject of any proceeding of
the type described in Section 8(e).
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Effectiveness. This Agreement shall
become effective on the first day (the "Closing Date") on which
all of the following conditions precedent have been satisfied (or
waived in accordance with the terms hereof):
(a) Agreement. The Administrative Agent shall have
received (i) this Agreement, executed on behalf of the
Borrower by the Owner Trustee acting through a duly
authorized officer of the Owner Trustee and executed by the
Administrative Agent and (ii) from each Lender, an Addendum
executed by such Lender.
(b) Collateral Trust Agreement. The Administrative
Agent shall have received the Collateral Trust Agreement,
duly executed by the Administrative Agent and the Collateral
Trustee and on behalf of the Borrower by the Owner Trustee.
(c) Other Facility Documents. The Administrative
Agent shall have received each of the Administration
Agreement, the Owner Trust Agreement, the Metris Pooling and
Servicing Agreement, the Master Trust Purchase Agreement,
the Series 1998-1 Supplement and the Depositary Agreement,
in each case duly executed by the respective parties
thereto.
(d) Legal Opinions. The Administrative Agent shall
have received the following executed legal opinions:
(i) the executed legal opinion of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, counsel to the
Borrower, substantially in the form of Exhibit F-1;
(ii) the executed legal opinion of Xxxx
Xxxxxxxx, General Counsel of Metris Companies Inc.,
substantially in the form of Exhibit F-2;
(iii) the executed legal opinions of
Xxxxxxxx, Xxxxxx & Finger, counsel to the Owner
Trustee, substantially in the form of Exhibit G-1; and
(iv) the executed legal opinion of Xxxxxx &
Whitney, counsel to the Collateral Trustee,
substantially in the form of Exhibit G-2.
(e) Trust Documents. The Administrative Agent shall
have received a true and complete copy of the certificate of
trust of the Borrower, certified as a true and correct copy
thereof by an authorized officer of the Owner Trustee.
(f) Incumbency Certificate. The Administrative Agent
shall have received a certificate as to the incumbency and
signature of the officers or other employees of the Owner
Trustee authorized to sign the Program Documents to which
the Borrower is a party for the Owner Trustee on behalf of
the Borrower and any certificate or other document to be
delivered pursuant thereto, together with evidence of the
incumbency of such Secretary or Assistant Secretary,
certified by the Secretary or Assistant Secretary of the
Owner Trustee.
(g) Administrator Corporate Proceedings. The
Administrative Agent shall have received a copy of the
resolutions of the Board of Directors of the Administrator
authorizing the execution, delivery and performance of the
Administration Agreement and the other Program Documents to
which it is a party, certified by the Secretary or an
Assistant Secretary of the Administrator, which certificate
shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded.
(h) Administrator Corporate Documents. The
Administrative Agent shall have received true and complete
copies of the certificate of incorporation and by-laws of
the Administrator, certified as complete and correct copies
thereof by the Secretary or an Assistant Secretary of the
Administrator, and a good standing certificate from the
Secretary of State of Delaware.
(i) Administrator Incumbency Certificate. The
Administrative Agent shall have received a certificate, as
to the incumbency and signature of the officers or other
employees of the Administrator authorized to sign the
Administration Agreement and the other Program Documents to
which it is a party and any certificate or other document to
be delivered pursuant thereto, together with evidence of the
incumbency of such Secretary or Assistant Secretary,
certified by the Secretary or Assistant Secretary of the
Administrator.
(j) Payment of Other Fees. The Administrative Agent
shall have received, for its own account and the account of
the Lenders, all fees agreed to be paid on or prior to the
Closing Date.
(k) Certificate of Lenders. The Administrative Agent
shall have received a certificate from each of the Lenders
substantially in the form of Exhibit H.
(l) Commercial Paper Account. The Administrative
Agent shall have received satisfactory evidence that the
Commercial Paper Account has been established.
(m) 364-Day Liquidity Agreement. The Administrative
Agent shall have received satisfactory evidence that the
"Closing Date" under and as defined in the 364-Day Liquidity
Agreement will occur concurrently with the occurrence of the
Closing Date hereunder.
(n) Class A Security; etc. (i) The Administrative
Agent shall have received (x) a copy of the Series 1998-1
Class A Security, duly executed and delivered by MRI and
authenticated by or on behalf of the Trustee and (y) one or
more opinions with respect to tax and other matters, in form
and substance reasonably satisfactory to the Administrative
Agent and (ii) the conditions to the issuance of the Class A
Security specified in Section 4.14 of the Series 1998-1
Supplement and Section 5.1 of the Series 1998-1 Class A
Security Purchase Agreement shall have been satisfied.
(o) Payment of Accrued Commitment Fees. The
Administrative Agent shall have received, for the account of
the lenders under the Fingerhut Owner Trust Amended and
Restated Liquidity Agreement dated as of May 26, 1995, all
accrued unpaid commitment fees and any other amounts owing
under such Liquidity Agreement.
(p) Payment of Other Fees. The Administrative Agent
shall have received, for its own account and the account of
the Lenders, all fees agreed to be paid on the Closing Date.
5.2 Conditions Precedent to Each Credit Utilization.
The right of the Borrower to make any Credit Utilization is
subject to the conditions that at the time of each such Credit
Utilization and after giving effect thereto and to all other
transactions pursuant to the Facility Documents on such day,
including, without limitation, the issuance and repayment of
Commercial Paper and the borrowing and repayment of Loans:
(a) Borrowing Base; Class A Percentage. (i) The
Credits Outstanding on such day shall not exceed the
Borrowing Base and (ii) the Class A Percentage on such day
shall not exceed 97%.
(b) Maximum Aggregate Commitment. The sum on such day
of (i) Credits Outstanding and (ii) the excess, if any, of
(x) the Interest Component of the outstanding Commercial
Paper over (y) all funds then on deposit in the Interest
Reserve Subaccount (except to the extent that such funds are
then subject to any writ, order, stay, judgment, warrant of
attachment or execution or similar process) shall not exceed
the sum of the Maximum Aggregate Commitment and the 364-Day
Maximum Aggregate Commitment.
(c) Ratings. (i) With respect to the right of the
Borrower to issue Commercial Paper only, the Commercial
Paper issued shall be rated A-1 or better by S&P, P-1 or
better by Moody's, and an equivalent rating by each of the
other Rating Agencies.
(d) No Default or Event of Default. No Default or
Event of Default shall have occurred and be continuing and
no Default or Event of Default will result from such Credit
Utilization.
(e) Representations and Warranties. All
representations and warranties of the Borrower and the
Administrator contained in this Agreement and the other
Program Documents shall, in each case, be true and correct
in all material respects with the same force and effect as
though such representations and warranties had been made on
and as of the day of such Credit Utilization.
(f) Offering Memorandum. With respect to the right of
the Borrower to issue Commercial Paper only, the portion, if
any, of each credit report, offering memorandum or
information circular, other than the initial Commercial
Paper Memorandum, to be used by the Borrower in connection
with the offer or sale of the Commercial Paper which
describes a Lender either (i) shall have been approved by
such Lender or (ii) shall not have been objected to in
writing delivered to the Administrator within 10 Business
Days after receipt by such Lender of such portion of such
document.
(g) Accounts. The Collateral Account, the Commercial
Paper Account, the Reserve Account and the Non-Pro Rata
Funding Account and any funds on deposit in, or otherwise to
the credit of, the Collateral Account, the Commercial Paper
Account, the Reserve Account and the Non-Pro Rata Funding
Account shall not be subject to any writ, order, stay,
judgment, warrant of attachment or execution of similar
process.
