AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as of
July 30, 1998 (the "Pooling and Servicing Agreement") by and
among METRIS RECEIVABLES, INC., a corporation organized and
existing under the laws of the State of Delaware, as Transferor,
DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION, a
national banking organization organized and existing under the
laws of the United States of America, as Servicer, and THE BANK
OF NEW YORK (DELAWARE), a Delaware banking corporation organized
and existing under the laws of the State of Delaware, as Trustee.
WHEREAS, Direct Merchants Credit Card Bank, National
Association, a national banking association with its principal
place of business in Phoenix, Arizona 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 Servicer").
WHEREAS, Metris Receivables, Inc., as transferor (the
"Transferor"), the Predecessor Servicer, and The Bank of New York
(Delaware), as trustee (the "Trustee"), entered into a Pooling
and Servicing Agreement, dated as of May 26, 1995, as amended to
the date hereof (the "Previous Pooling and Servicing Agreement");
WHEREAS, Direct Merchants Credit Card Bank, National
Association, the Transferor and the Trustee previously entered
into the Amendment and Assumption Agreement (the "Assumption
Agreement") dated as of July 13, 1998 (the "Assumption Date") in
which the Direct Merchants Credit Card Bank, National Association
assumed all of the rights and obligations of the Predecessor
Servicer hereunder;
WHEREAS, Metris Receivables, Inc., as Transferor,
Direct Merchants Credit Card Bank, National Association, as
Servicer and The Bank of New York (Delaware), as Trustee desire
to amend and restate the Pooling and Servicing Agreement in
accordance with the provisions of subsection 13.1(b) of the
Pooling and Servicing Agreement to read in its entirety as set
forth below;
NOW, THEREFORE, pursuant to subsection 13.1(b) of the
Pooling and Servicing Agreement, the parties hereto hereby agree
that effective on and as of the date hereof, the Pooling and
Servicing Agreement is hereby amended to read in its entirety as
follows:
In consideration of the mutual agreements herein
contained, each party agrees as follows for the benefit of the
other parties and the Securityholders:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this
Agreement, the following words and phrases shall have the
following meanings:
"Account" shall mean each revolving credit consumer
credit card account established pursuant to a Contract between a
Credit Card Originator and any Person, which on the Initial
Closing Date was an Eligible Account or, with respect to accounts
transferred to the Trust after the Initial Closing Date, each
Additional Account or Supplemental Account. The definition of
Account shall include each Transferred Account but shall not
include any Accounts containing Ineligible Receivables and
reassigned to the Transferor pursuant to Section 2.4. The term
"Account" shall be deemed to refer to an Additional Account or
Supplemental Account only from and after the Addition Date with
respect thereto, and the term "Account" shall be deemed to refer
to any Removed Account only prior to the Removal Date with
respect thereto.
"Addition Date" shall mean each date as of which
Receivables under Additional Accounts or Supplemental Accounts
are included in the Trust as Accounts pursuant to Section 2.6.
"Additional Account" shall mean (a) for the period
from the Initial Closing Date through the day preceding the
Amendment Closing Date, each revolving credit consumer credit
card account owned by a Credit Card Originator coming into
existence after the Initial Closing Date which is an Approved
Account that the Transferor has not elected to exclude from the
Trust after June 7, 1996 and prior to the Amendment Closing Date,
or (b) on and after the Amendment Closing Date, each revolving
credit consumer credit card account in which a Credit Card
Originator acquires rights that is an Approved Account and is not
an Excluded Account; provided, however, that a revolving credit
consumer credit card account that does not satisfy the definition
of Approved Account on the date of its creation shall be an
Additional Account on the date that it satisfies the definition
of Approved Account. Any election to exclude certain Approved
Accounts shall be made by the Transferor or the Servicer
providing to the Trustee a written notice thereof clearly
identifying such excluded accounts.
"Adjustment Payment" shall have the meaning specified
in subsection 3.8(a).
"Affiliate" means, 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.
"Aggregate Invested Amount" shall mean, as of any date
of determination, the sum of the Invested Amounts of all Series
of Securities issued and outstanding on such date of
determination.
"Aggregate Investor Percentage" with respect to each of
Principal Collections, Finance Charge Collections and Defaulted
Receivables, as the case may be, shall mean, as of any date of
determination, the sum of such Investor Percentages of all Series
of Securities issued and outstanding on such date of
determination; provided, however, that the Aggregate Investor
Percentage shall not exceed 100%.
"Aggregate Principal Receivables" shall mean, for any
day, the aggregate amount of Principal Receivables at the end of
such day.
"Agreement" shall mean this Pooling and Servicing
Agreement and all amend ments hereof and supplements hereto,
including any Supplement.
"Amendment Closing Date" shall mean July 30, 1998.
"Amortization Period" shall mean, with respect to any
Series, the period following the Revolving Period for such
Series, which shall be the Amortization Period, the Early
Amortization Period, or other amortization or accumulation
period, in each case as defined with respect to such Series in
the related Supplement.
"Amortization Period Commencement Date" shall mean with
respect to any Series, the date on which the Amortization Period
commences with respect thereto as set forth in the related
supplement.
"Applicable Tax State" shall mean, as of any date of
determination, each state as to which any of the following is
then applicable: (a) a state in which the Trustee maintains its
principal corporate trust office, (b) a state in which the
Transferor maintains its principal executive offices, and (c) a
state in which the Servicer regularly conducts servicing and
collection operations which are not limited to ministerial
activities and which relate to a material portion of the
Receivables.
"Applicants" shall have the meaning specified in
Section 6.7.
"Appointment Day" shall have the meaning specified in
subsection 9.2(a).
"Approved Account" shall mean each (i) Eligible Account
that is a MasterCard or VISA account or (ii) any other revolving
credit consumer credit card account the inclusion in the Trust of
which would not cause a Ratings Event.
"Authentication Agent" shall have the meaning specified
in Section 6.8.
"Authorized Newspaper" shall mean a newspaper of
general circulation in the Borough of Manhattan, The City of New
York printed in the English language and customarily published on
each Business Day, whether or not published on Saturdays, Sundays
and holidays.
"Automatic Addition Suspension Date" shall mean the
Business Day specified in subsection 2.6(b).
"Automatic Addition Termination Date" shall mean the
Business Day specified by the Transferor pursuant to subsection
2.6(b) as of which new open end credit card accounts designated
by the Transferor shall cease to become Additional Accounts.
"Bank Receivables Purchase Agreement" shall mean the
Amended and Restated Bank Receivables Purchase Agreement dated as
of July 30, 1998 by and among Metris, as purchaser, and DMCCB, as
Seller, as amended from time to time.
"Base Rate" shall mean, with respect to any outstanding
Series, the amount which the related Supplement specifies as the
"Base Rate".
"Bearer Securities" shall have the meaning specified in
Section 6.1.
"Bearer Rules" shall mean the provisions of the
Internal Revenue Code, in effect from time to time, governing the
treatment of bearer obligations, including sections 163(f), 871,
881, 1441, 1442 and 4701, and any regulations thereunder
including, to the extent applicable to any Series, proposed or
temporary regulations of the Internal Revenue Service.
"Benefit Plan" shall mean (i) an employee benefit plan
(as defined in Section 3(3) of ERISA that is subject to the
provisions of Title I of ERISA, (ii) a plan described in Section
4975(e)(1) of the Code or (iii) any entity whose underlying
assets include plan assets by reason of a plan's investment in
the entity (each, a "Benefit Plan").
"Book-Entry Securities" shall mean securities
evidencing a beneficial interest in the Investor Securities,
ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 6.10;
provided, that after the occurrence of a condition whereupon book-
entry registration and transfer are no longer authorized and
Definitive Securities are to be issued to the Security Owners,
such securities shall no longer be "Book-Entry Securities."
"Business Day" shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in New
York, Minnesota, Arizona, Nebraska, Oklahoma or Delaware (or,
with respect to any Series, any additional city or state
specified in the related Supplement) are authorized or obligated
by law or executive order to be closed, and such other days in
each year designated by the Servicer in writing to the Trustee by
the first day of December in the preceding year.
"Cash Equivalents" shall mean, unless otherwise
provided in the Supplement with respect to any Series, (a)
negotiable instruments or securities represented by instruments
in bearer or registered form which evidence (i) obligations of or
fully guaranteed by the United States of America; (ii) time
deposits, promissory notes, or certificates of deposit of any
depositary institution or trust company; provided, however, that
at the time of the Trust's investment or contractual commitment
to invest therein, the certificates of deposit or short-term
deposits of such depositary institution or trust company shall
have a credit rating from Standard & Poor's of A-1+ and from
Moody's of P-1; (iii) commercial paper having, at the time of the
Trust's investment or contractual commitment to invest therein, a
rating from Standard & Poor's of A-1+ and from Moody's of P-1;
(iv) bankers acceptances issued by any depositary institution or
trust company described in clause (a)(ii) above; and (v)
investments in money market funds rated AAA-m or AAA-mg by
Standard & Poor's and Aaa by Moody's or otherwise approved in
writing by Moody's and Standard & Poor's; (b) time deposits and
demand deposits in the name of the Trust or the Trustee in any
depositary institution or trust company referred to in clause
(a)(ii) above; (c) securities not represented by an instrument
that are registered in the name of the Trustee or its nominee
(which may not be Metris or an Affiliate) upon books maintained
for that purpose by or on behalf of the issuer thereof and
identified on books maintained for that purpose by the Trustee as
held for the benefit of the Trust or the Securityholders, and
consisting of (x) shares of an open end diversified investment
company which is registered under the Investment Company Act
which (i) invests its assets exclusively in obligations of or
guaranteed by the United States of America or any instrumentality
or agency thereof having in each instance a final maturity date
of less than one year from their date of purchase or other Cash
Equivalents, (ii) seeks to maintain a constant net asset value
per share, (iii) has aggregate net assets of not less than
$100,000,000 on the date of purchase of such shares and (iv)
which the Rating Agency designates in writing will not result in
a withdrawal or downgrading of its then current rating of any
Series rated by it or (y) Eurodollar time deposits of a
depository institution or trust company that are rated A-1+ by
Standard & Poor's and P-1 by Moody's; provided, however, that at
the time of the Trust's investment or contractual commitment to
invest therein, the Eurodollar deposits of such depositary
institution or trust company shall have a credit rating from
Standard & Poor's of A-1+ and P-1 by Moody's; (d) a guaranteed
investment contract (guaranteed as to timely payment) which each
Rating Agency designates in writing will not result in a
withdrawal or downgrading of its then current rating of any
Series rated by it; (e) repurchase agreements transacted with
either (i) an entity subject to the United States federal
bankruptcy code, provided, however, that (A) the term of the
repurchase agreement is consistent with the requirements with
regard to the maturity of Cash Equivalents specified herein or in
the applicable Supplement for the applicable account or is due on
demand, (B) the Trustee or a third party acting solely as agent
for the Trustee has possession of the collateral, (C) the Trustee
on behalf of the Trust has a perfected first priority security
interest in the collateral, (D) the market value of the
collateral is maintained at the requisite collateral percentage
of the obligation in accordance with standards of the Rating
Agencies, (E) the failure to maintain the requisite collateral
level will obligate the Trustee to liquidate the collateral as
promptly as practicable upon instructions from the Servicer, (F)
the securities subject to the repurchase agreement are either
obligations of, or fully guaranteed as to principal and interest
by, the United States of America or any agency or any
instrumentality or agency thereof, certificates of deposit or
bankers acceptances and (G) the securities subject to the
repurchase agreement are free and clear of any third party lien
or claim, or (ii) a financial institution insured by the FDIC, or
any broker-dealer with "retail-customers" that is under the
jurisdiction of the Securities Investors Protection Corp.
("SIPC"), provided, however, that (A) the market value of the
collateral is maintained at the requisite collateral percentage
of the obligation in accordance with the standards of the Rating
Agencies, (B) the Trustee or a third party (with a rating from
Moody's and Standard & Poor's of P-1 and A-1+, respectively)
acting solely as agent for the Trustee has possession of the
collateral, (C) the collateral is free and clear of third party
liens and, in the case of an SIPC broker, was not acquired
pursuant to a repurchase or reverse repurchase agreement and (D)
the failure to maintain the requisite collateral percentage will
obligate the Trustee to liquidate the collateral upon
instructions from the Servicer; provided, however, that at the
time of the Trust's investment or contractual commitment to
invest in any repurchase agreement the short-term deposits or
commercial paper rating of such entity or institution in
subsections (i) and (ii) above shall have a credit rating of P-1
or A-1+ or their equivalent from each Rating Agency; and (f) any
other investment if each Rating Agency confirms in writing that
such investment will not adversely affect its then current rating
of the Investor Securities.
"Cedel" shall mean Cedel Bank, societe anonyme.
"Class" shall mean, with respect to any Series, any one
of the classes of Securities of that Series as specified in the
related Supplement.
"Clearing Agency" shall mean an organization registered
as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended.
"Clearing Agency Participant" shall mean a broker,
dealer, bank, other financial institution or other Person for
whom from time to time a Clearing Agency or Foreign Clearing
Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency or Foreign Clearing Agency.
"Closing Date" shall mean, with respect to any Series,
the date of issuance of such Series of Securities, as specified
in the related Supplement.
"Collection Account" shall have the meaning specified
in subsection 4.2(a).
"Collections" shall mean all payments received by the
Servicer 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.
"Contract" shall mean an agreement between a Credit
Card Originator 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).
"Corporate Trust Office" shall mean the principal
office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office at
the date of the execution of this Agreement is located at Xxxxx
Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, Attention:
Corporate Trust Specialized Agency Services.
"Coupon" shall have the meaning specified in Section
6.1.
"Credit and Collection Policy" means the written
policies and procedures of the applicable Credit Card Originator
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.
"Credit Card Originator" shall mean (i) DMCCB Utah and
(ii) DMCCB and its successors or assigns under the Bank
Receivables Purchase Agreement and/or any transferee of the
Accounts from DMCCB or (iii) any other originator of accounts
which enters into a receivables purchase agreement with DMCCB or
Metris (to the extent that rights therein are granted to the
Transferor directly or indirectly) or the Transferor in
accordance with the provisions of this Agreement and who has been
identified in a prior written notice to each Rating Agency.
"Daily Report" shall mean a report in the form
specified in subsection 1.2(e) as may be supplemented pursuant to
any Supplement.
"Date of Processing" shall mean, with respect to any
transaction, the date on which such transaction is settled
according to the Servicer's (or, in the case of a Credit Card
Originator, such Credit Card Originator's) computer master file
of revolving credit accounts.
"Default Amount" shall mean, (i) on any Business Day
other than the Default Recognition Date, the aggregate amount of
Principal Receivables in Accounts which became Defaulted Accounts
on such Business Day and (ii) on any Default Recognition Date the
aggregate amount of Principal Receivables in Accounts which
became Defaulted Accounts during the then current Monthly Period
(other than such Accounts which were included in clause (i)).
"Default Recognition Date" shall mean the last day of
each calendar month; provided, however that with respect to any
Monthly Period the "related Default Recognition Date" shall mean
the Default Recognition Date occurring closest to the last day of
such Monthly Period and any amounts allocated or applied on such
Default Recognition Date shall be deemed to apply to the related
Monthly Period.
"Defaulted Account" shall mean each Account with
respect to which, in accor dance with the Credit and Collection
Policy or the Servicer's customary and usual servicing
procedures, the Servicer 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 Servicer'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.
"Defeasance Account" shall have the meaning specified
in the applicable Supplement.
"Definitive Security" shall have the meaning specified
in Section 6.10.
"Depositary" shall have the meaning specified in
Section 6.10.
"Depositary Agreement" shall mean, with respect to each
Series, the agreement among the Transferor, the Trustee and the
applicable Clearing Agency, or as otherwise provided in the
related Supplement.
"Determination Date" shall mean the second Business Day
prior to each Distribu tion Date.
"Discount Option Receivables" shall mean, on and after
the date on which the Transferor's exercise of its discount
option pursuant to Section 2.8 takes effect, the sum of (a) the
aggregate Discount Option Receivables at the end of the prior day
(which amount, prior to the date on which the Transferor's
exercise of its discount option takes effect and with respect to
Receivables generated prior to such date, shall be zero) plus (b)
any New Discount Option Receivables created on such day minus (c)
any Discount Option Receivables Collections received on such Date
of Processing.
"Discount Option Receivable Collections" shall mean on
any Date of Processing, on and after the date on which the
Transferor's exercise of its discount option pursuant to Section
2.8 takes effect, the product of (a) a fraction the numerator of
which is the amount of Discount Option Receivables and the
denominator of which is the sum of the Principal Receivables and
the Discount Option Receivables in each case (for both numerator
and denominator) at the end of the prior Date of Processing, (b)
Collections of Principal Receivables and Discount Option
Receivables received on such Date of Processing and (c) a
fraction the numerator of which is the aggregate amount of
Principal Receivables arising on each Date of Processing falling
on or after the date on which the Transferor exercises its
discount option and the denominator of which is the Aggregate
Principal Receivables on such Date of Processing.
"Discount Percentage" shall mean the fixed percentage,
if any, designated by the Transferor pursuant to Section 2.8.
"Disposition" shall have the meaning specified in
Section 9.2(a).
"Distribution Account" shall have the meaning specified
in subsection 4.2(c).
"Distribution Date" shall mean, unless otherwise
specified in any Supplement for the related Series, the twentieth
day of each month or, if such twentieth day is not a Business
Day, the next succeeding Business Day.
"DMCCB" shall mean Direct Merchants Credit Card Bank,
National Association, a national banking organization organized
and existing under the laws of the United States of America and
the successor by merger to DMCCB Utah.
"DMCCB Utah" or "Predecessor Servicer" shall mean
Direct Merchants Credit Card Bank, National Association, a
national banking organization organized under the laws of the
United States and located in Salt Lake City, Utah which has been
merged into DMCCB.
"Dollars", "$" or "U.S. $" shall mean United States
dollars.
"Eligible Account" shall mean, as of the Initial
Closing Date (or, with respect to Additional Accounts, on the
date the Credit Card Originator acquires rights therein, or, with
respect to Supplemental Accounts, as of the date the Receivables
arising in such Accounts are designated for inclusion in the
Trust), each revolving credit consumer credit card account owned
by a Credit Card Originator:
(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 applicable
Credit Card Originator or any of its Affiliates in its computer
files as stolen or lost;
(d) which is not at the time of transfer to the Trust
sold or pledged to any other party and which does not have
Receivables which, at the time of transfer to the Trust, are sold
or pledged to any other party (provided that Receivables which
were sold or pledged prior to the Closing Date, but were
repurchased free of all Liens or where all Liens were released
prior to the sale hereunder, shall not be disqualified under this
clause (d)); and
(e) the Receivables in which the applicable Credit
Card Originator has not charged off in its customary and usual
manner for charging off Receivables in such Accounts as of the
Initial Closing Date (or, with respect to Additional Accounts, as
of the date the Receivables of such Accounts are first designated
for inclusion in the Trust) unless such Account is subsequently
reinstated.
"Eligible Receivable" shall mean each Receivable that
satisfies each of the following criteria: (a) 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 each Relevant UCC State, (d) it is at the time of
its transfer to the Trust 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) it was created or
acquired in compliance, in all material respects, with all
Requirements of Law applicable to the Credit Card Originator and
pursuant to a Contract that complies, in all material respects,
with all Requirements of Law applicable to the Credit Card
Originator (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 Transferor or the Trust will have good
and marketable title free and clear of all Liens and security
interests arising under or through the Transferor (other than
Permitted Liens).
"Enhancement" shall mean, with respect to any Series,
any cash collateral account, cash collateral guaranty, guaranty,
collateral invested amount, letter of credit, guaranteed rate
agreement, maturity guaranty facility, tax protection agreement,
interest rate cap, interest rate swap, currency swap,
subordination of the rights of one Class or one Series to
another, or any other contract, agreement or arrangement for the
benefit of the Securityholders of such Series (or Securityholders
of any Class within such Series) as designated in the applicable
Supplement.
"Enhancement Provider" shall mean, with respect to any
Series, the Person, if any, designated as such in the related
Supplement.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"Euroclear Operator" shall mean Xxxxxx Guaranty Trust
Company of New York, Brussels, Belgium office, as operator of the
Euroclear System.
"Excess Funding Account" shall have the meaning
specified in subsection 4.2(d).
"Exchange" shall mean either of the procedures
described in Section 6.9(b).
"Exchange Date" shall have the meaning, with respect to
any Series issued pursuant to an Exchange, specified in
subsection 6.9(b).
"Exchange Notice" shall have the meaning, with respect
to any Series issued pursuant to an Exchange, specified in
subsection 6.9(b).
"Exchangeable Transferor Security" shall mean the
security executed by the Transferor and authenticated by the
Trustee, substantially in the form of Exhibit A and exchangeable
as provided in Section 6.9; provided, that at any time there
shall be only one Exchangeable Transferor Security.
"Excluded Account" shall mean on any date of
determination (i) during any period on and after Restart Date and
prior to an Automatic Addition Suspension Date, any revolving
credit consumer credit card account which has been excluded from
addition to the Trust pursuant to subsections 2.6(b) or 2.6(g)
and any revolving credit consumer credit card account which the
Transferor has elected to exclude pursuant to subsection 2.6(h)
and (ii) during any period on and after an Automatic Addition
Suspension Date and prior to a Restart Date, all revolving credit
consumer credit card accounts other than accounts that were
Accounts on the Automatic Addition Suspension Date and
Supplemental Accounts previously added during such period.
"Extended Trust Termination Date" shall have the
meaning specified in subsec tion 12.1(a).
"FDIC" shall mean the Federal Deposit Insurance
Corporation, or any successor thereto.
"Finance Charge Collections" shall mean, with respect
to any Business Day, Collections received by the Servicer with
respect to Finance Charge Receivables on such Business Day.
"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 (x) Recoveries, (y) investment
earnings on amounts credited to the Excess Funding Account and
(z) Discount Option Receivables, if any.
"Foreign Clearing Agency" shall mean Cedel and the
Euroclear Operator.
"Global Security" shall have the meaning specified in
Section 6.13.
"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.
"Holder" or "Securityholder" shall mean the Person in
whose name a Security is registered in the Security Register, and
if applicable, the holder of any Bearer Security or Coupon, as
the case may be.
"Ineligible Receivable" shall mean any Receivable that
does not satisfy the definition of Eligible Receivable.
"Initial Closing Date" shall mean May 30, 1995.
"Initial Invested Amount" shall mean, with respect to
any Series of Securities, the amount stated in the related
Supplement or, if not stated therein, the initial Invested
Amount.
"Insolvency Event" shall have the meaning specified in
subsection 9.2(a).
"Interest Funding Account" shall have the meaning
specified in subsection 4.2(b).
"Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
"Invested Amount" shall have, with respect to any
Series of Securities, the meaning stated in the related
Supplement.
"Investment Company Act" shall mean the Investment
Company Act of 1940, as amended from time to time.
"Investor Account" shall mean each of any Interest
Funding Account, any Principal Account, the Excess Funding
Account, any Distribution Account and any Series Account.
"Investor Exchange" shall have the meaning specified in
subsection 6.9(b).
"Investor Percentage" shall mean, with respect to
Principal Collections, Finance Charge Collections and Receivables
in Defaulted Accounts, and with respect to any Series of
Securities, the percentage specified in the related Supplement.
"Investor Security" shall mean any one of the
securities (including, without limitation, the Bearer Securities
or the Registered Securities) executed by the Transferor and
authenticated by the Trustee substantially in the form (or forms
in the case of a Series with multiple classes) of the investor
security or variable funding security attached to the related
Supplement.
"Investor Securityholder" shall mean the Holder of an
Investor Security.
"Lien" shall mean any lien, security interest or other
encumbrance; provided, however, that any assignment pursuant to
Section 7.2 shall not be deemed to constitute a Lien.
"Metris" shall mean Metris Companies Inc., a
corporation organized and existing under the laws of the State of
Delaware.
"Minimum Aggregate Principal Receivables" shall mean,
as of any date of determination, the sum of the numerators used
in the calculation of the Investor Percentages for Principal
Collections for all outstanding Series on such date of
determination.
"Minimum Retained Interest" shall mean the product of
the weighted average Minimum Retained Percentages for all Series
and the sum of the outstanding principal amounts of all Classes
of all Series.
"Minimum Retained Percentage" shall mean, for any
Series, the Minimum Retained Percentage specified in the
Supplement for that Series.
"Minimum Transferor Interest" shall mean, as of any
date of determination, the product of (i) the sum of (a) the
aggregate Principal Receivables and (b) the amounts on deposit in
the Excess Funding Account and (ii) the Minimum Transferor
Percentage.
"Minimum Transferor Percentage" shall mean the highest
Minimum Transferor Percentage specified in any Supplement.
"Monthly Investor Servicing Fee" shall mean the
Servicing Fee payable to the Servicer with respect to a Monthly
Period.
"Monthly Period" shall mean, unless otherwise defined
with respect to a Series in the related Supplement, the period
from and including the first day of each fiscal month of the
Transferor to and including the last day of such fiscal month.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. or
its successor.
"MRI" shall mean Metris Receivables, Inc., a Delaware
corporation.
"New Discount Option Receivables" shall mean, on any
Date of Processing on and after the date on which the
Transferor's exercise of its discount option pursuant to Section
2.8 takes effect, the product of the amount of any Principal
Receivables created on such Date of Processing (without reducing
the amount of Principal Receivables by the amount of Financial
Charge Receivables which are Discount Option Receivables) and the
Discount Percentage.
"Obligor" shall mean a Person obligated to make
payments with respect to a Receivable arising under an Account
pursuant to a Contract.
"Officer's Certificate" shall mean a certificate signed
by any Vice President, Treasurer, Assistant Treasurer or more
senior officer of the Transferor or Servicer and delivered to the
Trustee.
"Opinion of Counsel" shall mean a written opinion of
counsel, who may be counsel for or an employee of the Person
providing the opinion, and who shall be reasonably acceptable to
the Trustee.
"Paying Agent" shall mean any paying agent appointed
pursuant to Section 6.6 and shall initially be the Trustee.
"Pay Out Commencement Date" shall mean, with respect to
each Series, the date on which (a) a Trust Pay Out Event is
deemed to occur pursuant to Section 9.1 or (b) a Series Pay Out
Event is deemed to occur pursuant to the Supplement for such
Series.
"Pay Out Event" shall mean, with respect to each
Series, a Trust Pay Out Event or a Series Pay Out Event.
"Periodic Finance Charges" shall have, with respect to
any Account, the meaning specified 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: (i) Liens in favor of the Transferor created
pursuant to the Purchase Agreement assigned to the Trustee
pursuant to this Agreement; (ii) Liens in favor of the Trustee
pursuant to this Agreement; and (iii) 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, limited liability company,
joint venture, association, joint-stock company, trust,
unincorporated organization, governmental entity or other entity
of similar nature.
"Pool Factor" shall mean, as of any Record Date, a
number carried out to seven decimals representing the ratio of
the applicable Invested Amount as of such Record Date (determined
after taking into account any reduction in the Invested Amount
which will occur on the following Distribution Date) to the
applicable Initial Invested Amount unless otherwise specified
with respect to a Series in the related Supplement.
"Pooling and Servicing Agreement" shall have the
meaning assigned in the preamble hereto.
"Portfolio Yield" shall mean, with respect to any
Monthly Period and any outstanding Series, the amount which the
related Supplement specifies as the "Portfolio Yield" for such
Monthly Period.
"Principal Account" shall have the meaning specified in
subsection 4.2(b).
"Principal Collections" shall mean, with respect to any
Business Day, the Collections received with respect to each
Principal Receivable on such Business Day.
"Principal Receivables" shall mean amounts shown on the
Servicer's records as amounts payable by Obligors with respect to
Eligible Receivables on any Account other than such amounts that
are Finance Charge Receivables (including Discount Option
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.
"Principal Shortfalls" shall mean, with respect to any
Business Day and any outstanding Series, the amount which the
related Supplement specifies as the "Principal Shortfall" for
such Business Day.
"Principal Terms" shall have the meaning, with respect
to any Series issued pursuant to an Exchange, specified in
subsection 6.9(c).
"Prospective Pay Out Event" shall have the meaning
specified in subsection 2.3(m).
"Publication Date" shall have the meaning specified in
subsection 9.2(a).
"Purchase Agreement" shall mean the amended and
restated purchase agreement dated as of July 30, 1998 between the
Transferor, as buyer of receivables, and Metris, as seller of
receivables, as amended from time to time.
"Qualified Institution" shall have the meaning
specified in subsection 4.2(a).
"Rating Agency" shall mean, with respect to each
Series, the rating agency or agencies, if any, specified in the
related Supplement.
"Ratings Event" shall mean, with respect to any Class
of any outstanding Series rated by a Rating Agency, a reduction
or withdrawal of the rating of any such Class by a Rating Agency.
"Reassignment Date" shall have the meaning specified in
subsection 2.4(e).
"Receivable" shall mean all of the indebtedness of any
Obligor under an Account, including the right to receive payment
of any interest or finance charges and other obligations of such
Obligors with respect thereto. Each receivable includes, without
limitation, all rights of the Transferor under the applicable
Contract.
"Record Date" shall mean, with respect to any
Distribution Date, unless otherwise specified in the applicable
Supplement, the Business Day preceding such Distribution Date,
except that, with respect to any Definitive Securities, Record
Date shall mean the fifth day of the then current Monthly Period.
"Recoveries" shall mean any amounts received by the
Servicer with respect to Receivables in Accounts that previously
became Defaulted Accounts.
"Registered Securities" shall have the meaning
specified in Section 6.1.
