METRIS COMPANIES INC.
Buyer
and
DIRECT MERCHANTS CREDIT CARD BANK,
NATIONAL ASSOCIATION
Seller
AMENDED AND RESTATED
BANK RECEIVABLES PURCHASE AGREEMENT
Dated as of July 30, 1998
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Other Definitional Provisions . . . . . . . . . . . 8
ARTICLE II
PURCHASE, CONVEYANCE AND SERVICING OF RECEIVABLES . . . . . . . 9
Section 2.1 Sale . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
CONSIDERATION AND PAYMENT . . . . . . . . . . . . . . . . . . . 11
Section 3.1 Purchase Price . . . . . . . . . . . . . . . . . . 11
Section 3.2 Payment of Purchase Price . . . . . . . . . . . . . 11
Section 3.3 Daily Reports . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 12
Section 4.1 Seller's Representations and Warranties . . . . . . 12
Section 4.2 Seller's Representations and Warranties
Regarding Receivables . . . . . . . . . . . . . . 15
Section 4.3 Representations and Warranties of the Buyer . . . . 17
ARTICLE V
COVENANTS OF SELLER AND BUYER . . . . . . . . . . . . . . . . . 19
Section 5.1 Seller Covenants . . . . . . . . . . . . . . . . . 19
Section 5.2 Addition of Accounts . . . . . . . . . . . . . . . 21
Section 5.3 Buyer Covenant Regarding Sale Treatment . . . . . . 22
ARTICLE VI
OPTIONAL REPURCHASE . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.1 Breach of Warranty . . . . . . . . . . . . . . . . . 22
Section 6.2 Conveyance of Reassigned Receivables . . . . . . . 23
ARTICLE VII
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 23
Section 7.1 Conditions to the Buyer's Obligations
Regarding Receivables . . . . . . . . . . . . . . 23
Section 7.2 Conditions Precedent to the Seller's
Obligations . . . . . . . . . . . . . . . . . . . 24
ARTICLE VIII
TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.1 Term . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.2 Effect of Termination . . . . . . . . . . . . . . . 25
ARTICLE IX
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . 26
Section 9.1 Amendment . . . . . . . . . . . . . . . . . . . . . 26
Section 9.2 Governing Law . . . . . . . . . . . . . . . . . . . 26
Section 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . 26
Section 9.4 Severability of Provisions . . . . . . . . . . . . 27
Section 9.5 Further Assurances . . . . . . . . . . . . . . . . 27
Section 9.6 No Waiver; Cumulative Remedies . . . . . . . . . . 27
Section 9.7 Counterparts . . . . . . . . . . . . . . . . . . . 27
Section 9.8 Binding Effect; Third Party Beneficiaries . . . . . 27
Section 9.9 Merger and Integration. . . . . . . . . . . . . . 28
Section 9.10 Headings . . . . . . . . . . . . . . . . . . . . . 28
Section 9.11 Schedules and Exhibits . . . . . . . . . . . . . . 28
Section 9.12 Protection of Right, Title and Interest
to Receivables . . . . . . . . . . . . . . . . . 28
Exhibit A Form of Daily Report
AMENDED AND RESTATED BANK
RECEIVABLES PURCHASE AGREEMENT
AMENDED AND RESTATED BANK RECEIVABLES PURCHASE AGREEMENT, dated
as of July 30, 1998 (the "Agreement"), by and between METRIS COMPANIES
INC., a Minnesota corporation ("Metris" or the "Buyer"), and DIRECT
MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION, a national banking
association ("Direct Merchants" or the "Seller").
W I T N E S S E T H :
WHEREAS, the Buyer desires to purchase from time to time certain
open-end or revolving credit receivables (including, without limitation,
MasterCard, Visa and private label credit card receivables) generated on or
before April 18, 1995 (the "Original Closing Date") or to be generated
after the Closing Date in the normal course of business;
WHEREAS, the Seller desires to sell and assign from time to time
such receivables to the Buyer upon the terms and conditions hereinafter set
forth;
WHEREAS, the Buyer is an Affiliate of the Seller;
WHEREAS, the Seller is the successor by merger to Direct
Merchants Credit Card Bank, National Association, a national banking
association with its principal place of business in Salt Lake City, Utah
(the "Predecessor Seller").
WHEREAS, the Predecessor Seller and Fingerhut Companies, Inc.
("Fingerhut") previously entered into that certain Amended and Restated
Bank Receivables Purchase Agreement dated as of May 26, 1995 as amended
prior hereto pursuant to which the Predecessor Seller has previously sold
to the Buyer all Receivables in all Previous Accounts (as hereinafter
defined) (the "Previously Amended and Restated Purchase Agreement");
WHEREAS, the Predecessor Seller, the Buyer and Fingerhut
previously entered into an Assignment and Assumption Agreement (the
"Assumption Agreement") dated as of September 16, 1996 in which Fingerhut
assigned to Metris all of its rights arising under the Previously Amended
and Restated Purchase Agreement and Metris agreed to assume and perform all
of Fingerhut's duties and obligations under the Previously Amended and
Restated Purchase Agreement;
WHEREAS, the Seller and the Buyer previously entered into an
Amendment and Assumption Agreement (the "Amendment and Assumption
Agreement") dated as of July 13, 1998 (the "Assumption Date") in which the
Seller assumed all of the rights and obligations of the Predecessor Seller;
WHEREAS, the parties hereto desire to amend and restate the
Previously Amended and Restated Purchase Agreement;
WHEREAS, the Seller understands that the Buyer will be re-selling
the Receivables (as defined herein) to a special purpose subsidiary, which
will in turn transfer the Receivables to a master trust pursuant to the
Pooling and Servicing Agreement (as defined herein);
NOW, THEREFORE, it is hereby agreed by and between the Buyer and
the Seller as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. For all purposes of this Agreement,
except as otherwise expressly provided herein or unless the context
otherwise requires, capitalized terms used herein shall have the following
meanings assigned to them:
"Account" shall mean: (i) each revolving credit card account in
which the Predecessor Seller had rights on the Original Closing Date; (ii)
each revolving credit card account in which the Predecessor Seller acquired
rights from the Original Closing Date through the Assumption Date; (iii)
each revolving credit card account in which the Seller had rights on the
Assumption Date and (iv) each Additional Account. The definition of
Account shall include each Transferred Account but shall not include any
Accounts containing Ineligible Receivables and repurchased by the Seller
pursuant to Article VI hereof. The term "Account" shall be deemed to refer
to an Additional Account only from and after the date the Seller acquires
rights therein.