(h) Required Reserve Account Funded Amount. With
respect to the right of the Borrower to issue Commercial
Paper only, the amount on deposit in the Reserve Account
with respect to each Downgraded Lender which is obligated to
make Non-Pro Rata Reserve Account Loans is greater than or
equal to the Required Reserve Account Funded Amount of such
Downgraded Lender (after giving effect to such issuance of
Commercial Paper).
(i) Commercial Paper Interest Component. With respect
to the right of the Borrower to issue Commercial Paper only,
the Interest Component of such Commercial Paper (expressed
as a per annum rate) shall not exceed 9.625% unless (i) the
Interest Component of such Commercial Paper (expressed as a
per annum rate) does not exceed 0.30% plus LIBOR (as defined
in the Series 1998-1 Supplement) in effect on the most
recent Interest Accrual Period Commencement Date (as defined
below) occurring on or prior to the date of issuance of such
Commercial Paper and (ii) the stated maturity date of such
Commercial Paper occurs prior to the Interest Accrual Period
Commencement Date next succeeding the date of issuance of
such Commercial Paper. As used in this paragraph, "Interest
Accrual Period Commencement Date" means the first day of any
Interest Accrual Period.
(j) Commercial Paper Principal Component. With
respect to the right of the Borrower to issue Commercial
Paper only, after giving effect to such issuance, the
aggregate Principal Component of all outstanding Commercial
Paper (minus all funds then on deposit in the Principal
Subaccount, the Reserve Account and the Non-Pro Rata Funding
Account, except to the extent that such funds are then
subject to any writ, order, stay, judgment, warrant of
attachment or execution or similar process) shall not exceed
the Series 1998-1 Class A Invested Amount.
(k) Class A Maximum Invested Amount. With respect to
the right of the Borrower to issue Commercial Paper only,
after giving effect to such issuance, the sum of (i) the
aggregate Principal Component of all outstanding Commercial
Paper (minus all funds then on deposit in the Principal
Subaccount, the Reserve Account and the Non-Pro Rata Funding
Account, except to the extent that such funds are then
subject to any writ, order, stay, judgment, warrant of
attachment or execution or similar process) and (ii) the
excess, if any, of (x) the Interest Component of all
outstanding Commercial Paper over (y) all funds then on
deposit in the Interest Reserve Subaccount (except to the
extent that such funds are then subject to any writ, order,
stay, judgment, warrant of attachment or execution or
similar process) shall not exceed the Series 1998-1 Class A
Maximum Invested Amount.
The Borrower hereby agrees that each Credit Utilization
constitutes a representation and warranty by the Borrower that
the conditions specified above are then satisfied and will be
satisfied after giving effect thereto.
5.3 Conditions Precedent to Making of Each Refunding
Loan, Non-Pro Rata Revolving Loan or Initial Non-Pro Rata Reserve
Account Loan. The obligation of each Lender to make any
Refunding Loan or Non-Pro Rata Revolving Loan or its initial Non-
Pro Rata Reserve Account Loan is subject to the condition that at
the time of making any such Refunding Loan or Non-Pro Rata
Revolving Loan or initial Non-Pro Rata Reserve Account Loan and
after giving effect thereto and to all other transactions
pursuant to the Facility Documents on such day:
(a) Borrowing Base; Class A Percentage. (i) The
Credits Outstanding on such day shall not exceed the
Borrowing Base and (ii) the Class A Percentage on such day
shall not exceed 97%.
(b) Maximum Aggregate Commitment. The sum on such day
of (i) Credits Outstanding and (ii) the excess, if any, of
(x) the Interest Component of the outstanding Commercial
Paper over (y) all funds then on deposit in the Interest
Reserve Subaccount (except to the extent that such funds are
then subject to any writ, order, stay, judgment, warrant of
attachment or execution or similar process) shall not exceed
the sum of the Maximum Aggregate Commitment and the 364-Day
Maximum Aggregate Commitment.
(c) Bankruptcy Events. No Event of Default described
in clause (i), (ii) or (iii) of Section 8(e) shall have
occurred and be continuing, in each case with respect to the
Borrower.
(d) Lender's Commitment. The aggregate outstanding
principal amount of the Loans made by any Lender shall not
exceed such Lender's Commitment.
The Borrower hereby agrees that each Borrowing by the Borrower of
a Refunding Loan, a Non-Pro Rata Revolving Loan or the initial
Non-Pro Rata Reserve Account Loan of any Lender shall constitute
a representation and warranty by the Borrower that the conditions
contained in this Section 5.3 are then satisfied and will be
satisfied after giving effect thereto.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the
Commitments remain in effect, any Commercial Paper Note remains
outstanding and unpaid, any Loan remains outstanding and unpaid
or any other amount is owing to any Lender or the Administrative
Agent hereunder, the Borrower shall:
6.1 Financial Statements. Furnish to the
Administrative Agent (with sufficient copies for each Lender), as
soon as available, but in any event within 100 days after the end
of each fiscal year, commencing with fiscal year 1998, a copy of
the audited balance sheet of the Borrower as at the end of such
year and the related audited statements of income and retained
earnings for such year, setting forth in each case in comparative
form the figures for the previous year, reported on without any
material qualification by independent certified public
accountants of nationally recognized standing; which financial
statements shall be complete and correct in all material respects
and shall be prepared in accordance with GAAP applied
consistently throughout the periods reflected therein and with
prior periods (except as approved by such accountants and
disclosed therein).
6.2 Certificates; Other Information. Furnish to the
Administrative Agent (with, except in the case of Daily Reports,
sufficient copies for each Lender):
(a) all notices, financial statements, audit reports
and similar writings the Borrower receives pursuant to the
Series 1998-1 Supplement or the Depositary Agreement and
copies of all offering materials not previously furnished to
the Administrative Agent that are in the possession of the
Borrower;
(b) concurrently with the delivery of the financial
statements referred to in Section 6.1, a certificate of the
independent certified public accountants reporting on such
financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Default
or Event of Default, except as specified in such
certificate;
(c) concurrently with the delivery of the financial
statements referred to in Section 6.1, a certificate of a
Responsible Officer of the Administrator stating that, to
the best of such Officer's knowledge, (i) such financial
statements present fairly the financial condition and
results of operations of the Borrower for the period
referred to therein and (ii) no Default or Event of Default
except as specified in such certificate has occurred and is
continuing;
(d) concurrently with the delivery to the Borrower,
(i) each Master Trust Settlement Statement, (ii) at the
request of the Administrative Agent, each Master Trust Daily
Report and (iii) any other report or statement delivered
pursuant to the Basic Documents;
(e) promptly, upon receipt thereof, copies of all
annual certificates or special procedures letters delivered
by certified public accountants with respect to the Master
Trust Investor Certificates or Metris Master Trust;
(f) promptly, upon receipt thereof, copies of all
written communications from the Rating Agencies; and
(g) promptly, such additional financial and other
information with respect to the Facility Documents or the
Borrower as the Administrative Agent or any Lender may from
time to time reasonably request.
6.3 Maintenance of Existence; Governmental
Obligations; Compliance with Contractual Obligations,
Requirements of Law. Preserve, renew and keep in full force and
effect its existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in
the normal conduct of its business except as otherwise permitted
pursuant to Section 7.5; pay all taxes, pension obligations,
including obligations under ERISA, if any, and other governmental
claims in respect of Borrower's operations and assets; comply
with all material Contractual Obligations and Requirements of
Law; file and record all documents, financing statements and
continuation statements that are necessary or appropriate to
perfect the Collateral Trustee's security interest in the
Collateral pursuant to the Collateral Trust Agreement.