"Related Person" shall mean a Person that is an
Affiliate of Metris, any Investor Securityholder, any Enhancement
Provider, or any Person whose status would violate the conditions
for a trustee contained in Section (4)(i) of Rule 3a-7 under the
Investment Company Act of 1940, as amended.
"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
Transferor pursuant to the Purchase Agreement or the ownership or
security interest of the Trustee established under this
Agreement.
"Removal Date" shall have the meaning specified in
subsection 2.7(b).
"Removal Notice Date" shall mean the day, no later than
the fifth Business Day prior to a Removal Date, on which the
Transferor gives notice to the Trustee pursuant to Section 2.7(a)
of its intention to remove Accounts from the Trust.
"Removed Accounts" shall have the meaning specified in
subsection 2.7(a).
"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.
"Responsible Officer" shall mean any officer within the
Corporate Trust Office (or any successor group of the Trustee),
including the President, any Vice President or any other officer
of the Trustee customarily performing functions similar to those
performed by any person who at the time shall be an above-
designated officer and who shall have direct responsibility for
the administration of this Agreement.
"Restart Date" shall mean the date specified in the
notice delivered by the Transferor to the Trustee pursuant to
subsection 2.6(b).
"Retained Interest" shall mean, on any date of
determination, the sum of the Transferor Interest and the
Invested Amount represented by any Transferor Retained Security.
"Retained Percentage" shall mean, on any date of
determination, the percentage equivalent of a fraction the
numerator of which is the Retained Interest and the denominator
of which is the aggregate amount of Principal Receivables at the
end of the day immediately prior to such date of determination
plus all amounts on deposit in the Excess Funding Account (but
not including investment earnings on such amounts).
"Revolving Period" shall have, with respect to each
Series, the meaning specified in the related Supplement.
"Secured Obligations" shall have the meaning specified
in Section 2.1.
"Securities Act" shall mean the Securities Act of 1933,
as amended from time to time.
"Security" shall mean any one of the Investor
Securities of any Series or the Exchangeable Transferor Security.
"Security Interest" shall mean interest payable in
respect of the Investor Securities of any Series pursuant to
Article IV of the Agreement as supplemented by the Supplement for
such Series.
"Security Owner" shall mean, with respect to a Book-
Entry Security, the Person who is the beneficial owner of such
Book-Entry Security, as may be reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing
Agency).
"Security Principal" shall mean principal payable in
respect of the Investor Securities of any Series pursuant to
Article IV of this Agreement.
"Security Rate" shall mean, with respect to any Series
of Securities (or, for any Series with more than one Class, for
each Class of such Series), the percentage (or formula on the
basis of which such rate shall be determined) stated in the
related Supplement.
"Security Register" shall mean the register maintained
pursuant to Section 6.3, providing for the registration of the
Securities and transfers and exchanges thereof.
"Securityholder" or "Holder" shall mean the Person in
whose name a Security is registered in the Security Register and,
if applicable, the holder of any Bearer Security or Coupon, as
the case may be.
"Series" shall mean any series of Investor Securities
issued by the Trust pursuant to a Supplement, which may include
within any such Series a Class or Classes of Investor Securities
subordinate to another such Class or Classes of Investor
Securities.
"Series Account" shall mean any account or accounts
established pursuant to a Supplement for the benefit of the
related Series.
"Series Charge Off" shall have, with respect to each
Series, the meaning specified in the applicable Supplement.
"Series Default Amount" shall have, with respect to any
Series of Securities, the meaning stated in the related
Supplement.
"Series Pay Out Event" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"Series Percentage" shall mean with respect to any
Series, on any date of determination, the percentage equivalent
of a fraction the numerator of which is the Invested Amount of
such Series and the denominator of which is the sum of the
Invested Amounts of all Series then outstanding.
"Series Servicing Fee Percentage" shall mean, with
respect to any Series, the amount specified as such in the
related Supplement.
"Series Termination Date" shall mean, with respect to
any Series of Securities, the date stated as such in the related
Supplement.
"Servicer" shall mean DMCCB in its capacity as
Servicer of the Receivables or any Person appointed as Successor
Servicer as herein provided to service the Receivables.
"Servicer Default" shall have the meaning specified in
Section 10.1.
"Servicing Fee" shall have the meaning specified in the
related Supplements.
"Settlement Statement" shall mean a report in the form
specified in subsection 1.2(e) as may be supplemented pursuant to
any Supplement.
"Shared Principal Collections" shall mean, with respect
to any Business Day, the aggregate amount of Principal
Collections for all outstanding Series that the related
Supplements specify are to be treated as "Shared Principal
Collections" available to be allocated to other Series for such
Business Day.
"Standard & Poor's" shall mean Standard & Poor's, a
Division of The XxXxxx- Xxxx Companies, or its successor.
"Successor Servicer" shall have the meaning specified
in subsection 10.2(a).
"Supplement" shall mean, with respect to any
outstanding Series, a supplement to this Agreement complying with
the terms of Section 6.9 of this Agreement, executed in
conjunction with any issuance of Securities of such Series.
"Supplemental Accounts" shall have the meaning
specified in subsection 2.6(c).
"Supplemental Security" shall have the meaning
specified in subsection 6.9(d).
"Termination Notice" shall have, with respect to any
Series, the meaning specified in Section 10.1.
"Transfer" shall mean transfer, sell, exchange, pledge,
hypothecate, participate, assign or otherwise dispose, in whole
or in part.
"Transfer Agent and Registrar" shall have the meaning
specified in Section 6.3 (a) and shall initially be The Bank of
New York (Delaware).
"Transfer Date" shall mean, with respect to any Series,
the Business Day immediately prior to each Distribution Date.
"Transferor" shall mean Metris Receivables, Inc., a
corporation organized and existing under the laws of the State of
Delaware, and any successor thereto.
"Transferor Exchange" shall have the meaning specified
in subsection 6.9(b).
"Transferor Interest" shall mean, on any date of
determination, the aggregate amount of Principal Receivables at
the end of the day immediately prior to such date of
determination plus all amounts on deposit in the Excess Funding
Account (but not including investment earnings on such amounts)
at the end of such immediately preceding day, minus the Aggregate
Invested Amount at the end of such immediately preceding day.
"Transferor Percentage" shall mean, on any date of
determination, when used with respect to Principal Collections,
Finance Charge Collections and Receivables in Defaulted Accounts,
a percentage equal to 100% minus the Aggregate Investor
Percentage with respect to such categories of Receivables.
"Transferor Retained Class" shall mean any Class of
Investor Securities of any Series which the Transferor retained
pursuant to the terms of any Supplement.
"Transferor Retained Securities" shall mean Investor
Securities of any Series which the Transferor is required to
retain pursuant to the terms of any Supplement.
"Transferred Account" shall mean an Account with
respect to which a new credit account number has been issued by
the applicable Credit Card Originator 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.
"Trigger Event" shall have the meaning specified in
subsection 9.2(a).
"Trust" shall mean the trust created by this Agreement,
the corpus of which shall consist of the Trust Property.
"Trust Extension" shall have the meaning specified in
subsection 12.1(a).
"Trust Pay Out Event" shall have, with respect to each
Series, the meaning specified in Section 9.1.
"Trust Property" shall have the meaning specified in
Section 2.1.
"Trust Termination Date" shall mean the earliest to
occur of (i) unless a Trust Extension shall have occurred, the
day after the Distribution Date with respect to any Series
following the date on which funds shall have been deposited in
the Distribution Account or the applicable Series Account for the
payment of Investor Securityholders of each Series then issued
and outstanding sufficient to pay in full the Aggregate Invested
Amount plus interest accrued at the applicable Security Rate
through the end of the day prior to the Distribution Date with
respect to each such Series and certain other amounts as may be
specified in any Series Supplement, (ii) if a Trust Extension
shall have occurred, the Extended Trust Termination Date, and
(iii) the date specified in subsection 12.1(a).
"Trustee" shall mean The Bank of New York (Delaware), a
banking corporation organized and existing under the laws of
Delaware, and its successors and any Person resulting from or
surviving any consolidation or merger to which it or its
successors may be a party and any successor trustee appointed as
herein provided.
"UCC" shall mean the Uniform Commercial Code, as
amended from time to time, as in effect in the applicable
jurisdiction.
"Undivided Interest" shall mean the undivided interest
in the Trust evidenced by an Investor Security.
"Variable Funding Securities" shall mean a Series of
Investor Securities, issued pursuant to Section 6.9 and a
Variable Funding Supplement, in one or more Classes.
"Variable Funding Supplement" shall mean a Supplement
executed in connection with the issuance of Variable Funding
Securities.
Section 1.2 Other Definitional Provisions.
(a) All terms defined in any Supplement or this
Agreement shall have the meanings ascribed to them herein when
used in any security, certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any security, certificate or
other document made or delivered pursuant hereto or thereto,
accounting terms not defined in Section 1.1, and accounting terms
partially defined in Section 1.1 to the extent not defined, shall
have the respective meanings given to them under generally
accepted accounting principles. To the extent that the
definitions of accounting terms herein are inconsistent with the
meanings of such terms under generally accepted accounting
principles, the definitions contained herein shall control.
(c) The agreements, representations and warranties of
DMCCB in this Agreement and in any Supplement in its capacity as
Servicer and of MRI in its capacity as Transferor shall be deemed
to be the agreements, representations and warranties of DMCCB and
MRI solely in each such capacity for so long as either of them
acts in each such capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to any Supplement or this Agreement as a whole and not to any
particular provision of this Agreement or any Supplement; and
Section, subsection, Schedule and Exhibit references contained in
this Agreement or any Supplement are references to Sections,
subsections, Schedules and Exhibits in or to this Agreement or
any Supplement unless otherwise specified.
(e) The Daily Report and Settlement Statement shall be
in substantially the forms of Exhibits B and C, with such changes
as the Servicer may determine to be necessary or desirable;
provided, however, that no such change shall serve to exclude
information required by this Agreement or any Supplement and each
such change shall be reasonably acceptable to the Trustee. The
Servicer shall, upon making such determination and receiving the
consent of the Trustee to such change, deliver to the Trustee and
each Rating Agency an Officer's Certificate to which shall be
annexed the form of the related Exhibit, as so changed. Upon the
delivery of such Officer's Certificate to the Trustee, the
related Exhibit, as so changed, shall for all purposes of this
Agreement constitute such Exhibit. The Trustee may conclusively
rely upon such Officer's Certificate in determining whether the
related Exhibit, as changed, conforms to the requirements of this
Agreement.
[End of Article I]
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF SECURITIES
Section 2.1 Conveyance of Receivables. The Transferor
does hereby transfer, assign, set-over, and otherwise convey to
the Trust for the benefit of the Securityholders, without
recourse, all of its right, title and interest in, to and under
(i) the Receivables now existing and hereafter created and
arising in connection with the Accounts existing as of the
Initial Closing Date and any Additional Accounts, including
without limitation, all accounts, general intangibles, chattel
paper, contract rights, and other obligations of any Obligor with
respect to the Receivables, now or hereafter existing, (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), (iii) all proceeds of
such Receivables, (iv) the Purchase Agreement and (v) the Bank
Receivables Purchase Agreement to the extent that it relates to
the Receivables. Such property, together with all monies and
investments on deposit, from time to time, in the Collection
Account, the Excess Funding Account, the Series Accounts
maintained for the benefit of the Securityholders of any Series
of Securities, any Enhancement and all monies available under any
Enhancement, to be provided for any Series for payment to the
Securityholders of such Series, shall constitute the assets of
the Trust (collectively, the "Trust Property"). The foregoing
transfer, assignment, set-over and conveyance does not constitute
and is not intended to result in a creation or an assumption by
the Trust, the Trustee or any Investor Securityholder of any
obligation of the Transferor, the Servicer, the applicable Credit
Card Originator or any other Person 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, or in
connection with the Purchase Agreement or the Bank Receivables
Purchase Agreement.
In connection with such transfer, assignment, set-over
and conveyance, the Transferor agrees to record and file, at its
own expense, one or more financing statements (including any
continuation statements with respect to such financing statements
when applicable) with respect to the Receivables now existing and
hereafter created for the transfer of accounts, chattel paper or
general intangibles (each as defined in Section 9-106 of the UCC
as in effect in the Relevant UCC State) meeting the requirements
of applicable state law in such manner and in such jurisdictions
as are necessary to perfect the assignment of the Receivables to
the Trust, and to deliver file-stamped copies of such financing
statements or continuation statements or other evidence of such
filing (which may, for purposes of this Section 2.1, consist of
facsimile confirmation of such filing) to the Trustee on or prior
to the date of issuance of the Securities, and in the case of any
continuation statements filed pursuant to this Section 2.1, as
soon as practicable after receipt thereof by the Transferor. The
foregoing transfer, assignment, set-over and conveyance to the
Trust shall be made to the Trustee, on behalf of the Trust, and
each reference in this Agreement to such transfer, assignment,
set-over and conveyance shall be construed accordingly.
To the extent that the transfer of the Receivables from
the Transferor to the Trust hereunder may be characterized as a
pledge rather than as a sale, the Transferor hereby grants and
transfers to the Trustee for the benefit of the Securityholders a
first priority perfected security interest in all of the
Transferor's right, title and interest in, to and under the Trust
Property to secure a loan in an amount equal to the unpaid
principal amount of the Investor Securities issued hereunder or
to be issued pursuant to this Agreement and the interest accrued
thereon at the related Security Rate and to secure all of the
Transferor's and Servicer's obligations hereunder, including,
without limitation, the Transferor's obligation to transfer
Receivables hereafter created or acquired to the Trust (the
"Secured Obligations"), and agrees that this Agreement shall
constitute a security agreement under applicable law.
Section 2.2 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, on
behalf of the Trust, of all right, title and interest previously
held by the Transferor in, to and under the Trust Property and
declares that it shall maintain such right, title and interest,
upon the Trust herein set forth, for the benefit of all
Securityholders.
(b) The Trustee shall have no power to create, assume
or incur indebtedness or other liabilities in the name of the
Trust other than as contemplated in this Agreement.
Section 2.3 Representations and Warranties of the
Transferor. The Transferor hereby represents and warrants to the
Trustee, on behalf of the Trust, as of the Initial Closing Date,
as of the Amendment Closing Date and, with respect to any Series
of Securities, as of the date of the related Supplement and the
related Closing Date for such Series:
(a) Organization and Good Standing. The Transferor is
a corporation duly organized and validly existing and in good
standing under the laws of the State of Delaware and has the
corporate power and authority and legal right to own its
properties and conduct its business as such properties are
presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Agreement
and the Purchase Agreement and to execute and deliver to the
Trustee the Securities pursuant hereto.
(b) Due Qualification. The Transferor 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 its business, and has obtained all
necessary licenses and approvals with respect to the Transferor
required under federal and Delaware law; provided, however, that
no representation or warranty is made with respect to any
qualifications, licenses or approvals which the Trustee would
have to obtain to do business in any state in which the Trustee
seeks to enforce any Receivable.
(c) Due Authorization. The execution and delivery of
this Agreement and the Purchase Agreement and the consummation of
the transactions provided for herein and therein, have been duly
authorized by the Transferor by all necessary corporate action on
its part.
(d) Binding Obligation. Each of this Agreement and
the Purchase Agreement, and the consummation of the transactions
provided for herein and therein, constitutes a legal, valid, and
binding obligation of the Transferor, 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 this
Agreement and the Purchase Agreement and the performance of the
transactions contemplated hereby and thereby, do not (i)
contravene the Transferor's charter or bylaws, (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 Transferor, except for such filings,
registrations, consents or approvals as have already been
obtained and are in full force and effect.
(f) Taxes. Except as specified on Schedule 1, the
Transferor and each prior owner of the Receivables 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
Transferor or such prior owner 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 this
Agreement and the Purchase Agreement and the execution and
delivery to the Trustee of the Securities, the performance of the
transactions contemplated by this Agreement and the Purchase
Agreement and the fulfillment of the terms hereof and thereof
will not violate any Requirements of Law applicable to the
Transferor, 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 Transferor or any material indenture,
contract, agreement, mortgage, deed of trust or other material
instrument to which the Transferor 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
Transferor, threatened against the Transferor, before any
Governmental Authority (i) asserting the invalidity of this
Agreement and the Purchase Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated hereby or
thereby, (iii) seeking any determination or ruling that would
materially and adversely affect the performance by the Transferor
of its obligations thereunder, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability thereof or (v) seeking to affect adversely the tax
attributes of the Trust.
(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 this Agreement, the Purchase Agreement and the
Securities, the performance of the transactions contemplated by
this Agreement and the Purchase Agreement and the fulfillment of
the terms hereof and thereof, have been obtained.
(j) Bona Fide Receivables. Each Receivable is or will
be an account receivable arising out of the performance by the
applicable Credit Card Originator in accordance with the terms of
the Contract giving rise to such Receivable. The Transferor 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 Transferor in any document or report delivered under this
Agreement satisfies the requirements of eligibility contained in
the definition of Eligible Receivable set forth in this
Agreement.
(k) Place of Business. The principal executive
offices of the Transferor are in Minnetonka, Minnesota, and the
offices where the Transferor keeps its records concerning the
Receivables and related Contracts are in Hennepin County,
Minnesota and St. Cloud, Minnesota.
(l) Use of Proceeds. No proceeds of the issuance of
any Security will be used by the Transferor to purchase or carry
any margin security.
(m) Pay Out Event. No Pay Out Event and no condition
that with the giving of notice and/or the passage of time
constitutes a Pay Out Event (a "Prospective Pay Out Event") has
occurred and is continuing.
(n) Not an Investment Company. The Transferor is not
an "investment company" within the meaning of the Investment
Company Act, or is exempt from all provisions of such Act.
(o) Solvency. The Transferor is not insolvent and
will not be rendered insolvent upon the transfer of the
Receivables to the Trust.
The representations and warranties set forth in this
Section 2.3 shall survive the transfer and assignment of the
respective Receivables to the Trust, and termination of the
rights and obligations of the Servicer pursuant to Section 10.1.
The Transferor hereby represents and warrants to the Trust, with
respect to any Series of Securities, as of its Closing Date,
unless otherwise stated in the related Supplement, that the
representations and warranties of the Transferor set forth in
Section 2.3, are true and correct as of such date (and for the
purposes of such representations and warranties, "Securities"
shall mean the Securities issued on the related Closing Date) and
that each representation and warranty set forth in this Section
2.3 and in Section 2.4(a)(i) with respect to the Agreement shall
be made at such time with respect to the applicable Supplement.
Upon discovery by the Transferor, the Servicer or a Responsible
Officer of the Trustee of a breach of any of the foregoing
representations and warranties, the party discovering such breach
shall give prompt written notice to the others.
Section 2.4 Representations and Warranties of the
Transferor Relating to the Agreement and the Receivables.
(a) Binding Obligation; Valid Transfer and Assignment.
The Transferor hereby represents and warrants to the Trustee, on
behalf of the Trust, that, as of the Initial Closing Date, as of
the Amendment Closing Date and, with respect to any Series of
Securities, as of the date of its related Supplement and Closing
Date, and, with respect to any matters involving Additional
Accounts, as of the date the Receivables of such Accounts are
first designated for inclusion in the Trust:
(i) The Purchase Agreement and this Agreement
each constitutes the legal, valid and binding obligation of
the Transferor, enforceable against the Transferor in
accordance with its terms, except (A) as such enforceability
may be limited by applicable bankruptcy, 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
Transferor to the Trust under this Agreement constitutes
either (A) a valid transfer, assignment, set-over and
conveyance to the Trust of all right, title and interest of
the Transferor in and to the Trust Property, and such Trust
Property will be held by the Trust free and clear of any
Lien of any Person claiming through or under the Transferor
or any of its Affiliates except for (x) Permitted Liens, (y)
the interest of the Transferor as Holder of the Exchangeable
Transferor Security and any other Class of Securities held
by the Transferor from time to time and (z) the Transferor's
right, if any, to interest accruing on, and investment
earnings, if any, in respect of any Interest Funding
Account, any Principal Account, the Excess Funding Account,
or any Series Account, as provided in this Agreement or the
related Supplement, or (B) a grant of a first priority
security interest (as defined in the UCC as in effect in the
Relevant UCC State) in, to and under the Trust Property,
which grant is enforceable with respect to the existing
Receivables and any Receivables in Additional Accounts
designated for inclusion in the Trust (other than
Receivables in Supplemental Accounts) and the proceeds
thereof upon execution and delivery of this Agreement, and
which will be enforceable with respect to such Receivables
hereafter created and the proceeds thereof, upon such
creation. If this Agreement constitutes the grant of a
security interest to the Trust in such property, upon the
filing of the financing statement described in Section 2.1
and in the case of the Receivables hereafter created and
proceeds thereof, upon such creation, the Trust shall have a
first priority perfected security interest in such property,
except for Permitted Liens. Except as contemplated in this
Agreement or any Supplement, neither the Transferor nor any
Person claiming through or under the Transferor shall have
any claim to or interest in the Collection Account, any
Principal Account, any Interest Funding Account, the
Distribution Account, the Excess Funding Account, any
principal funding account for any Series or any other Series
Account, except for the Transferor's rights to receive
interest accruing on, and investment earnings in respect of,
any such account as provided in this Agreement (or, if
applicable, any Series Account as provided in any
Supplement) and, if this Agreement constitutes the grant of
a security interest in such property, except for the
interest of the Transferor in such property as a debtor for
purposes of the UCC as in effect in the Relevant UCC State.
The Purchase Agreement constitutes a valid transfer,
assignment, set-over and conveyance to the Transferor of all
right, title and interest of Metris in and to the
Receivables purported to be sold thereunder, whether then
existing or thereafter created in the applicable Accounts
and the proceeds thereof.
(iii) The Transferor 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 Trust free and clear of any Lien
other than Permitted Liens.
(iv) All consents, licenses, approvals or
authorizations of or registrations or declarations with any
Governmental Authority required in connection with the
transfer of Trust Property to the Trust have been obtained.
(v) Each Account classified as an "Eligible
Account" by the Transferor in any document or report
delivered hereunder will satisfy the requirements contained
in the definition of Eligible Account as of the time of such
document or report and each Receivable classified as an
"Eligible Receivable" by the Transferor 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.
(vi) Each Receivable then existing has been
conveyed to the Trust free and clear of any Lien of any
Person claiming through or under the Transferor or any of
its Affiliates (other than Permitted Liens) and in
compliance, in all material respects, with all Requirements
of Law applicable to the Transferor.
(b) Daily Representations and Warranties. On each day
on which any new Receivable is purchased by the Transferor, the
Transferor shall be deemed to represent and warrant to the Trust
that (A) each Receivable purchased by the Transferor on such day
has been conveyed to the Trust in compliance, in all material
respects, with all Requirements of Law applicable to the
Transferor and free and clear of any Lien of any Person claiming
through or under the Transferor 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
Transferor in connection with the conveyance of such Receivable
to the Trust 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 2.4 shall survive the
transfer and assignment of the respective Receivables to the
Trust. Upon discovery by the Transferor, the Servicer or a
Responsible Officer of the Trustee of a breach of any of the
representations and warranties set forth in this Section 2.4, the
party discovering such breach shall give prompt written notice to
the other parties mentioned above. The Transferor agrees to
cooperate with the Servicer and the Trustee in attempting to cure
any such breach.
(d) Designation of Ineligible Receivables. In the
event of a breach with respect to a Receivable of any
representations and warranties set forth in subsection 2.3(j) or
subsections 2.4(a)(iii) through (vi) or subsection 2.4(b), or in
the event that a Receivable is not an Eligible Receivable on the
date of its transfer to the Trust as a result of the failure to
satisfy the conditions set forth in the definition of Eligible
Receivable, such Receivable shall be designated an "Ineligible
Receivable" and shall be assigned a principal balance of zero for
the purpose of determining the aggregate amount of Principal
Receivables on any day; provided, however, that if such
representations and warranties with respect to such Receivable
shall subsequently be true and correct in all material respects
as if such Receivable had been created on such day or such
Receivable shall subsequently satisfy the conditions set forth in
the definition of Eligible Receivable, such Receivable shall be
designated an Eligible Receivable, and such Principal Receivables
shall be included in determining the Aggregate Principal
Receivables on such day. On and after the date of its
designation as an Ineligible Receivable, each Ineligible
Receivable shall not be given credit in determining the aggregate
amount of Principal Receivables used in the calculation of any
Investor Percentage, the Transferor Percentage or the Transferor
Interest. In the event that on any Business Day the exclusion of
an Ineligible Receivable from the calculation of the Transferor
Interest would cause the Transferor Interest to be reduced below
the Minimum Transferor Interest, the Transferor shall immediately
make a deposit in the Excess Funding Account (for allocation as a
Principal Receivable) in immediately available funds prior to the
next succeeding Business Day in an amount equal to the amount by
which the Transferor Interest would be reduced below the Minimum
Transferor Interest as a result of the exclusion of such
Ineligible Receivable. The portion of such deposit allocated to
the Investor Securities of each Series shall be distributed to
the Investor Securityholders of each Series in the manner
specified in Article IV.
(e) Reassignment of Trust Portfolio. In the event of
a breach of any of the representations and warranties set forth
in subsections 2.3(a), (b) and (c) and 2.4(a)(i) and (ii) with
respect to any Series, either the Trustee or the Holders of
Investor Securities evidencing Undivided Interests aggregating
more than 50% of the aggregate Invested Amount of such Series, by
notice then given in writing to the Transferor (and to the
Trustee and the Servicer, if given by the Investor
Securityholders of such Series), may direct the Transferor to
accept reassignment of an amount of Principal Receivables equal
to the face amount of the Invested Amount to be repurchased (as
specified below) within 60 days of such notice (or within such
longer period as may be specified in such notice), and the
Transferor shall be obligated to accept reassignment of such
Receivables on a Distribution Date specified by the Transferor
(such Distribution Date, the "Reassignment Date") occurring
within such applicable period on the terms and conditions set
forth below; provided, however, that no such reassignment shall
be required to be made, and no notice of such reassignment may be
given, if, at any time during such applicable period, the
representations and warranties contained in subsections 2.3(a),
(b) and (c) and subsections 2.4(a)(i) and (ii) shall then be true
and correct in all material respects. The Transferor shall, on
the Transfer Date (in next day funds) preceding the Reassignment
Date, deposit an amount equal to the reassignment deposit amount
for such Series in the related Distribution Account or Series
Account, as provided in the related Supplement, for distribution
to the Investor Securityholders pursuant to Article XII. The
reassignment deposit amount with respect to any Series, unless
otherwise stated in the related Supplement, shall be equal to (i)
the Invested Amount of such Series at the end of the day on the
Business Day preceding the Reassignment Date (provided, however,
that with respect to any Series issued pursuant to a Variable
Funding Supplement such amount shall be the Invested Amount of
such Series as of the Reassignment Date, less the amount, if any,
previously allocated for payment of principal to such
Securityholders on the related Reassignment Date, in the Monthly
Period in which the Reassignment Date occurs), plus (ii) an
amount equal to all interest accrued but unpaid on the Investor
Securities of such Series at the applicable Security Rate through
such last day, less the amount, if any, previously allocated for
payment of interest to the Securityholders of such Series on the
related Distribution Date in the Monthly Period in which the
Reassignment Date occurs plus any other amounts accrued and owing
as specified in the applicable Supplement. Payment of the
reassignment deposit amount with respect to any Series, and all
other amounts in the Distribution Account or the applicable
Series Account in respect of the preceding Monthly Period, shall
be considered a prepayment in full of the Receivables represented
by the Investor Securities of such Series. On the Distribution
Date following the Transfer Date on which such amount has been
deposited in full into the Distribution Account or the applicable
Series Account, the Receivables and all monies due or to become
due with respect thereto and all proceeds of the Receivables
shall be released to the Transferor after payment of all amounts
otherwise due hereunder on or prior to such dates and the Trustee
shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or
warranty, as shall be prepared by and as are reasonably requested
by the Transferor to vest in the Transferor, or its designee or
assignee, all right, title and interest of the Trust in and to
such Receivables, all monies due or to become due with respect
thereto and all proceeds of such Receivables allocated to such
Receivables pursuant to the related Supplement. If the Trustee
or the Investor Securityholders of any Series give notice
directing the Transferor to accept reassignment as provided
above, the obligation of the Transferor to accept reassignment of
the applicable Receivables and pay the reassignment deposit
amount pursuant to this subsection 2.4(e) shall constitute the
sole remedy respecting a breach of the representations and
warranties contained in subsections 2.3(a), (b) and (c) and
2.4(a)(i) and (ii) available to the Investor Securityholders of
such Series or the Trustee on behalf of the Investor
Securityholders of such Series. The Trustee shall have no duty
to conduct any affirmative investigation as to the occurrence of
any condition requiring the repurchase of any Receivable by the
Transferor pursuant to this Agreement or any Supplement or the
eligibility of any Receivable for purposes of this Agreement or
any Supplement.
Section 2.5 Covenants of the Transferor. The
Transferor hereby covenants that:
(a) Receivables to be Accounts, Chattel Paper or
General Intangibles. The Transferor 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 Transferor will take no action
to cause any Receivable to be anything other than an "account,"
"chattel paper" or a "general intangible" (as defined in the UCC
as in effect in the Relevant UCC State).
(b) Security Interests. Except for the conveyances
hereunder, the Transferor 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 Transferor
will immediately notify the Trustee of the existence of any Lien
on any Receivable; and the Transferor shall defend the right,
title and interest of the Trust in, to and under the Receivables,
whether now existing or hereafter created, against all claims of
third parties claiming through or under the Transferor; provided,
however, that nothing in this subsection 2.5(b) shall prevent or
be deemed to prohibit the Transferor from suffering to exist upon
any of the Receivables any Permitted Lien.