"Additional Account" shall mean each revolving credit card
account in which the Seller acquires rights after the Assumption Date other
than any Excluded Accounts.
"Affiliate" shall mean, with respect to a particular Person, any
Person that, directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person.
"Assumption Date" shall mean July 13, 1998.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in Minneapolis, Minnesota,
Scottsdale, Arizona, Tulsa, Oklahoma or Omaha, Nebraska are authorized or
obligated by law or executive order to be closed.
"Collections" shall mean all payments received by the Seller in
respect of the Eligible Receivables in the form of cash, checks or any
other form of payment in accordance with the Contract in effect from time
to time on any Eligible Receivables, other than pre-paid insurance
premiums.
"Contract" shall mean an agreement between the Seller or an
Affiliate thereof and another Person for the extension of revolving credit,
including pursuant to a credit card, in the form of a written contract,
invoice, or revolving credit agreement (but shall not include any agreement
or plan relating to the extension of credit on a closed-end basis).
"Credit Adjustment" shall have the meaning set forth in Section
3.2(b) hereof.
"Credit and Collection Policy" shall mean the written policies
and procedures of the Seller relating to the operation of its consumer
revolving credit card business, including, without limitation, the written
policies and procedures for determining the creditworthiness of credit card
customers, the extension of credit to credit card customers and relating to
the maintenance of credit card accounts and collection of receivables with
respect thereto, as such policies and procedures may be amended, modified
or otherwise changed from time to time.
"Date of Processing" shall mean with respect to any transaction,
the date on which such transaction is settled according to the Seller's
computer master file of revolving credit accounts.
"Defaulted Account" shall mean each Account with respect to
which, in accordance with the Credit and Collection Policy or the Seller's
customary and usual servicing procedures, the Seller has charged off the
Receivables in such Account as uncollectible; an Account shall become a
Defaulted Account on the day on which such Receivables are recorded as
charged off as uncollectible on the Seller's computer master file of
consumer credit card revolving accounts. Notwithstanding any other
provision hereof, any Receivables in a Defaulted Account that are
Ineligible Receivables shall be treated as Ineligible Receivables rather
than Receivables in Defaulted Accounts.
"Eligible Account" shall mean, as of May 26, 1995 (or, with
respect to Additional Accounts, as of the date the Receivable arising in
such Accounts are first sold to the Buyer), each revolving credit consumer
credit card account owned by the Seller:
(a) which is payable in Dollars;
(b) the Obligor on which has provided, as its initial billing
address, an address located in the United States or its territories or
possessions or a United States military address;
(c) which has not been identified by the Seller in its computer
master file as stolen or lost;
(d) which is not at the time of sale sold or pledged to any
other party and which does not have Receivables, which at the time of sale,
are sold or pledged to any other party (provided that Receivables which
were sold or pledged prior to the Closing Date, but repurchased free of all
Liens or where all Liens were released prior to the sale hereunder, shall
not be disqualified under this clause (d));
(e) the Receivables in which the Seller has not charged off (or
required to be charged off) in its customary and usual manner for charging
off Receivables in such Accounts as of the Closing Date (or, with respect
to Additional Accounts, as of the date the Receivables of such Accounts are
sold to the Buyer) unless such Account is subsequently reinstated; and
(f) which is not an Excluded Account.
"Eligible Receivable" shall mean each Receivable that satisfies
each of the following criteria: (a) it arises under an Account, (b) it is
not sold or pledged to any other party, (c) it constitutes an "account,"
"chattel paper" or a "general intangible" as each are defined in Article 9
of the UCC as then in effect in the Relevant UCC State, (d) it is at the
time of its purchase by the Buyer the legal, valid, and binding obligation
of, or is guaranteed by, a person who is competent to enter into a contract
and incur debt, and is enforceable against such person in accordance with
its terms, (e) which was created or acquired in compliance, in all material
respects, with all Requirements of Law applicable to the Seller and
pursuant to a Contract which complies, in all material respects, with all
Requirements of Law applicable to the Seller (including, without
limitation, laws, rules and regulations relating to truth in lending,
usury, fair credit billing, fair credit reporting, equal credit opportunity
and fair debt collection practices), (f) all material consents, licenses,
or authorizations of, or registrations with, any Governmental Authority
required to be obtained or given in connection with the creation of such
Receivable or the execution, delivery, creation, and performance of the
related Contract have been duly obtained or given and are in full force and
effect as of the date of the creation of such Receivables and (g)
immediately prior to giving effect to the sale, the Seller will have good
and marketable title free and clear of all Liens and security interests
arising under or through the Seller (other than Permitted Liens).
"Excluded Account" shall mean an Additional Account which the
Buyer and the Seller have elected to exclude from sale under this Agreement
in accordance Section 2.1(e) hereof.
"Finance Charge Receivables" shall mean the sum of (w) all
amounts billed from time to time to the Obligors on any Account in respect
of (i) Periodic Finance Charges, (ii) overlimit fees, (iii) late charges,
(iv) returned check fees, (v) annual membership fees and annual service
charges, if any, (vi) transaction charges, (vii) cash advance fees and
(viii) similar fees and charges, excluding fees and charges for insurance
and insurance type products, plus (y) Recoveries.