6.4 Inspection of Property; Books and Records;
Discussions. (a) Keep proper books and records of account in
which full, true and correct entries in conformity with GAAP and
all applicable Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and
(b) permit representatives of the Administrative Agent and any
Lender to examine and make abstracts from any of its books and
records without charge to the Administrative Agent or such Lender
and to discuss the business, operations and financial condition
of the Borrower with officers and employees of the Borrower and,
after consultation with the Borrower, with its independent
certified public accountants, but in each case only (i) upon
reasonable request and notice and (ii) during normal business
hours, all as the Administrative Agent or any Lender may
reasonably deem appropriate for the purpose of verifying the
accuracy of various reports delivered by or on behalf of the
Borrower to the Administrative Agent and/or the Lenders pursuant
to this Agreement or any other Program Document or for otherwise
ascertaining compliance with this Agreement or any other Program
Document. Except during the continuance of any Event of Default,
all requests by Lenders under this Section 6.4 shall be made
through and coordinated by the Administrative Agent with a view
to minimizing inconvenience to the Borrower.
6.5 Notices. Promptly give notice to the
Administrative Agent and each Lender of:
(a) the occurrence of any Default, Event of Default or
Administrator Termination Event;
(b) any default or event of default under any material
Contractual Obligation of the Borrower;
(c) any litigation, and any investigation or
proceeding of which the Borrower has knowledge, specifically
relating to the Borrower; and
(d) a material adverse change in the business,
operations or condition (financial or otherwise) of the
Borrower.
Each notice pursuant to this Section 6.5 shall be accompanied by
a statement of a Responsible Officer of the Administrator setting
forth details of the occurrence referred to therein and stating
what action the Borrower proposes to take with respect thereto.
The Borrower shall send a copy of each notice pursuant to Section
6.5(a) to each Rating Agency.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the
Commitments remain in effect, any Commercial Paper Note remains
outstanding and unpaid, any Loan remains outstanding and unpaid
or any other amount is owing to any Lender or the Administrative
Agent hereunder, the Borrower shall not directly or indirectly:
7.1 Limitation on Activities of the Borrower. Engage
in any business or activity of any kind or enter into any
transaction or indenture, mortgage, instrument, agreement,
contract, lease or other undertaking which is not directly
related to the transactions contemplated by the Facility
Documents or the 364-Day Liquidity Agreement.
7.2 Limitation on Indebtedness, Guarantees. Create,
incur, assume or suffer to exist any (a) Indebtedness, except
(i) obligations incurred or owing to the Lenders under this
Agreement, (ii) the Commercial Paper Notes, (iii) the
administration fee provided for in the Administration Agreement
and (iv) liabilities contemplated by any Facility Document or the
364-Day Liquidity Agreement or (b) obligation pursuant to any
Guarantee.
7.3 Limitation on Liens. Create, incur, assume or
suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, or assign or
otherwise convey or encumber any existing or future right to
receive any income or payments, except for Liens created pursuant
to the Collateral Trust Agreement and the Depositary Agreement.
7.4 Limitation on Investments, Loans and Advances.
Make any advance, loan, extension of credit or capital
contribution to, or purchase any stock, bonds, notes, debentures
or other securities of or any assets constituting a business unit
of, or make any other investment in, any Person, except:
(a) purchase of any interest in the Series 1998-1
Class A Security pursuant to and in accordance with the
Series 1998-1 Supplement; and
(b) investments of amounts on deposit in the
Collateral Account, the Non-Pro Rata Funding Account and the
Reserve Account permitted by the Collateral Trust Agreement.
7.5 Limitation on Fundamental Changes and Sale of
Assets. Enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation
or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, any of its property, business or assets,
including, without limitation, the Series 1998-1 Class A
Security, except as contemplated by the Collateral Trust
Agreement, the Depositary Agreement or the Owner Trust Agreement.
7.6 Limitation on Payments, Capital Expenditures.
Make any payment to any Person (including, without limitation,
any salaries or bonuses) or make any expenditure (by long-term or
operating lease or otherwise) for capital assets (both realty and
personal), except as contemplated by the Facility Documents or
the 364-Day Liquidity Agreement.
7.7 Other Agreements. (a) Become a party to, or
permit any of its properties to be bound by, any indenture,
mortgage, instrument, contract, agreement, lease or other
undertaking, except the Facility Documents or the 364-Day
Liquidity Agreement or documents and agreements incidental
thereto or contemplated by the Facility Documents or the 364-Day
Liquidity Agreement, or establish or maintain a Plan or have any
liability to PBGC under ERISA or issue any power of attorney
except to the Collateral Trustee and except for the purpose of
permitting any Person to perform any ministerial functions on
behalf of the Borrower which are not inconsistent with the terms
of the Collateral Trust Agreement.
(b) Agree to, consent to, or request the cancellation,
termination, amendment, supplementation, modification, extension
or waiver of any of the provisions of any Facility Document,
unless (i) the Borrower receives the prior written consent of the
Majority Lenders, (ii) the Owner Trustee shall have taken all
steps necessary to enable it to take such action pursuant to
Section 4.1 of the Owner Trust Agreement and (iii) such
cancellation, termination, amendment, supplement, modification,
extension or waiver would not result in a withdrawal or downgrade
of the ratings of the outstanding Commercial Paper Notes referred
to in Section 5.2(c) or the ratings of the Series 1998-1 Class A
Security referred to in Section 5.1(b) of the Series 1998-1 Class
A Security Purchase Agreement; provided, however, that (x) the
Borrower may cancel, terminate, amend, supplement, modify or
waive provisions of the Commercial Paper Agreement, the
Commercial Paper Notes and the Owner Trust Agreement so long as
no such cancellation, termination, amendment, supplement,
modification, extension or waiver would adversely affect the
Lenders; (y) the Borrower may not extend the time for payment, or
reduce the amount, of any amount of money payable to or for the
account of the holder of the Series 1998-1 Class A Security under
any provision of the Series 1998-1 Supplement, in each case
without the consent of all Lenders (except that, with respect to
extending the Expiration Date (and extending the scheduled
termination date of the Revolving Period, the Scheduled Series
Termination Date and the Series 1998-1 Amortization Period
Commencement Date by corresponding lengths of time), no consent
of a Non-Extending Lender shall be necessary) and (z) no
provision of Section 8 of the Collateral Trust Agreement may be
amended, supplemented, modified or waived, and no material
portion of the Collateral may be released, without the written
consent of all the Lenders. The Borrower will give the Rating
Agencies and the Administrative Agent at least five Business
Days' prior written notice of any such cancellation, termination,
amendment, supplement, modification, extension or waiver of any
of the Facility Documents. The Administrative Agent shall
promptly deliver any such notice received by it to the Lenders.
(c) Without the prior written consent of the
Administrative Agent (which may, in accordance with its rights
under Section 9, or shall, at the direction of the Majority
Lenders, provide such consent), exercise any right, remedy, power
or privilege available to it with respect to the Master Trust
Servicer or the Master Trust Trustee under the Series 1998-1
Supplement or the Metris Pooling and Servicing Agreement or the
Administrator under the Administration Agreement, take any action
to compel or secure performance or observance by the Master Trust
Servicer or the Master Trust Trustee of its obligations to the
Borrower under the Series 1998-1 Supplement or the Metris Pooling
and Servicing Agreement or the Administrator under the
Administration Agreement, or give any consent, request, notice,
direction, approval, extension or waiver to the Master Trust
Servicer or the Master Trust Trustee under the Series 1998-1
Supplement or the Metris Pooling and Servicing Agreement or the
Administrator under the Administration Agreement, not required to
be exercised, taken, observed or given by the Borrower pursuant
to the terms of the Series 1998-1 Supplement, the Metris Pooling
and Servicing Agreement or the Administration Agreement, as the
case may be.