(c) Delivery of Collections. In the event that the
Transferor receives Collections, the Transferor agrees to deposit
such Collections into the Collection Account as soon as
practicable after the receipt thereof, but in no event later than
two Business Days after receipt thereof.
(d) Notice of Liens. The Transferor shall notify the
Trustee promptly after becoming aware of any Lien on any
Receivable other than Permitted Liens.
(e) Enforcement of Purchase Agreements. The
Transferor agrees to take all action necessary and appropriate to
enforce its rights and claims under the Purchase Agreement and
the Bank Receivables Purchase Agreement.
(f) Separate Business. The Transferor will not permit
its assets to be commingled with those of either DMCCB or Metris
and the Transferor shall maintain separate corporate records,
books of account and bank accounts from those of either DMCCB or
Metris. The Transferor will not conduct its business in the name
of either DMCCB or Metris and will cause either DMCCB or Metris
to conduct its business solely in its own name so as not to
mislead others as to the identity of the entity with which those
others are concerned. The Transferor will provide for its own
operating expenses and liabilities from its own funds, except
that the organizational expenses of the Transferor may be paid by
either DMCCB or Metris. The Transferor will not hold itself out,
or permit itself to be held out, as having agreed to pay, or as
generally being liable for, the debts of either DMCCB or Metris.
The Transferor shall cause either DMCCB or Metris not to hold
itself out, or permit itself to be held out, as having agreed to
pay, or as generally being liable for, the debts of the
Transferor except that the organizational expenses of the
Transferor may be paid by either DMCCB or Metris and that either
DMCCB or Metris will contribute to the Transferor on the Closing
Date a demand note. The Transferor will maintain an arm's length
relationship with either DMCCB or Metris with respect to any
transactions between the Transferor, on the one hand, and either
DMCCB or Metris, on the other.
(g) Purchase Agreement Notices. The Transferor (i)
shall promptly give the Trustee copies of any notices, reports or
certificates given or delivered to the Transferor under the
Purchase Agreement, (ii) shall not, without the consents,
approvals and opinions, if any, required by Section 13.1, as if
Section 13.1 related to the Purchase Agreement rather than this
Agreement, enter into any amendment, supplement or other
modification to, or waiver of any provision of, the Purchase
Agreement and (iii) shall not permit the addition or removal of
an Account or a Receivable to or from the operation of the
Purchase Agreement unless there is a corresponding right or
obligation of the Transferor to add or remove such Account or
Receivable to or from the Trust.
Section 2.6 Addition of Accounts.
(a) Except for Excluded Accounts, all revolving credit
consumer credit card accounts which meet the definition of
Additional Accounts shall be included as Accounts from and after
the date upon which the Credit Card Originator acquires rights in
such Additional Accounts and all Receivables in such Additional
Accounts, whether such Receivables are then existing or
thereafter created, shall be transferred automatically to the
Trust. For all purposes of this Agreement, all receivables of
such Additional Accounts shall be treated as Receivables upon the
Credit Card Originator acquiring rights therein.
(b) Notwithstanding the foregoing, the Transferor
may elect at any time, or may be required pursuant to subsection
2.6(g), to suspend the automatic inclusion in Accounts of new
accounts which would otherwise be Additional Accounts as of any
Business Day (the "Automatic Addition Suspension Date"), or
terminate any such inclusion as of any Business Day (an
"Automatic Addition Termination Date") until a date (the "Restart
Date") to be identified in writing by the Transferor to the
Trustee, the Servicer and each Rating Agency at least 10 days
prior to such Restart Date. Promptly after an Automatic Addition
Suspension Date or any Automatic Addition Termination Date, or a
Restart Date, the Transferor and the Trustee agree to execute and
the Transferor agrees to record and file at its own expense an
amendment to the financing statements referred to in Section 2.1
hereof to specify the accounts then subject to this Agreement
(which specification may incorporate a list of accounts by
reference) and may, except in connection with any such filing
made after a Restart Date, release any security interest in any
accounts created after the Automatic Addition Suspension Date or
any Automatic Addition Termination Date. In connection with any
Restart Date, the Transferor shall take all actions necessary to
grant the Trust a valid and perfected security interest in all
credit card accounts in which the Transferor acquired rights
since the preceding Automatic Addition Suspension Date.
(c) If the Transferor has elected to terminate or
suspend the inclusion of Additional Accounts and (i) on the tenth
Business Day prior to any Determination Date, the Transferor
Interest for the related Monthly Period is less than the Minimum
Transferor Interest, the Transferor shall designate additional
credit card accounts ("Supplemental Accounts") to be included as
Accounts in a sufficient amount such that the Transferor Interest
as a percentage of the Aggregate Principal Receivables for such
Monthly Period after giving effect to such addition is at least
equal to the Minimum Transferor Interest, or on any Record Date,
the Aggregate Principal Receivables is less than the Minimum
Aggregate Principal Receivables, the Transferor shall designate
Supplemental Accounts to be included as Accounts in a sufficient
amount such that the Aggregate Principal Receivables will be
equal to or greater than the Minimum Aggregate Principal
Receivables. Receivables from such Supplemental Accounts shall
be transferred to the Trust on or before the tenth Business Day
following such Record Date. On any day on which the Receivables
in Supplemental Accounts are to be transferred to the Trust, the
Receivables in such Accounts shall be included as Eligible
Receivables if they satisfy the requirements of the definition
of "Eligible Receivables".
(d) In addition to its obligation under subsection
2.6(c), the Transferor may, by giving ten Business Days notice to
the Trustee and each Rating Agency, but shall not be obligated
to, designate from time to time Supplemental Accounts of the
Transferor to be included as Accounts.
(e) Unless otherwise specified in a Series Supplement,
the Transferor agrees that any such transfer of Receivables from
Supplemental Accounts, under subsection 2.6(c) or (d), shall
satisfy the following conditions (to the extent provided below):
(i) on or before the fifth Business Day prior to
the Addition Date with respect to additions pursuant to
subsection 2.6(c) and on or before the twentieth Business
Day prior to the Addition Date with respect to additions
pursuant to subsection 2.6(d) (as applicable, the "Notice
Date"), the Transferor shall give the Trustee, each Rating
Agency and the Servicer written notice that such
Supplemental Accounts will be included, which notice shall
specify the approximate aggregate amount of the Receivables
to be transferred;
(ii) on or before the applicable Addition Date,
the Transferor shall have delivered to the Trustee a written
assignment (including an acceptance by the Trustee on behalf
of the Trust for the benefit of the Investor
Securityholders) in substantially the form of Exhibit H (the
"Assignment") and the Transferor shall have indicated in its
computer files that the Receivables created in connection
with the Supplemental Accounts have been transferred to the
Trust and, within five Business Days thereafter, the
Transferor shall have delivered to the Trustee or the bailee
of the Trustee a computer file or microfiche list containing
a true and complete list of all Supplemental Accounts,
identified by account number and the Principal Receivables
in such Supplemental Accounts, as of the Addition Date,
which computer file or microfiche list shall be as of the
date of such Assignment incorporated into and made a part of
such Assignment;
(iii) the Transferor shall represent and warrant
that (x) no selection procedure that is materially adverse
to the interests of the Investor Securityholders was
utilized in selecting the Supplemental Accounts and (y) as
of the applicable Addition Date, the Transferor is not
insolvent and will not be rendered insolvent upon the
transfer of Receivables to the Trust;
(iv) the Transferor shall represent and warrant
that, as of the Addition Date, the Assignment constitutes
either (x) a valid transfer and assignment to the Trust of
all right, title and interest of the Transferor in and to
(A) the Receivables then existing and thereafter created and
arising in connection with the Accounts and any accounts
that meet the definition of Additional Accounts, including,
without limitation, all accounts, general intangibles,
chattel paper, contract rights, 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, (B) all monies and investments due or to become
due with respect thereto (including, without limitation, the
right to any payment of interest and Finance Charge
Receivables, including any Recoveries), (C) all proceeds (as
defined in the UCC as in effect in the Relevant UCC State)
of such Receivables, (D) the Purchase Agreement and (E) the
Bank Receivables Purchase Agreement, and such Receivables
and all proceeds thereof will be held by the Trust free and
clear of any Lien of any Person claiming through or under
the Transferor or any of its Affiliates, except for (i)
Permitted Liens, (ii) the interest of the Transferor as
Holder of the Exchangeable Transferor Security and any other
Class or Series of Securities and (iii) the Transferor's
right, if any, to receive interest accruing on, and
investment earnings, if any, in respect of, any Interest
Funding Account and any Principal Account, the Excess
Funding Account or any Series Account as provided in this
Agreement and any related Supplement or (y) a grant of a
security interest (as defined in the UCC as in effect in the
Relevant UCC State) in such property to the Trust, which is
enforceable with respect to then existing Receivables of the
Supplemental Accounts, the proceeds (as defined in the UCC
as in effect in the Relevant UCC State) thereof upon the
conveyance of such Receivables to the Trust, and which will
be enforceable with respect to the Receivables thereafter
created in respect of Supplemental Accounts conveyed on such
Addition Date and the proceeds (as defined in the UCC as in
effect in the Relevant UCC State) thereof upon such
creation; and (z) if the Assignment constitutes the grant of
a security interest to the Trust in such property, upon the
filing of a financing statement as described in Section 2.1
with respect to such Supplemental Accounts and in the case
of the Receivables thereafter created in such Supplemental
Accounts and the proceeds (as defined in the UCC as in
effect in the Relevant UCC State) thereof, upon such
creation, the Trust shall have a first priority perfected
security interest in such property, except for Permitted
Liens;
(v) the Transferor shall deliver to the Trustee
an Officer's Certificate substantially in the form of
Schedule 2 to Exhibit H confirming the items set forth in
paragraph (ii) above;
(vi) the Transferor shall deliver to the Trustee
an Opinion of Counsel with respect to the Receivables in the
Supplemental Accounts (with a copy to the Rating Agencies)
substantially in the form of Exhibit I; and
(vii) the Transferor shall have received written
notice from the Rating Agencies that the inclusion of such
accounts as Supplemental Accounts pursuant to subsection
2.6(c) or (d), as the case may be, will not result in the
reduction or withdrawal of its then existing rating of any
Class of any Series of Investor Securities then issued and
outstanding and shall have delivered such notice to the
Trustee.
(f) The Transferor shall be permitted to designate
Additional Accounts with respect to any Monthly Period (the
"Current Monthly Period") prior to the last day of the May 1996
Monthly Period pursuant to subsection 2.6(a) of the Agreement,
without limitation, provided, however, that with respect to each
Monthly Period beginning with the September 1995 Monthly Period:
(i) the arithmetic average for the three Monthly
Periods preceding the Current Monthly Period, of the
annualized percentage equivalent of a fraction for each
respective Monthly Period, the numerator of which is equal
to the Default Amount for the respective Monthly Period
(provided, however, that the Default Amount with respect to
each Default Recognition Date shall be deemed to apply to
the Monthly Period ending closest to such Default
Recognition Date) and the denominator of which is equal to
the average amount of Aggregate Principal Receivables
outstanding on each day during such Monthly Period, is less
than 6%;
(ii) the arithmetic average for the three Monthly
Periods preceding the Current Monthly Period, of the
percentage (the "Payment Rate Percentage") equivalent of a
fraction for each respective Monthly Period, the numerator
of which is equal to the amount of Collections received
during the respective Monthly Period and the denominator of
which is equal to the Aggregate Principal Receivables as of
the first day of the respective Monthly Period, is greater
than or equal to 6%; or
i the weighted average of the Portfolio Yields for each Series
then outstanding for the three Monthly Periods preceding the
Current Monthly Period minus the weighted average of the Base
Rates for each Series then outstanding for such three Monthly
Periods (the "Excess Spread Percentage") is greater than or equal
to 4%.
(iv) Standard & Poor's shall not have notified the
Transferor that the continued addition of Additional
Accounts pursuant to this subsection 2.6(e) will result in a
reduction or withdrawal of the then current rating of any
Class by Standard & Poor's.
In the event that as of any date of determination prior to last
day of the May 1996 Monthly Period any of the conditions in
clauses (i) through (iii) listed above is not met, and with
respect to each Monthly Period after the May 1996 Monthly Period
this subsection 2.6(f) shall no longer apply and the conditions
of subsection 2.6(g) shall apply. On or before the later of (x)
the last day of the September 1995 Monthly Period, the December
1995 Monthly Period and the March 1996 Monthly Period or (y) in
each case the tenth day following receipt of the settlement
statement for the prior Monthly Period, Standard & Poor's shall
determine whether a Ratings Event shall have occurred in
connection with the addition of Additional Accounts during the
three consecutive Monthly Periods ending in August, November and
February preceding such date. Upon the occurrence of a Ratings
Event in connection with the addition of Additional Accounts this
subsection 2.6(f) shall no longer apply and the conditions of
subsection 2.6(g) shall apply.
(g) Unless each Rating Agency otherwise consents to the
continued automatic addition of accounts, on and after the
beginning of the June 1996 Monthly Period, the Transferor shall
be required to cease the automatic addition of accounts and
notify the Trustee, the Servicer and each Rating Agency of the
Automatic Addition Suspension Date in the following
circumstances: the number of Accounts the Receivables of which
are designated to be included in the Trust pursuant to subsection
2.6(a) since (i) the first day of the eleventh preceding Monthly
Period (or, in the case of any date on which Additional Accounts
are to be added to the Trust which occurs on or before the last
day of the May 1997 Monthly Period, June 1, 1996) minus the
number of Accounts of the type described in clause (ii) of the
definition of "Approved Account" which have been added on the
initial day of the addition of such type of Account pursuant to
such clause (ii) since the first day of such eleventh preceding
Monthly Period (or June 1, 1996, as the case may be) shall not
exceed 20% of number of Accounts on the first day of such
eleventh preceding Monthly Period (or June 1, 1996, as the case
may be), and (ii) the first day of the second preceding Monthly
Period (or, in the case of any date on which Additional Accounts
are to be added to the Trust which occurs on or before the last
day of the August 1996 Monthly Period, June 1, 1996) minus the
number of Accounts of the type described in clause (ii) of the
definition of "Approved Accounts" have been added on the initial
day of the addition of such type of Account pursuant to such
clause (ii) since the first day of such second preceding Monthly
Period (or June 1, 1996, as the case may be) shall not exceed 15%
of the number of Accounts on the first day of such second
preceding Monthly Period (or June 1, 1996, as the case may be).
(h) The Transferor may designate revolving credit consumer
credit card accounts which would otherwise be Additional Accounts
as Excluded Accounts by the Transferor delivering to the Trustee
a written notice clearly identifying such excluded accounts. If
such designation is made after the Trust acquires rights in such
Accounts, such designation shall only occur in accordance with
the provisions of Section 2.7 hereof.
Section 2.7 Removal of Accounts.
(a) On each Determination Date that the Transferor Interest
for the related Monthly Period exceeds the Minimum Transferor
Interest with respect to such Determination Date, the Trustee
shall be deemed to have offered to the Transferor automatically
and without any notice to or action by or on behalf of the
Trustee, as of such Determination Date, the right to remove from
the Trust all of the Trust's right, title and interest in, to and
under the Receivables then existing and thereafter created, all
monies then due or to become due and all amounts thereafter
received with respect thereto and all proceeds thereof in or with
respect to those Accounts designated by the Transferor (the
"Removed Accounts") in an aggregate amount not greater than the
lesser of (i) the excess of the Transferor Interest over the
Minimum Transferor Interest and (ii) the excess of Aggregate
Principal Receivables over the Minimum Aggregate Principal
Receivables. To accept such offer, the Transferor is required to
furnish to the Trustee and each Rating Agency written notice by
the fifth Business Day after the Determination Date specifying
the approximate aggregate amount of Principal Receivables covered
by the offer that the Transferor intends to accept. There shall
be no more than one such removal with respect to any Monthly
Period.
(b) In addition to the satisfaction of the conditions set
forth in subsection 2.7(a), the Transferor shall be permitted to
accept reassignment to it of the Receivables from Removed
Accounts only upon satisfaction of the following conditions:
(i) On each date specified by the Transferor for
removal of the Removed Accounts (a "Removal Date"), the
Transferor shall prepare and the Trustee shall execute and
deliver to the Transferor a written reassignment in
substantially the form of Exhibit J (the "Reassignment") and
the Transferor shall deliver to the Trustee or the bailee of
the Trustee a computer file or microfiche list containing a
true and complete schedule identifying all Accounts the
Receivables in which remain in the Trust specifying for each
such Account, as of the Removal Notice Date, its account
number and the principal balance of such Account. Such
computer file or microfiche list shall be incorporated into
and made part of this Agreement as of the date of such
Reassignment.
(ii) The Transferor shall represent and warrant as of
each Removal Notice Date that (a) the list of the Accounts
not removed from the Trust, as of the Removal Notice Date,
complies in all material respects with the requirements of
paragraph (i) above and (b) no selection procedure used by
the Transferor that is materially adverse to the interests
of the Investor Securityholders was utilized in selecting
the Removed Accounts.
(iii) The Transferor shall represent and warrant that
the removal of any Receivables in any Removed Accounts on
any Removal Date shall not, in the reasonable belief of the
Transferor, cause, immediately or with the passage of time,
a Pay Out Event to occur.
(iv) The Transferor shall have delivered at least 20
days' (or such lesser number as any Rating Agency may agree)
prior written notice (which may be given prior to the
Removal Date in expectation that the Trustee will make the
offer described in subsection 2.7(a)) of such removal to
each Rating Agency that has rated any outstanding Class of
any Series and the Trustee shall have received written
confirmation from each such Rating Agency that such Rating
Agency will not reduce or withdraw its rating on any
outstanding Class of any Series as a result of such removal.
(v) The Transferor shall have delivered to the Trustee
an Officer's Certificate confirming the Transferor's
compliance with the items set forth in paragraphs (i)
through (iv) above. The Trustee may conclusively rely on
such certificate, shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no
liability in so relying.
(c) Upon satisfaction of the conditions set forth in
subsections 2.7(a) and (b), the Trustee shall execute and deliver
the Reassignment to the Transferor, and the Receivables from the
Removed Accounts shall no longer constitute a part of the Trust.
Section 2.8 Discount Option. (a) The Transferor shall
have the option to designate a percentage, which may be a fixed
percentage or a variable percentage based on a formula (the
"Discount Percentage"), of Principal Receivables, without giving
effect to any discounting pursuant to this Section 2.8, arising
on or after the date of such designation, to be treated as
Finance Charge Receivables. The Transferor shall provide to the
Servicer, the Trustee, any Enhancement Provider and the Rating
Agency 15 days' prior written notice of such designation, and
such designation shall become effective on the date designated
therein (i) unless such designation in the reasonable belief of
the Transferor would cause a Pay Out Event to occur, or an event
which, with notice or the lapse of time or both, would constitute
a Pay Out Event and (ii) only if the Rating Agency shall have
delivered a letter to the Transferor and the Trustee confirming
that its then current rating of the Investor Securities of any
Series then outstanding will not be reduced or withdrawn as a
result of such designation.
(b) After the date on which the Transferor's exercise of
its discount option takes effect, and with respect to Receivables
generated on and after such date, the Transferor, in accordance
with Section 4.3, shall deposit into the Collection Account in
immediately available funds an amount equal to the amount of the
Discount Option Receivable Collections processed on such day.
The deposit made by the Transferor into the Collection Account
under the preceding sentence shall be considered a payment of
such Discount Option Receivables and shall be applied as Finance
Charge Receivables in accordance with Article IV.
Section 2.9 Covenants of the Transferor with Respect to the
Purchase Agreement. The Transferor, in its capacity as purchaser
of the Receivables from Metris or a Credit Card Originator
pursuant to the Purchase Agreement, hereby covenants that the
Transferor will at all times enforce the covenants and agreements
of each Credit Card Originator in the Bank Receivables Purchase
Agreement, including, without limitation, covenants to the effect
set forth below.
(a) Periodic Finance Charges and Other Fees. Except as
otherwise required by any Requirement of Law, or as is
deemed by the applicable Credit Card Originator 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 Transferor's reasonable
expectation is that such reduction will cause a Pay Out
Event to occur or (ii) such reduction is not also applied to
any comparable segment of consumer revolving credit card
accounts owned by such Credit Card Originator that have
characteristics the same as, or substantially similar to,
such Accounts.
(b) Credit and Collection Policy and Contracts. Each
Credit Card Originator 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, a Credit Card
Originator 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 Credit
Card Originator (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 such Credit Card Originator 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) will not be made with the intent to
materially benefit the Transferor or the Credit Card
Originator over the Investor Securityholders or to
materially adversely affect the Investor Securityholders,
except as otherwise restricted by an endorsement,
sponsorship, or other agreement between the Transferor and
an unrelated third party or by the terms of the Contracts.
The Transferor further covenants that the Transferor will
not enter into any amendments to the Bank Receivables Purchase
Agreement or the Purchase Agreement that would cause a Ratings
Event to occur.
Section 2.10. Receivables in Defaulted Accounts. On the
date on which an Account becomes a Defaulted Account, the Trust
shall automatically and without further action or consideration
be deemed to transfer, set over, and otherwise convey to the
Transferor, without recourse, representation or warranty, all the
right, title and interest of the Trust in and to the Receivables
in such Defaulted Account, all monies due or to become due with
respect thereto, all proceeds of such Receivables allocable to
the Trust with respect to such Receivable, excluding Recoveries
relating thereto, which shall remain a part of the Trust
Property. On each Determination Date, the Servicer shall
calculate the aggregate Series Default Amount for the preceding
Monthly Period with respect to each Series.
[End of Article II]
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and Other Matters
Relating to the Servicer.
(a) DMCCB agrees to act as the Servicer under this
Agreement. The Investor Securityholders of each Series by their
acceptance of the related Securities consent to DMCCB acting as
Servicer. Notwithstanding the foregoing or any other provisions
of this Agreement or any Supplement, the Investor Securityholders
consent to an Affiliate of DMCCB acting as Servicer hereunder, in
full substitution thereof; provided that such Affiliate shall
expressly assume in writing (unless such assumption occurs by
operation of law), by an agreement supplemental hereto, executed
and delivered to the Trustee, the performance of every covenant
and obligation of the Servicer, as applicable hereunder, and
shall in all respects be designated the Servicer under this
Agreement; provided, further, that DMCCB will remain jointly and
severally liable with such Affiliate.
(b) The Servicer shall service and administer the
Receivables and shall collect payments due under the Receivables
in accordance with its customary and usual servicing procedures
and the Credit and Collection Policies and shall have full power
and authority, acting alone or through any party properly
designated by it hereunder, to do any and all things in
connection with such servicing and administration that it may
deem necessary or desirable. Without limiting the generality of
the foregoing and subject to Section 10.1, the Servicer is hereby
authorized and empowered (i) to make withdrawals from the
Collection Account as set forth in this Agreement, (ii) unless
such power and authority is revoked by the Trustee on account of
the occurrence of a Servicer Default pursuant to Section 10.1, to
instruct the Trustee in writing to make withdrawals and payments,
from any Interest Funding Account, the Excess Funding Account,
any Principal Account and any Series Account, in accordance with
such instructions as set forth in this Agreement, (iii) unless
such power and authority is revoked by the Trustee on account of
the occurrence of a Servicer Default pursuant to Section 10.1, to
instruct the Trustee in writing to take any action permitted or
required under any Enhancement at such time as set forth in this
Agreement and any Supplement, (iv) to execute and deliver, on
behalf of the Trust for the benefit of the Securityholders, any
and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable
instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under
and in compliance with applicable law and regulations, to
commence enforcement proceedings with respect to such
Receivables, (v) to make any filings, reports, notices,
applications, registrations with, and to seek any consents or
authorizations from, the Securities and Exchange Commission and
any state securities authority on behalf of the Trust as may be
necessary or advisable to comply with any federal or state
securities or reporting requirements and (vi) to delegate certain
of its service, collection, enforcement and administrative duties
hereunder with respect to the Accounts and the Receivables to any
Person who agrees to conduct such duties in accordance with the
Credit and Collection Policies; provided, however, that the
Servicer shall notify the Trustee in writing of any such
delegation; and provided further that the Servicer shall remain
jointly and severally liable with such Person. The Trustee
agrees that it shall promptly follow the instructions of the
Servicer or its delegate to withdraw funds from the Collection
Account, any Principal Account, any Interest Funding Account, the
Excess Funding Account, or any Series Account and to take any
action required under any Enhancement at such time as required
under this Agreement. The Trustee shall execute at the
Servicer's written request such documents prepared by the
Transferor and acceptable to the Trustee as the Servicer
certifies are necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder.
(c) The Servicer shall not be obligated to use separate
servicing procedures, offices or employees for servicing the
Receivables from the procedures, offices and employees used by
the Servicer in connection with servicing other credit card
receivables.
Section 3.2 Servicing Compensation. As compensation for
its servicing activities hereunder and reimbursement for its
expenses as set forth in the immediately following paragraph, the
Servicer shall be entitled to receive a servicing fee in respect
of each day prior to the termination of the Trust pursuant to
Section 12.1 (the "Servicing Fee"), payable in arrears on each
date and in the manner specified in the applicable Supplement,
equal to the product of (i) a fraction, the numerator of which is
the actual number of days in the measuring period specified in
the applicable Supplement and the denominator of which is the
actual number of days in the year, (ii) the weighted average
Series Servicing Fee Percentage for all outstanding Series (based
upon the Series Servicing Fee Percentage for each Series and the
Invested Amount of such Series) and (iii) the daily average
aggregate balance of all Principal Receivables over the term of
such measuring period. The share of the Servicing Fee allocable
to each Series with respect to any date of payment shall be equal
to the product of (i) a fraction, the numerator of which is the
actual number of days in the measuring period specified in the
applicable Supplement and the denominator of which is the actual
number of days in the year, (ii) the applicable Series Servicing
Fee Percentage for such Series and (iii) the Invested Amount of
such Series, as appropriate, as of the date of determination for
such payment as specified in the applicable Supplement. The
remainder of the Servicing Fee shall be paid by the Transferor,
or retained by the Servicer as provided in Article IV, and in no
event shall the Trust, the Trustee, any Enhancement Provider, or
the Investor Securityholders be liable for the share of the
Servicing Fee to be paid by the Transferor.
The Servicer shall be responsible for its own expenses,
which shall include the amounts due to the Trustee pursuant to
Section 11.5 and the reasonable fees and disbursements of
independent public accountants and all other expenses incurred by
the Servicer in connection with its activities hereunder;
provided, that the Servicer shall not be liable for any
liabilities, costs or expenses of the Trust, the Investor
Securityholders or the Security Owners arising under any tax law,
including without limitation any federal, state or local income
or franchise taxes or any other tax imposed on or measured by
income (or any interest, penalties or additions with respect
thereto or arising from a failure to comply therewith). In the
event that the Servicer fails to pay any amounts due to the
Trustee pursuant to Section 11.5, the Trustee shall be entitled
to deduct and receive such amounts from the Servicing Fee prior
to the payment thereof to the Servicer and the obligations of the
Trust to pay any such amounts shall thereby be fully satisfied.
The Servicer shall be required to pay such expenses for its own
account and shall not be entitled to any payment therefor other
than the Servicing Fee.
Section 3.3 Representations and Warranties of the Servicer.
DMCCB, as Servicer, hereby makes, and any Successor Servicer by
its appointment hereunder shall make, the following
representations and warranties on which the Trustee has relied in
accepting the Receivables in trust and in authenticating the
Securities issued on the Initial Closing Date:
(a) Organization and Good Standing. The Servicer is either
(i) a national banking association duly organized, validly
existing and in good standing under the laws of the United States
or (ii) a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation and
has the corporate power, authority and legal right to own its
properties and conduct its business as such properties are
presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this
Agreement.
(b) Due Qualification. The Servicer is duly qualified to
do business and is in good standing (or is exempt from such
requirements) as a foreign corporation in any state where such
qualification is necessary in order to service the Receivables as
required by this Agreement and has obtained all necessary
licenses and approvals as required under Federal and state law in
order to service the Receivables as required by this Agreement,
and if the Servicer shall be required by any Requirement of Law
to so qualify or register or obtain such license or approval,
then it shall do so except where the failure to obtain such
license or approval does not materially affect the Servicer's
ability to perform its obligations hereunder or the
enforceability of the Receivables.
(c) Due Authorization. The execution and delivery of this
Agreement and the consummation of the transactions provided for
herein, have been duly authorized by the Servicer by all
necessary corporate action on the part of the Servicer.
(d) Binding Obligation. This Agreement and the
consummation of the transac tions provided for herein,
constitutes a legal, valid and binding obligation of the
Servicer, 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 Violation. The execution and delivery of this
Agreement by the Servicer, and the performance of the
transactions contemplated by this Agreement and the fulfillment
of the terms hereof applicable to the Servicer, 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
Servicer or any material indenture, contract, agreement,
mortgage, deed of trust or other material instrument to which the
Servicer is a party or by which it is bound.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of the Servicer,
threatened against the Servicer before any Governmental Authority
(i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the issuance of the Securities or the consummation of any
of the transactions contemplated by this Agreement, (iii) seeking
any determination or ruling that would materially and adversely
affect the performance by the Servicer of its obligations under
this Agreement, (iv) seeking any determination or ruling that
would materially and adversely affect the validity or
enforceability of this Agreement or (v) seeking to affect
adversely the tax attributes of the Trust.
(g) Compliance with Requirements of Law. The Servicer
shall duly satisfy all obligations on its part to be fulfilled
under or in connection with each Receivable and the related
Contract, will maintain in effect all qualifications required
under Requirements of Law in order to service properly each
Receivable and the related Contract and will comply in all
material respects with all other Requirements of Law in
connection with servicing each Receivable and the related
Contract the failure to comply with which would have a material
adverse effect on the Securityholders or any Enhancement
Provider.