"Governmental Authority" shall mean the United States of America,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Ineligible Receivable" shall have the meaning set forth in
Section 6.1 hereof.
"Lien" shall mean any lien, security interest or other
encumbrance.
"Obligor" shall mean a Person obligated to make payments with
respect to a Receivable arising under an Account pursuant to a Contract.
"Original Closing Date" shall mean April 18, 1995.
"Periodic Finance Charges" shall have, with respect to any
Account, the meaning set forth in the Contract applicable to such Account
for finance charges (due to periodic rate) or any similar term.
"Permitted Lien" shall mean with respect to the Receivables:
Liens that secure the payment of taxes, assessments and governmental
charges or levies, if such taxes are either (a) not delinquent or (b) being
contested in good faith by appropriate legal or administrative proceedings
and as to which adequate reserves in accordance with generally accepted
accounting principles shall have been established.
"Person" shall mean any legal person, including any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental entity or other entity of
similar nature.
"Pooling and Servicing Agreement" shall mean the Amended and
Restated Pooling and Servicing Agreement, dated as of July 20, 1998, as
amended from time to time, by and among Direct Merchants Credit Card Bank,
National Association, as Servicer, Metris Receivables, Inc., as Transferor
and The Bank of New York (Delaware), as Trustee.
"Previous Accounts" shall mean all revolving credit card accounts
specified in clauses (i) and (ii) of the definition of Account.
"Principal Receivables" shall mean amounts shown on the Seller's
records as amounts payable by Obligors with respect to Eligible Receivables
on any Account other than such amounts that are Finance Charge Receivables
or Receivables in Defaulted Accounts and shall include, without limitation,
amounts payable for purchases of goods or services or cash advances. A
Receivable shall be deemed to have been created at the end of the day on
the Date of Processing of such Receivable. In calculating the aggregate
amount of Principal Receivables on any day, the amount of Principal
Receivables shall be reduced by the aggregate amount of credit balances in
the Accounts on such day.
"Purchase Price" shall have the meaning set forth in Section 3.1
hereof.
"Receivable" shall mean, with respect to any Obligor, all of the
indebtedness of such Obligor under an Account, including the right to
receive payment of any interest or finance charges and other obligations of
such Obligor with respect thereto. Each receivable includes, without
limitation, all rights of the Seller under the applicable Contract.
"Recoveries" shall mean any amounts received by the Seller with
respect to Receivables in Accounts that previously became Defaulted
Accounts.
"Relevant UCC State" shall mean each jurisdiction in which the
filing of a UCC financing statement is necessary to perfect the ownership
interest and security interest of the Buyer pursuant to this Agreement.
"Requirements of Law" for any Person shall mean the certificate
of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any material law,
treaty, rule or regulation, or determination of an arbitrator or
Governmental Authority, in each case applicable to or binding upon such
Person or to which such Person is subject.
"Sale Papers" shall have the meaning set forth in Section 4.1(c)
hereof.
"Secured Obligations" shall have the meaning set forth in Section
2.1(d) hereof.
"Termination Date" shall have the meaning set forth in Section
8.1 hereof.
"Transferred Account" shall mean an Account with respect to which
a new credit card account number has been issued by the Seller under
circumstances resulting from a lost or stolen credit card and not requiring
standard application and credit evaluation procedures under the Credit and
Collection Policy.
"UCC" shall mean the Uniform Commercial Code, as amended from
time to time, as in effect in the applicable jurisdiction.
Section 1.2 Other Definitional Provisions. The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this
Agreement or any Sale Paper shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; and Section, Subsection,
Schedule and Exhibit references contained in this Agreement are references
to Sections, Subsections, Schedules and Exhibits in or to this Agreement
unless otherwise specified.
[END OF ARTICLE I]
ARTICLE II
PURCHASE, CONVEYANCE AND SERVICING
OF RECEIVABLES
Section 2.1 Sale. (a) In consideration for the Purchase Price
and upon the terms and subject to the conditions set forth herein, the
Seller does hereby sell, assign, transfer, set-over, and otherwise convey
to the Buyer, and the Buyer does hereby purchase from the Seller, on the
terms and subject to the conditions specifically set forth herein, all of
the Seller's right, title and interest in, to and under (i) the Receivables
now existing and hereafter created and arising in connection with the
Accounts and any Additional Accounts, including, without limitation, all
accounts, general intangibles, chattel paper and other obligations of any
Obligor with respect to the Receivables, now or hereafter existing, whether
or not arising out of or in connection with the sale or lease of goods or
the rendering of services, (ii) all monies and investments due or to become
due with respect thereto (including, without limitation, the right to any
Finance Charge Receivables, including any recoveries)and (iii) all proceeds
of such Receivables. The foregoing sale, transfer, assignment, set-over
and conveyance does not constitute and is not intended to result in a
creation or an assumption by the Buyer of any obligation of the Seller in
connection with the Receivables or any agreement or instrument relating
thereto, including, without limitation, any obligation to any Obligors,
merchant banks, merchant clearance systems, VISA USA, Inc., MasterCard
International Incorporated or insurers.
(b) In connection with the foregoing sale, the Seller agrees to
record and file, at the Buyer's expense, a financing statement or
statements with respect to the Receivables and the other property described
in Section 2.1(a) sold by the Seller hereunder meeting the requirements of
applicable state law in such manner and in such jurisdictions as are
necessary to perfect and protect the interests of the Buyer created hereby
under the applicable UCC against all creditors of and purchasers from the
Seller, and to deliver a file-stamped copy of such financing statements or
other evidence of such filings to the Buyer.
(c) In connection with the sale and conveyance hereunder, the
Seller agrees, at the Buyer's expense, on or prior to the Closing Date and
on each Business Day thereafter, to indicate or cause to be indicated
clearly and unambiguously in its accounting records that such Receivables
and the other property described in clauses (i), (ii) and (iii) of Section
2.1(a) have been sold to the Buyer pursuant to this Agreement as of the
Closing Date or such Business Day as applicable.