7.8 Commercial Paper Notes. (a) Fail to comply with
all laws and regulations applicable to the offering, issuance,
sale or delivery of Commercial Paper Notes or (b) sell any
Commercial Paper Notes if (i) the applicable conditions to such
sale set forth in Section 5.2 have not been satisfied or (ii) any
changes have been made to the Commercial Paper Memorandum or
other offering material to be used in connection with the
offering, issuance, sale or delivery of any Commercial Paper
Notes, insofar as such pertains to any Lender, the Administrative
Agent or the Collateral Trustee or their respective obligations
hereunder or under the transactions contemplated hereby, unless
either (x) such changes shall have been approved by such Lender,
the Administrative Agent or the Collateral Trustee, as the case
may be, or (y) such changes shall not have been objected to in
writing delivered to the Administrator within 10 Business Days
after receipt by such Lender, the Administrative Agent or the
Collateral Trustee, as the case may be, of a copy thereof.
7.9 Amendment of Organizational Certificate. Amend
its certificate of trust without the consent of the Majority
Lenders and the Rating Agencies, provided, however, that (a) the
Borrower may change the name and address (but not the identity)
of the Owner Trustee listed in such certificate without the
consent of the Lenders or the Rating Agencies (so long as the
Administrative Agent shall have been given prior written notice
thereof), and (b) upon payment in full of the Obligations, the
Borrower may amend such certificate without the consent of the
Lenders.
7.10 Series 1998-1 Class A Security. (a) Increase
the Series 1998-1 Class A Invested Amount unless the following
conditions precedent have been satisfied with respect thereto on
the date of such increase:
(i) no Series 1998-1 Pay Out Event shall have occurred
and be continuing or would occur after giving effect to such
increase;
(ii) all conditions precedent to such increase set
forth in the Series 1998-1 Supplement shall have been
satisfied;
(iii) the conditions to a Credit Utilization
consisting of either a Revolving Loan or the issuance of
Commercial Paper could be satisfied as of such date;
(iv) all representations and warranties of MRI and the
Master Trust Servicer contained in the Metris Pooling and
Servicing Agreement and the Master Trust Purchase Agreement
shall, in each case, be true and correct in all material
respects with the same force and effect as though such
representations and warranties had been made on and as of
the day of such increase, except to the extent such
representations and warranties expressly relate to a
particular date, in which case such representations and
warranties shall be true and correct on and as of such date;
and
(v) (A) the Administrative Agent shall have received
(x) a copy of the Series 1998-1 Class A Security, duly
executed and delivered by MRI and authenticated by or on
behalf of the Master Trust Trustee and (y) one or more
opinions with respect to tax and other matters, in form and
substance reasonably satisfactory to the Administrative
Agent and (B) the conditions to the issuance of the Series
1998-1 Class A Security specified in Section 4.14 of the
Series 1998-1 Supplement and Section 5.1 of the Series 1998-
1 Class A Security Purchase Agreement shall have been
satisfied.
(b) Increase the Maximum Aggregate Commitment pursuant
to Section 2.8 unless, on the date of such increase, (i) after
giving effect thereto, the Series 1998-1 Class A Invested Amount
shall equal or exceed the Maximum Aggregate Commitment and (ii)
the sum of the Class B Invested Amount and the CTO Invested
Amount (as each such term is defined in the Series 1998-1
Supplement) shall have been increased in a manner satisfactory to
the Majority Lenders.
SECTION 8. EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any
of the following events:
(a) The Borrower shall fail to pay any principal of
any Loan or any amount in respect of any Commercial Paper
Note when due in accordance with the terms hereof or thereof
(unless, in the case of Commercial Paper Notes, such failure
is a result of the failure of a Lender to make a Refunding
Loan required to be made by it hereunder); or the Borrower
shall fail to pay any interest on any Loan, or any fee or
other amount payable hereunder, and such failure shall
continue unremedied for a period of five Business Days after
any such interest or other amount becomes due in accordance
with the terms hereof; provided, however, that the failure
to pay any amount due under Section 2.17, 2.18, 2.19 or 2.20
shall not constitute an Event of Default unless such failure
shall continue unremedied for 90 days after such amount
becomes due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made
by the Borrower herein or in any other Program Document or
which is contained in any certificate, document or financial
or other statement furnished at any time under or in
connection herewith or therewith shall prove to have been
incorrect in any respect material to the interests of the
Lenders on or as of the date made or deemed made; or
(c) The Borrower shall default in the observance or
performance of any agreement contained in Section 2.21, 3,
6.5(a) or 7 of this Agreement or in Section 4.1 or 4.2 of
the Collateral Trust Agreement; or
(d) The Borrower shall default in the observance or
performance of any other agreement contained in this
Agreement (other than as provided in paragraphs (a) through
(c) of this Section), or in any other Program Document, and
such default shall continue unremedied for a period of 30
days after notice from the Administrative Agent or the
Majority Lenders; or
(e) (i) The Borrower, MRI or the Metris Master Trust
shall commence any case, proceeding or other action (A)
under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for
it or for all or any substantial part of its assets, or the
Borrower, MRI or the Metris Master Trust shall make a
general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Borrower, MRI or the
Metris Master Trust any case, proceeding or other action of
a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication
or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be
commenced against the Borrower, MRI or the Metris Master
Trust any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets
which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof;
or (iv) the Borrower, MRI or the Metris Master Trust shall
take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii) or (iii) above; or (v) the
Borrower, MRI or the Metris Master Trust shall generally
not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered
against the Borrower involving in the aggregate a liability
(not paid or covered by insurance) of $10,000 or more and
all such judgments or decrees shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or
(g) The Collateral Trust Agreement shall cease, for
any reason, to be in full force and effect or any other
Facility Document shall cease, for any reason, to be in full
force and effect other than as permitted in accordance with
its terms; or
(h) The Master Trust Servicer shall fail to make any
payment, transfer or deposit or shall fail to give
instructions or notice to the Master Trust Trustee pursuant
to Article IV of the Metris Pooling and Servicing Agreement
on or before the date occurring five Business Days after the
date such payment, transfer or deposit or such instruction
or notice is required to be made or given, as the case may
be, under the terms of the Metris Pooling and Servicing
Agreement; provided, however, that any such failure caused
by a non-willful act of the Master Trust Servicer shall not
constitute an Event of Default if the Master Trust Servicer
promptly remedies such failure within five Business Days
after receiving notice of such failure or otherwise becoming
aware of such failure; or
(i) MRI shall fail (i) to make any payment or deposit
required to be made by MRI by the terms of (x) the Metris
Pooling and Servicing Agreement or (y) the Series 1998-1
Supplement, on or before the date occurring five Business
Days after the date such payment or deposit is required to
be made therein, (ii) to perform in all material respects
MRI's covenant not to sell, pledge, assign, or transfer to
any person, or grant any unpermitted lien on, any
Receivable; or (iii) duly to observe or perform in any mate
rial respect any covenants or agreements of MRI set forth in
the Metris Pooling and Servicing Agreement or the Series
1998-1 Supplement, which failure has a material adverse
effect on the interests of the Lenders and which continues
unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be
remedied, shall have been given to MRI by the Administrative
Agent or the Majority Lenders; or
(j) Any representation or warranty made by MRI in the
Metris Pooling and Servicing Agreement or the Series 1998-1
Supplement, (i) shall prove to have been incorrect in any
material respect when made, which continues to be incorrect
in any material respect for a period of 30 days after the
date on which written notice of such failure, requiring the
same to be remedied, shall have been given to MRI by the
Administrative Agent or the Majority Lenders, and (ii) as a
result of which the interests of the Lenders are materially
and adversely affected and continue to be materially and
adversely affected for such period; provided, however, that
an Event of Default pursuant to this paragraph (d) shall not
be deemed to have occurred hereunder if MRI has accepted
reassignment of the related Receivable, or all of such
Receivables, if applicable, during such period in accordance
with the provisions of the Metris Pooling and Servicing
Agreement; or
(k) A Master Trust Servicer Default shall have
occurred and be continuing; provided, however, that such
Master Trust Servicer Default shall be an Event of Default