(h) Protection of Securityholders' Rights. The Servicer
shall take no action which, nor omit to take any action the
omission of which, would impair the rights of Securityholders in
any Receivable or the related Account or the rights or
obligations of any Enhancement Provider, nor shall it reschedule,
revise or defer payments due on any Receivable except in
accordance with the Credit and Collection Policies.
(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 this
Agreement and the performance of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof, have been
obtained; provided, however, that the Servicer makes no
representation or warranty regarding State securities or "Blue
Sky" laws in connection with the distribution of the Securities.
(j) Rescission or Cancellation. The Servicer shall not
permit any rescission or cancellation of any Receivable except as
ordered by a court of competent jurisdiction or other
Governmental Authority or in accordance with the Credit and
Collection Policy or the normal operating procedures of the
Servicer.
(k) Receivables Not To Be Evidenced by Promissory Notes.
Except in connec tion with its enforcement or collection of an
Account (in which case any such promissory note would be made in
the name of the Trust on behalf of the Securityholders), the
Servicer will take no action to cause any Receivable to be
evidenced by an instrument (as defined in the UCC as in effect in
the Relevant UCC State).
(l) Principal Place of Business. The Servicer shall at all
times maintain its principal executive offices within the United
States.
Section 3.4 Reports and Records for the Trustee.
(a) Daily Records. Upon reasonable prior notice by the
Trustee, the Servicer shall make available at an office of the
Servicer (or other location designated by the Servicer if such
records are not accessible by the Servicer at an office of the
Servicer) selected by the Servicer for inspection by the Trustee
or its agent (reasonably acceptable to the Servicer) on a
Business Day during the Servicer's normal business hours a record
setting forth (i) the Collections on the Receivables and (ii) the
amount of Receivables for the Business Day preceding the date of
the inspection. The Servicer shall, at all times, maintain its
computer files with respect to the Receivables in such a manner
so that the Receivables may be specifically identified and, upon
reasonable prior request of the Trustee, shall make available to
the Trustee, at an office of the Servicer (or other location
designated by the Servicer if such computer files are not located
at an office of the Servicer) selected by the Servicer, on any
Business Day of the Servicer during the Servicer's normal
business hours any computer programs necessary to make such
identification.
(b) Daily Report.
(i) On each Business Day the Servicer shall prepare a
completed Daily Report.
(ii) The Servicer shall deliver to the Trustee and the
Paying Agent the Daily Report by 3:00 p.m. (New York City
time) on each Business Day with respect to activity in the
Receivables for the prior Business Day (or, in the case of a
Daily Report delivered on the second Business Day following
a Saturday, Sunday or other non-Business Day, the aggregate
activity for the preceding Business Day and such preceding
non-Business Days).
(iii) Upon discovery of any error or receipt of notice
of any error in any Daily Report, the Servicer, the
Transferor and the Trustee shall arrange to confer and shall
agree upon any adjustments necessary to correct any such
errors. If any such error is materially adverse to the
interests of the Security Owners, the Servicer or the
Trustee, as the case may be, shall retain all Collections
which would otherwise be paid from the Trust (or such lesser
amount as the Trustee and the Servicer shall agree to be
necessary to cover any such error) in the Collection Account
until such material error is corrected. Unless the Trustee
has received written notice of any error or discrepancy, the
Trustee may rely on each Daily Report delivered to it for
all purposes hereunder.
(c) Settlement Statement. On the second Business Day prior
to each Distribution Date, the Servicer shall, prior to 3:00 p.m.
(New York City time) on such day, deliver to the Trustee and the
Paying Agent the Settlement Statement for the related Monthly
Period substantially in the form of Exhibit C hereto, including
the following information (which, in the case of clauses (iii),
(iv) and (v) below, will be stated on the basis of an original
principal amount of $1,000 per Security): (i) the aggregate
amount of Collections received in the Collection Account for the
Monthly Period preceding such Determination Date and the
aggregate amount of Finance Charge Collections and the aggregate
amount of Principal Collections processed during such Monthly
Period; (ii) the aggregate amount of the applicable Investor
Percentage of Principal Collections during the preceding Monthly
Period for each Series of Securities and the aggregate amount of
the applicable Investor Percentage of Finance Charge Collections
during the preceding Monthly Period for each Series of
Securities; (iii) for each Series and for each Class within any
such Series, the total amount to be distributed to Investor
Securityholders on the next succeeding Distribution Date; (iv)
for each Series and for each Class within any such Series, the
amount of such distribution allocable to principal; (v) for each
Series and for each Class within any such Series, the amount of
such distribution allocable to interest; (vi) for each Series and
each Class within a Series, the Series Default Amount for the
immediately preceding Monthly Period; (vii) for each Series and
each Class within a Series, the amount of the Series Charge-Offs
and the amount of the reimbursements of Series Charge-Offs for
such Distribution Date; (viii) for each Series, the Servicing Fee
for such Distribution Date; (ix) for each Series, the existing
deficit controlled amortization amount, if applicable; (x) the
Aggregate Principal Receivables in the Trust at the close of
business on the last day of the Monthly Period preceding such
Distribution Date; (xi) for each Series, the Invested Amount at
the close of business on the last day of the Monthly Period
immediately preceding such Distribution Date; (xii) the available
amount of any Enhancement for each Class of each Series, if any;
(xiii) for each Series and each Class within a Series, the Pool
Factor as of the end of the related Monthly Period; (xiv) whether
a Pay Out Event or a Prospective Pay Out Event with respect to
any Series shall have occurred during or with respect to the
related Monthly Period; (xv) the aggregate amount of Discount
Option Receivables in the Trust at the close of business on the
last day of the Monthly Period preceding such Distribution Date;
(xvi) the aggregate amount of Discount Option Receivables
Collections processed during such Monthly Period; and (xvii) such
other calculations as may be required by any Supplement. The
Trustee shall be under no duty to recalculate, verify or
recompute the information supplied to it under this Section 3.4
or such other matters as are set forth in any Settlement
Statement. The Servicer shall also provide a copy of the
Settlement Statement in a prompt manner to each Rating Agency.
Section 3.5 Annual Servicer's Certificate. The Servicer
will deliver, in accor dance with Section 13.5, to the Trustee,
any Enhancement Provider and the Rating Agencies, within 100 days
of the end of each fiscal year, beginning in 1995, an Officer's
Certificate substantially in the form of Exhibit D stating that
(a) a review of the activities of the Servicer during the
preceding fiscal year and of its performance under this Agreement
was made under the supervision of the officer signing such
certificate and (b) to such officer's knowledge, based on such
review, the Servicer has fully performed all its obligations
under this Agreement throughout such period, or, if there has
been a default in the performance of any such obligation,
specifying each such default known to such officer and the nature
and status thereof. A copy of such certificate may be obtained
by any Investor Securityholder by a request in writing to the
Trustee addressed to the Corporate Trust Office.
Section 3.6 Annual Independent Accountants' Servicing
Report.
(a) Within 100 days of the end of each fiscal year, the
Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the
Servicer or the Transferor) to furnish a report with respect to
the prior fiscal year (or, in the case of the first such period,
the period beginning on the Initial Closing Date and ending on
the last day of the related fiscal year) to the Trustee, any
Enhancement Provider and each Rating Agency, to the effect that
such firm has applied certain procedures, agreed upon with the
Servicer and the Trustee and substantially as set forth in
Exhibit G hereto, which would re-perform certain accounting
procedures performed by the Servicer pursuant to certain
documents and records relating to the servicing of the Accounts
under this Agreement. In addition, each report shall set forth
the agreed upon procedures performed and the results of such
procedures.
(b) Within 100 days of the end of each fiscal year, the
Servicer shall cause a firm of nationally recognized independent
certified public accountants (who may also render other services
to the Servicer or the Transferor) to furnish a report to the
Trustee, any Enhancement Provider and the Rating Agency to the
effect that they have compared the amounts and percentages set
forth in four of the monthly certificates forwarded by the
Servicer pursuant to subsection 3.4(c) during the period covered
by such report with the computer reports (which may include
personal computer generated reports that summarize data from the
computer reports generated by either the Transferor or Servicer
which are used to prepare the Daily Reports) which were the
source of such amounts and percentages and that on the basis of
such comparison, such amounts and percentages are in agreement
except as shall be set forth in such report. A copy of such
report will be sent by the Trustee to each Investor
Securityholder.
Section 3.7 Tax Treatment. The Transferor has structured
this Agreement and the Investor Securities with the intention
that the Investor Securities will qualify under applicable
federal, state, local and foreign tax law as indebtedness.
Except to the extent expressly specified to the contrary in any
Supplement, the Transferor, the Servicer, the Holder of the
Exchangeable Transferor Security, each Investor Securityholder,
Holder of a Variable Funding Security, and each Security Owner
agree to treat and to take no action inconsistent with the
treatment of the Investor Securities (or beneficial interest
therein) as indebtedness for purposes of federal, state, local
and foreign income or franchise taxes and any other tax imposed
on or measured by income. Each Investor Securityholder, Holder
of a Variable Funding Security and the Holder of the Exchangeable
Transferor Security, by acceptance of its Security and each
Security Owner, by acquisition of a beneficial interest in a
Security, agree to be bound by the provisions of this Section
3.7. Each Securityholder agrees that it will cause any Security
Owner acquiring an interest in a Security through it to comply
with this Agreement as to treatment as indebtedness under
applicable tax law, as described in this Section 3.7.
Furthermore, subject to Section 11.11, the Trustee shall treat
the Trust as a security device only, and shall not file tax
returns or obtain an employer identification number on behalf of
the Trust.
Section 3.8 Adjustments. (a) If the Servicer 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 Servicer
otherwise adjusts downward the amount of any Receivable without
receiving Collections therefor or without charging off such
amount as uncollectible, then, in any such case, the aggregate
amount of the Principal Receivables used to calculate the
Investor Percentages applicable to any Series and the Transferor
Interest will be reduced by the principal amount of any such
adjustment. Similarly, the aggregate amount of the Principal
Receivables used to calculate the Investor Percentages applicable
to any Series will be reduced by the amount of any Principal
Receivable which was discovered as having been created through a
fraudulent or counterfeit charge or with respect to which the
covenant contained in subsection 2.5(b) was breached. Any
adjustment required pursuant to either of the two preceding
sentences shall be made on or prior to the end of the Monthly
Period in which such adjustment obligation arises. In the event
that, following any such adjustment, the Transferor Interest
would be less than the Minimum Transferor Interest, within two
Business Days of the date on which such adjustment obligation
arises, the Transferor shall pay to the Servicer, for deposit
into the Excess Funding Account, in immediately available funds
an amount equal to the amount by which the Transferor Interest
would be reduced below the Minimum Transferor Interest as a
result of such adjustment or exclusion. Any amount deposited
into the Excess Funding Account in connection with the adjustment
of a Receivable (an "Adjustment Payment") shall be applied in
accordance with Article IV and the terms of each Supplement.
(b) If (i) the Servicer makes a deposit into the Collection
Account in respect of a Collection of a Receivable and such
deposit was in the form of a check which is not honored for any
reason or (ii) the Servicer makes a mistake with respect to the
amount of any Collection and deposits an amount that is less than
or more than the actual amount of such Collection, the Servicer
shall appropriately adjust the amount subsequently deposited into
the Collection Account (or shall be entitled to receive a refund
from the Collection Account in the case of an excess deposit) to
reflect such dishonored check or mistake. Any Receivable in
respect of which a dishonored check is received shall be deemed
not to have been paid. Notwithstanding the first two sentences
of this paragraph, any adjustments made pursuant to this
paragraph will be reflected in a current report but will not
change any amount of Collections previously reported pursuant to
subsection 3.4(b).
Section 3.9 Notices to DMCCB. In the event that DMCCB or
any Affiliate thereof is no longer acting as Servicer, any
Successor Servicer appointed pursuant to Section 10.2 shall
deliver or make available to Metris each certificate and report
required to be prepared, forwarded or delivered thereafter
pursuant to Sections 3.4, 3.5 and 3.6.
[End of Article III]
ARTICLE IV
RIGHTS OF SECURITYHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.1 Rights of Securityholders. Each Series of
Investor Securities shall represent Undivided Interests in the
Trust, including the benefits of any Enhancement issued with
respect to such Series and the right to receive the Collections
and other amounts at the times and in the amounts specified in
this Article IV and the related Supplement to be deposited in the
Investor Accounts or to be paid to the Investor Securityholders
of such Series; provided, however, that the aggregate interest
represented by such Securities at any time in the Principal
Receivables shall not exceed an amount equal to the Invested
Amount of such Securities. The Exchangeable Transferor Security
shall represent the remaining undivided interest in the Trust,
including the right to receive the Collections and other amounts
with respect to each Series at the times and in the amounts
specified in this Article IV and the related Supplement to be
paid to the Holder of the Exchangeable Transferor Security;
provided, however, that the aggregate interest represented by
such Security at any time in the Principal Receivables shall not
exceed the Transferor Interest at such time and such Security
shall not represent any interest in the Investor Accounts, except
as provided in this Agreement and the Supplements, or the
benefits of any Enhancement issued with respect to any Series.
Section 4.2 Establishment of Accounts.
(a) The Collection Account. The Servicer, for the benefit
of the Securityholders, shall establish in the name of the
Trustee, on behalf of the Trust, a non-interest bearing
segregated account (the "Collection Account") bearing a
designation clearly indicating that the funds deposited therein
are held in trust for the benefit of the Securityholders, and
shall cause such Collection Account to be established and
maintained, (i) in a segregated trust account with the corporate
trust department of a depositary institution or trust company
(which may include the Trustee) organized under the laws of the
United States of America or any one of the states thereof or the
District of Columbia which has a long-term unsecured debt rating
of at least Baa3 by Moody's and whose deposits are insured to the
limits provided by law by the FDIC having corporate trust powers
and acting as trustee for funds deposited therein (provided,
however, that such account need not be maintained as a segregated
trust account with the corporate trust department of such
institution if at all times the certificates of deposit, short-
term deposits or commercial paper or the long-term unsecured debt
obligations (other than such obligation whose rating is based on
collateral or on the credit of a Person other than such
institution or trust company) of such depositary institution or
trust company shall have a credit rating from Standard & Poor's
of at least A-1+ and P-1 from Moody's in the case of the
certificates of deposit, short-term deposits or commercial paper,
or a rating from Standard & Poor's of AAA and from Moody's of Aaa
in the case of the long-term unsecured debt obligations) or (ii)
with a depositary institution, which may include the Trustee,
which is acceptable to the Rating Agency (in the case of (i) and
(ii), a "Qualified Institution"). If, at any time, the
institution holding the Collection Account ceases to be a
Qualified Institution, the Transferor shall direct the Servicer
to establish within 10 Business Days a new Collection Account
with a Qualified Institution, transfer any cash and/or any
investments to such new Collection Account and from the date such
new Collection Account is established, it shall be the
"Collection Account." The Servicer shall give written notice to
the Trustee of the location and account number of the Collection
Account and shall notify the Trustee in writing prior to any
subsequent change thereof. Pursuant to authority granted to it
pursuant to subsection 3.1(b), the Servicer shall have the power
revocable by the Trustee to withdraw funds from the Collection
Account for the purposes of carrying out its duties hereunder.
The Collection Account shall be under the sole dominion and
control of the Trustee and the Trustee shall possess all right,
title and interest in all funds from time to time on deposit in
such account.
(b) The Interest Funding and Principal Accounts. The
Trustee, for the benefit of the Investor Securityholders, shall
establish and maintain with a Qualified Institution in the name
of the Trust two segregated trust accounts for each Series (an
"Interest Funding Account" and a "Principal Account,"
respectively), each bearing a designation clearly indicating that
the funds therein are held for the benefit of the Investor
Securityholders of such Series. Except as provided in subsection
4.2(e), each Interest Funding Account and each Principal Account
shall be under the sole dominion and control of the Trustee for
the benefit of the Investor Securityholders. Pursuant to
authority granted to it hereunder, the Servicer shall have the
revocable power to instruct the Trustee to withdraw funds from
the Interest Funding Account and any Principal Account for any
purpose of carrying out the Servicer's or the Trustee's duties
hereunder. The Trustee at all times shall maintain accurate
records reflecting each transaction in each Principal Account and
each Interest Funding Account and that funds held therein shall
at all times be held in trust for the benefit of the Investor
Securityholders of such Series. If, at any time, the institution
holding the Interest Funding Account ceases to be a Qualified
Institution, the Servicer shall direct the Trustee to establish
within 10 Business Days a new Interest Funding Account meeting
the conditions specified above with a Qualified Institution,
transfer any cash and/or any investments to such new Interest
Funding Account and from the date such new Interest Funding
Account is established, it shall be the "Interest Funding
Account." Similarly, if, at any time, the institution holding
any Principal Account ceases to be a Qualified Institution, the
Servicer shall direct the Trustee to establish within 10 Business
Days a new Principal Account meeting the conditions specified
above with a Qualified Institution, transfer any cash and/or any
investments to such new Principal Account and from the date such
new Principal Account is established, it shall be a "Principal
Account."
(c) Distribution Accounts. The Trustee, for the benefit of
the Investor Securityholders of each Series, shall cause to be
established and maintained in the name of the Trust, with an
office or branch of a Qualified Institution a non-interest-
bearing segregated demand deposit account for each Series (a
"Distribution Account") bearing a designation clearly indicating
that the funds deposited therein are held in trust for the
benefit of the Investor Securityholders of such Series. Each
Distribution Account shall be under the sole dominion and control
of the Trustee for the benefit of the Investor Securityholders of
the related Series. Pursuant to the authority granted to the
Paying Agent herein, the Paying Agent shall have the power,
revocable by the Trustee, to make withdrawals and payments from
the Distribution Account for the purpose of carrying out the
Paying Agent's duties hereunder. If, at any time, the
institution holding a Distribution Account ceases to be a
Qualified Institution, the Servicer shall direct the Trustee to
establish within 10 Business Days a new Distribution Account
meeting the conditions specified above with a Qualified
Institution, transfer any cash and/or any investments to such new
Distribution Account and from the date such new Distribution
Account is established, it shall be a "Distribution Account."
(d) The Excess Funding Account. The Trustee, for the
benefit of the Securityholders, shall cause to be established in
the name of the Trustee, on behalf of the Securityholders, with a
Qualified Institution, a segregated trust account (the "Excess
Funding Account") bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the
Securityholders. Except as provided in subsection 4.3(e), the
Excess Funding Account shall, except as otherwise provided
herein, be under the sole dominion and control of the Trustee for
the benefit of the Securityholders. Pursuant to the authority
granted to the Servicer herein, the Servicer shall have the
power, revocable by the Trustee, to make withdrawals and payments
from the Excess Funding Account for the purpose of carrying out
the Servicer's or Trustee's duties hereunder. If, at any time,
the institution holding the Excess Funding Account ceases to be a
Qualified Institution, the Servicer shall direct the Trustee to
establish within 10 Business Days a new Excess Funding Account
meeting the conditions specified above with a Qualified
Institution, transfer any cash and/or any investments to such new
Excess Funding Account and from the date such new Excess Funding
Account is established, it shall be the "Excess Funding Account."
(e) Administration of the Principal Accounts and the
Interest Funding Accounts. Funds on deposit in each Principal
Account and each Interest Funding Account shall at all times be
invested by the Servicer (or, at the written direction of the
Transferor, by the Trustee) on behalf of the Transferor in Cash
Equivalents. Any such investment shall mature and such funds
shall be available for withdrawal on or before the Transfer Date
following the Monthly Period in which such funds were processed
for collection. No such investments shall be liquidated prior to
maturity. At the end of each month, all interest and earnings
(net of losses and investment expenses) on funds on deposit in
each Principal Account and each Interest Funding Account (unless
otherwise specified in the applicable Supplement) shall be
deposited by the Trustee in a separate deposit account with a
Qualified Institution in the name of the Servicer, or a Person
designated in writing by the Servicer, which shall not constitute
a part of the Trust, or shall otherwise be turned over by the
Trustee to the Servicer in accordance with instructions from the
Servicer to the Trustee not less frequently than monthly.
Subject to the restrictions set forth above, the Servicer, or a
Person designated in writing by the Servicer, of which the
Trustee shall have received written notification, shall have the
authority to instruct the Trustee with respect to the investment
of funds on deposit in any Principal Account and any Interest
Funding Account. Any investment instructions to the Trustee
shall be in writing, shall be given no later than 10:00 a.m. New
York City time on a Business Day that such investment is proposed
to be made and shall include a certification that the proposed
investment is a Cash Equivalent that matures at or prior to the
time required by this Agreement. For purposes of determining the
availability of funds or the balances in any Interest Funding
Account and any Principal Account for any reason under this
Agreement, all investment earnings on such funds shall be deemed
not to be available or on deposit.
Section 4.3 Collections and Allocations.
(a) Collections. Obligors shall make payments on the
Receivables to the Servicer who shall deposit all such payments
in the Collection Account no later than the second Business Day
following the Date of Processing thereof.
The Servicer shall allocate such amounts to each Series of
Investor Securities and to the Holder of the Exchangeable
Transferor Security in accordance with this Article IV and the
related Supplement and shall cause the Trustee to withdraw the
required amounts from the Collection Account or pay such amounts
to the Holder of the Exchangeable Transferor Security in
accordance with this Article IV and the related Supplement. The
Servicer shall make such deposits or payments on the date
indicated herein by wire transfer or as otherwise provided in the
Supplement for any Series of Securities with respect to such
Series.
Notwithstanding anything in this Agreement to the contrary,
but subject to the terms of any Supplement, for so long as, and
only so long as, DMCCB (or any successors to DMCCB pursuant to
Section 8.2) or an Affiliate of DMCCB shall remain the Servicer
hereunder, and (a)(i) DMCCB (or any successors to DMCCB pursuant
to Section 8.2) or an Affiliate of DMCCB provides to the Trustee
a letter of credit or other form of Enhancement rated at least A-
1 by Standard & Poor's and P-1 by Moody's (as certified to the
Trustee by the Servicer), and (ii) after notifying each Rating
Agency of the proposed use of such letter of credit or other form
of Enhancement the Transferor shall have received a notice from
each Rating Agency that making payments monthly rather than daily
would not result in a downgrading or withdrawal of any of such
Rating Agency's then-existing ratings of the Investor Securities,
or (b) DMCCB (or any successors to DMCCB pursuant to Section 8.2)
shall have and maintain a short-term credit rating of at least A-
1 by Standard & Poor's and P-1 by Moody's (as certified to the
Trustee by the Servicer), the Servicer need not deposit
Collections from the Collection Account into the Principal
Account or the Interest Funding Account or any Series Account, or
make payments to the Holder of the Exchangeable Transferor
Security, prior to the close of business on the day any
Collections are deposited in the Collection Account as otherwise
provided in this Article IV and the related Supplement, but may
instead make such deposits, payments and withdrawals on each
Transfer Date in an amount equal to the net amount of such
deposits, payments and withdrawals which would have been made but
for the provisions of this paragraph.
(b) Allocations for the Exchangeable Transferor Security.
Throughout the existence of the Trust, unless otherwise stated in
any Supplement, on each Business Day the Servicer shall allocate
to the Holder of the Exchangeable Transferor Security an amount
equal to the product of (A) the Transferor Percentage as of the
end of the preceding Business Day and (B) the aggregate amount of
Principal Collections and Finance Charge Collections available in
the Collection Account. The Servicer shall pay such amount to
the Holder of the Exchangeable Transferor Security on each
Business Day; provided, however, that amounts payable to the
Holder of the Exchangeable Transferor Security pursuant to this
clause (b) shall instead be deposited in the Excess Funding
Account to the extent necessary to prevent the Transferor
Interest from being less than the Minimum Transferor Interest.
(c) Allocation for Series. On each Business Day, (i) the
amount of Finance Charge Collections available in the Collection
Account allocable to each Series, (ii) the amount of Principal
Collections available in the Collection Account allocable to each
Series and (iii) the Receivables in Defaulted Accounts allocable
to each Series shall be determined in accordance with the
provisions of the related Supplement. The Servicer shall, prior
to the close of business on the day any Collections are deposited
in the Collection Account, cause the Trustee to withdraw the
required amounts from the Collection Account and cause the
Trustee to deposit such amounts into the applicable Principal
Account, the applicable Interest Funding Account, the Excess
Funding Account, or any Series Account or pay such amounts to the
Holder of the Exchangeable Transferor Security in accordance with
the provisions of this Article IV and the Supplements.
(d) Unallocated Principal Collections; Excess Funding
Account. On each Business Day, Shared Principal Collections
shall be allocated to each outstanding Series pro rata based on
the Principal Shortfall, if any, for each such Series, and then,
at the option of the Transferor, any remainder may be applied as
principal with respect to the Variable Funding Securities. The
Servicer shall pay any remaining Shared Principal Collections on
such Business Day to the Transferor; provided, that if the
Transferor Interest as determined on such Business Day does not
exceed the Minimum Transferor Interest, then such remaining
Shared Principal Collections shall be deposited in the Excess
Funding Account to the extent necessary to increase the
Transferor Interest above the Minimum Transferor Interest;
provided, further, that if an Amortization Period has commenced
and is continuing with respect to more than one outstanding
Series, such remaining Shared Principal Collections shall be
allocated to such Series pro rata based on the Investor
Percentage for Principal Receivables applicable for such Series.
(e) Amounts in Excess Funding Account. Amounts on deposit
in the Excess Funding Account on any Business Day will be
invested by the Servicer (or, at the direction of the Transferor,
by the Trustee) on behalf of the Transferor in Cash Equivalents
which shall mature and be available on or before the next
Business Day on which amounts may be released from the Excess
Funding Account. Earnings from such investments received shall
be deposited in the Collection Account and treated as Finance
Charge Collections. Any investment instructions to the Trustee
shall be in writing and shall include a certification that the
proposed investment is a Cash Equivalent that matures at or prior
to the date required by this Agreement. If on any Business Day
other than a Business Day on which a Pay Out Event or a
Prospective Pay Out Event has occurred and is continuing, the
Transferor Interest is greater than the Minimum Transferor
Interest, amounts on deposit in the Excess Funding Account may,
at the option of the Transferor, be released to the Holder of the
Exchangeable Transferor Security. On the first Business Day of
the Amortization Period for any Series, funds on deposit in the
Excess Funding Account will be deposited in the Principal Account
for such Series to the extent of the lesser of (x) the Invested
Amount of such Series and (y) the amount then on deposit in the
Excess Funding Account.
[THE REMAINDER OF ARTICLE IV IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT WITH RESPECT TO ANY SERIES]
[End of Article IV]
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL BE SPECIFIED IN ANY
SUPPLEMENT WITH RESPECT TO ANY SERIES]
[End of Article V]
ARTICLE VI
THE SECURITIES
Section 6.1 The Securities. Subject to Sections 6.10 and
6.13, the Investor Securities of each Series and any Class
thereof may be issued in bearer form (the "Bearer Securities")
with attached interest coupons and, if applicable, a special
coupon (collectively, the "Coupons") or in fully registered form
(the "Registered Securities"), and shall be substantially in the
form of the exhibits with respect thereto attached to the related
Supplement. The Exchangeable Transferor Security shall be
substantially in the form of Exhibit A. The Investor Securities
and the Exchangeable Transferor Security shall, upon issue
pursuant hereto or to Section 6.9 or Section 6.10, be executed
and delivered by the Transferor to the Trustee for authentication
and redelivery as provided in Sections 2.1 and 6.2. Unless
otherwise specified in any Supplement, any Investor Security
shall be issuable in a minimum denomination of $1,000 Undivided
Interest and integral multiples thereof, and shall be issued upon
original issuance in an original aggregate principal amount equal
to the Initial Invested Amount. The Exchangeable Transferor
Security shall be issued as a single security. Each Security
shall be executed by manual or facsimile signature on behalf of
the Transferor by its President or any Vice President.
Securities bearing the manual or facsimile signature of the
individual who was, at the time when such signature was affixed,
authorized to sign on behalf of the Transferor or the Trustee
shall not be rendered invalid, notwithstanding that such
individual has ceased to be so authorized prior to the
authentication and delivery of such Securities or does not hold
such office at the date of such Securities. No Security shall be
entitled to any benefit under this Agreement, or be valid for any
purpose, unless there appears on such Security a certificate of
authentication substantially in the form provided for herein,
executed by or on behalf of the Trustee by the manual signature
of a duly authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence,
that such Security has been validly issued and duly authenticated
and delivered hereunder. All Securities shall be dated the date
of their authentication except Bearer Securities which shall be
dated the applicable Issuance Date as provided in the related
Supplement.
Section 6.2 Authentication of Securities.
Contemporaneously with the initial assignment and transfer of the
Receivables, whether now existing or hereafter created (other
than Receivables in Supplemental Accounts) and the other
components to the Trust, the Trustee shall authenticate and
deliver the initial Series of Investor Securities (or applicable
Classes thereof), upon the written order of the Transferor. Upon
the issuance of such Investor Securities, such Investor
Securities shall be validly issued, fully paid and non-
assessable. The Trustee shall authenticate and deliver the
Exchangeable Transferor Security to the Transferor simultaneously
with its delivery of the initial Series of Investor Securities.