(d) It is the express intent of the Seller and the Buyer that
the conveyance of the Receivables by the Seller to the Buyer pursuant to
this Agreement be construed as a sale of such Receivables by the Seller to
the Buyer. It is, further, not the intention of the Seller and the Buyer
that such conveyance be deemed a grant of a security interest in the
Receivables by the Seller to the Buyer to secure a debt or other obligation
of the Seller. However, in the event that, notwithstanding the intent of
the parties, the Receivables are held to continue to be property of the
Seller, then (i) this Agreement also shall be deemed to be and hereby is a
security agreement within the meaning of the UCC; and (ii) the conveyance
by the Seller provided for in this Agreement shall be deemed to be and the
Seller hereby grants to the Buyer a security interest in and to all of the
Seller's right, title and interest in (w) all Receivables outstanding on
the Closing Date and thereafter created by the Seller and all rights (but
not the obligations) relating to such Receivables, (x) with respect to the
Receivables, all accounts (as defined in the applicable UCC) outstanding on
the Closing Date and thereafter created by the Seller, and all rights (but
not the obligations) relating thereto, (y) all monies due or to become due
with respect thereto and (z) all proceeds of the foregoing to secure (1)
the obligations of the Seller and (2) a loan to the Seller in the amount of
the Purchase Price as set forth in this Agreement (the "Secured
Obligations"). The Seller and the Buyer shall, to the extent consistent
with this Agreement, take such actions as may be necessary to ensure that,
if this Agreement were deemed to create a security interest in the
Receivables, such security interest would be deemed to be a perfected
security interest of first priority in favor of the Buyer under applicable
law and will be maintained as such throughout the term of this Agreement.
(e) The Buyer and the Seller may designate revolving credit card
accounts which would otherwise be Additional Accounts as Excluded Accounts.
Such designation shall be evidenced by the Seller indicating in the
appropriate computer files that receivables arising under such revolving
credit card accounts have been retained by the Seller by including in such
computer files a code identifying that each such account has been so
retained. If such designation is made after the Buyer acquires rights in
such Accounts and the Buyer has agreed to the designation of such revolving
credit card accounts as Excluded Accounts, upon receipt of payment for the
related receivables the Buyer will take such actions as may be reasonably
requested by the Seller to reconvey any Receivables relating to such
Excluded Accounts to the Seller.
[END OF ARTICLE II]
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1 Purchase Price. The Purchase Price for the
Receivables and related property conveyed to the Buyer under this Agreement
shall be a dollar amount equal to, for Receivables sold on any date, the
aggregate amount of all Principal Receivables sold as of such date subject
to adjustment from time to time with respect to new Receivables to reflect
such factors as the Buyer and the Purchaser mutually agree will result in a
Purchase Price determined to approximate the fair market value of such new
Receivables.
Section 3.2 Payment of Purchase Price. (a)On each Business Day
on which Receivables are transferred hereunder, the Purchase Price shall be
paid in immediately available funds.
(b) The Purchase Price shall be adjusted on a daily basis (the
"Credit Adjustment") if the Seller adjusts downward the amount of any
Receivable because of a rebate, refund, unauthorized charge or billing
error to an Obligor, because such Receivable was created in respect of
merchandise which was refused or returned by an Obligor, or if the Seller
otherwise adjusts downward the amount of any Receivable without receiving
Collections therefor or without charging off such amount as uncollectible.
Section 3.3 Daily Reports. On each Business Day, the Seller
shall deliver to the Buyer a Daily Report (the "Daily Report") showing the
aggregate Purchase Price of Receivables generated, the aggregate amount, if
any, owing to the Buyer pursuant to Section 6.1 hereof and the aggregate
net amount of cash owing for Receivables generated in each case for the
period from and including the preceding Business Day.
[END OF ARTICLE III]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Seller's Representations and Warranties. Without
limiting the generality of the Amendment and Assumption Agreement, the
Seller expressly assumes responsibility for all representations and
warranties made by the Predecessor Seller under Section 4.1 and 4.2 of the
Previously Amended and Restated Purchase Agreement which are incorporated
herein by reference. The Seller represents and warrants to the Buyer as of
the Assumption Date, and as to matters involving Additional Accounts, as
of the date the Receivables of such Accounts are sold to the Buyer, that:
(a) Organization and Good Standing. The Seller is a national
banking association organized and validly existing in good standing under
the laws of the United States and has the corporate power and authority and
legal right to own its property and conduct its business as such properties
are presently owned and as such business is presently conducted and to
execute, deliver and perform its obligations under this Agreement and each
other document or instrument to be delivered by the Seller hereunder
(collectively, the "Sale Papers").
(b) Due Qualification. The Seller is duly qualified to do
business and is in good standing (or is exempt from such requirements), as
a foreign corporation in any state required in order to conduct business,
and has obtained all necessary licenses and approvals with respect to the
Seller required under applicable law; provided that no representation or
warranty is made with respect to any qualifications, licenses or approvals
which the Buyer would have to obtain to do business in any state in which
the Buyer seeks to enforce any Receivable.
(c) Due Authorization. The execution and delivery of the Sale
Papers, and the consummation of the transactions provided for herein and
therein have been duly authorized by the Seller by all necessary corporate
action on its part.
(d) Binding Obligation. Each of the Sale Papers, and the
consummation of the transactions provided for therein, constitutes a legal,
valid and binding obligation of the Seller, enforceable in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereinafter in effect, affecting the enforcement of creditors'
rights in general and as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity).
(e) No Conflicts. The execution and delivery of the Sale Papers
and the performance of the transactions contemplated thereby, do not (i)
contravene the Seller's charter or by-laws or (ii) violate any material
provision of law applicable to it or require any filing (except for the
filings under the UCC), registration, consent or approval under, any law,
rule, regulation, order, writ, judgment, injunction, decree, determination
or award presently in effect having applicability to the Seller, except for
such filings, registrations, consents or approvals as have already been
obtained and are in full force and effect.