only if in the good faith judgment of the Majority Lenders
such Master Trust Servicer Default would have a Material
Adverse Effect on the collectibility of the Loans and the
Administrative Agent shall have notified the Borrower in
writing that such determination has been made; or
(l) An Administrator Termination Event shall have
occurred and be continuing; or
(m) The Borrower, MRI or Metris Master Trust shall
become required to register under the Investment Company Act
of 1940, as amended, as an "investment company" (as defined
in such act); or
(n) An "Event of Default" under and as defined in the
364-Day Liquidity Agreement shall have occurred and be
continuing; or
(o) As of any Determination Date, the Class A
Percentage shall equal 100%;
then, and in any such event, the Administrative Agent and the
Lenders shall have the following rights: If such event is an
Event of Default specified in paragraph (e), (m) or (o) of this
Section 8, (x) automatically the right of the Borrower to sell
any Commercial Paper Notes shall immediately terminate and (y)
automatically the Commitments shall immediately terminate and the
Loans (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable
(provided, however, that such termination shall not affect the
obligations of the Lenders to make additional Refunding Loans
upon satisfaction of the applicable conditions precedent
thereto). If such an event is an Event of Default other than an
Event of Default specified in paragraph (e), (m) or (o) of this
Section 8, any or all of the following actions may be taken: (A)
with the consent of the Majority Lenders the Administrative Agent
may, or upon the request of the Majority Lenders the
Administrative Agent shall, by notice to the Borrower and the
Depositary with respect to Commercial Paper Notes, terminate the
right of the Borrower to sell Commercial Paper Notes, whereupon
such right shall immediately terminate; and (B) with the consent
of the Majority Lenders the Administrative Agent may, or upon the
request of the Majority Lenders the Administrative Agent shall,
by notice to the Borrower, declare the Commitments to be
terminated forthwith, whereupon the Commitments shall immediately
terminate; and (C) with the consent of the Majority Lenders the
Administrative Agent may, or upon the request of the Majority
Lenders the Administrative Agent shall, by notice of default to
the Borrower, declare the Loans (with accrued interest thereon)
and all other amounts owing under this Agreement to be due and
payable forthwith, whereupon the same shall immediately become
due and payable (provided, however, that any such declaration
referred to in clause (B) or (C) above shall not affect the
obligations of the Lenders to make additional Refunding Loans
upon satisfaction of the applicable conditions precedent
thereto). Except as expressly provided above in this Section 8,
presentment, demand, protest and all other notices of any kind
are hereby expressly waived.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably
designates and appoints the Administrative Agent as the agent of
such Lender under this Agreement, and each such Lender hereby
irrevocably authorizes the Administrative Agent, as agent for
such Lender, to take such action on its behalf under the
provisions of this Agreement and the other Program Documents and
to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this
Agreement, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement or any other Program
Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Program Document
or otherwise exist against the Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent
may execute any and all duties hereunder by or through agents or
employees and shall be entitled to rely upon the advice of legal
counsel selected by it with respect to all matters arising
hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of
such counsel.
9.3 Exculpatory Provisions. Neither the
Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any
other Program Document (except for its or such Person's own gross
negligence or wilful misconduct), or (ii) responsible in any
manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Program Party contained
in this Agreement, the other Program Documents or in any
certificate, report, statement or other document referred to or
provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or the other Program Documents
or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the other
Program Documents or any such certificate, report, statement or
other document or for any failure of any Program Party to perform
its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this
Agreement or the other Program Documents or any such certificate,
report, statement or other document, or to inspect the
properties, books or records of any Program Party.
9.4 Reliance by Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and
upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and
other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the Lender specified in
the Register with respect to any amount payable hereunder as the
payee thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed
with the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under
this Agreement or any other Program Document unless it shall
first receive such advice or concurrence of the Majority Lenders
or, if otherwise specifically set forth herein, all Lenders, as
it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action. The Majority Lenders, or if
otherwise specifically set forth herein, all Lenders, shall be
entitled to direct the Administrative Agent in taking action
under this Agreement and the other Program Documents. The
Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and
the other Program Documents in accordance with a request of the
Majority Lenders or, if otherwise specifically set forth herein,
all Lenders, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and
all future holders of the obligations owing by the Borrower
hereunder.
9.5 Notice of Default. The Administrative Agent shall
not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives
such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall
be reasonably directed by the Majority Lenders (or, if otherwise
specifically set forth herein, all Lenders); provided, however,
that, unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as
it shall deem advisable in the best interests of the Lenders.
9.6 Non-Reliance on Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or
warranties to it and that no act by the Administrative Agent
hereinafter taken, including any review of the affairs of any
Program Party, shall be deemed to constitute any representation
or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial
and other condition and creditworthiness of the Borrower and made
its own decision to make its Loans hereunder and enter into this
Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not
taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports
and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder (which shall in
each case be furnished promptly to the Lenders), the
Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information
concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any
Program Party which may come into the possession of the
Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify
the Administrative Agent in its capacity as such (to the extent
not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which
indemnification is sought under this Section 9.7 (or, if
indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with their Commitment
Percentages immediately prior to such date of payment in full),
from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment
of the Loans) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of
this Agreement, the other Program Documents or any documents
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken
or omitted by the Administrative Agent under or in connection
with any of the foregoing; provided, however, that no Lender
shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from
the Administrative Agent's gross negligence or wilful misconduct.
The agreements in this Section 9.7 shall survive the payment of
the Loans and all other amounts payable hereunder.
9.8 Administrative Agent in Its Individual Capacity.
The Administrative Agent and its affiliates may make loans to,
accept deposits from, and generally engage in any kind of
business with, the Borrower as though the Administrative Agent
were not the Administrative Agent hereunder. With respect to its
Loans made or renewed by it, the Administrative Agent shall have
the same rights and powers under this Agreement and the other
Program Documents as any Lender and may exercise the same as
though it were not the Administrative Agent, and the term
"Lenders" shall include the Administrative Agent in its
individual capacity.
9.9 Successor Administrative Agent. The
Administrative Agent may resign as Administrative Agent upon 10
days' notice to the Lenders and following the appointment of a
successor Administrative Agent in accordance with the provisions
of this Section 9.9. If the Administrative Agent shall resign as
Administrative Agent under this Agreement, then the Majority
Lenders shall appoint from among the Lenders willing to serve as
Administrative Agent a successor agent for the Lenders, which
successor agent shall be approved by the Borrower (which approval
shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent"
shall mean such successor agent effective upon its appointment,
and the former Administrative Agent's rights, powers and duties
as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative
Agent or any of the parties to this Agreement or any holders of
the obligations owing by the Borrower hereunder. After any
retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this
Agreement.