Upon an Exchange as provided in Section 6.9 and the satisfaction
of certain other conditions specified therein, the Trustee shall
authenticate and deliver the Investor Securities of additional
Series (with the designation provided in the related Supplement),
upon the written order of the Transferor. Upon the written order
of the Transferor, the Securities of any Series shall be duly
authenticated by or on behalf of the Trustee, in authorized
denominations equal to (in the aggregate) the Initial Invested
Amount of such Series of Investor Securities. If specified in
the related Supplement for any Series, the Trustee shall
authenticate and deliver outside the United States the Global
Security that is issued upon original issuance thereof, upon the
written order of the Transferor, to the Depositary. If specified
in the related Supplement for any Series, the Trustee shall
authenticate Book-Entry Securities that are issued upon original
issuance thereof, upon the written order of the Transferor, to a
Clearing Agency or its nominee as provided in Section 6.10.
Section 6.3 Registration of Transfer and Exchange of
Securities.
(a) The Trustee shall cause to be kept at the office or
agency to be maintained by a transfer agent and registrar (the
"Transfer Agent and Registrar") in accordance with the provisions
of Section 11.16, a register (the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the
Transfer Agent and Registrar shall provide for the registration
of the Investor Securities of each Series (unless otherwise
provided in the related Supplement) and of transfers and
exchanges of the Investor Securities as herein provided.
Whenever reference is made in this Agreement to the transfer or
exchange of the Securities by the Trustee, such reference shall
be deemed to include the transfer or exchange on behalf of the
Trustee by a Transfer Agent and Registrar. The Trustee is hereby
initially appointed Transfer Agent and Registrar for the purposes
of registering the Investor Securities and transfers and
exchanges of the Investor Securities as herein provided. If any
form of Investor Security is issued as a Global Security, the
Trustee may, or if and so long as any Series of Investor
Securities are listed on a stock exchange and such exchange shall
so require, the Trustee shall appoint a co-transfer agent and co-
registrar, which will also be a co-paying agent, in such city as
the Transferor may specify. Any reference in this Agreement to
the Transfer Agent and Registrar shall include any co-transfer
agent and co-registrar unless the context otherwise requires.
The Trustee shall be permitted to resign as Transfer Agent and
Registrar upon 30 days' written notice to the Servicer. In the
event that the Trustee shall no longer be the Transfer Agent and
Registrar, the Transferor shall appoint a successor Transfer
Agent and Registrar. If any Series with respect to which Book
Entry Securities were originally issued is no longer issued as
Book-Entry Securities, then the Servicer may appoint a successor
Transfer Agent and Registrar.
Unless otherwise provided in the related Supplement, in the
case of any Investor Security with respect to which no Opinion of
Counsel to the effect that such Investor Security (or Class or
Series to which such Investor Security pertains) will be
characterized as indebtedness for federal income tax purposes was
delivered, no sale, assignment, participation, pledge,
hypothecation, transfer or other disposition of such Investor
Security (or any interest therein) shall be made unless the
Transferor and the Servicer shall have granted their prior
consent thereto, which consent may not be unreasonably withheld
and, provided further, that for purposes of this sentence, it
shall in all cases be reasonable for the Transferor or the
Servicer to withhold consent to such proposed sale, assignment,
participation, pledge, hypothecation, transfer or other
disposition of all or any part of a Security (or any interest
therein) if the transaction would, if effected, give rise to any
adverse tax consequence, as determined in the sole and absolute
discretion of the Transferor or the Servicer.
Upon surrender for registration of transfer of any Security
at any office or agency of the Transfer Agent and Registrar
maintained for such purpose, the Transferor shall execute,
subject to the provisions of subsection 6.3(c), and the Trustee
shall (unless the Transfer Agent and Registrar is different than
the Trustee, in which case the Transfer Agent and Registrar
shall) authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities in
authorized denominations of like aggregate Undivided Interests;
provided, that the provisions of this paragraph shall not apply
to Bearer Securities.
At the option of any Holder of Registered Securities,
Registered Securities may be exchanged for other Registered
Securities of the same Series in authorized denominations of like
aggregate Undivided Interests in the Trust, upon surrender of the
Registered Securities to be exchanged at any office or agency of
the Transfer Agent and Registrar maintained for such purpose. At
the option of a Bearer Securityholder, subject to applicable laws
and regulations (including without limitation, the Bearer Rules),
Bearer Securities may be exchanged for other Bearer Securities
or Registered Securities of the same Series in authorized
denominations of like aggregate Undivided Interests in the Trust,
in the manner specified in the Supplement for such Series, upon
surrender of the Bearer Securities to be exchanged at an office
or agency of the Transfer Agent and Registrar located outside the
United States. Each Bearer Security surrendered pursuant to this
Section 6.3 shall have attached thereto (or be accompanied by)
all unmatured Coupons, provided that any Bearer Security so
surrendered after the close of business on the Record Date
preceding the relevant Distribution Date after the related Series
Termination Date need not have attached the Coupons relating to
such Distribution Date.
Whenever any Investor Securities of any Series are so
surrendered for exchange, the Transferor shall execute, and the
Trustee shall (unless the Transfer Agent and Registrar is
different than the Trustee, in which case the Transfer Agent and
Registrar shall) authenticate and deliver, the Investor
Securities of such Series which the Securityholder making the
exchange is entitled to receive. Every Investor Security
presented or surrendered for registration of transfer or exchange
shall be accompanied by a written instrument of transfer in a
form satisfactory to the Trustee and the Transfer Agent and
Registrar duly executed by the Securityholder thereof or his
attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.3
notwithstanding, the Trustee or the Transfer Agent and Registrar,
as the case may be, shall not be required to register the
transfer of or exchange any Investor Security of any Series for
the period from the Record Date preceding the due date for any
payment to the Distribution Date with respect to the Investor
Securities of such Series.
Unless otherwise provided in the related Supplement, no
service charge shall be made for any registration of transfer or
exchange of Securities, but the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer or exchange of Securities.
All Investor Securities (together with any Coupons attached
to Bearer Securities) surrendered for registration of transfer or
exchange shall be canceled by the Transfer Agent and Registrar
and disposed of in a manner satisfactory to the Trustee. The
Trustee shall cancel and dispose of any Global Security upon its
exchange in full for Definitive Securities, but shall not be
required to destroy such Global Securities. Such security shall
also state that a security or securities of each Foreign Clearing
Agency to the effect referred to in Section 6.13 was received
with respect to each portion of the Global Security exchanged for
Definitive Securities.
The Transferor shall execute and deliver to the Trustee or
the Transfer Agent and Registrar, as applicable, Bearer
Securities and Registered Securities in such amounts and at such
times as are necessary to enable the Trustee to fulfill its
responsibilities under this Agreement and the Securities.
(b) Except as provided in Section 6.9 or 7.2 or in any
Supplement, in no event shall the Exchangeable Transferor
Security or any interest therein be transferred, sold, exchanged,
pledged, participated or otherwise assigned hereunder, in whole
or in part, unless the Transferor shall have consented in writing
to such transfer and unless the Trustee shall have received (1)
confirmation in writing from each Rating Agency that such
transfer will not result in a lowering or withdrawal of its then-
existing rating of any Series of Investor Securities and (2) an
Opinion of Counsel that such transfer does not (i) adversely
affect the conclusions reached in any of the federal income tax
opinions issued in connection with the original issuance of any
Series of Investor Securities or (ii) result in a taxable event
to the holders of any such Series.
(c) Unless otherwise provided in the related Supplement,
registration of transfer of Registered Securities containing a
legend relating to the restrictions on transfer of such
Registered Securities (which legend shall be set forth in the
Supplement relating to such Investor Securities) shall be
effected only if the conditions set forth in such related
Supplement are satisfied.
Whenever a Registered Security containing the legend set
forth in the related Supplement is presented to the Transfer
Agent and Registrar for registration of transfer, the Transfer
Agent and Registrar shall promptly seek instructions from the
Servicer regarding such transfer. The Transfer Agent and
Registrar and the Trustee shall be entitled to receive written
instructions signed by an officer of the Trustee prior to
registering any such transfer or authenticating new Registered
Securities, as the case may be. The Servicer hereby agrees to
indemnify the Transfer Agent and Registrar and the Trustee and to
hold each of them harmless against any loss, liability or expense
incurred without negligence or bad faith on their part arising
out of or in connection with actions taken or omitted by them in
reliance on any such written instructions furnished pursuant to
this subsection 6.3(c).
(d) The Transfer Agent and Registrar will maintain at its
expense in the Borough of Manhattan, The City of New York, an
office or offices or an agency or agencies where Investor
Securities of such Series may be surrendered for registration of
transfer or exchange.
(e) Prior to the Transfer of any portion of a Transferor
Retained Class, the Trustee shall have received an Opinion of
Counsel to the effect that such proposed Transfer will not
adversely affect the Federal or Applicable Tax State income tax
characterization of any outstanding Series of Investor Securities
or the taxability (or tax characterization) of the Trust under
Federal, Minnesota or Delaware income tax laws. The Transferor
shall provide to Moody's notice of any such Transfer and a copy
of the Opinion of Counsel described above.
Section 6.4 Mutilated, Destroyed, Lost or Stolen
Securities. If (a) any mutilated Security (together, in the case
of Bearer Securities, with all unmatured Coupons, if any,
appertaining thereto) is surrendered to the Transfer Agent and
Registrar, or the Transfer Agent and Registrar receives evidence
to its satisfaction of the destruction, loss or theft of any
Security and (b) there is delivered to the Transfer Agent and
Registrar and the Trustee such security or indemnity as may be
required by them to hold each of them and the Trust harmless,
then, in the absence of notice to the Trustee that such Security
has been acquired by a bona fide purchaser, the Trustee shall
(unless the Transfer Agent and Registrar is different from the
Trustee, in which case the Transfer Agent and Registrar shall)
authenticate and deliver (in compliance with applicable law), in
exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Security, a new Security of like tenor and aggregate
Undivided Interest. In connection with the issuance of any new
Security under this Section 6.4, the Trustee or the Transfer
Agent and Registrar may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees
and expenses of the Trustee and the Transfer Agent and Registrar)
connected therewith. Any duplicate Security issued pursuant to
this Section 6.4 shall constitute complete and indefeasible
evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Security shall be
found at any time.
Section 6.5 Persons Deemed Owners. Prior to due
presentation of a Security for registration of transfer, the
Trustee, the Paying Agent, the Transfer Agent and Registrar and
any agent of any of them may treat the Person in whose name any
Security is registered as the owner of such Security for the
purpose of receiving distributions pursuant to Article V (as
described in any Supplement) and Article XII and for all other
purposes whatsoever, and neither the Trustee, the Paying Agent,
the Transfer Agent and Registrar nor any agent of any of them
shall be affected by any notice to the contrary; provided,
however, that in determining whether the holders of Investor
Securities evidencing the requisite Undivided Interests have
given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Investor Securities owned by the
Transferor, the Servicer or any Affiliate thereof shall be
disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice,
consent or waiver, only Investor Securities which a Responsible
Officer in the Corporate Trust Office of the Trustee knows to be
so owned shall be so disregarded. Investor Securities so owned
that have been pledged in good faith shall not be disregarded as
outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such
Investor Securities and that the pledgee is not the Transferor,
the Servicer or an Affiliate thereof.
In the case of a Bearer Security, the Trustee, the Paying
Agent, the Transfer Agent and Registrar and any agent of any of
them may treat the holder of a Bearer Security or Coupon as the
owner of such Bearer Security or Coupon for the purpose of
receiving distributions pursuant to Article V (as described in
any Supplement) and Article XII and for all other purposes
whatsoever, and neither the Trustee, the Paying Agent, the
Transfer Agent and Registrar nor any agent of any of them shall
be affected by any notice to the contrary. Securities so owned
that have been pledged in good faith shall not be disregarded and
may be regarded as outstanding, if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with
respect to such Investor Securities and that the pledgee is not
the Transferor, the Servicer or an Affiliate thereof.
Section 6.6 Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Investor
Securityholders from the appropriate account or accounts
maintained for the benefit of Securityholders as specified in
this Agreement or the related Supplement for any Series pursuant
to Articles IV and V hereof. Any Paying Agent shall have the
revocable power to withdraw funds from such appropriate account
or accounts for the purpose of making distributions referred to
above. The Trustee (or the Servicer if the Trustee is the Paying
Agent) may revoke such power and remove the Paying Agent, if the
Trustee (or the Servicer if the Trustee is the Paying Agent)
determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in
any material respect or for other good cause. The Paying Agent,
unless the Supplement with respect to any Series states
otherwise, shall initially be the Trustee. The Trustee shall be
permitted to resign as Paying Agent upon 30 days' written notice
to the Servicer. Upon the resignation of the Paying Agent, if
the Paying Agent was not the Trustee, the Trustee shall be the
successor Paying Agent unless and until another successor has
been appointed as Paying Agent. In the event that the Trustee,
shall no longer be the Paying Agent, the Transferor shall appoint
a successor to act as Paying Agent (which shall be a bank or
trust company). Any reference in this Agreement to the Paying
Agent shall include any co-paying agent unless the context
requires otherwise.
If specified in the related Supplement for any Series, so
long as the Investor Securities of such Series are outstanding
and the Paying Agent is not located in New York City, the
Transferor shall maintain a co-paying agent in New York City (for
Registered Securities only) or any other city designated in such
Supplement.
(b) The Trustee shall cause each Paying Agent (other than
itself) to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee that such
Paying Agent will hold all sums, if any, held by it for payment
to the Securityholders in trust for the benefit of the
Securityholders entitled thereto and waive all rights of set off
the Paying Agent may have against any sums held by it until such
sums shall be paid to such Securityholders and shall agree, and
if the Trustee is the Paying Agent it hereby agrees, that it
shall comply with all requirements of the Internal Revenue Code
regarding the withholding by the Trustee of payments in respect
of federal income taxes due from Security Owners.
Section 6.7 Access to List of Securityholders' Names and
Addresses. The Trustee will furnish or cause to be furnished by
the Transfer Agent and Registrar to the Servicer or the Paying
Agent, within five Business Days after receipt by the Trustee of
a request therefor from the Servicer or the Paying Agent,
respectively, in writing, a list in such form as the Servicer or
the Paying Agent may reasonably require, of the names and
addresses of the Investor Securityholders as of the most recent
Record Date for payment of distributions to Investor
Securityholders. Unless otherwise provided in the related
Supplement, holders of Investor Securities evidencing Undivided
Interests aggregating not less than 25% of the Invested Amount of
the Investor Securities of any Series (the "Applicants") may
apply in writing to the Trustee, and if such application states
that the Applicants desire to communicate with other Investor
Securityholders of any Series with respect to their rights under
this Agreement or under the Investor Securities and is
accompanied by a copy of the communication which such Applicants
propose to transmit, then the Trustee, after having been
adequately indemnified by such Applicants for its costs and
expenses, shall afford or shall cause the Transfer Agent and
Registrar to afford such Applicants access during normal business
hours to the most recent list of Securityholders held by the
Trustee and shall give the Servicer notice that such request has
been made, within five Business Days after the receipt of such
application. Such list shall be as of a date no more than 45
days prior to the date of receipt of such Applicants' request.
Every Securityholder, by receiving and holding a Security, agrees
with the Trustee that neither the Trustee, the Transfer Agent and
Registrar, nor any of their respective agents shall be held
accountable by reason of the disclosure of any such information
as to the names and addresses of the Securityholders hereunder,
regardless of the source from which such information was
obtained.
Section 6.8 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating
agents (each, an "Authenticating Agent") with respect to the
Securities which shall be authorized to act on behalf of the
Trustee in authenticating the Securities in connection with the
issuance, delivery, registration of transfer, exchange or
repayment of the Securities. The Trustee will appoint any
Transfer Agent and Registrar to be an Authentication Agent.
Whenever reference is made in this Agreement to the
authentication of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed
on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent must be acceptable to the Transferor. The
Trustee hereby initially appoints The Bank of New York as its
Authenticating Agent.
(b) Any institution succeeding to the corporate agency
business of an Authenticating Agent shall continue to be an
Authenticating Agent without the execution or filing of any paper
or any further act on the part of the Trustee or such
Authenticating Agent.
(c) An Authenticating Agent may at any time resign by
giving written notice of resignation to the Trustee and to the
Transferor. The Trustee may at any time terminate the agency of
an Authenticating Agent by giving notice of termination to such
Authenticating Agent and to the Transferor. Upon receiving such
a notice of resignation or upon such a termination, or in case at
any time an Authenticating Agent shall cease to be acceptable to
the Trustee or the Transferor, the Trustee promptly may appoint a
successor Authenticating Agent. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be
appointed unless acceptable to the Trustee and the Transferor.
(d) The Servicer agrees to pay each Authenticating Agent
from time to time reasonable compensation for its services under
this Section 6.8.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be
applicable to any Authenticating Agent.
(f) Pursuant to an appointment made under this Section 6.8,
the Securities may have endorsed thereon, in lieu of the
Trustee's certificate of authentication, an alternate certificate
of authentication in substantially the following form:
Trustee's Certificate of Authentication
This is one of the securities described in the Pooling and
Servicing Agreement.
,
as Authenticating Agent for the Trustee
By:
Authorized Signatory
Dated:
Section 6.9 Tender of Exchangeable Transferor Security.
(a) Upon any Exchange, the Transferor shall deliver to the
Trustee for authentication under Section 6.2, one or more new
Series of Investor Securities. Any such Series of Investor
Securities shall be substantially in the form specified in the
related Supplement and shall bear, upon its face, the designation
for such Series to which it belongs, as selected by the
Transferor. Except as specified in any Supplement for a related
Series, all Investor Securities of any Series shall rank pari
passu and be equally and ratably entitled as provided herein to
the benefits hereof (except that the Enhancement provided for any
Series shall not be available for any other Series) without
preference, priority or distinction on account of the actual time
or times of authentication and delivery, all in accordance with
the terms and provisions of this Agreement and the related
Supplement.
(b) The Holder of the Exchangeable Transferor Security may
(i) tender the Exchangeable Transferor Security to the Trustee in
exchange for (A) one or more newly issued Series of Investor
Securities or, with respect to any pre-funded Series, interests
therein and (B) a reissued Exchangeable Transferor Security, (ii)
request the Trustee to issue to it one or more Classes of any
newly issued Series of Investor Securities which upon payment by
the purchaser thereof of the Initial Invested Amount of such
Securities to a Defeasance Account, will represent an interest in
the Trust equal to such Initial Invested Amount (an "Unfunded
Security") or (iii) take a combination of the actions specified
in clauses (i) and (ii) provided that the sum of the amount of
Transferor Interest which is tendered under clause (i) and the
amount to be paid to the Defeasance Account under clause (ii)
equals the Initial Invested Amount of the Investor Securities
delivered to the Holder of the Exchangeable Transferor Security
(any such event under clauses (i), (ii) or (iii), a "Transferor
Exchange"). In addition, to the extent permitted for any Series
of Investor Securities as specified in the related Supplement,
the Investor Securityholders of such Series may tender their
Investor Securities and the Holder of the Exchangeable Transferor
Security may tender the Exchangeable Transferor Security to the
Trustee pursuant to the terms and conditions set forth in such
Supplement in exchange for (i) one or more newly issued Series of
Investor Securities and (ii) a reissued Exchangeable Transferor
Security (an "Investor Exchange"). Unless otherwise specified in
any Supplement, the Transferor shall not be permitted to deposit
money into any Defeasance Account. The Transferor Exchange and
Investor Exchange are referred to collectively herein as an
"Exchange." The Holder of the Exchangeable Transferor Security
may perform an Exchange by notifying the Trustee, in writing, at
least five Business Days in advance (an "Exchange Notice") of the
date upon which the Exchange is to occur (an "Exchange Date").
Any Exchange Notice shall state the designation of any Series to
be issued on the Exchange Date and, with respect to each such
Class or Series: (a) its Initial Invested Amount (or the method
for calculating such Initial Invested Amount), which at any time
may not be greater than the current principal amount of the
Exchangeable Transferor Security at such time (or in the case of
an Investor Exchange, the sum of the Invested Amount of any Class
or Series of Investor Securities to be exchanged plus the current
principal amount of the Exchangeable Transferor Security) taking
into account any Receivables transferred to the Trust
simultaneous with such Exchange, (b) its Security Rate (or the
method for allocating interest payments or other cash flows to
such Series), if any, and (c) the Enhancement Provider, if any,
with respect to such Series. On the Exchange Date, the Trustee
shall authenticate and deliver any such Class or Classes of such
Series of Investor Securities only upon delivery to it of the
following: (a) a Supplement satisfying the criteria set forth in
subsection 6.9(c) and in form reasonably satisfactory to the
Trustee executed by the Transferor and the Servicer and
specifying the Principal Terms of such Series, (b) the applicable
Enhancement, if any, (c) the agreement, if any, pursuant to which
the Enhancement Provider agrees to provide the Enhancement, if
any, (d) an Opinion of Counsel to the effect that (i) any Class
of the newly issued Series of Investor Securities sold to third
parties will be characterized as either indebtedness or
partnership interests for Federal and applicable state income tax
purposes or (ii) that the issuance of the newly issued Series of
Investor Securities will not adversely affect the Federal or
Applicable Tax State income tax characterization of any
outstanding Series of Investor Securities or the taxability of
the Trust under Federal or Applicable Tax State income tax laws,
(e) written confirmation from each Rating Agency that the
Exchange will not result in such Rating Agency's reducing or
withdrawing its rating on any then outstanding Class of any
Series as to which it is a Rating Agency, (f) an Officer's
Certificate of the Transferor, that on the Exchange Date after
giving effect to such exchange (i) the Transferor Interest would
be at least equal to the Minimum Transferor Interest and (ii) the
Retained Interest would be at least equal to the Minimum Retained
Interest, (g) the existing Exchangeable Transferor Security or
applicable Investor Securities, as the case may be and (h) such
other documents, certificates and Opinions of Counsel as may be
required by the applicable Supplement. Upon satisfaction of such
conditions, the Trustee shall cancel the existing Exchangeable
Transferor Security or applicable Investor Securities, as the
case may be, and issue, as provided above, such Series of
Investor Securities and a new Exchangeable Transferor Security,
dated the Exchange Date. There is no limit to the number of
Exchanges that may be performed under this Agreement.
(c) In conjunction with an Exchange, the parties hereto
shall execute a Supplement, which shall specify the relevant
terms with respect to any newly issued Series of Investor
Securities, which may include without limitation: (i) its name
or designation, (ii) the Initial Invested Amount or the method of
calculating the Initial Invested Amount, (iii) the Security Rate
(or formula for the determination thereof), (iv) the Closing
Date, (v) the rating agency or agencies rating such Series, (vi)
the name of the Clearing Agency, if any, (vii) the rights of the
Holder of the Exchangeable Transferor Security that have been
transferred to the Holders of such Series pursuant to such
Exchange (including any rights to allocations of Finance Charge
Collections and Principal Collections), (viii) the interest
payment date or dates and the date or dates from which interest
shall accrue, (ix) the method of allocating Principal Collections
for such Series and the method by which the principal amount of
Investor Securities of such Series shall amortize or accrete and
the method for allocating Finance Charge Collections, (x) the
names of any accounts to be used by such Series and the terms
governing the operation of any such account, (xi) the Series
Servicing Fee Percentage, (xii) the Minimum Transferor Interest,
(xiii) the Series Termination Date, (xiv) the terms of any
Enhancement with respect to such Series, (xv) the Enhancement
Provider, if applicable, (xvi) the base rate applicable to such
Series, (xvii) the terms on which the Securities of such Series
may be repurchased or remarketed to other investors, (xviii) any
deposit into any account provided for such Series, (xix) the
number of Classes of such Series and, if more than one Class, the
rights and priorities of each such Class, (xx) whether any fees
will be included in the funds available to be paid for such
Series, (xxi) the subordination of such Series to any other
Series, (xxii) the Pool Factor, (xxiii) the Minimum Aggregate
Principal Receivables, (xxiv) whether such Series will be a part
of a group or subject to being paired with any other Series,
(xxv) whether such Series will be pre-funded, and (xxvi) any
other relevant terms of such Series (including whether or not
such Series will be pledged as collateral for an issuance of any
other securities, including commercial paper) (all such terms,
the "Principal Terms" of such Series). The terms of such
Supplement may modify or amend the terms of this Agreement solely
as applied to such new Series. If on the date of the issuance of
such Series there is issued and outstanding one or more Series of
Investor Securities and no Series of Investor Securities is
currently rated by a Rating Agency, then as a condition to such
Exchange a nationally recognized investment banking firm or
commercial bank shall also deliver to the Trustee an officer's
certificate stating, in substance, that the Exchange will not
have an adverse effect on the timing or distribution of payments
to such other Series of Investor Securities then issued and
outstanding.
(d) The Transferor may surrender the Exchangeable
Transferor Security to the Trustee in exchange for a newly issued
Exchangeable Transferor Security and a second security (a
"Supplemental Security"), the terms of which shall be defined in
a supplement to this Agreement (which supplement shall be subject
to Section 13.1 hereof to the extent that it amends any of the
terms of this Agreement), to be delivered to or upon the order of
the Transferor (or a Person designated by the Transferor, in the
case of the transfer or exchange thereof, as provided below),
upon satisfaction of the following conditions: (i) following
such exchange, the Transferor Interest (less any interest therein
represented by any Supplemental Securities) would be at least
equal to the Minimum Transferor Interest ,(ii) following such
exchange the Retained Interest (less any interest therein
represented by any Supplemental Securities) equals or exceeds the
Minimum Retained Interest, and (iii) the Trustee received prior
to such exchange (A) a letter from the Rating Agency stating that
the then current ratings on the Investor Securities of each rated
class of each Series then outstanding will not be reduced or
withdrawn because of the issuance of such Supplemental Security
and (B) an Opinion of Counsel to the effect that (i) such
Supplemental Security will be characterized as either
indebtedness or a partnership interest for Federal and applicable
state income tax purposes or (ii) that such Supplemental Security
will not adversely affect the Federal, Minnesota or Delaware
income tax characterization of any outstanding Series of Investor
Securities or the taxability of the Trust under Federal,
Minnesota or Delaware income tax laws, transferred or exchanged
only upon satisfaction of the conditions set forth in clause
(iii) above.
Section 6.10 Book-Entry Securities. Unless otherwise
provided in any related Supplement, the Investor Securities, upon
original issuance, shall be issued in the form of typewritten
Securities representing the Book-Entry Securities, to be
delivered to the depositary specified in such Supplement (the
"Depositary") which shall be the Clearing Agency or Foreign
Clearing Agency, by or on behalf of such Series. The Investor
Securities of each Series shall, unless otherwise provided in the
related Supplement, initially be registered on the Security
Register in the name of the nominee of the Clearing Agency or
Foreign Clearing Agency. No Security Owner will receive a
definitive security representing such Security Owner's interest
in the related Series of Investor Securities, except as provided
in Section 6.12. Unless and until definitive, fully registered
Investor Securities of any Series ("Definitive Securities") have
been issued to Security Owners pursuant to Section 6.12:
(i) the provisions of this Section 6.10 shall be in
full force and effect with respect to each such Series;
(ii) the Transferor, the Servicer, the Paying Agent,
the Transfer Agent and Registrar and the Trustee may deal
with the Clearing Agency and the Clearing Agency
Participants for all purposes (including the making of
distributions on the Investor Securities of each such
Series) as the authorized representatives of the Security
Owners;
(iii) to the extent that the provisions of this
Section 6.10 conflict with any other provisions of this
Agreement, the provisions of this Section 6.10 shall control
with respect to each such Series; and
(iv) the rights of Security Owners of Investor
Securities of each such Series shall be exercised only
through the Clearing Agency or Foreign Clearing Agency and
the applicable Clearing Agency Participants and shall be
limited to those established by law and agreements between
such Security Owners and the Clearing Agency or Foreign
Clearing Agency and/or the Clearing Agency Participants.
Pursuant to the Depositary Agreement applicable to a Series,
unless and until Definitive Securities of such Series are
issued pursuant to Section 6.12, the initial Clearing Agency
will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of
principal and interest on the Investor Securities to such
Clearing Agency Participants.
Section 6.11 Notices to Clearing Agency. Whenever notice
or other communica tion to the Securityholders is required under
this Agreement, unless and until Definitive Securities shall have
been issued to Security Owners pursuant to Section 6.12, the
Trustee shall give all such notices and communications specified
herein to be given to Holders of the Investor Securities to the
Clearing Agency or Foreign Clearing Agency.
Section 6.12 Definitive Securities. If (i) (A) the
Transferor advises the Trustee in writing that the Clearing
Agency or Foreign Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the applicable
Depositary Agreement, and (B) the Transferor is unable to locate
a qualified successor, (ii) the Transferor, at its option,
advises the Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or Foreign Clearing
Agency with respect to any Series of Securities or (iii) after
the occurrence of a Servicer Default, Security Owners of a Series
representing beneficial interests aggregating not less than 50%
of the Invested Amount of such Series advise the Trustee and the
applicable Clearing Agency or Foreign Clearing Agency through the
applicable Clearing Agency Participants in writing that the
continuation of a book-entry system through the applicable
Clearing Agency or Foreign Clearing Agency is no longer in the
best interests of the Security Owners, the Trustee shall notify
all Security Owners of such Series, through the applicable
Clearing Agency Participants, of the occurrence of any such event
and of the availability of Definitive Securities to Security
Owners of such Series requesting the same. Upon surrender to the
Trustee of the Investor Securities of such Series by the
applicable Clearing Agency or Foreign Clearing Agency for
registration, accompanied by registration instructions from the
applicable Clearing Agency or Foreign Clearing Agency, the
Trustee shall issue the Definitive Securities of such Series.
Neither the Transferor nor the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Securities of such Series, all
references herein to obligations imposed upon or to be performed
by the applicable Clearing Agency or Foreign Clearing Agency
shall be deemed to be imposed upon and performed by the Trustee,
to the extent applicable with respect to such Definitive
Securities, and the Trustee shall recognize the Holders of the
Definitive Securities of such Series as Securityholders of such
Series hereunder.