(f) Taxes. The Seller has filed all material tax returns
required to be filed and has paid or made adequate provision for the
payment of all material taxes, assessments and other governmental charges
due from the Seller or is contesting any such tax, assessment or other
governmental charge in good faith through appropriate proceedings.
(g) No Violation. The execution and delivery of the Sale
Papers, the performance of the transactions contemplated by the Sale Papers
and the fulfillment of the terms thereof, will not violate any Requirements
of Law applicable to the Seller, will not violate, result in any breach of
any of the material terms and provisions of or constitute (with or without
notice or lapse of time or both) a default under any Requirement of Law
applicable to the Seller, or any material indenture, contract, agreement,
mortgage, deed of trust or other material instrument to which the Seller is
a party or by which it or its properties are bound.
(h) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Seller, threatened against the
Seller before any Governmental Authority (i) asserting the invalidity of
the Sale Papers, (ii) seeking to prevent the consummation of any of the
transactions contemplated thereby, (iii) seeking any determination or
ruling that would materially and adversely affect the performance by the
Seller of its obligations thereunder or (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability thereof.
(i) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Governmental Authority required in
connection with the execution and delivery of the Sale Papers, the
performance of the transactions contemplated by the Sale Papers and the
fulfillment of the terms hereof and thereof, have been obtained.
(j) Bona Fide Receivables. The Seller has no knowledge of any
fact which should have led it to expect at the time of the classification
of any Receivable as an Eligible Receivable that such Receivable would not
be paid in full when due, and each Receivable classified as an Eligible
Receivable by the Seller in any document or report delivered under this
Agreement satisfies the requirements of eligibility contained in the
definition of Eligible Receivable set forth herein.
(k) Place of Business. The principal executive offices of the
Seller are in Scottsdale, Arizona and the offices where the Seller keeps
its records concerning the Receivables and related Contracts are in
Scottsdale, Arizona, [Salt Lake City, Utah], Omaha, Nebraska, Hennepin
County, Minnesota, Tulsa, Oklahoma and St. Cloud, Minnesota.
(l) Use of Proceeds. No proceeds of the sale of any Receivable
hereunder received by the Seller will be used by the Seller to purchase or
carry any margin stock.
(m) Not an Investment Company. The Seller is not an "investment
company" within the meaning of the Investment Company Act, or is exempt
from all provisions of such Act.
The representations and warranties set forth in this Section 4.1
shall survive the sale of the Receivables to the Buyer. The Seller hereby
represents and warrants to the Buyer, that the representations and
warranties of the Seller set forth in Section 4.1 are true and correct as
of such date. Upon discovery by the Seller or the Buyer of a material
breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice thereof to the
other.
Section 4.2 Seller's Representations and Warranties Regarding
Receivables.
(a) Valid Sale, etc. The Seller (x) hereby represents and
warrants as of the Assumption Date, with respect to the Receivables created
on or prior to, and outstanding on, such date and (y) shall be deemed to
represent and warrant as of the date of the creation and transfer to the
Buyer of any Receivables with respect to such Receivables, that:
(i) This Agreement constitutes the legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance
with its terms, except (A) as such enforceability may be limited by
applicable bankruptcy, receivership, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect, affecting
the enforcement of creditors' rights in general, and (B) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(ii) The transfer of Receivables by the Seller to the Buyer
under this Agreement constitutes a valid sale, transfer, assignment,
set-over and conveyance to the Buyer of all right, title and interest
of the Seller in and to the Receivables, whether then existing or
thereafter created and arising in connection with the Accounts, and
such Receivables will be held by the Buyer free and clear of any Lien
of any Person claiming through or under the Seller or any of its
Affiliates except for Permitted Liens. This Agreement constitutes a
valid sale, transfer, assignment, set-over and conveyance to the Buyer
of all right, title and interest of the Seller in and to the
Receivables purported to be sold hereunder, whether then existing or
thereafter created and the proceeds thereof.
(iii) The Seller is not insolvent and will not be rendered
insolvent upon sale of the Receivables to the Buyer.
(iv) The Seller is (or, with respect to Receivables arising
after the date hereof, will be) the legal and beneficial owner of all
right, title and interest in and to each Receivable and each
Receivable has been or will be transferred to the Buyer free and clear
of any Lien other than Permitted Liens.
(v) All consents, licenses, approvals or authorizations of
or registrations or declarations with any Governmental Authority
required in connection with the transfer of such Receivables to the
Buyer have been obtained.
(vi) Each Account classified as an "Eligible Account" by
the Seller in any document or report delivered hereunder will satisfy
the requirements contained in the definition of Eligible Account as of
the date of such document or report and each Receivable classified as
an "Eligible Receivable" by the Seller in any document or report
delivered hereunder will satisfy the requirements contained in the
definition of Eligible Receivable as of the time of such document or
report.
(vii) Each Receivable then existing has been conveyed to
the Buyer free and clear of any Lien of any Person claiming through or
under the Seller or any of its Affiliates (other than Permitted Liens)
and in compliance, in all material respects, with all Requirements of
Law applicable to the Seller.
(b) Daily Representations and Warranties. On each day on which
any new Receivable is created or acquired by the Seller, the Seller shall
be deemed to represent and warrant to the Buyer that (A) each Receivable
purchased by the buyer on such day has been conveyed to the Buyer in
compliance, in all material respects, with all Requirements of Law
applicable to the Seller and free and clear of any Lien of any Person
claiming through or under the Seller or any of its Affiliates (other than
Permitted Liens) and (B) with respect to each such Receivable, all
consents, licenses, approvals or authorizations of or registrations or
declarations with, any Governmental Authority required to be obtained,
effected or given by the Seller in connection with the conveyance of such
Receivable to the Buyer have been duly obtained, effected or given and are
in full force and effect.