9.10 Administrative Agent's Fee. The Borrower shall
pay the Administrative Agent the agency fee referred to in the
separate letter agreement between the Administrative Agent and
Metris.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. (a) No provision of
this Agreement may be amended, waived, supplemented, modified,
restated, discharged or terminated without the written consent of
the Administrative Agent, the Majority Lenders and the Borrower;
provided, however, that no such amendment, waiver, supplement,
modification, restatement, discharge or termination shall (i)
reduce the principal amount or extend the maturity of any Loan,
or reduce the rate or extend the time of payment of interest
thereon, or reduce the amount of any fees or commissions
receivable by the Lenders hereunder, or change the amount or
extend the expiration date of any Lender's Commitment, in each
case without the consent of each Lender directly affected
thereby, or (ii) amend, modify or waive any provision of Section
7.7(b) or (c) or of this Section 10.1, or reduce the percentage
specified in the definition of Majority Lenders or otherwise
reduce any other stated percentage of Lenders required to grant
any consent pursuant to this Agreement, in each case without the
written consent of all the Lenders, or (iii) amend, modify or
waive any provision of Section 9 without the written consent of
the Administrative Agent.
(b) Unless otherwise specified herein or therein, no
provision of the Program Documents (other than this Agreement)
may be amended, waived, supplemented, modified, restated,
discharged or terminated without the written consent of the
Administrative Agent, the Majority Lenders and the Borrower;
provided, however, that (i) no such amendment, waiver,
supplement, modification, restatement, discharge or termination
shall reduce the amount of any fees or commissions receivable by
the Lenders under the Administration Agreement without the
written consent of all the Lenders, (ii) any provision of the
Program Documents which by its terms requires the written consent
of all the Lenders shall not be amended, waived, supplemented,
modified, restated, discharged or terminated without prior
written consent of all the Lenders and (iii) any provision of the
Commercial Paper Agreement, the Commercial Paper Notes and the
Owner Trust Agreement (unless otherwise specified in any
provision thereof) may be amended, waived, supplemented,
modified, restated, discharged or terminated without the consent
of the Lenders (but not without a confirmation by each Rating
Agency of the ratings of the Commercial Paper) if such amendment,
waiver, supplement, modification, restatement, discharge or
termination would not adversely affect the Lenders.
(c) No amendment, waiver, supplement, modification,
restatement, discharge or termination pursuant to this Section
10.1 shall be made without a confirmation by each of the Rating
Agencies that such action will not result in a withdrawal or
downgrade of the ratings of the outstanding Commercial Paper
Notes referred to in Section 5.2(c) or the ratings of the Series
1998-1 Class A Security referred to in Section 5.1(b) of the
Series 1998-1 Class A Security Purchase Agreement.
(d) Any amendment, waiver, supplement, modification,
restatement, discharge or termination approved in accordance with
this Section 10.1 shall apply equally to each of the Lenders and
shall be binding upon the Borrower, the Lenders, the
Administrative Agent and all future holders of the obligations
owing by the Borrower hereunder. In the case of any waiver, the
Borrower, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder, and any
Default or Event of Default waived shall be deemed to be cured
and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any
right consequent thereon.
10.2 Notices. Except where telephonic instructions or
notices are authorized herein to be given, all notices, requests
and demands to or upon the respective parties hereto to be
effective shall be in writing and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made
when delivered by hand or by overnight courier, or, in the case
of telecopy notice, when received, addressed as follows in the
case of the Borrower and the Administrative Agent, and as set
forth in an administrative questionnaire furnished to the
Administrative Agent in the case of the Lenders, or to such
address or other address as may be hereafter notified by the
respective parties hereto and any future holders of the
obligations owing by the Borrower hereunder:
The Borrower:
METRIS OWNER TRUST
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust
Administration
Telecopy: 000-000-0000
The Administrative Agent:
THE CHASE MANHATTAN BANK
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
Telecopy:
000-000-0000
With a copy to:
CHASE AGENCY SERVICES GROUP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy: 000-000-0000
provided, however, that any notice, request or demand to or upon
the Lenders or the Administrative Agent pursuant to Sections 2.3,
2.6, 2.7 and 2.11 shall not be effective until received by the
party or parties to whom such notice, request or demand is sent.
10.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of any Lender or
the Administrative Agent, any right, remedy, power or privilege
hereunder, and no course of dealing between the Borrower and any
Lender, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law. No notice to or demand on any party
in any case shall entitle such party to any other or further
notice or demand in similar or other circumstances, or constitute
a waiver of the right of the other party to any other or further
action in any circumstances without notice or demand.
10.4 Survival of Representations and Warranties. All
representations and warranties made by the Borrower hereunder, in
any of the other Program Documents and in any other document,
certificate or statement delivered pursuant hereto or thereto or
in connection herewith or therewith shall survive the execution
and delivery of this Agreement and the making of the Loans
hereunder.
10.5 Payment of Expenses and Taxes. Subject to
Section 10.15, the Borrower agrees (a) to pay or reimburse the
Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the development,
preparation and execution of this Agreement and the other
Facility Documents and any amendment, supplement or modification
to this Agreement and the other Facility Documents and any other
documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby,
including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, (b) to pay
or reimburse each Lender for the reasonable fees and
disbursements of counsel to such Lender incurred in connection
with the preparation, execution and delivery of the opinion
referred to in Section 5.1(d)(ii), (c) to pay or reimburse the
Administrative Agent and each Lender for all its costs and
expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other
Facility Documents and any such other documents, including,
without limitation, fees and disbursements of counsel to the
Administrative Agent and to the several Lenders, (d) to pay,
indemnify and hold each Lender and the Administrative Agent
harmless from, any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in
paying, stamp and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement,
any of the other Facility Documents and any such other documents,
and (e) to pay, indemnify and hold each Lender and the
Administrative Agent, and their respective directors, trustees,
officers, employees, agents and affiliates, harmless from and
against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to
the execution, delivery, enforcement, performance and
administration of this Agreement, any of the other Facility
Documents and any such other documents. The obligation of the
Borrower to make any payment pursuant to this Section 10.5 shall
be payable solely from amounts, if any, available therefor
pursuant to Section 5.3(a)(ii)(I) or Section 5.3(b)(v) of the
Collateral Trust Agreement.
10.6 Successors and Assigns; Participation. (a) This
Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, all future
holders of the obligations of the Borrower owing hereunder and
their respective successors and assigns; provided, however, that
the Borrower shall not assign or transfer any or all its rights
and obligations hereunder without the prior written consent of
each Lender.
(b) Any Lender may, in the ordinary course of its
commercial banking or lending business and in accordance with
applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan
owing to such Lender, the Commitment of such Lender or any other
interest of such Lender hereunder. In the event of any such sale
by a Lender of participating interests to a Participant, such
Lender's obligations under this Agreement to the other parties to
this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall
remain the holder of its Commitment and its Loans for all
purposes under this Agreement and the Borrower and the
Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under this Agreement. The Borrower agrees that each
Participant shall be entitled to the benefits, and subject to the
requirements, of Sections 2.17, 2.18, 2.19, 2.20, 2.23 and 10.5
with respect to its participation in the Commitment and the Loans
outstanding from time to time; provided, however, that no
Participant shall be entitled to receive any greater amount
pursuant to such Sections than the transferor Lender would have
been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such
Participant had no such transfer occurred. In the event of any
such sale by a selling Lender of a participating interest to a
Participant the selling Lender shall not grant any such
Participant any voting rights or veto power over any action by
the selling Lender under this Agreement, except that the selling
Lender may agree not to take any action which would require the
consent of such selling Lender under Section 10.1(a) or (b)
without the consent of such Participant.