Section 6.13 Global Security; Euro-Security Exchange Date.
If specified in the related Supplement for any Series, the
Investor Securities may be initially issued in the form of a
single temporary Global Security (the "Global Security") in
bearer form, without interest coupons, in the denomination of the
Initial Invested Amount of such Series and substantially in the
form attached to the related Supplement. Unless otherwise
specified in the related Supplement, the provisions of this
Section 6.13 shall apply to such Global Security. The Global
Security will be authenticated by the Trustee upon the same
conditions, in substantially the same manner and with the same
effect as the Definitive Securities. The Global Security may be
exchanged in the manner described in the related Supplement for
Registered Securities or Bearer Securities in definitive form.
Section 6.14 Meetings of Securityholders.
To the extent provided by the Supplement for any Series
issued in whole or in part in Bearer Securities, the Servicer or
the Trustee may at any time call a meeting of the Securityholders
of such Series, to be held at such time and at such place as the
Servicer or the Trustee, as the case may be, shall determine, for
the purpose of approving a modification of or amendment to, or
obtaining a waiver of, any covenant or condition set forth in
this Agreement with respect to such Series or in the Securities
of such Series, subject to Section 13.1 of this Agreement.
[End of Article VI]
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.1 Liability of the Transferor. The Transferor
shall be liable in accordance herewith solely to the extent of
the obligations specifically undertaken by the Transferor.
Section 7.2 Merger or Consolidation of, or Assumption of
the Obligations of, the Transferor.
(a) The Transferor shall not consolidate with or merge into
any other business entity or convey or transfer its properties
and assets substantially as an entirety to any Person, unless:
(i) the business entity formed by such consolidation
or into which the Transferor is merged or the Person which
acquires by conveyance or transfer the properties and assets
of the Transferor substantially as an entirety shall be, if
the Transferor is not the surviving entity, (x) a
corporation organized and existing under the laws of the
United States of America or any State or the District of
Columbia or (y) a state or national banking association that
is not subject to the Bankruptcy Code of 1978, as amended
from time to time, or to any successor statute, and shall
expressly assume, by an agreement supplemental hereto,
executed and delivered to the Trustee, in form satisfactory
to the Trustee, the performance of every covenant and
obligation of the Transferor, as applicable hereunder and
shall benefit from all the rights granted to the Transferor,
as applicable hereunder. To the extent that any right,
covenant or obligation of the Transferor, as applicable
hereunder, is inapplicable to the successor entity, such
successor entity shall be subject to such covenant or
obligation, or benefit from such right, as would apply, to
the extent practicable, to such successor entity. In
furtherance hereof, in applying this Section 7.2 to a
successor entity, Section 9.2 hereof shall be applied by
reference to events of involuntary liquidation, receivership
or conservatorship applicable to such successor entity as
shall be set forth in the officer's certificate described in
subsection 7.2(a)(ii);
(ii) the Transferor shall have delivered to the
Trustee an Officer's Certificate signed by a Vice President
(or any more senior officer) of the Transferor stating that
such consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section 7.2 and that
all conditions precedent herein provided for relating to
such transaction have been complied with and an Opinion of
Counsel that such supplemental agreement is legal, valid and
binding and that the entity surviving such consolidation,
conveyance or transfer is organized and existing under the
laws of the United States of America or any State or the
District of Columbia and, subject to customary limitations
and qualifications, such entity will not be substantively
consolidated with any Credit Card Originator or the
Servicer;
(iii) the Transferor shall have delivered notice to
the Rating Agency of such consolidation, merger, conveyance
or transfer and the Rating Agency shall have provided
written confirmation that such consolidation, merger,
conveyance or transfer will not result in the Rating Agency
reducing or withdrawing its rating on any then outstanding
Series as to which it is a Rating Agency;
(iv) the successor entity shall be a special purpose
bankruptcy remote entity; and
(v) if the Transferor is not the surviving entity, the
surviving entity shall file new UCC-1 financing statements
with respect to the interest of the Trust in the
Receivables.
(b) The obligations of the Transferor hereunder shall not
be assignable nor shall any Person succeed to the obligations of
the Transferor hereunder except for mergers, consolidations,
assumptions or transfers in accordance with the provisions of the
foregoing paragraph.
Section 7.3 Limitation on Liability. The directors,
officers, employees or agents of the Transferor shall not be
under any liability to the Trust, the Trustee, the
Securityholders, any Enhancement Provider or any other Person
hereunder or pursuant to any document delivered hereunder, it
being expressly understood that all such liability is expressly
waived and released as a condition of, and as consideration for,
the execution of this Agreement and any Supplement and the
issuance of the Securities; provided, however, that this
provision shall not protect the officers, directors, employees,
or agents of the Transferor against any liability which would
otherwise be imposed upon them by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder.
Except as provided in Sections 7.1 and 7.4 with respect to the
Trust and the Trustee and its officers, directors, employees and
agents, the Transferor shall not be under any liability to the
Trust, the Trustee, its officers, directors, employees and
agents, the Securityholders, any Enhancement Provider or any
other Person for any action taken or for refraining from the
taking of any action in its capacity as Transferor pursuant to
this Agreement or any Supplement whether arising from express or
implied duties under this Agreement or any Supplement or
otherwise; provided, however, that this provision shall not
protect the Transferor against any liability which would
otherwise be imposed upon it by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder.
The Transferor and any director, officer, employee or agent may
rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any
matters arising hereunder.
Section 7.4 Liabilities. Notwithstanding Section 7.3, by
entering into this Agreement, the Transferor agrees to be liable,
directly to the injured party, for the entire amount of any
losses, claims, damages, penalties or liabilities (other than
those incurred by a Securityholder in the capacity of an investor
in the Investor Securities as a result of the performance of the
Receivables, market fluctuations, a shortfall or failure by the
Enhancement Provider to make payment under any Enhancement or
other similar market or investment risks associated with
ownership of the Investor Securities) arising out of or based on
the arrangement created by this Agreement and the actions of the
Servicer taken pursuant hereto as though this Agreement created a
partnership under the Delaware Uniform Partnership Law, in which
the Transferor is a general partner. The Transferor agrees to
pay, indemnify and hold harmless each Investor Securityholder
against and from any and all such loses, claims, damages and
liabilities (other than those incurred by a Securityholder in the
capacity of an investor in the Investor Securities as a result of
the performance of the Receivables, market fluctuations, a
shortfall or failure by an Enhancement Provider to make payment
under an Enhancement or other similar market or investment risks)
except to the extent that they arise from any action by such
Investor Securityholder. Subject to Sections 8.3 and 8.4, in the
event of a Service Transfer, the Successor Servicer will
indemnify and hold harmless the Transferor for any losses,
claims, damages and liabilities of the Transferor as described in
this Section 7.4 arising from the actions or omissions of such
Successor Servicer.
[End of Article VII]
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.1 Liability of the Servicer. The Servicer shall
be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer in such
capacity herein.
Section 8.2 Merger or Consolidation of, or Assumption of
the Obligations of, the Servicer. Subject to subsection 3.1(a),
the Servicer shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or
into which the Servicer is merged or the Person which
acquires by conveyance or transfer the properties and assets
of the Servicer substantially as an entirety shall be (x) a
corporation organized and existing under the laws of the
United States of America or any State or the District of
Columbia or (y) a state or national banking association that
is not subject to the Bankruptcy Code of 1978, as amended
from time to time, or to any successor statute, and, if the
Servicer is not the surviving entity, shall expressly
assume, by an agreement supplemental hereto, executed and
delivered to the Trustee in form satisfactory to the
Trustee, the performance of every covenant and obligation of
the Servicer hereunder (to the extent that any right,
covenant or obligation of the Servicer, as applicable
hereunder, is inapplicable to the successor entity, such
successor entity shall be subject to such covenant or
obligation, or benefit from such right, as would apply, to
the extent practicable, to such successor entity);
(ii) the Servicer shall have delivered to the Trustee
an Officer's Certificate that such consolidation, merger,
conveyance or transfer and such supplemental agreement
comply with this Section 8.2 and that all conditions
precedent herein provided for relating to such transaction
have been complied with and an Opinion of Counsel that such
supplemental agreement is legal, valid and binding with
respect to the Servicer and that the entity surviving such
consolidation, conveyance or transfer is organized and
existing under the laws of the United States of America or
any State or the District of Columbia; and
(iii) the Servicer shall have delivered notice to the
Rating Agency of such consolidation, merger, conveyance or
transfer.
Section 8.3 Limitation on Liability of the Servicer and
Others. The directors, officers, employees or agents of the
Servicer shall not be under any liability to the Trust, the
Trustee, the Securityholders, any Enhancement Provider or any
other Person hereunder or pursuant to any document delivered
hereunder, it being expressly understood that all such liability
is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and any
Supplement and the issuance of the Securities; provided, however,
that this provision shall not protect the directors, officers,
employees and agents of the Servicer against any liability which
would otherwise be imposed upon them by reason of willful
misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and
duties hereunder. Except as provided in Sections 8.1 and 8.4
with respect to the Trustee, its officers, directors, employees
and agents, the Servicer shall not be under any liability to the
Trust, the Trustee, its officers, directors, employees and
agents, the Securityholders, any Enhancement Provider or any
other Person for any action taken or for refraining from the
taking of any action in its capacity as Servicer pursuant to this
Agreement or any Supplement; provided, however, that this
provision shall not protect the Servicer against any liability
which would otherwise be imposed upon it by reason of willful
misfeasance, bad faith or gross negligence in the performance of
duties or by reason of its reckless disregard of its obligations
and duties hereunder or under any Supplement. The Servicer may
rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any
matters arising hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action
which is not incidental to its duties to service the Receivables
in accordance with this Agreement which in its reasonable opinion
may involve it in any expense or liability.
Section 8.4 Servicer Indemnification of the Transferor, the
Trust and the Trustee. Subject to the limitations on liability
set forth in Section 8.3, the Servicer shall indemnify and hold
harmless the Transferor, the Trustee and the Trust (each, an
"Indemnified Party") from and against any loss, liability,
reasonable expense, damage or injury, including, but not limited
to, any judgment, award, settlement, reasonable attorneys' fees
and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim,
suffered or sustained by reason of any acts or omissions or
alleged acts or omissions of the Servicer with respect to
activities of the Trust or the Trustee for which the Servicer is
responsible pursuant to this Agreement; provided, however, that
the Servicer shall not indemnify or hold harmless an Indemnified
Party if such acts, omissions or alleged acts or omissions
constitute or are caused by fraud, gross negligence, or willful
misconduct by such Indemnified Party (or any of such Indemnified
Party's officers, directors, employees or agents) or the Investor
Securityholders; provided, further, that the Servicer shall not
indemnify or hold harmless the Trust, the Investor
Securityholders or the Security Owners for any losses,
liabilities, expenses, damages or injuries suffered or sustained
by any of them with respect to any action taken by the Trustee at
the request of the Investor Securityholders; provided further,
that the Servicer shall not indemnify or hold harmless the Trust,
the Investor Securityholders or the Security Owners as to any
losses, liabilities, expenses, damages or injuries suffered or
sustained by any of them in their capacities as investors,
including without limitation losses incurred as a result of
Receivables in Defaulted Accounts; provided further, that the
Servicer shall not indemnify or hold harmless the Transferor, the
Trust, the Investor Securityholders or the Security Owners for
any losses, liabilities, expenses, damages or injuries suffered
or sustained by the Trust, the Investor Securityholders or the
Security Owners arising under any tax law, including without
limitation, any federal, state, local or foreign income or
franchise taxes or any other tax imposed on or measured by income
(or any interest, penalties or additions with respect thereto or
arising from a failure to comply therewith) required to be paid
by the Trust, the Investor Securityholders or the Security Owners
in connection herewith to any taxing authority; and, provided,
further, that in no event will the Servicer be liable, directly
or indirectly, for or in respect of any indebtedness or
obligation evidenced or created by any Security, recourse as to
which shall be limited solely to the assets of the Trust
allocated for the payment thereof as provided in this Agreement
and any applicable Supplement. Any such indemnification shall
not be payable from the assets of the Trust, but the Servicer
shall be subrogated to the rights of the Trust with respect to
the foregoing matters if and to the extent that the Servicer
shall have indemnified the Trust with respect thereto. The
Servicer shall indemnify and hold harmless the Trustee and its
officers, directors, employees or agents from and against any
loss, liability, reasonable expense, damage or injury suffered or
sustained by reason of the acceptance of this Trust by the
Trustee, the issuance by the Trust of the Securities or any of
the other matters contemplated herein or in any Supplement;
provided, however, that the Servicer shall not indemnify the
Trustee or its officers, directors, employees or agents for any
loss, liability, expense, damage or injury caused by the fraud,
negligence or willful misconduct of any of them. The provisions
of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof and shall survive
the resignation or removal of the Servicer, the resignation or
removal of the Trustee and/or the termination of the Trust and
shall survive the termination of the Agreement.
Section 8.5 The Servicer Not to Resign. Subject to
subsection 3.1(a), the Servicer shall not resign from the
obligations and duties hereby imposed on it except upon
determination that (i) the performance of its duties hereunder is
no longer permissible under applicable law and (ii) there is no
reasonable action that the Servicer could take to make the
performance of its duties hereunder permissible under applicable
law. Any such determination permitting the resignation of the
Servicer shall be evidenced as to clause (i) above by an Opinion
of Counsel to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee or a
Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 10.2
hereof. If the Trustee is unable within 120 days of the date of
delivery to it of such Opinion of Counsel to appoint a Successor
Servicer, the Trustee shall serve as Successor Servicer hereunder
(but shall have continued authority to appoint another Person as
Successor Servicer).
Section 8.6 Access to Certain Documentation and Information
Regarding the Receivables. The Servicer shall provide to the
Trustee and its agents (who shall be reasonably acceptable to the
Servicer) access to the documentation regarding the Accounts and
the Receivables in such cases where the Trustee is required in
connection with the enforcement of the rights of the Investor
Securityholders, or by applicable statutes or regulations, to
review such documentation, such access being afforded without
charge but only (i) upon reasonable request, (ii) during normal
business hours, (iii) subject to the Servicer's normal security
and confidentiality procedures and (iv) at offices designated by
the Servicer. Nothing in this Section 8.6 shall derogate from
the obligation of any Credit Card Originator, the Transferor, the
Trustee or the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure
of the Servicer to provide access as provided in this Section 8.6
as a result of such obligations shall not constitute a breach of
this Section 8.6.
Section 8.7 Delegation of Duties. It is understood and
agreed by the parties hereto that the Servicer may delegate
certain of its duties hereunder to First Data Resources, Inc., a
Delaware corporation. In the ordinary course of business, the
Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the
Credit and Collection Policies. Any such delegations shall not
relieve the Servicer of its liability and responsibility with
respect to such duties, and shall not constitute a resignation
within the meaning of Section 8.5 hereof and the Servicer will
remain jointly and severally liable with such Person for any
amounts which would otherwise be payable pursuant to this Article
VIII as if the Servicer had performed such duty; provided,
however, that in the case of any significant delegation to a
Person other than First Data Resources, Inc. or an Affiliate of
DMCCB (i) written notice shall be given to the Trustee and to
each Rating Agency of such delegation, (ii) Moody's shall have
notified the Transferor and the Trustee in writing that such
delegation will not result in the lowering or withdrawal of its
then existing rating of any Series or Class of Investor
Securities and (iii) the Transferor shall not have received
written notice from Standard & Poor's that such delegation would
result in the lowering or withdrawal of its then existing rating
of any Series or Class of Investor Securities.
[End of Article VIII]
ARTICLE IX
PAY OUT EVENTS
Section 9.1 Pay Out Events. If any one of the following
events (each, a "Trust Pay Out Event") shall occur:
(a) the Transferor, Metris or DMCCB shall consent to the
appointment of a bankruptcy trustee or receiver or liquidator in
any bankruptcy proceeding or any other insolvency, readjustment
of debt, marshalling of assets and liabilities or similar
proceedings of or relating to all or substantially all of its
property; or a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a bankruptcy trustee or receiver or liquidator in
any bankruptcy proceeding or any other insolvency, readjustment
of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Transferor, Metris or DMCCB;
or the Transferor, Metris or DMCCB shall admit in writing its
inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or
reorganization statute including the U.S. bankruptcy code, make
an assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations; or the Transferor shall
become unable for any reason to transfer Receivables to the Trust
in accordance with the provisions of this Agreement; or
(b) the Trust shall become subject to regulation by the
Securities and Exchange Commission as an "investment company"
within the meaning of the Investment Company Act;
then a Pay Out Event with respect to all Series of Securities
shall occur without any notice or other action on the part of the
Trustee or the Investor Securityholders immediately upon the
occurrence of such event. The Trustee shall provide notice of a
Pay Out Event in a prompt manner to each Rating Agency.
Section 9.2 Additional Rights Upon the Occurrence of
Certain Events.
(a) If (x) the Transferor shall consent to the appointment
of a bankruptcy trustee or receiver or liquidator for the winding-
up or liquidation of its affairs, or a decree or order of a court
or agency or supervisory authority having jurisdiction in the
premises for the appointment of a bankruptcy trustee or receiver
or liquidator for the winding-up or liquidation of its affairs
shall have been entered against the Transferor or Metris (an
"Insolvency Event"), on the day of such Insolvency Event (the
"Appointment Day") or (y) the Retained Percentage shall at any
time be equal to or less than 2% (a "Trigger Event"), the
following actions shall be taken and processes begun:
(i) If an Insolvency Event shall have occurred, the
Transferor shall immediately cease to transfer Principal
Receivables to the Trust and shall promptly give written
notice to the Trustee of such Insolvency Event.
Notwithstanding any cessation of the transfer to the Trust
of additional Principal Receivables, receivables accrued in
respect of Finance Charge Receivables (other than Discount
Option Receivables), whenever created, accrued in respect of
Receivables that have been transferred to the Trust, shall
continue to be a part of the Trust, and Collections with
respect thereto shall continue to be allocated and paid in
accordance with Article IV.
(ii) If an Insolvency Event or a Trigger Event shall
have occurred this Agreement and the Trust shall be deemed
to have terminated, subject to the liquidation, winding-up
and dissolution procedures described below; provided,
however, that within 15 days of the date of written notice
to the Trustee, the Trustee shall (i) publish a notice in an
Authorized Newspaper that an Insolvency Event or a Trigger
Event has occurred, that the Trust has terminated, and that
the Trustee intends to sell, dispose of or otherwise
liquidate the Receivables pursuant to this Agreement in a
commercially reasonable manner and on commercially
reasonable terms, which shall include the solicitation of
competitive bids (a "Disposition"), and (ii) send written
notice to the Investor Securityholders describing the
provisions of this Section 9.2 and requesting each Investor
Securityholder to advise the Trustee in writing that it
elects one of the following options: (A) the Investor
Securityholder wishes the Trustee to instruct the Servicer
not to effectuate a Disposition, or (B) the Investor
Securityholder refuses to advise the Trustee as to the
specific action the Trustee shall instruct the Servicer to
take or (C) the Investor Securityholder wishes the Servicer
to effect a Disposition. If after 90 days from the day
notice pursuant to clause (i) above is first published (the
"Publication Date"), the Trustee shall not have received the
written instruction described in clause (A) above from
Holders of Investor Securities representing Undivided
Interests aggregating in excess of 50% of the related
Invested Amount of each Series (or, in the case of a Series
having more than one Class, each Class of such Series) and
the holders of any Supplemental Securities or any other
interest in the Exchangeable Transferor Security other than
the Transferor as provided in Section 6.3(b) for each
Series, a "Holders' Majority"), the Trustee shall instruct
the Servicer to effectuate a Disposition, and the Servicer
shall proceed to consummate a Disposition. If, however,
with respect to the portion of the Receivables allocable to
any outstanding Series, a Holders' Majority instruct the
Trustee not to effectuate a Disposition of the portion of
the Receivables allocable to such Series, the Trust shall be
reconstituted and continue with respect to such Series
pursuant to the terms of this Agreement and the applicable
Supplement (as amended in connection with such
reconstitution). The portion of the Receivables allocable
to any Series shall be equal to the sum of (1) the product
of (A) the Transferor Percentage, (B) the aggregate
outstanding Principal Receivables and (C) a fraction the
numerator of which is the related Investor Percentage of
Finance Charge Collections and the denominator of which is
the sum of all Investor Percentages with respect to Finance
Charge Collections for all Series outstanding and (2) the
Invested Amount of such Series. The Transferor or any of
its Affiliates shall be permitted to bid for the
Receivables. In addition, the Transferor or any of its
Affiliates shall have the right to match any bid by a third
person and be granted the right to purchase the Receivables
at such matched bid price. The Trustee may obtain a prior
determination from any such bankruptcy trustee, receiver or
liquidator that the terms and manner of any proposed
Distribution are commercially reasonable. The provisions of
Sections 9.1 and 9.2 shall not be deemed to be mutually
exclusive.
(b) The proceeds from the Disposition pursuant to
subsection (a) above shall be treated as Collections on the
Receivables and shall be allocated and deposited in accordance
with the provisions of Article IV; provided, however, that the
proceeds from a Disposition with respect to any Series shall be
applied solely to make payments to such Series; provided further,
that the Trustee shall determine conclusively in its sole
discretion the amount of such proceeds that are allocable to
Finance Charge Collections and the amount of such proceeds that
are allocable to Collections of Principal Receivables. Unless
the Trustee receives written instructions from Investor
Securityholders of one or more Series to continue the Trust with
respect to such Series as provided in subsection 9.2(a) above, on
the day following the last Distribution Date in the Monthly
Period during which such proceeds are distributed to the Investor
Securityholders of each Series, the Trust shall terminate.
(c) The Trustee may appoint an agent or agents to assist
with its responsibilities pursuant to this Article IX with
respect to competitive bids.
[End of Article IX]
ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults. If any one of the
following events (a "Servicer Default") shall occur and be
continuing:
(a) any failure by the Servicer to make any payment,
transfer or deposit or to give instructions or notice to the
Trustee pursuant to Article IV or to instruct the Trustee to make
any required drawing, withdrawal, or payment under any
Enhancement on or before the date occurring five Business Days
after the date such payment, transfer, deposit, withdrawal or
drawing or such instruction or notice is required to be made or
given, as the case may be, under the terms of this Agreement;
provided, however, that any such failure caused by a non- willful
act of the Servicer shall not constitute a Servicer Default if
the Servicer promptly remedies such failure within five Business
Days after receiving notice of such failure or otherwise becoming
aware of such failure;
(b) failure on the part of the Servicer duly to observe or
perform in any respect any other covenants or agreements of the
Servicer set forth in this Agreement, which has a material
adverse effect on the Investor Securityholders of any Series and
which continues unremedied for a period of 60 days after the date
on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee,
or to the Servicer and the Trustee by the Holders of Investor
Securities evidencing Undivided Interests aggregating not less
than 50% of the Invested Amount of any Series materially
adversely affected thereby and continues to materially adversely
affect such Investor Securityholders for such period; or the
Servicer shall delegate its duties under this Agreement, except
as permitted by Section 8.7;
(c) any representation, warranty or certification made by
the Servicer in this Agreement or in any security delivered
pursuant to this Agreement shall prove to have been incorrect
when made, which has a material adverse effect on the Investor
Securityholders of any Series and which continues to be incorrect
in any material respect for a period of 60 days after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee,
or to the Servicer and the Trustee by the Holders of Investor
Securities evidencing Undivided Interests aggregating not less
than 50% of the Invested Amount of any Series materially
adversely affected thereby and continues to materially adversely
affect such Investor Securityholders for such period; or
(d) the Servicer shall consent to the appointment of a
bankruptcy trustee or receiver or liquidator in any bankruptcy
proceeding or any other insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of
or relating to the Servicer or of or relating to all or
substantially all of its property; or a decree or order of a
court or agency or supervisory authority having jurisdiction in
the premises for the appointment of a bankruptcy trustee or
receiver or liquidator in any bankruptcy proceeding or any other
insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the
Servicer, and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or the Servicer
shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make any
assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations;
then, so long as such Servicer Default shall not have been
remedied, either the Trustee, or the Holders of Investor
Securities evidencing Undivided Interests aggregating more than
50% of the Aggregate Invested Amount, by notice then given in
writing to the Servicer (and to the Trustee if given by the
Investor Securityholders) (a "Termination Notice"), may terminate
all of the rights and obligations of the Servicer as Servicer
under this Agreement. After receipt by the Servicer of such
Termination Notice, and on the date that a Successor Servicer
shall have been appointed by the Trustee pursuant to Section
10.2, all authority and power of the Servicer under this
Agreement shall pass to and be vested in a Successor Servicer;
and, without limitation, the Trustee is hereby authorized and
empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the Servicer, as attorney-in-
fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such transfer
of servicing rights and obligations. The Servicer agrees to
cooperate with the Trustee and such Successor Servicer in
effecting the termination of the responsibilities and rights of
the Servicer to conduct servicing hereunder including, without
limitation, the transfer to such Successor Servicer of all
authority of the Servicer to service the Receivables provided for
under this Agreement, including, without limitation, all
authority over all Collections which shall on the date of
transfer be held by the Servicer for deposit, or which have been
deposited by the Servicer, in the Collection Account, the Excess
Funding Account, the Interest Funding Account or the Principal
Account, and any Series Account, or which shall thereafter be
received with respect to the Receivables. The Servicer shall
promptly transfer its electronic records or electronic copies
thereof relating to the Receivables to the Successor Servicer in
such electronic form as the Successor Servicer may reasonably
request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the
continued servicing of the Receivables in the manner and at such
times as the Successor Servicer shall reasonably request. To the
extent that compliance with this Section 10.1 shall require the
Servicer to disclose to the Successor Servicer information of any
kind which the Servicer deems to be confidential, the Successor
Servicer shall be required to enter into such customary licensing
and confidentiality agreements as the Servicer shall deem
necessary to protect its interests. The Servicer shall, on the
date of any servicing transfer, transfer all of its rights and
obligations under the Enhancement with respect to any Series to
the Successor Servicer. In connection with any service transfer,
all reasonable costs and expenses (including attorneys' fees)
incurred in connection with transferring the records,
correspondence and other documents with respect to the
Receivables and the other Trust Property to the Successor
Servicer and amending this Agreement to reflect such succession
as Successor Servicer pursuant to this Section 10.1 and Section
10.2 shall be paid by the Servicer (unless the Trustee is acting
as the Servicer on a temporary basis, in which case the original
Servicer shall be responsible therefor) upon presentation of
reasonable documentation of such costs and expenses.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in subsection 10.1(a) for a period of
five Business Days or under subsection 10.1(b) or (c) for a
period of 60 days, shall not constitute a Servicer Default if
such delay or failure could not be prevented by the exercise of
reasonable diligence by the Servicer and such delay or failure
was caused by an act of God or the public enemy, acts of declared
or undeclared war, public disorder, rebellion, riot or sabotage,
epidemics, landslides, lightning, fire, hurricanes, tornadoes,
earthquakes, nuclear disasters or meltdowns, floods, power
outages, bank closings, communications outages, computer failure
or similar causes. The preceding sentence shall not relieve the
Servicer from using its best efforts to perform its obligations
in a timely manner in accordance with the terms of this Agreement
and the Servicer shall provide the Trustee, any Enhancement
Provider, the Transferor and the Holders of Investor Securities
with an Officer's Certificate giving prompt notice of such
failure or delay by it, together with a description of the cause
of such failure or delay and its efforts so to perform its
obligations.
Section 10.2 Trustee to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a
Termination Notice pursuant to Section 10.1, the Servicer shall
continue to perform all servicing functions under this Agreement
until the date specified in the Termination Notice or as
otherwise specified by the Trustee in writing or, if no such date
is specified in such Termination Notice, or otherwise specified
by the Trustee, until a date mutually agreed upon by the Servicer
and Trustee. The Trustee shall notify each Rating Agency of such
removal of the Servicer. The Trustee shall, as promptly as
possible after the giving of a Termination Notice, appoint a
successor servicer (the "Successor Servicer"), and such Successor
Servicer shall accept its appointment by a written assumption in
a form acceptable to the Trustee. If such Successor Servicer is
unable to accept such appointment, the Trustee may obtain bids
from any potential successor servicer. If the Trustee is unable
to obtain any bids from any potential successor servicer and the
Servicer delivers an Officer's Certificate to the effect that it
cannot in good faith cure the Servicer Default which gave rise to
a transfer of servicing, and if the Trustee is legally unable to
act as Successor Servicer, then the Trustee shall offer the
Transferor the right to accept reassignment of all of the
Receivables for an amount equal to the Aggregate Invested Amount
on the date of such purchase plus all interest accrued but unpaid
on all of the outstanding Investor Securities at the applicable
Security Rate through the date of such purchase; provided,
however, that no such purchase by the Transferor shall occur
unless the Transferor shall deliver an Opinion of Counsel
reasonably acceptable to the Trustee that such purchase would not
constitute a fraudulent conveyance of the Transferor. The
proceeds of such sale shall be deposited in the Distribution
Account or any Series Account, as provided in the related
Supplement, for distribution to the Investor Securityholders of
each outstanding Series pursuant to Section 12.3 of the
Agreement. In the event that a Successor Servicer has not been
appointed and has not accepted its appointment at the time when
the Servicer ceases to act as Servicer, the Trustee without
further action shall automatically be appointed the Successor
Servicer (but shall have continued authority to appoint another
Person as Successor Servicer). The Trustee may delegate any of
its servicing obligations to an affiliate or agent of the Trustee
in accordance with Article III hereof. Any such delegations
shall not relieve the Trustee of its liability and responsibility
with respect to such duties. Notwithstanding the above, the
Trustee shall, if it is legally unable to act, petition a court
of competent jurisdiction to appoint any established financial
institution having, in the case of an entity that is subject to
risk-based capital adequacy requirements, risk-based capital of
at least $50,000,000 or, in the case of an entity that is not
subject to risk-based capital requirements, having a net worth of
not less than $50,000,000 and whose regular business includes the
servicing of credit card receivables similar to the Receivables
as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be
the successor in all respects to the Servicer with respect to
servicing functions under this Agreement and shall be subject to
all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof, and
all references in this Agreement to the Servicer shall be deemed
to refer to the Successor Servicer. Any Successor Servicer, by
its acceptance of its appointment, will automatically agree to be
bound by the terms and provisions of each Enhancement.