(c) Notice of Breach. The representations and warranties set
forth in this Section 4.2 shall survive the sale, transfer and assignment
of the respective Receivables to the Buyer. Upon discovery by the Seller
or the Buyer of a breach of any of the representations and warranties set
forth in this Section 4.2, the party discovering such breach shall give
prompt written notice thereof to the other. The Seller agrees to cooperate
with the Buyer in attempting to cure any such breach.
Section 4.3 Representations and Warranties of the Buyer. The
Buyer hereby represents and warrants and agrees with the Seller, as of the
date hereof, and shall be deemed to represent and warrant as of the date of
the sale of any Receivable to the Buyer hereunder that:
(a) Organization and Good Standing. The Buyer is a corporation
duly organized and validly existing in good standing under the laws of the
State of Delaware and has the corporate power and authority and legal right
to own its property and conduct its business as such properties are
presently owned and such business is presently conducted and to execute,
deliver, and perform its obligations under the Sale Papers.
(b) Due Qualification. The Buyer is duly qualified to do
business and is in good standing (or is exempt from such requirements) as a
foreign corporation in any state required in order to conduct business and
has obtained all necessary licenses and approvals with respect to the Buyer
required under federal and Minnesota law.
(c) Due Authorization. The execution and delivery of the Sale
Papers and the consummation of the transactions provided for in the Sale
Papers have been duly authorized by the Buyer by all necessary corporate
action on its part.
(d) No Conflicts. The execution and delivery of the Sale Papers
and the performance of the transactions contemplated thereby do not (i)
contravene the Buyer's certificate of incorporation or by-laws or (ii)
violate any material provision of law applicable to it, or require any
filing (except for the filings under the UCC), registration, consent or
approval under, any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to the Buyer, except for such filings, registrations,
consents or approvals as have already been obtained and are in full force
and effect.
(e) No Violation. The execution and delivery of the Sale
Papers, the performance of the transactions contemplated by the Sale
Papers, and the fulfillment of the terms of the Sale Papers will not
violate any Requirements of Law applicable to the Buyer, will not violate,
result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default
under any Requirement of Law applicable to the Buyer, or any material
indenture, contract, agreement, mortgage, deed of trust or other material
instrument to which the Buyer is a party or by which it or its properties
are bound.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Buyer, threatened against the
Buyer, before any Governmental Authority (i) asserting the invalidity of
the Sale Papers, (ii) seeking to prevent the consummation of any of the
transactions contemplated by the Sale Papers, (iii) seeking any
determination or ruling that would materially and adversely affect the
performance by the Buyer of its obligations thereunder or (iv) seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of the Sale Papers.
(g) All Consents Required. All approvals, authorizations,
consents, orders, or other actions of any Governmental Authority required
in connection with the execution and delivery of the Sale Papers, the
performance of the transactions contemplated by the Sale Papers, and the
fulfillment of the terms of the Sale Papers have been obtained.
The representations and warranties set forth in this Section 4.3
shall survive the sale of the Receivables to the Buyer. The Buyer hereby
represents and warrants to the Seller that the representations and
warranties of the Buyer set forth in Section 4.3 are true and correct as of
such date. Upon discovery by the Buyer or the Seller of a breach of any of
the foregoing representations and warranties, the party discovering such
breach shall give prompt written notice to the other.
[END OF ARTICLE IV]
ARTICLE V
COVENANTS OF SELLER AND BUYER
Section 5.1 Seller Covenants. The Seller hereby covenants that:
(a) Receivables to be Accounts, General Intangibles or Chattel
Paper. The Seller will take no action to cause any Receivable to be
evidenced by any instrument (as defined in the UCC as in effect in the
Relevant UCC State), except in connection with the enforcement or
collection of a Receivable. Except in such circumstances, the Seller will
take no action to cause any Receivable to be anything other than an
"account," a "general intangible" or "chattel paper" (as defined in the UCC
as in effect in the Relevant UCC State).
(b) Security Interests. Except for the conveyances hereunder,
the Seller will not sell, pledge, assign or transfer to any other Person,
or grant, create, incur, assume or suffer to exist any Lien, on any
Receivable, whether now existing or hereafter created, or any interest
therein; the Seller will immediately notify the Buyer of the existence of
any Lien on any Receivable; and the Seller shall defend the right, title
and interest of the Buyer in, to and under the Receivables, whether now
existing or hereafter created, against all claims of third parties claiming
through or under the Seller; provided, however, that nothing in this
subsection 5.1(b) shall prevent or be deemed to prohibit the Seller from
suffering to exist upon any of the Receivables any Permitted Lien.
(c) Periodic Finance Charges and Other Fees. Except as
otherwise required by any Requirement of Law, or as is deemed by the Seller
in its sole discretion to be necessary in order to maintain its credit card
business on a competitive basis, it shall not at any time reduce the annual
percentage rates of the Periodic Finance Charges assessed on the
Receivables or other fees charged on any of the Accounts if, as a result of
any such reduction, either (i) the Seller's reasonable expectation is that
such reduction will cause a Pay Out Event (as defined in the Pooling and
Servicing Agreement) to occur so long as there are Investor Securities (as
defined in the Pooling and Servicing Agreement) outstanding or (ii) such
reduction is not also applied to any comparable segment of consumer
revolving credit card accounts owned by the Seller that have
characteristics the same as, or substantially similar to, such Accounts.