(c) Any Lender may, in the ordinary course of its
commercial banking or lending business and in accordance with
applicable law, (i) at any time sell all or any part of its
rights and obligations under this Agreement to any Lender or any
affiliate thereof and (ii) with the consent of the Administrative
Agent and the Borrower (which in each case shall not be
unreasonably withheld or delayed) and subject to at least 10
days' advance notice to the Rating Agencies, sell to one or more
additional banks or financial institutions ("Purchasing
Lenders"), all or any part of its rights and obligations under
this Agreement, pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit A (an "Assignment and
Acceptance"), executed by such Purchasing Lender, such transferor
Lender (and, in the case of a Purchasing Lender that is not then
a Lender or an affiliate thereof, by the Administrative Agent and
the Borrower), and delivered to the Administrative Agent for its
acceptance and recording in the Register (as defined below);
provided that (A) such Purchasing Lender is an Eligible Assignee,
(B) such Purchasing Lender delivers to the Rating Agencies such
opinions of counsel as may be required by the Rating Agencies as
to the enforceability of this Agreement against such Purchasing
Lender, (C) such Assignment and Acceptance is accompanied by a
confirmation by each Rating Agency of the ratings of the
outstanding Commercial Paper and (D) after giving effect to any
such assignment (other than an assignment of all of a Lender's
interests under this Agreement), the transferor Lender (together
with any Lender which is an affiliate of such transferor Lender)
shall retain a Commitment and/or Loans aggregating not less than
$5,000,000. Upon such execution, delivery, acceptance and
recording, from and after the Transfer Effective Date (as defined
in the Assignment and Acceptance) determined pursuant to the
Assignment and Acceptance, (x) the Purchasing Lender thereunder
shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a
Lender hereunder with a Commitment as set forth therein, and (y)
the transferor Lender thereunder shall, to the extent of the
interest transferred, as reflected in such Assignment and
Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or
the remaining portion of a transferor Lender's rights and
obligations under this Agreement, such transferor Lender shall
cease to be a party hereto). Such Assignment and Acceptance
shall be deemed to amend this Agreement to the extent, and only
to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of Commitment
Percentages arising from the purchase by such Purchasing Lender
of all or a portion of the rights and obligations of such
transferor Lender under this Agreement.
(d) The Administrative Agent shall maintain at its
address referred to in Section 10.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the
Commitment of and the principal amount of any Loans of each
Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower,
the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as the owner of the Loan
recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by a transferor Lender and a Purchasing Lender (and, in
the case of a Purchasing Lender that is not then a Lender or an
affiliate thereof, by the Borrower and the Administrative Agent),
together with payment to the Administrative Agent of a
registration and processing fee of $3,000, the Administrative
Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the Transfer Effective Date determined pursuant
thereto record the information contained therein in the Register
and give notice of such acceptance and recordation to the Lenders
and the Borrower.
(f) The Borrower authorizes each Lender to disclose to
any Participant or Purchasing Lender (each, a "Transferee") and
any prospective Transferee any and all financial information in
such Lender's possession which has been delivered to such Lender
pursuant to this Agreement or which has been delivered to such
Lender in connection with such Lender's credit evaluation prior
to becoming a party to this Agreement; provided, that, prior to
any such disclosure of information designated by the Borrower as
confidential, each Transferee or prospective Transferee shall
execute an agreement whereby such Transferee or prospective
Transferee shall agree (subject to customary exceptions) to
preserve the confidentiality of such confidential information.
(g) Nothing herein shall prohibit any Lender from
pledging or assigning all or any portion of its Loans to any
Federal Reserve Bank in accordance with applicable law. In order
to facilitate such pledge or assignment, the Borrower hereby
agrees that, upon the request of any Lender at any time and from
time to time after the Borrower has made its initial borrowing
hereunder, the Borrower shall provide to such Lender, at the
Borrower's expense, a promissory note (each, a "Note"),
substantially in the form of Exhibit I, evidencing the Loans made
by such Lender.
10.7 Adjustments. If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of
its Loans, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-
off, pursuant to events or proceedings of the nature referred to
in Section 8(e) or otherwise) in a greater proportion than any
such payment to or collateral received by any other Lender, if
any, in respect of such other Lender's Loans, or interest
thereon, such Benefitted Lender shall purchase for cash from the
other Lenders such portion of each such other Lender's Loan, or
shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to
cause such Benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the
Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such
recovery, but without interest.
10.8 Counterparts. This Agreement may be executed by
one or more of the parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument. Copies of this Agreement executed by all parties
hereto shall be lodged with the Borrower and the Administrative
Agent.
10.9 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
10.10 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
10.11 Acknowledgements. The Borrower hereby
acknowledges that:
(a) neither the Administrative Agent nor any Lender
has any fiduciary relationship to the Borrower, and the
relationship between the Administrative Agent and Lenders
(in their capacities as such), on one hand, and the
Borrower, on the other hand, is solely that of debtor and
creditor; and
(b) no joint venture, partnership or any other kind of
entity has been created among the Lenders or among the
Borrower and the Lenders as a result of the execution,
delivery and performance by the Lenders and the Borrower of
this Agreement.
10.12 Submission to Jurisdiction; Waivers. (a) Each
of the parties hereto agrees that a final judgment in any New
York State court or any Federal court of the United States of
America sitting in New York City, or any appellate court with
respect to any of the foregoing, shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Nothing in this Agreement shall
affect any right that any Lender or the Administrative Agent may
have to bring any action or proceeding relating to this Agreement
or the other Program Documents against the Borrower or its
properties in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Program
Documents in any New York State or Federal court, or any
appellate court with respect to any of the foregoing. Each of
the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents
to service of process in the manner provided for notices in
Section 10.2. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner
permitted by law.
10.13 WAIVERS OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
PROGRAM DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.14 No Bankruptcy Petition. Each Lender and the
Administrative Agent, severally and not jointly, hereby covenants
and agrees that prior to (a) in the case of the Borrower, the
date which is one (1) year and one (1) day after the later to
occur of the Scheduled Termination Date and the payment in full
of all Commercial Paper Notes and (b) in the case of MRI and
Metris Master Trust, the date which is one (1) year and one (1)
day after payment in full of all invested amounts of all Series
(as defined in the Metris Pooling and Servicing Agreement, it
will not institute against, or join any other Person in
instituting against, the Borrower, Metris Master Trust or MRI any
bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the
laws of the United States or any state of the United States.
Nothing in this Section 10.14 shall preclude, or be deemed to
estop, any Lender or the Administrative Agent from taking or
omitting to take any action prior to such date in (i) any case or
proceeding voluntarily filed or commenced by or on behalf of the
Borrower, Metris Master Trust or MRI under or pursuant to any
such law or (ii) any involuntary case or proceeding pertaining to
the Borrower, Metris Master Trust or MRI that is filed or
commenced by or on behalf of a Person other than any such Lender
or the Administrative Agent (or any Person to which any such
Lender or the Administrative Agent shall have assigned,
transferred or otherwise conveyed any part of the obligations of
the Borrower, Metris Master Trust or MRI hereunder) under or
pursuant to any such law.
10.15 Limited Recourse. The obligations of the
Borrower under this Agreement and all other Program Documents are
solely the obligations of the Borrower. Except as otherwise
provided in the Program Documents, no recourse shall be had for
the payment of any amount owing in respect of Loans or for the
payment of any fee or other obligation or claim arising out of or
based upon this Agreement or any other Program Document against
any holder of beneficial interest of the Borrower; provided,
however, that nothing in this Section 10.15 shall relieve any
such holder from any liability which any such holder may
otherwise have as a result of such holder's willful misconduct.
For purposes of this Section 10.15 the term "holder of beneficial
interest" shall mean and include such holder of beneficial
interest and all affiliates, employees, officers, directors,
stockholders and beneficial owners of such holder of beneficial
interest.