(c) In connection with such appointment and assumption, the
Trustee shall be entitled to such compensation, or may make such
arrangements for the compensation of the Successor Servicer out
of Collections, as it and such Successor Servicer shall agree;
provided, however, that no such compensation shall be in excess
of the Servicing Fee permitted to the Servicer pursuant to
Section 3.2. The Transferor agrees that if the Servicer is
terminated hereunder, it will agree to deposit a portion of the
Collections in respect of Finance Charge Receivables that it is
entitled to receive pursuant to Article IV to pay its ratable
share of the compensation of the Successor Servicer.
(d) All authority and power granted to the Successor
Servicer under this Agreement shall automatically cease and
terminate upon termination of the Trust pursuant to Section 12.1
and shall pass to and be vested in the Transferor and, without
limitation, the Transferor is hereby authorized and empowered to
execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such transfer
of servicing rights. The Successor Servicer agrees to cooperate
with the Transferor in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct
servicing on the Receivables. The Successor Servicer shall
transfer its electronic records relating to the Receivables to
the Transferor in such electronic form as the Transferor may
reasonably request and shall transfer all other records,
correspondence and documents to the Transferor in the manner and
at such times as the Transferor shall reasonably request. To the
extent that compliance with this Section 10.2 shall require the
Successor Servicer to disclose to the Transferor information of
any kind which the Successor Servicer deems to be confidential,
the Transferor shall be required to enter into such customary
licensing and confidentiality agreements as the Successor
Servicer shall deem necessary to protect its interests.
Section 10.3 Notification to Securityholders. Upon the
Servicer becoming aware of any Servicer Default, the Servicer
shall give prompt written notice thereof to the Trustee and any
Enhancement Provider and, upon receipt of such written notice,
the Trustee shall give notice to the Investor Securityholders at
their respective addresses appearing in the Security Register.
Upon any termination or appointment of a Successor Servicer
pursuant to this Article X, the Trustee shall give prompt written
notice thereof to Investor Securityholders at their respective
addresses appearing in the Security Register.
Section 10.4 Waiver of Past Defaults. The Holders of
Investor Securities evidencing Undivided Interests aggregating
not less than 66-2/3% of the Invested Amount of each Series
materially adversely affected by any default by the Servicer or
Transferor may, on behalf of all Securityholders of such Series,
waive any default by the Servicer or Transferor in the
performance of their respective obligations hereunder and its
consequences, except a default in the failure to make any
required deposits or payments of interest or principal relating
to such Series pursuant to Article IV, which default does not
result from the failure of the Paying Agent to perform its
obligations to make any required deposits or payments of interest
and principal in accordance with Article IV. Upon any such
waiver of a past default, such default shall cease to exist, and
any default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any
right consequent thereon except to the extent expressly so
waived.
[End of Article X]
ARTICLE XI
THE TRUSTEE
Section 11.1 Duties of Trustee.
(a) The Trustee, prior to the occurrence of any Servicer
Default of which a Responsible Officer of the Trustee has actual
knowledge and after the curing of all Servicer Defaults which may
have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement, and no
implied covenants or duties shall be read into this Agreement
against the Trustee. If a Responsible Officer has received
written notice that a Servicer Default has occurred (and such
Servicer Default has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;
provided, however, that if the Trustee shall assume the duties of
the Servicer pursuant to Section 8.5 or 10.2, the Trustee in
performing such duties shall use the degree of skill and
attention customarily exercised by a servicer with respect to
comparable receivables that it services for itself or others.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee that are specifically
required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they
substantially conform to the requirements of this Agreement. The
Trustee shall retain all such items for at least one year after
receipt and shall make such items available for inspection by any
Investor Securityholder at the Corporate Trust Office, such
inspection to be made during regular business hours and upon
reasonable prior notice to the Trustee.
(c) Subject to subsection 11.1(a), no provision of this
Agreement shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure
to act or its own misconduct; provided, however, that:
(i) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of the
Holders of Investor Securities evidencing Undivided
Interests aggregating more than 50% of the Invested Amount
of any Series relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee with respect to such Series, or exercising any trust
or power conferred upon the Trustee with respect to such
Series, under this Agreement; and
(iii) the Trustee shall not be charged with knowledge
of any failure by the Servicer referred to in clauses (a)
and (b) of Section 10.1 or of any breach by the Servicer
contemplated by clause (c) of Section 10.1 or any Pay Out
Event unless a Responsible Officer of the Trustee obtains
actual knowledge of such failure, breach or Pay-Out Event or
the Trustee receives written notice of such failure, breach
or Pay Out Event from the Servicer or any Holders of
Investor Securities evidencing Undivided Interests
aggregating not less than 10% of the Invested Amount of any
Series adversely affected thereby.
(d) The Trustee shall not be required to expend or risk its
own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it,
and none of the provisions contained in this Agreement shall in
any event require the Trustee to perform, or be responsible for
the manner of performance of, any of the obligations of the
Servicer under this Agreement except during such time, if any, as
the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Agreement.
(e) Except for actions expressly authorized by this
Agreement, the Trustee shall take no action reasonably likely to
impair the interests of the Trust in any Receivable now existing
or hereafter created or to impair the value of any Receivable now
existing or hereafter created.
(f) Except as provided in this Agreement, the Trustee shall
have no power to vary the corpus of the Trust.
(g) If a Responsible Officer of the Trustee, has received
written notice that the Paying Agent or the Transfer Agent and
Registrar shall fail to perform any obligation, duty or agreement
in the manner or on the day required to be performed by the
Paying Agent or the Transfer Agent and Registrar, as the case may
be, under this Agreement, the Trustee shall be obligated promptly
upon its obtaining knowledge thereof by a Responsible Officer of
the Trustee to perform such obligation, duty or agreement in the
manner so required.
(h) If the Transferor has agreed to transfer any of its
open-end revolving credit card receivables (other than the
Receivables) to another Person, upon the written request of the
Transferor, the Trustee on behalf of the Trust will enter into
such intercreditor agreements with the transferee of such
receivables as are customary and necessary to identify separately
the rights, if any, of the Trust and such other Person in the
Transferor's open-end revolving credit card receivables;
provided, however, that the Trust shall not be required to enter
into any intercreditor agreement that could adversely affect the
interests of the Securityholders or the Trustee and, upon the
request of the Trustee, the Transferor will deliver an Opinion of
Counsel on any matters relating to such intercreditor agreement,
reasonably requested by the Trustee.
Section 11.2 Certain Matters Affecting the Trustee. Except
as otherwise provided in Section 11.1:
(a) the Trustee may rely on and shall be protected in
acting on, or in refraining from acting in accordance with, the
initial report, the Daily Report, the Settlement Statement, the
annual Servicer's certificate, the monthly payment instructions
and notification to the Trustee, the monthly Securityholder's
statement, any resolution, Officer's Certificate, certificate of
auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond
or other paper or document believed by it to be genuine and to
have been signed or presented to it pursuant to this Agreement by
the proper party or parties;
(b) the Trustee may consult with counsel, and the advice or
any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement or any
Enhancement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or
direction of any of the Securityholders or any Enhancement
Provider, pursuant to the provisions of this Agreement, unless
such Securityholders or Enhancement Provider shall have offered
to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby; nothing contained herein shall, however, relieve the
Trustee of the obligations, upon the occurrence of any Servicer
Default (which has not been cured or waived) of which a
Responsible Officer of the Trustee has knowledge, to exercise
such of the rights and powers vested in it by this Agreement and
any Enhancement, and to use the same degree of care and skill in
its exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs;
(d) the Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(e) the Trustee shall not be bound to make any
investigation into the facts of matters stated in the initial
report, the Daily Report, the Settlement Statement, the annual
Servicer's certificate, the monthly payment instructions and
notification to the Trustee, the monthly Securityholders
statement, any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond
or other paper or document, unless requested in writing so to do
by Holders of Investor Securities evidencing Undivided Interests
aggregating more than 50% of the Invested Amount of any Series
which could be adversely affected if the Trustee does not perform
such acts;
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through agents or attorneys or a custodian, and the Trustee
shall not be responsible for any misconduct or negligence on the
part of any such agent, attorney or custodian appointed with due
care by it hereunder;
(g) except as may be required by subsection 11.1(a), the
Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Accounts
or the Receivables for the purpose of establishing the presence
or absence of defects, the compliance by the Transferor with its
representations and warranties or for any other purpose;
(h) whenever in the administration of this Agreement the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officer's Certificate; and
(i) the right of the Trustee to perform any discretionary
act enumerated in this Agreement or any Supplement or Enhancement
shall not be construed as a duty, and the Trustee shall not be
answerable for performance of any such act.
Section 11.3 Trustee Not Liable for Recitals in Securities.
The Trustee assumes no responsibility for the correctness of the
recitals contained herein and in the Securities (other than the
certificate of authentication on the Securities). Except as set
forth in Section 11.15, the Trustee makes no representations as
to the validity or sufficiency of this Agreement or of the
Securities (other than the certificate of authentication on the
Securities) or of any Receivable or related document. The
Trustee shall not be accountable for the use or application by
the Transferor of any of the Securities or of the proceeds of
such Securities, or for the use or application of any funds paid
to the Transferor in respect of the Receivables or deposited in
or withdrawn from the Collection Account, the Excess Funding
Account, the Principal Account or the Interest Funding Account,
or any Series Account or other accounts now or hereafter
established to effectuate the transactions contemplated herein
and in accordance with the terms hereof. The Trustee shall have
no responsibility for filing any financing or continuation
statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or
Lien granted to it hereunder (unless the Trustee shall have
become the Successor Servicer) or to prepare or file any
Securities and Exchange Commission filing for the Trust or to
record this Agreement or any Supplement.
Section 11.4 [Reserved].
Section 11.5 The Servicer to Pay Trustee's Fees and
Expenses. The Servicer covenants and agrees to pay to the
Trustee from time to time, and the Trustee shall be entitled to
receive, reasonable compensation (which shall not be limited by
any provision of law in regard to the compensation of a trustee
of an express trust) for all services rendered by the Trustee in
the execution of the trust hereby created and in the exercise and
performance of any of the powers and duties hereunder of the
Trustee, and, subject to Section 8.4, the Servicer will pay or
reimburse the Trustee (without reimbursement from any Investor
Account, any Series Account or otherwise) upon its request for
all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of
this Agreement (including the reasonable fees and expenses of its
agents and counsel) except any such expense, disbursement or
advance as may arise from its own negligence or bad faith and
except as provided in the following sentence. If the Trustee is
appointed Successor Servicer pursuant to Section 10.2, the
provisions of this Section 11.5 shall not apply to expenses,
disbursements and advances made or incurred by the Trustee in its
capacity as Successor Servicer (which shall be covered out of the
Servicing Fee).
The obligations of the Servicer under this Section 11.5
shall survive the termination of the Trust and the resignation or
removal of the Trustee.
Section 11.6 Eligibility Requirements for Trustee. The
Trustee hereunder shall at all times (a) be a corporation
organized and doing business under the laws of the United States
of America or any state thereof authorized under such laws to
exercise corporate trust powers, having a long-term unsecured
debt rating of at least Baa3 by Moody's, having, in the case of
an entity that is subject to risk-based capital adequacy
requirements, risk-based capital of at least $50,000,000 or, in
the case of an entity that is not subject to risk-based capital
adequacy requirements, having a combined capital and surplus of
at least $50,000,000 and subject to supervision or examination by
federal or state authority and (b) not be a Related Person. If
such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this
Section 11.6, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 11.6,
the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.7.
Section 11.7 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign and be discharged
from the Trust hereby created by giving written notice thereof to
the Servicer. Upon receiving such notice of resignation, the
Servicer shall promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed
and have accepted such appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment
of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible
in accordance with the provisions of Section 11.6 hereof and
shall fail to resign after written request therefor by the
Transferor, or if at any time the Trustee shall be legally unable
to act, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Transferor may, but shall
not be required to, remove the Trustee and promptly appoint a
successor trustee by written instrument, in duplicate, one copy
of which instrument shall be delivered to the Trustee so removed
and one copy to the successor trustee.
(c) If (i) the Trustee shall fail to perform any of its
obligations hereunder, (ii) a Securityholder shall deliver
written notice of such failure to the Trustee, and (iii) the
Trustee shall not have corrected such failure for 60 days
thereafter, then the Holders of Investor Securities representing
more than 50% of the Invested Amount (including related
commitments of holders of Variable Funding Securities) shall have
the right to remove the Trustee and (with the consent of the
Transferor, which shall not be unreasonably withheld) promptly
appoint a successor trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
(d) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the
provisions of this Section 11.7 shall not become effective until
acceptance of appointment by the successor trustee as provided in
Section 11.8 hereof and any liability of the Trustee arising
hereunder shall survive such appointment of a successor trustee.
Notice of any resignation or removal of the Trustee and
appointment of a successor trustee shall be provided to Moody's
and Standard & Poor's by the Servicer in a prompt manner.
Section 11.8 Successor Trustee.
(a) Any successor trustee appointed as provided in Section
11.7 hereof shall execute, acknowledge and deliver to the
Transferor and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or
removal of the predecessor Trustee shall become effective and
such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as Trustee herein. The
predecessor Trustee shall deliver to the successor trustee all
documents and statements held by it hereunder, and the Transferor
and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the
successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as
provided in this Section 11.8 unless at the time of such
acceptance such successor trustee shall be eligible under the
provisions of Section 11.6 hereof.
(c) Upon acceptance of appointment by a successor trustee
as provided in this Section 11.8, such successor trustee shall
mail notice of such succession hereunder to all Securityholders
at their addresses as shown in the Security Register.
Section 11.9 Merger or Consolidation of Trustee. Any
Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee shall be
a party, or any Person succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation
shall be eligible under the provisions of Section 11.6 hereof,
without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 11.10 Appointment of Co-Trustee or Separate
Trustee.
(a) Notwithstanding any other provisions of this Agreement,
at any time, for the purpose of meeting any legal requirements of
any jurisdiction in which any part of the Trust may at the time
be located, the Trustee shall have the power and may execute and
deliver all instruments to appoint one or more Persons to act as
a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Securityholders, such title to the trust, or any part thereof,
and, subject to the other provisions of this Section 11.10, such
powers, duties, obligations, rights and trusts as the Trustee may
consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 11.6 and no
notice to Securityholders of the appointment of any co-trustee or
separate trustee shall be required under Section 11.8. The
Trustee shall provide written notice to each Rating Agency of any
co-trustee or separate trustee so appointed .
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in
such act), except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to
the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the
holding of title to the Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee
hereunder; and
(iii) the Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to
each of them. Every instrument appointing any separate trustee
or co-trustee shall refer to this Agreement and the conditions of
this Article XI. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the
estates or property specified in its instrument of appointment,
either jointly with the Trustee or separately, as may be provided
therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement or
Enhancement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Every such
instrument shall be filed with the Trustee and a copy thereof
given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee as its agent or attorney-in-fact with full
power and authority, to the extent not prohibited by law, to do
any lawful act under or in respect to this Agreement on its
behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted
by law, without the appointment of a new or successor trustee.
Section 11.11 Tax Returns. Consistent with Section 3.7,
the Trustee shall not, except as required by law, file any United
States federal income tax returns on behalf of the Trust;
provided, however, that if a class of Securities is issued that
will be characterized (in the sole and absolute discretion of the
Transferor) as equity interests in a partnership for federal
income tax purposes, partnership information returns for the
Trust shall be prepared and signed by the Transferor, as general
partner, and the Transferor shall act as the "Tax Matters
Partner" (as defined in Section 6231(a)(7) of the Internal
Revenue Code). In the event the Trust shall be required to file
tax returns, the Servicer shall at its expense prepare or cause
to be prepared any tax returns required to be filed by the Trust
and, to the extent possible, shall remit such returns to the
Trustee for signature at least five days before such returns are
due to be filed. The Trustee is hereby authorized to sign any
such return on behalf of the Trust. The Servicer shall prepare
or shall cause to be prepared all tax information required by law
to be distributed to Securityholders and shall deliver such
information to the Trustee at least five days prior to the date
it is required by law to be distributed to Securityholders. The
Trustee, upon request, will furnish the Servicer with all such
information known to the Trustee as may be reasonably required in
connection with the preparation of all tax returns of the Trust
and shall, upon request, execute such return. In no event shall
the Trustee be liable for any liabilities, costs or expenses of
the Trust, the Investor Securityholders or the Security Owners
arising under any tax law, including without limitation federal,
state, local or foreign income or excise taxes or any other tax
imposed on or measured by income (or any interest or penalty or
addition with respect thereto or arising from a failure to comply
therewith).
Section 11.12 Trustee May Enforce Claims Without Possession
of
Securities. All rights of action and claims under this Agreement
or any Series of Securities may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or the
production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its
own name as trustee. Any recovery of judgment shall, after
provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of any Series of
Securityholders in respect of which such judgment has been
obtained.
Section 11.13 Suits for Enforcement. If a Servicer Default
of which a Responsi ble Officer of the Trustee has knowledge
shall occur and be continuing, the Trustee, in its discretion
may, subject to the provisions of Section 10.1, proceed to
protect and enforce its rights and the rights of any Series of
Securityholders under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in
this Agreement or for the enforcement of any other legal,
equitable or other remedy as the Trustee, being advised by
counsel, shall deem most effectual to protect and enforce any of
the rights of the Trustee or any Series of Securityholders.
Section 11.14 Rights of Securityholders to Direct Trustee.
Holders of Investor Securities representing more than 50% of the
Aggregate Invested Amount (or, with respect to any remedy, trust
or power that does not relate to all Series, 50% of the aggregate
Invested Amount of the Investor Securities of all Series to which
such remedy, trust or power relates) shall have the right to
direct the time, method, and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee; provided, however, that
Holders of Investor Securities representing more than 50% of the
aggregate Invested Amount of any Class may direct the Trustee to
exercise its rights under Section 8.6; provided, further, that,
subject to Section 11.1, the Trustee shall have the right to
decline to follow any such direction if the Trustee being advised
by counsel determines that the action so directed may not
lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee,
determine that the proceedings so directed would be illegal or
involve it in personal liability or be unduly prejudicial to the
rights of Securityholders not parties to such direction; and
provided, further that nothing in this Agree ment shall impair
the right of the Trustee to take any action deemed proper by the
Trustee and which is not inconsistent with such direction of such
Holders of Investor Securities.
Section 11.15 Representations and Warranties of Trustee.
The Trustee represents and warrants that:
(i) the Trustee is a corporation organized, existing
and authorized to engage in the business of banking under
the laws of the State of its incorporation;
(ii) the Trustee is an entity that satisfies the
eligibility requirements of Section 11.6;
(iii) the Trustee has full power, authority and right
to execute, deliver and perform this Agreement, and has
taken all necessary action to authorize the execution,
delivery and performance by it of this Agreement; and
(iv) this Agreement has been duly executed and
delivered by the Trustee.
Section 11.16 Maintenance of Office or Agency. The Trustee
will maintain at its expense an office or offices, or agency or
agencies, where notices and demands to or upon the Trustee in
respect of the Securities and this Agreement may be served. The
Trustee initially appoints its Corporate Trust Office as its
office for such purposes. The Trustee will give prompt written
notice to the Servicer and to Securityholders (or in the case of
Holders of Bearer Securities, in the manner provided for in the
related Supplement) of any change in the location of the Security
Register or any such office or agency.
[End of Article XI]
ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust.
(a) The respective obligations and responsibilities of the
Transferor, the Servicer and the Trustee created hereby (other
than the obligation of the Trustee to make payments to
Securityholders as hereafter set forth) shall terminate, except
with respect to the duties described in Sections 7.4, 8.4 and
11.5 and subsection 12.3(b), on the Trust Termination Date;
provided, however, that the Trust shall not terminate on the date
specified in clause (i) of the definition of "Trust Termination
Date" if each of the Servicer and the Holder of the Exchangeable
Transferor Security notify the Trustee in writing, not later than
five Business Days preceding such date, that they desire that the
Trust not terminate on such date, which notice (such notice, a
"Trust Extension") shall specify the date on which the Trust
shall terminate (such date, the "Extended Trust Termination
Date"); provided, however, that the Extended Trust Termination
Date shall be not later than May 26, 2095. The Servicer and the
Holder of the Exchangeable Transferor Security may, on any date
following the Trust Extension, so long as no Series of Securities
is outstanding, deliver a notice in writing to the Trustee
changing the Extended Trust Termination Date.
(b) In the event that (i) the Trust has not terminated by
the Distribution Date occurring in the second month preceding the
Trust Termination Date, and (ii) the Invested Amount of any
Series, exclusive of any Transferor Retained Class (after giving
effect to all transfers, withdrawals, deposits and drawings to
occur on such date and the payment of principal on any Series of
Securities to be made on the related Distribution Date during
such month pursuant to Article IV), would be greater than zero,
the Servicer shall sell within 30 days after such Transfer Date
an amount of Receivables up to the remaining Invested Amount if
it can do so in a commercially reasonable manner. The Servicer
shall notify each Enhancement Provider of the proposed sale of
the Receivables and shall provide each Enhancement Provider an
opportunity to bid on the Receivables. The Transferor shall have
the right of first refusal to purchase the Receivables on terms
equivalent to the best purchase offer as determined by the
Trustee in its sole discretion. The proceeds of any such sale
shall be treated as Collections on the Receivables and shall be
allocated and deposited in accordance with Article IV; provided,
however, that the Trustee shall determine conclusively in its
sole discretion the amount of such proceeds which are allocable
to Finance Charge Collections and the amount of such proceeds
which are allocable to Principal Collections. During such thirty-
day period, the Servicer shall continue to collect payments on
the Receivables and allocate and deposit such payments in
accordance with the provisions of Article IV.
(c) All principal or interest with respect to any Series of
Investor Securities shall be due and payable no later than the
Series Termination Date with respect to such Series. Unless
otherwise provided in a Supplement, in the event that the
Invested Amount of any Series of Securities is greater than zero,
exclusive of any Class held by the Transferor, on its Series
Termination Date (the "Affected Series"), after giving effect to
all transfers, withdrawals, deposits and drawings to occur on
such date and the payment of principal to be made on such Series
on such date, and the Trustee will sell or cause to be sold, and
the Trustee will pay the proceeds to all Securityholders of such
Series pro rata in final payment of all principal of and accrued
interest on such Series of Securities or, if any Class of such
Series is subordinated, in order of their respective seniorities,
an amount of Principal Receivables and the related Finance Charge
Receivables (or interests therein) up to 110% of the Invested
Amount of such Series at the close of business on such date (but
the amount of such Principal Receivables not to be more than an
amount of Receivables equal to the sum of (1) the product of (A)
the Transferor Percentage, (B) the aggregate outstanding
Principal Receivables and (C) a fraction the numerator of which
is the Invested Amount of such Series on such date and the
denominator of which is the sum of the Invested Amounts of all
Series on such Date and (2) the Invested Amount of such Series).
Receivables on which the Obligor has not made the full monthly
payment for the prior months shall be deemed to be in default for
purposes of this Section 12.1(c) to the extent that the cash
allocated to any Class of Transferor Retained Securities of such
Series pursuant to a sale under Section 12.1(c) is less than the
amount that would have been allocated to the Exchangeable
Transferor Security and the Transferor Retained Securities had
the proceeds from such sale been allocated pursuant to Section
4.3. The Servicer shall notify each Enhancement Provider of the
proposed sale of such Receivables and shall provide each
Enhancement Provider an opportunity to bid on such Receivables.
The Transferor shall be permitted to purchase such Receivables in
such case and shall have a right of first refusal with respect
thereto to the extent of a bona fide offer by an unrelated third
party or to the extent the Receivables represent Defaulted
Receivables. Any proceeds of such sale in excess of such
principal and interest paid shall be paid to the Holder of the
Exchangeable Transferor Security. Upon such Series Termination
Date with respect to the applicable Series of Securities, final
payment of all amounts allocable to any Investor Securities of
such Series shall be made in the manner provided in Section 12.3.
Section 12.2 Optional Termination. (a) If so provided in
any Supplement, the Transferor may, but shall not be obligated
to, cause a final distribution to be made in respect of the
related Series of Securities on a Distribution Date specified in
such Supplement by depositing into the Distribution Account or
the applicable Series Account, not later than the Transfer Date
preceding such Distribution Date, for application in accordance
with Section 12.3, the amount specified in such Supplement;
provided, however that if the short-term deposits or long-term
unsecured debt obligations of the Transferor are not rated at the
time of such purchase of Receivables at least P-3 or Baa3,
respectively, by Moody's, no such event shall occur unless the
Transferor shall deliver to the Trustee, with a copy to Moody's,
an Officer's Certificate which shall have attached to it the
relevant fraudulent conveyance statue, if any, and set forth the
factual basis for a conclusion that such deposit into the
Distribution Account or any Series Account as provided in the
related Supplement would not constitute a fraudulent conveyance
of the Transferor.
(b) The amount deposited pursuant to subsection 12.2(a)
shall be paid to the Investor Securityholders of the related
Series pursuant to Section 12.3 on the related Distribution Date
following the date of such deposit. All Securities of a Series
with respect to which a final distribution has been made pursuant
to subsection 12.2(a) shall be delivered by the Holder to, and be
canceled by, the Transfer Agent and Registrar and be disposed of
in a manner satisfactory to the Trustee and the Transferor. The
Invested Amount of each Series with respect to which a final
distribution has been made pursuant to subsection 12.2(a) shall,
for the purposes of the definition of "Transferor Interest," be
deemed to be equal to zero on the Distribution Date following the
making of the deposit, and the Transferor Interest shall
thereupon be deemed to have been increased by the Invested Amount
of such Series.
Section 12.3 Final Payment with Respect to any Series.
(a) Written notice of any termination, specifying the
Distribution Date upon which the Investor Securityholders of any
Series may surrender their Securities for payment of the final
distribution with respect to such Series and cancellation, shall
be given (subject to at least four Business Days' prior notice
from the Servicer to the Trustee) by the Trustee to Investor
Securityholders of such Series mailed not later than the fifth
day of the month of such final distribution (or in the manner
provided by the Supplement relating to such Series) specifying
(i) the Distribution Date (which shall be the Distribution Date
in the month (x) in which the deposit is made pursuant to
subsection 2.4(e), 9.2(a), 10.2(a), or 12.2(a) of the Agreement
or such other section as may be specified in the related
Supplement, or (y) in which the related Series Termination Date
occurs) upon which final payment of such Investor Securities will
be made upon presentation and surrender of such Investor
Securities at the office or offices therein designated (which, in
the case of Bearer Securities, shall be outside the United
States), (ii) the amount of any such final payment and (iii) that
the Record Date otherwise applicable to such Distribution Date is
not applicable, payments being made only upon presentation and
surrender of the Investor Securities at the office or offices
therein specified. The Servicer's notice to the Trustee in
accordance with the preceding sentence shall be accompanied by an
Officers' Certificate setting forth the information specified in
Article V of this Agreement covering the period during the then
current calendar year through the date of such notice and setting
forth the date of such final distribution. The Trustee shall
give such notice to the Transfer Agent and Registrar and the
Paying Agent at the time such notice is given to such Investor
Securityholders.
(b) Notwithstanding the termination of the Trust pursuant
to subsection 12.1(a) or the occurrence of the Series Termination
Date with respect to any Series, all funds then on deposit in the
Excess Funding Account, the Interest Funding Account, the
Principal Account, the Distribution Account or any Series Account
applicable to the related Series shall continue to be held in
trust for the benefit of the Securityholders of the related
Series and the Paying Agent or the Trustee shall pay such funds
to the Securityholders of the related Series upon surrender of
their Securities (which surrenders and payments, in the case of
Bearer Securities, shall be made only outside the United States).
In the event that all of the Investor Securityholders of any
Series shall not surrender their Securities for cancellation
within six months after the date specified in the above-mentioned
written notice, the Trustee shall give a second written notice
(or, in the case of Bearer Securities, publication notice) to the
remaining Investor Securityholders of such Series upon receipt of
the appropriate records from the Transfer Agent and Registrar to
surrender their Securities for cancellation and receive the final
distribution with respect thereto. If within one and one half
years after the second notice with respect to a Series, all the
Investor Securities of such Series shall not have been
surrendered for cancellation, the Trustee may take appropriate
steps or may appoint an agent to take appropriate steps, to
contact the remaining Investor Securityholders of such Series
concerning surrender of their Securities, and the cost thereof
shall be paid out of the funds in the Distribution Account or any
Series Account held for the benefit of such Investor
Securityholders. The Trustee and the Paying Agent shall pay to
the Transferor upon request any monies held by them for the
payment of principal or interest which remains unclaimed for two
years. After payment to the Transferor, Investor Securityholders
entitled to the money must look to the Transferor for payment as
general creditors unless an applicable abandoned property law
designates otherwise.