(d) Credit and Collection Policy and Contracts. The Seller
shall comply with and perform its obligations under the Contracts relating
to the Accounts and the Credit and Collection Policy except insofar as any
failure so to comply or perform would not materially and adversely affect
the rights of the Trust or the Securityholders hereunder or under the
Securities. Subject to compliance with all Requirements of Law, the Seller
may change the terms and provisions of the Contracts or the Credit and
Collection Policy with respect to any of the Accounts in any respect
(including the calculation of the amount, or the timing, of charge-offs and
the Periodic Finance Charges and other fees to be assessed thereon) only if
in the reasonable judgment of the Seller (i) (if it owns a comparable
segment of receivables) such change is made applicable to any comparable
segment of the consumer revolving credit card accounts owned by the Seller
which have characteristics the same as, or substantially similar to, such
Accounts or (ii) (if it does not own such a comparable segment of
receivables) such change will not be made with the intent to materially
benefit the Seller over the Buyer or to materially adversely affect the
Buyer, except as otherwise restricted by an endorsement, sponsorship, or
other agreement between the Seller and an unrelated third party or by the
terms of the Contracts. The Seller further covenants that the Seller will
not enter into any amendments to this Agreement that would cause a Ratings
Event (as defined in the Pooling and Servicing Agreement) to occur so long
as there are Investor Securities outstanding.
(e) Delivery of Collections. In the event that the Seller
receives Collections, the Seller agrees to forward to the Buyer or its
designee such Collections as soon as practicable after the receipt thereof,
but in no event later than the second Business Day following the Date of
Processing thereof.
(f) Notice of Liens. The Seller shall notify the Buyer promptly
after becoming aware of any Lien on any Receivable other than Permitted
Liens.
(g) Separate Business. The Seller shall maintain separate
corporate records and books of account from those of the Buyer. The Seller
will not conduct its business in the name of the Buyer so as not to mislead
others as to the identity of the entity with which those others are
concerned.
Section 5.2 Addition of Accounts. Unless excluded pursuant to
Section 2.1(e) hereof, all revolving credit consumer credit card accounts
shall be included as Accounts from and after the date upon which the Seller
acquires rights in such Additional Accounts and all Receivables in such
Additional Accounts, whether such Receivables are then existing or
thereafter created or acquired, shall be automatically sold to the Buyer.
For the purposes of this Agreement, all receivables of such Additional
Accounts shall be treated as Receivables upon their creation.
Section 5.3 Buyer Covenant Regarding Sale Treatment. The Buyer
agrees to treat this conveyance for all purposes (including, without
limitation, tax and financial accounting purposes) as a sale on all
relevant books, records, tax returns, financial statements and other
applicable documents.
[END OF ARTICLE V]
ARTICLE VI
OPTIONAL REPURCHASE
Section 6.1 Breach of Warranty. In the event of a breach with
respect to a Receivable of any of the representations and warranties set
forth in Section 4.1(j) or subsections 4.2(a)(iii) through (vii) or 4.2(b),
or in the event that a Receivable is not an Eligible Receivable on the date
of its transfer to the Buyer as a result of the failure to satisfy the
conditions set forth in the definition of Eligible Receivable, at the sole
option of the Buyer and upon written notice to the Seller, such Receivable
shall be designated an "Ineligible Receivable" and the Seller shall pay to
the Buyer an amount in cash equal to the purchase price paid for any such
Ineligible Receivable by the Buyer to the Seller. Such payment must be
made by the close of business on the thirtieth Business Day following the
day such Receivable has been designated an Ineligible Receivable;
provided, however, that such amount may be offset against any amounts due
from the Buyer to the Seller with respect to the Purchase Price for
Receivables sold to the Buyer on such day. The obligation of the Seller
set forth in this Section shall constitute the sole remedy respecting any
breach of the representations and warranties set forth in the above-
referenced Sections or failure to meet the conditions set forth in the
definition of Eligible Receivable with respect to such Receivable available
to the Buyer.
Section 6.2 Conveyance of Reassigned Receivables. Upon the
request of the Seller, the Buyer shall execute and deliver to the Seller a
reconveyance substantially in such form and upon such terms as shall be
acceptable to the Seller, pursuant to which the Buyer evidences the
conveyance to the Seller of all of the Buyer's right, title, and interest
in any Receivables reconveyed to the Seller pursuant to Section 6.1. The
Buyer shall execute such other documents or instruments of conveyance or
take such other actions as the Seller may reasonably require to effect any
repurchase of Receivables pursuant to this Article VI.
[END OF ARTICLE VI]
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to the Buyer's Obligations Regarding
Receivables. The obligations of the Buyer to purchase the Receivables on
any Business Day shall be subject to the satisfaction of the following
conditions:
(a) All representations and warranties of the Seller contained
in this Agreement shall be true and correct on the Closing Date and on the
day of creation of any Receivable created thereafter with the same effect
as though such representations and warranties had been made on such date;
(b) All information concerning the Receivables provided to the
Buyer shall be true and correct in all material respects as of the Closing
Date, in the case of Receivables sold to the Buyer on the Closing Date, or
the applicable Date of Processing, in the case of Receivables created after
the Closing Date;
(c) At the Closing Date, the Seller shall have substantially
performed all other obligations required to be performed by the provisions
of this Agreement;
(d) With respect to Receivables sold to the Buyer on the Closing
Date, the Seller shall have filed the financing statement(s) required to be
filed pursuant to Section 2.1(b); and
(e) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Buyer, and the Buyer shall have
received from the Seller copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as the Buyer may reasonably have requested.
Section 7.2 Conditions Precedent to the Seller's Obligations.
The obligations of the Seller to sell Receivables on any Business Day shall
be subject to the satisfaction of the following conditions:
(a) All representations and warranties of the Buyer contained in
this Agreement shall be true and correct with the same effect as though
such representations and warranties had been made on such date;
(b) Payment or provision for payment of the Purchase Price in
accordance with the provisions of Section 3.2 hereof shall have been made;
and
(c) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Seller, and the Seller shall have
received from the Buyer copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as the Seller may reasonably have requested.