10.16 Limitation of Liability. It is expressly
understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by Wilmington Trust Company,
not individually or personally but solely as trustee of the
Borrower, in the exercise of the powers and authority conferred
and vested in it, (b) the representations, undertakings and
agreements herein made on the part of the Borrower are made and
intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but are made and intended
for the purpose of binding only the Borrower and (c) under no
circumstances shall Wilmington Trust Company be personally liable
for the payment of any indebtedness or expenses of the Borrower
or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the
Borrower under this Agreement or the other Facility Documents or
the Owner Trust Documents (as defined in the Owner Trust
Agreement).
10.17 Further Assurances. The Borrower agrees to do
such further acts and things and to execute and deliver to the
Administrative Agent such additional assignments, agreements,
powers and instruments, as the Administrative Agent may require
or deem advisable to carry into effect the purposes of this
Agreement and the other Facility Documents or to better assure
and confirm unto the Administrative Agent its rights, powers and
remedies hereunder.
10.18 Payments Pursuant to the Series 1998-1 Class A
Security Purchase Agreement. The Borrower acknowledges that any
payment owing by MRI to the Borrower pursuant to Section 2.4 of
the Series 1998-1 Class A Security Purchase Agreement shall be
made directly to the Administrative Agent, for the account of the
Lenders, at the Administrative Agent's office specified in
Section 10.2. The Administrative Agent shall in turn apply such
funds to pay Facility Fees or interest in respect of the Loans,
as applicable.
10.19 Limitation on Certain Claims. Notwithstanding
anything to the contrary herein, the Administrative Agent and the
Lenders shall be deemed not to have a claim against the Borrower
in a proceeding of the type described in Section 8(e) for any
amounts payable hereunder (other than (a) Loans and (b) amounts
falling within the parameters specified in Section 5.3(a)(ii)(A)
or 5.3(b)(i) of the Collateral Trust Agreement, as applicable),
except to the extent that amounts, if any, are available therefor
pursuant to the other relevant provisions of the Collateral Trust
Agreement. Nothing in this Section 10.19 shall be deemed to
modify any provision of this Agreement setting forth the
respective due dates for the amounts payable hereunder,
including, without limitation, for the purposes of Sections 2.13
and 8.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
METRIS OWNER TRUST
By: WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
By:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:
Title:
SCHEDULE I
Commitments
TOTAL $300,000,000
EXECUTION COPY
3-YEAR LIQUIDITY AGREEMENT
among
METRIS OWNER TRUST,
as Borrower
The Several Lenders Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of July 30, 1998
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 1
1.1 Defined Terms 1
1.2 Other Definitional Provisions 14
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS 14
2.1 Commitment 14
2.2 Evidence of Indebtedness 15
2.3 Procedure for Revolving Loan Borrowings 16
2.4 Non-Pro Rata Revolving Loans by Non-
Extending Lenders 16
2.5 Non-Pro Rata Reserve Account Loans by
Downgraded Lenders 17
2.6 Procedures for Non-Pro Rata Revolving Loans
and Non-Pro Rata Reserve Account Loans 19
2.7 Refunding Loans; Procedure for Refunding
Loan Borrowings 20
2.8 Additional Commitments 21
2.9 Facility Fees 21
2.10 Termination or Reduction of Commitments 22
2.11 Conversions and Continuations. 22
2.12 Prepayments. 23
2.13 Interest Rates and Payment Dates 23
2.14 Computation of Facility Fees and Interest 24
2.15 Pro Rata Treatment and Payments 24
2.16 Inability to Determine Interest Rate 25
2.17 Reserve Requirements; Change in
Circumstances 26
2.18 Change in Legality 27
2.19 Indemnity 28
2.20 Taxes 28
2.21 Proceeds; Application of Funds 30
2.22 Extensions of Expiration Date and Expiry
Dates 31
2.23 Replacement of a Lender 32
SECTION 3. ISSUANCE OF COMMERCIAL PAPER 32
SECTION 4. REPRESENTATIONS AND WARRANTIES 33
4.1 Trust Existence; Compliance With Law 33
4.2 Power; Authorization; Enforceable
Obligations 34
4.3 No Legal Bar 34
4.4 No Material Litigation 34
4.5 No Default 34
4.6 Security Interest 34
4.7 Taxes 34
4.8 Federal Regulations 35
4.9 ERISA 35
4.10 Securities Laws 35
4.11 Ownership of Securities, etc 35
4.12 Collateral Trust Agreement 35
4.13 Financial Condition of the Borrower 35
SECTION 5. CONDITIONS PRECEDENT 35
5.1 Conditions to Effectiveness 35
5.2 Conditions Precedent to Each Credit
Utilization 37
5.3 Conditions Precedent to Making of Each
Refunding Loan, Non-Pro Rata Revolving Loan 39
SECTION 6. AFFIRMATIVE COVENANTS 39
6.1 Financial Statements 39
6.2 Certificates; Other Information 40
6.3 Maintenance of Existence; Governmental
Obligations; Compliance with Contractual
Obligations, Requirements of Law 40
6.4 Inspection of Property; Books and Records;
Discussions 40
6.5 Notices 41
SECTION 7. NEGATIVE COVENANTS 41
7.1 Limitation on Activities of the Borrower 41
7.2 Limitation on Indebtedness, Guarantees 41
7.3 Limitation on Liens 42
7.4 Limitation on Investments, Loans and
Advances 42
7.5 Limitation on Fundamental Changes and Sale
of Assets 42
7.6 Limitation on Payments, Capital
Expenditures 42
7.7 Other Agreements 42
7.8 Commercial Paper Notes 43
7.9 Amendment of Organizational Certificate 43
7.10 Series 1998-1 Class A Security 43
SECTION 8. EVENTS OF DEFAULT 44
SECTION 9. THE ADMINISTRATIVE AGENT 47
9.1 Appointment 47
9.2 Delegation of Duties 47
9.3 Exculpatory Provisions 47
9.4 Reliance by Agent 48
9.5 Notice of Default 48
9.6 Non-Reliance on Agent and Other Lenders 48
9.7 Indemnification 49
9.8 Administrative
Agent in Its Individual Capacity 49
9.9 Successor Administrative Agent 49
9.10 Administrative Agent's Fee 49
SECTION 10. MISCELLANEOUS 50
10.1 Amendments and Waivers 50
10.2 Notices 50
10.3 No Waiver; Cumulative Remedies 51
10.4 Survival of Representations and Warranties 51
10.5 Payment of Expenses and Taxes 51
10.6 Successors and Assigns; Participation 52
10.7 Adjustments 54
10.8 Counterparts 54
10.9 Severability 54
10.10 GOVERNING LAW 54
10.11 Acknowledgements 54
10.13 WAIVERS OF JURY TRIAL 55
10.14 No Bankruptcy Petition 55
10.15 Limited Recourse 55
10.16 Limitation of Liability 56
10.17 Further Assurances 56
10.18 Payments Pursuant to the Series 1998-1
Class A Security Purchase Agreement 56
10.19 Limitation on Certain Claims 56
SCHEDULE
Schedule I Commitments
EXHIBITS
Exhibit A Form of Assignment and Acceptance
Exhibit B Addendum
Exhibit C Administration Agreement
Exhibit D Collateral Trust Agreement
Exhibit E Depositary Agreement
Exhibit F Forms of Opinion of General Counsel of Metris
Companies Inc.
Exhibit G Forms of Opinions of Counsel to the Trustees
Exhibit H Form of Certificate of Lenders
Exhibit I Form of Note