[END OF ARTICLE VII]
ARTICLE VIII
TERM AND TERMINATION
Section 8.1 Term. This Agreement shall commence as of the date
of execution and delivery hereof and shall continue in full force and
effect until the earlier of: (a) such date as may be agreed to in writing
by the Buyer and the Seller, or (b) the occurrence of any of the following
events: the Buyer or the Seller shall (i) become insolvent, (ii) fail to
pay its debts generally as they become due, (iii) voluntarily seek, consent
to, or acquiesce in the benefit or benefits of any debtor relief law, (iv)
become a party to (or be made the subject of) any proceeding provided for
by any debtor relief law, other than as a creditor or claimant, and, in the
event such proceeding is involuntary, the petition instituting same is not
dismissed within 60 days after its filing, or (v) become unable for any
reason to purchase or re-purchase Receivables in accordance with the
provisions of this Agreement or default in its obligations hereunder, which
default continues unremedied for more than 30 days after written notice is
delivered to the defaulting party by the non-defaulting party (any such
date set forth in clause (a) or (b) hereof being a "Termination Date");
provided, however, that the termination of this Agreement pursuant to this
Section 8.1 shall not discharge any Person from any obligations incurred
prior to such termination, including, without limitation, any obligations
to make any payments with respect to Receivables sold prior to such
termination.
Section 8.2 Effect of Termination. No termination or rejection
of or failure to assume the executory obligations of this Agreement in the
event of the receivership of the Seller or bankruptcy of the Buyer shall be
deemed to impair or affect the obligations pertaining to any executed sale
or executed obligations, including, without limitation, pre-termination
breaches of representations and warranties by the Seller or the Buyer.
[END OF ARTICLE VIII]
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Amendment. This Agreement and any other Sale Papers
and the rights and obligations of the parties hereunder may not be changed
orally, but only by an instrument in writing signed by the Buyer and the
Seller. The Seller shall provide prompt written notice of any such
amendment to the Rating Agencies.
Section 9.2 Governing Law. THIS AGREEMENT AND THE OTHER SALE
PAPERS SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MINNESOTA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.3 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given
if personally delivered at or mailed by registered mail, return receipt
requested, to:
(a) in the case of the Seller, to:
Direct Merchants Credit Card Bank, N.A.
0000 Xxxx Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Telephone: (000) 000-0000
(b) in the case of the Buyer, to:
Metris Companies Inc.
000 Xxxxx Xxxxxxx 000, Xxxxx 0000
Xx. Xxxxx Xxxx, Xxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or, as to each party, at such other address as shall be designated by such
party in a written notice to each other party.
Section 9.4 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of the Sale Papers shall for
any reason whatsoever be held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of the Sale Papers and shall in
no way affect the validity or enforceability of the other provisions of the
Sale Papers.
Section 9.5 Further Assurances. The Buyer and the Seller agree
to do and perform, from time to time, any and all acts and to execute any
and all further instruments required or reasonably requested by the other
party more fully to effect the purposes of the Sale Papers, including,
without limitation, the execution of any financing statements or
continuation statements or equivalent documents relating to the Receivables
for filing under the provisions of the UCC or other laws of any applicable
jurisdiction.
Section 9.6 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Buyer or the
Seller, any right, remedy, power or privilege hereunder, 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 exhaustive of any rights, remedies, powers and privileges provided
by law.
Section 9.7 Counterparts. The Sale Papers may each be executed
in two or more counterparts including telefax transmission thereof (and by
different parties on separate counterparts), each of which shall be an
original, but all of which together shall constitute one and the same
instrument.
Section 9.8 Binding Effect; Third Party Beneficiaries. The Sale
Papers will inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns. The Seller hereby
acknowledges that the Buyer has assigned certain of its rights hereunder to
Metris Receivables, Inc. and Metris Funding Corporation, respectively, and
that such entities are third party beneficiaries hereunder.
Section 9.9 Merger and Integration. Except as specifically
stated otherwise herein, the Sale Papers set forth the entire understanding
of the parties relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by the Sale Papers. The
Sale Papers may not be modified, amended, waived or supplemented except as
provided herein.
Section 9.10 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
Section 9.11 Schedules and Exhibits. The schedules and exhibits
attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.
Section 9.12 Protection of Right, Title and Interest to
Receivables.
(a) The Seller shall cause this Agreement, all amendments hereto
and/or all financing statements and continuation statements and any other
necessary documents covering the Seller's and the Buyer's right, title and
interest to the Receivables to be promptly recorded, registered and filed,
and at all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Buyer hereunder to the
Receivables and proceeds thereof. The Seller shall deliver to the Buyer
file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. The Buyer shall cooperate fully with
the Seller in connection with the obligations set forth above and will
execute any and all documents reasonably required to fulfill the intent of
this subsection 9.12(a).
(b) Within 30 days after the Seller makes any change in its
name, identity or corporate structure which would make any financing
statement or continuation statement filed in accordance with paragraph (a)
above materially misleading within the meaning of Section 9-402(7) of the
UCC as in effect in the Relevant UCC State, the Seller shall give the Buyer
written notice of any such change and shall file such financing statements
or amendments as may be necessary to continue the perfection of the Buyer's
security interest in the Receivables and the proceeds thereof.
(c) The Seller will give the Buyer prompt written notice of any
relocation of any office from which it services Receivables or keeps
records concerning the Receivables or of its principal executive office and
whether, as a result of such relocation, the applicable provisions of the
UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement and
shall file such financing statements or amendments as may be necessary to
continue the perfection of the Buyer's security interest in the Receivables
and the proceeds thereof. The Seller will at all times maintain each
office from which it services Receivables and its principal executive
office within the United States of America.
[END OF ARTICLE IX]
IN WITNESS WHEREOF, the Buyer and the Seller each have caused
this Agreement to be duly executed by their respective officers as of the
day and year first above written.
DIRECT MERCHANTS CREDIT CARD
BANK, NATIONAL ASSOCIATION,
as Seller
By:________________________
Title:
METRIS COMPANIES INC.,
as Buyer
By:________________________
Title:
EXHIBIT A
FORM OF DAILY REPORT