(c) All Securities surrendered for payment of the final
distribution with respect to such Securities and cancellation
shall be canceled by the Transfer Agent and Registrar and be
disposed of in a manner satisfactory to the Trustee and the
Transferor.
Section 12.4 Termination Rights of Holder of Exchangeable
Transferor Security. Upon the termination of the Trust pursuant
to Section 12.1, and after payment of all amounts due hereunder
on or prior to such termination and the surrender of the
Exchangeable Transferor Security, the Trustee shall execute a
written reconveyance substantially in the form of Exhibit F
pursuant to which it shall reconvey to the Holder of the
Exchangeable Transferor Security (without recourse,
representation or warranty) all right, title and interest of the
Trust in the Receivables, whether then existing or thereafter
created, all moneys due or to become due with respect thereto
(including all accrued interest theretofore posted as Finance
Charge Receivables) allocable to the Trust pursuant to any
Supplement, except for amounts held by the Trustee pursuant to
subsection 12.3(b). The Trustee shall execute and deliver such
instruments of transfer and assignment, in each case prepared by
the Transferor and without recourse, representation or warranty
(other than a warranty that such property is conveyed free and
clear of any Lien of any Person claiming by or through the
Trustee) as shall be reasonably requested by the Holder of the
Exchangeable Transferor Security to vest in such Holder all
right, title and interest which the Trust had in the Receivables
and other Trust Property.
[End of Article XII]
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.
(a) This Agreement (including any Supplement) may be
amended from time to time by the Servicer, the Transferor and the
Trustee, without the consent of any of the Securityholders, (i)
to cure any ambiguity, to revise any exhibits or Schedules (other
than Schedule 1), to correct or supplement any provisions herein
or thereon which may be inconsistent with any other provisions
herein or thereon or (ii) to add any other provisions with
respect to matters or questions raised under this Agreement which
shall not be inconsistent with the provisions of this Agreement;
provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the
interests of any of the Investor Securityholders. Additionally,
this Agreement may be amended from time to time by the Servicer,
the Transferor and the Trustee, without the consent of any of the
Securityholders, to add to or change any of the provisions of
this Agreement to provide that Bearer Securities may be
registrable as to principal, to change or eliminate any
restrictions on the payment of principal of (or premium, if any)
or any interest on Bearer Securities to comply with the Bearer
Rules, to permit Bearer Securities to be issued in exchange for
Registered Securities (if then permitted by the Bearer Rules), to
permit Bearer Securities to be issued in exchange for Bearer
Securities of other authorized denominations or to permit the
issuance of Securities in uncertificated form.
This Agreement (including any Supplement), and any schedule
or exhibit thereto may also be amended from time to time by the
Servicer, the Transferor and the Trustee, without the consent of
any of the Securityholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner the
rights of the Holders of Securities; provided, however, that (i)
the Servicer shall have provided an Officer's Certificate to the
Trustee to the effect that such amendment will not materially and
adversely affect the interests of the Securityholders, (ii) such
amendment shall not, as evidenced by an Opinion of Counsel, cause
the Trust to be characterized for Federal income tax purposes as
an association taxable as a corporation or otherwise have any
material adverse impact on the Federal income taxation of any
outstanding Series of Investor Securities or any Security Owner
and (iii) the Servicer shall have provided at least ten Business
Days prior written notice to each Rating Agency of such amendment
and shall have received written confirmation from each Rating
Agency to the effect that the rating of any Series or any class
of any Series will not be reduced or withdrawn as a result of
such amendment; provided, further, that such amendment shall not
reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor
Security of such Series without the consent of the related
Investor Securityholder, change the definition of or the manner
of calculating the interest of any Investor Securityholder of
such Series without the consent of the related Investor
Securityholder or reduce the percentage pursuant to Subsection
13.1(b) required to consent to any such amendment, in each case
without the consent of all such Investor Securityholders.
(b) This Agreement and any Supplement may also be amended
from time to time by the Servicer, the Transferor and the Trustee
with the consent of the Holders of Investor Securities evidencing
Undivided Interests aggregating not less than 66-2/3% of the
Invested Amount of each and every Series adversely affected, for
the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Investor
Securityholders of any Series then issued and outstanding;
provided, however, that no such amendment under this subsection
shall (i) reduce in any manner the amount of, or delay the timing
of, distributions which are required to be made on any Investor
Security of such Series without the consent of all of the related
Investor Securityholders; (ii) change the definition of or the
manner of calculating the interest of any Investor Securityholder
of such Series without the consent of the related Investor
Securityholder or (iii) reduce the aforesaid percentage required
to consent to any such amendment, in each case without the
consent of all such Investor Securityholders.
(c) Notwithstanding anything in this Section 13.1 to the
contrary, the Supplement with respect to any Series may be
amended on the items and in accordance with the procedures
provided in such Supplement.
(d) Promptly after the execution of any such amendment
(other than an amendment pursuant to paragraph (a)), the Trustee
shall furnish notification of the substance of such amendment to
each Investor Securityholder of each Series adversely affected
and ten Business Days prior to the proposed effective date for
such amendment the Servicer shall furnish notification of the
substance of such amendment to each Rating Agency providing a
rating for such Series.
(e) It shall not be necessary to obtain the consent of
Investor Securityholders under this Section 13.1 to approve the
particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof.
The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Investor
Securityholders shall be subject to such reasonable requirements
as the Trustee may prescribe.
(f) Any Supplement executed and delivered pursuant to
Section 6.9 and any amendments regarding the addition or removal
of Receivables from the Trust as provided in Sections 2.6 or 2.7,
executed in accordance with the provisions hereof, shall not be
considered amendments to this Agreement for the purpose of
subsections 13.1(a) and (b).
(g) In connection with any amendment, the Trustee may
request an Opinion of Counsel from the Transferor or Servicer to
the effect that the amendment complies with all requirements of
this Agreement. The Trustee may, but shall not be obligated to,
enter into any amendment which affects the Trustee's rights,
duties or immunities under this Agreement or otherwise.
Section 13.2 Protection of Right, Title and Interest to
Trust.
(a) The Servicer shall cause this Agreement, all amendments
hereto and/or all financing statements and continuation
statements and any other necessary documents covering the
Securityholders and the Trustee's right, title and interest to
the Trust 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
Securityholders or the Trustee, as the case may be, hereunder to
all property comprising the Trust. The Servicer shall deliver to
the Trustee 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 Transferor shall cooperate fully with the Servicer in
connection with the obligations set forth above and will execute
any and all documents reasonably required to fulfill the intent
of this subsection 13.2(a).
(b) Within 30 days after the Transferor 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 Transferor shall give the Trustee written notice of
any such change and shall file such financing statements or
amendments as may be necessary to continue the perfection of the
Trust's security interest in the Receivables and the proceeds
thereof.
(c) Each of the Transferor and the Servicer will give the
Trustee 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 Trust's
security interest in the Receivables and the proceeds thereof.
Each of the Transferor and the Servicer will at all times
maintain each office from which it services Receivables and its
principal executive office within the United States of America.
(d) The Servicer will deliver to the Trustee on or before
March 31 of each year, beginning with March 31, 1996, an Opinion
of Counsel, substantially in the form of Exhibit E and upon each
date that any Supplemental Accounts are to be included in the
Accounts pursuant to subsection 2.6(c) an Opinion of Counsel
substantially in the form of Exhibit I.
Section 13.3 Limitation on Rights of Securityholders.
(a) The death or incapacity of any Investor Securityholder
shall not operate to terminate this Agreement or the Trust, nor
shall such death or incapacity entitle such Securityholder's
legal representatives or heirs to claim an accounting or to take
any action or commence any proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any
of them.
(b) No Investor Securityholder shall have any right to vote
(except with respect to the Investor Securityholders as provided
in Section 13.1 hereof) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained
in the terms of the Securities, be construed so as to constitute
the Securityholders from time to time as members of an
association; nor shall any Investor Securityholder be under any
liability to any third person by reason of any action taken by
the parties to this Agreement pursuant to any provision hereof.
(c) No Securityholder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to
this Agreement, unless such Securityholder previously shall have
given written notice to the Trustee, and unless the Holders of
Securities evidencing Undivided Interests aggregating more than
50% of the Invested Amount of any Series which may be adversely
affected but for the institution of such suit, action or
proceeding, shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and
the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused
to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Securityholder with every other Securityholder and the Trustee,
that no one or more Securityholders shall have the right in any
manner whatever by virtue or by availing itself or themselves of
any provisions of this Agreement to affect, disturb or prejudice
the rights of the Securityholders of any other of the Securities,
or to obtain or seek to obtain priority over or preference to any
other such Securityholder, or to enforce any right under this
Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Securityholders. For
the protection and enforcement of the provisions of this Section
13.3, each and every Securityholder and the Trustee shall be
entitled to such relief as can be given either at law or in
equity.
Section 13.4 Governing Law. THIS AGREEMENT SHALL BE CON
STRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
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 13.5 Notices. All demands, notices and
communications hereunder shall be in writing and shall be deemed
to have been duly given if personally delivered at, sent by
facsimile to, sent by courier at or mailed by registered mail,
return receipt requested, to (a) in the case of the Transferor to
000 Xxxxx Xxxxxxx 000, Xxxxx 000, Xx. Xxxxx Xxxx, Xxxxxxxxx
00000, Attention: Chief Financial Officer and General Counsel,
with a copy to the Servicer as provided below, (b) in the case of
the Servicer, 0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxx
00000, Attention: Treasurer with a copy to 000 Xxxxx Xxxxxxx 000,
Xxxxx 000, Xx. Xxxxx Xxxx, Xxxxxxxxx 00000, Attention:
Treasurer and General Counsel, (c) in the case of the Trustee, to
the Corporate Trust Office, (d) in the case of the Enhancement
Provider for a particular Series, the address, if any, specified
in the Supplement relating to such Series and (e) in the case of
the Rating Agency for a particular Series, the address, if any,
specified in the Supplement relating to such Series; or, as to
each party, at such other address as shall be designated by such
party in a written notice to each other party. Unless otherwise
provided with respect to any Series in the related Supplement any
notice required or permitted to be mailed to a Securityholder
shall be given by first class mail, postage prepaid, at the
address of such Securityholder as shown in the Security Register,
or with respect to any notice required or permitted to be made to
the Holders of Bearer Securities, by publication in the manner
provided in the related Supplement. If and so long as any Series
or Class is listed on the Luxembourg Stock Exchange and such
Exchange shall so require, any Notice to Investor Securityholders
shall be published in an authorized newspaper of general
circulation in Luxembourg within the time period prescribed in
this Agreement. Any notice so mailed within the time prescribed
in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Securityholder receives such
notice.
Section 13.6 Severability of Provisions. If any one or
more of the covenants, agreements, provisions or terms of this
Agreement 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 this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of
the Securities or rights of the Securityholders thereof.
Section 13.7 Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Section 8.2,
this Agreement may not be assigned by the Servicer without the
prior consent of Holders of Investor Securities representing not
less than 66 2/3% of the Invested Amount of each Series on a
Series by Series basis. Upon such assignment, the Trustee shall
provide notice to Moody's in a prompt manner.
Section 13.8 Securities Non-Assessable and Fully Paid.
Except to the extent otherwise expressly provided in Section 7.4
with respect to the Transferor, it is the intention of the
parties to this Agreement that the Investor Securityholders shall
not be personally liable for obligations of the Trust, that the
Undivided Interests represented by the Securities shall be non-
assessable for any losses or expenses of the Trust or for any
reason whatsoever, and that Securities upon authentication
thereof by the Trustee pursuant to Sections 2.1 and 6.2 are and
shall be deemed fully paid.
Section 13.9 Further Assurances. The Transferor and the
Servicer 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 Trustee more fully to effect the
purposes of this Agreement, including, without limitation, the
execution of any financing statements or continuation statements
relating to the Receivables and the other Trust Property for
filing under the provisions of the UCC of any applicable
jurisdiction.
Section 13.10 No Waiver; Cumulative Remedies. No failure
to exercise and no delay in exercising, on the part of the
Trustee, any Enhancement Provider or the Investor
Securityholders, 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 13.11 Counterparts. This Agreement may be executed
in two or more counterparts (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 13.12 Third-Party Beneficiaries. This Agreement
will inure to the benefit of and be binding upon the parties
hereto, the Securityholders and, to the extent provided in the
related Supplement, to the Enhancement Provider named therein,
and their respective successors and permitted assigns. Except as
otherwise provided in this Article XIII, no other Person will
have any right or obligation hereunder.
Section 13.13 Actions by Securityholders.
(a) Wherever in this Agreement a provision is made that an
action may be taken or a notice, demand or instruction given by
Investor Securityholders, such action, notice or instruction may
be taken or given by any Investor Securityholder, unless such
provision requires a specific percentage of Investor
Securityholders.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Securityholder shall bind such
Securityholder and every subsequent holder of such Security
issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done or
omitted to be done by the Trustee or the Servicer in reliance
thereon, whether or not notation of such action is made upon such
Security.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement or any
Supplement to be given or taken by Securityholders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in
person or by agent duly appointed in writing; and except as
herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to
the Trustee and, when required, to the Transferor or the
Servicer. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any
purpose of this Agreement or any Supplement and conclusive in
favor of the Trustee, the Transferor and the Servicer, if made in
the manner provided in this Section.
(d) The fact and date of the execution by any
Securityholder of any such instrument or writing may be proved in
any reasonable manner which the Trustee deems sufficient.
Section 13.14 Rule 144A Information. For so long as any of
the Investor Securities of any Series or any Class are
"restricted securities" within the meaning of Rule 144(a)(3)
under the Securities Act, each of the Transferor, the Servicer,
the Trustee and the Enhancement Provider for such Series agree to
cooperate with each other to provide to any Investor
Securityholders of such Series or Class and to any prospective
purchaser of Securities designated by such an Investor
Securityholder upon the request of such Investor Securityholder
or prospective purchaser, any information required to be provided
to such holder or prospective purchaser to satisfy the condition
set forth in Rule 144A(d)(4) under the Securities Act.
Section 13.15 Merger and Integration. Except as
specifically stated otherwise herein, this Agreement sets forth
the entire understanding of the parties relating to the subject
matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided
herein.
Section 13.16 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof.
[End of Article XIII]
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Agreement to be duly executed by their
respective officers as of the day and year first above written.
METRIS RECEIVABLES, INC.,
Transferor
By:
Name:
Title:
DIRECT MERCHANTS CREDIT CARD BANK,
NATIONAL
ASSOCIATION, Servicer
By:
Name:
Title:
THE BANK OF NEW YORK (DELAWARE),
Trustee
By:
Name:
Title:
SCHEDULE 1
TAX RETURNS AND PAYMENTS
FCI (for so long as FCI owns 80% or more of the common stock of
Metris) or else Metris and its subsidiaries have filed all
applicable federal, state and material local tax returns and have
paid or caused to be paid all associated taxes due and payable on
such returns or on any assessments received by them; except that
FCI (for so long as FCI owns 80% or more of the common stock of
Metris) or its subsidiaries have not filed certain tax returns
purported to be required because they believe the requirements
are invalid and unenforceable under the commerce clause of the
United States Constitution as interpreted by the Supreme Court in
National Bellas Xxxx v. Department of Revenue of Illinois, 386
U.S. 753 (1967) and the supporting lines of cases, including
Quill Corp. v. North Dakota, 112 S. Ct. 1904 (1992). The
following are the states in which FCI (for so long as FCI owns
80% or more of the common stock of Metris) or its subsidiaries
are currently collecting sales/use taxes:
California Oklahoma
Florida Pennsylvania
Illinois South CarolinaIowa South
Dakota
Minnesota Tennessee
New York Utah
Ohio Wisconsin
Notwithstanding the Supreme Court decisions, the following
states, to the best knowledge of FCI (for so long as FCI owns 80%
or more of the common stock of Metris) or its subsidiaries,
currently have legislation in effect which purports or may
purport to require FCI (for so long as FCI owns 80% or more of
the common stock of Metris) or else Metris or its subsidiaries to
collect sales or use taxes:
Alabama Idaho Massachusett New Jersey
Arizona Illinois Michigan New Mexico
Arkansas Indiana Minnesota New York
California Iowa Mississippi North Carolina
Colorado Kansas Missouri North Dakota
Connecticut Kentucky Nebraska Ohio
Florida Louisiana Nevada Oklahoma
Georgia
In addition, because one of the subsidiaries of Metris,
Direct Merchants Credit Card Bank, National Association, is a
national banking entity which derives the majority of its income
from Mastercard credit cards, it may be subject to special
financial institution rules in certain states. Such rules
attempt to impute state income tax nexus to a credit card company
if it obtains finance revenue and/or has credit card receivables
generated from customers in that state. Of the states that have
adopted such financial institution rules, Minnesota is the only
state where Metris and its subsidiaries are currently filing
income or franchise tax returns. States which currently have
rules pursuant to which they may attempt to impose income tax
nexus based upon such credit card activity include:
Arkansas
California
Hawaii
Indiana
Massachusetts
Minnesota
New Mexico
Tennessee
Direct Merchants Credit Card Bank, National Association has not
filed in states other than Minnesota because it believes the
above referenced financial institution rules to be
unconstitutional.SCHEDULE 2
Nomenclature List
The following is a table listing the terms used in the Pooling
and Servicing Agreement prior to this Amended and Restated
Pooling and Servicing Agreement which have been renamed in this
Amended and Restated Pooling and Servicing Agreement. The terms
used in the Pooling and Servicing Agreement prior to this Amended
and Restated Pooling and Servicing Agreement will keep their
meaning with respect to each Series issued prior to the Amendment
Closing Date and outstanding on the date hereof consistent with
this table.
Terms Used in Pooling and Terms Used in This Amended and
Servicing Agreement Prior to Restated Pooling and Servicing
Amendment Agreement
Bearer Certificate Bearer Security
Bearer Certificateholder Bearer Securityholder
Book-Entry Certificates Book-Entry Securities
Certificate Owner Security Owner
Certificate Principal Security Principal
Certificate Rate Security Rate
Certificate Register Security Register
Certificateholders Securityholders
Certificates Securities
Definitive Certificates Definitive Securities
Euro-Certificate Exchange Date Euro-Security Exchange Date
Exchangeable Transferor Exchangeable Transferor
Certificate Security
Global Certificate Global Security
Investor Certificateholder Investor Securityholder
Investor Certificates Investor Securities
Investor Charge-Off Series Charge-Off
Investor Default Amount Series Default Amount
Registered Certificates Registered Securities
Supplemental Certificate Supplemental Security
Transferor Retained Transferor Retained
Certificate Security
Unfunded Certificate Unfunded Security
Variable Funding Variable Funding
Certificate Securities
EXHIBIT A
FORM OF EXCHANGEABLE TRANSFEROR SECURITY
No. 1 One Unit
METRIS MASTER TRUST
ASSET BACKED SECURITY
THIS SECURITY WAS ISSUED PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY BE SOLD ONLY PURSUANT TO A REGISTRATION STATEMENT
EFFECTIVE UNDER THE ACT OR AN EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE ACT. IN ADDITION, THE TRANSFER OF THIS SECURITY
IS SUBJECT TO RESTRICTIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. A COPY OF THE POOLING AND
SERVICING AGREEMENT WILL BE FURNISHED TO THE HOLDER OF THIS
SECURITY BY THE TRUSTEE UPON WRITTEN REQUEST.
This Security represents an Undivided Interest
in the Metris Master Trust
Evidencing an undivided interest in a trust, the corpus of which
consists of open-end or revolving credit receivables generated
from time to time in the ordinary course of business by Direct
Merchants Credit Card Bank, National Association ("DMCCB" or the
"Servicer") and other assets and interests constituting the Trust
under the Pooling and Servicing Agreement described below.
(Not an interest in or a recourse obligation of
Metris Receivables, Inc.,
Direct Merchants Credit Card Bank, National Association
or any Affiliate of either of them.)
This certifies that METRIS RECEIVABLES, INC. ("MRI," the
"Holder" or the "Transferor," as the context requires) is the
registered owner of a fractional undivided interest in the Metris
Master Trust (the "Trust") issued pursuant to the Amended and
Restated Pooling and Servicing Agreement, dated as of July 30,
1998 (the "Pooling and Servicing Agreement"; such term to include
any amendment or Supplement thereto) by and among MRI, as
Transferor, DMCCB, as the Servicer, and The Bank of New York
(Delaware), as Trustee (the "Trustee"), as supplemented by each
supplement thereto existing from time to time. The corpus of the
Trust will include (i) a portfolio of Receivables (the
"Receivables") generated from time to time by DMCCB satisfying
certain criteria, (ii) all funds to be collected from Obligors in
respect of the Receivables, (iii) all right, title, and interest
of the Transferor in, to, and under the Purchase Agreement, (iv)
the benefit of funds on deposit in the Excess Funding Account,
(v) Recoveries, (vi) moneys on deposit in the Pre-Funding
Account, (vii) all proceeds of the foregoing, (viii) all monies
and investments due or to become due with respect thereto and all
amounts received with respect to the Receivables in existence on
the Closing Date or generated thereafter, all monies on deposit
in the Collection Account, the Interest Funding Account, the
Principal Account, the Distribution Account, the Pre-Funding
Account and the Excess Funding Account (excluding any investment
earnings on such deposited amounts except for such amounts as are
on deposit in the Pre-Funding Account and the Excess Funding
Account), and all other assets and interests constituting the
Trust and (ix) all proceeds of the foregoing.
To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing
Agreement. This Security is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing
Agreement, to which Pooling and Servicing Agreement, as amended
from time to time, the Holder by virtue of the acceptance hereof
assents and by which the Holder is bound.
This Security has not been registered or qualified under the
Securities Act of 1933, as amended, or any state securities law.
No sale, transfer or other disposition of this Security shall be
permitted other than in accordance with the provisions of Section
6.3, 6.9 or 7.2 of the Pooling and Servicing Agreement.
The Receivables arise generally from revolving consumer
credit card accounts.
This Security is the Exchangeable Transferor Security (the
"Security"), which represents an undivided interest in the Trust,
including the right to receive the Collections and other amounts
at the times and in the amounts specified in the Pooling and
Servicing Agreement to be paid to the Holder of the Exchangeable
Transferor Security. The aggregate interest represented by this
Security at any time in the Principal Receivables in the Trust
shall not exceed the Transferor Interest at such time. In
addition to this Security, Series of Investor Securities will be
issued to investors pursuant to the Pooling and Servicing
Agreement, each of which will represent an Undivided Interest in
the Trust. This Security shall not represent any interest in any
Enhancement, except to the extent provided in the Pooling and
Servicing Agreement. The Transferor Interest on any date of
determination will be an amount equal to the aggregate amount of
Principal Receivables at the end of the day immediately prior to
such date of determination plus amounts on deposit in the Excess
Funding Account and Pre-Funding Account (but not including any
investment earnings thereon) minus the Aggregate Invested Amount
at the end of such day.
The Servicer shall deposit all Collections in the Collection
Account as promptly as possible after the Date of Processing of
such Collections. Unless otherwise stated in any Supplement,
throughout the existence of the Trust, the Servicer shall
allocate to the Holder of the Security an amount equal to the
product of (A) the Transferor Percentage and (B) the aggregate
amount of such Principal Collections and Finance Charge
Collections, respectively, in respect of each Monthly Period.
Notwithstanding the first sentence of this paragraph, the
Servicer need not deposit this amount or any other amounts so
allocated to the Security pursuant to the Pooling and Servicing
Agreement into the Collection Account and shall pay, or be deemed
to pay, such amounts as collected to the Holder of the Security.
DMCCB or any permitted successor or assignee, as Servicer,
is entitled to receive as servicing compensation a monthly
servicing fee. The portion of the servicing fee which will be
allocable to the Holder of the Security pursuant to the Pooling
and Servicing Agreement will be payable by the Holder of the
Security and neither the Trust nor the Trustee or the Investor
Securityholders will have any obligation to pay such portion of
the servicing fee.
This Security does not represent a recourse obligation of,
or any interest in, the Transferor or the Servicer. This
Security is limited in right of payment to certain Collections
respecting the Receivables, all as more specifically set forth
hereinabove and in the Pooling and Servicing Agreement.
Upon the termination of the Trust pursuant to Section 12.1
of the Pooling and Servicing Agreement, the Trustee shall assign
and convey to the Holder of the Security (without recourse,
representation or warranty) all right, title and interest of the
Trust in the Receivables, whether then existing or thereafter
created, and all proceeds relating thereto. The Trustee shall
execute and deliver such instruments of transfer and assignment,
in each case without recourse, as shall be reasonably requested
by the Holder of the Security to vest in such Holder all right,
title and interest which the Trustee had in the Receivables.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature,
this Security shall not be entitled to any benefit under the
Pooling and Servicing Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Security
to be duly executed.
METRIS RECEIVABLES, INC.
By:
Name:
Title:
Date:
CERTIFICATE OF AUTHENTICATION
This is the Exchangeable Transferor Security referred to in
the within-mentioned Pooling and Servicing Agreement.
Authenticating Agent
By:
Name:
Title:
EXHIBIT B
FORM OF DAILY REPORT
[TO BE SUPPLIED]
EXHIBIT C
FORM OF SETTLEMENT STATEMENT
[TO BE SUPPLIED]
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
METRIS RECEIVABLES, INC.
METRIS MASTER TRUST
The undersigned, a duly authorized representative of Direct
Merchants Credit Card Bank, National Association ("DMCCB"), as
Servicer, pursuant to the Amended and Restated Pooling and
Servicing Agreement dated as of July 30, 1998 (the "Pooling and
Servicing Agreement") by and among Metris Receivables, Inc. (the
"Transferor"), DMCCB, as Servicer and The Bank of New York
(Delaware), as trustee (the "Trustee") does hereby certify that:
1. DMCCB is Servicer under the Pooling and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the
Pooling and Servicing Agreement to execute and deliver this
Certificate to the Trustee.
3. This Certificate is delivered pursuant to Section 3.5
of the Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during (the
period from the Closing Date until) (the twelve fiscal month
period ended) ________, 19__ was conducted under our
supervision.
5. Based on such review, the Servicer has, to the best of
our knowledge, fully performed all its obligations under the
Pooling and Servicing Agreement throughout such period and no
default in the performance of such obligations has occurred or
is continuing except as set forth in paragraph 6 below.
6. The following is a description of each default in the
performance of the Servicer's obligations under the provisions
of the Pooling and Servicing Agreement, including any
Supplement, known to us to have been made during such period
which sets forth in detail (i) the nature of each such default,
(ii) the action taken by the Servicer, if any, to remedy each
such default and (iii) the current status of each such default:
[If applicable, insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate this ___ day of ________, ____.
DIRECT MERCHANTS CREDIT CARD BANK,
NATIONAL ASSOCIATION, as Servicer
By:
Name:
Title:
EXHIBIT E
FORM OF ANNUAL OPINION OF COUNSEL
The opinion set forth below, which is to be delivered
pursuant to subsection 13.2(d)(ii) of the Pooling and Servicing
Agreement, may be subject to certain qualifications, assumptions,
limitations and exceptions taken or made in the opinion of
counsel delivered on the Initial Closing Date with respect to
similar matters.
No filing or other action, other than such filing or action
described in such opinion, is necessary from the date of such
opinion through ________ of the following year to continue the
perfected status of the interest of the Trust in the collateral
described in the financing statements referred to in such
opinion.
EXHIBIT F
FORM OF RECONVEYANCE OF RECEIVABLES
RECONVEYANCE OF RECEIVABLES, dated as of _____ __ , 19__ by
and between METRIS RECEIVABLES, INC., a corporation organized and
existing under the laws of the State of Delaware (the
"Transferor"), and The Bank of New York (Delaware), a banking
corporation organized and existing under the laws of the State of
Delaware (the "Trustee") pursuant to the Pooling and Servicing
Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Transferor and the Trustee are parties to the
Amended and Restated Pooling and Servicing Agreement dated as of
July 30, 1998 (hereinafter as such agreement may have been, or
may from time to time be, amended, supplemented or otherwise
modified, the "Pooling and Servicing Agreement") by and among the
Transferor, Direct Merchants Credit Card Bank, National
Association, as Servicer, and the Trustee;
WHEREAS, pursuant to the Pooling and Servicing Agreement,
the Transferor wishes to cause the Trustee to reconvey all of the
Receivables and proceeds thereof, whether now existing or
hereafter created, from the Trust to the Transferor pursuant to
the terms of Section 12.4 of the Pooling and Servicing Agreement
upon termination of the Trust pursuant to subsection 12.1(a) of
the Pooling and Servicing Agreement (as each such term is defined
in the Pooling and Servicing Agreement);
WHEREAS, the Trustee is willing to reconvey the Receivables
subject to the terms and conditions hereof;
NOW THEREFORE, the Transferor and the Trustee hereby agree
as follows:
1. Defined Terms. All terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined
meanings when used herein, unless otherwise defined herein.
"Reconveyance Date" shall mean _____ __, 19__.
2. Return of Lists of Receivables. The Trustee shall
deliver to the Transferor or the bailee of the Transferor, not
later than three Business Days after the Reconveyance Date, each
and every computer file or microfiche list of Receivables
delivered to the Trustee pursuant to the terms of the Pooling and
Servicing Agreement.
3. Conveyance of Receivables. (a) The Trustee does hereby
reconvey to the Transferor, without recourse, representation or
warranty, on and after the Reconveyance Date, all right, title
and interest of the Trust in and to each and every Receivable now
existing and hereafter created, all monies due or to become due
with respect thereto (including all Finance Charge Receivables),
all proceeds (as defined in Section 9-306 of the UCC as in effect
in the Relevant UCC State) of such Receivables, except for
amounts, if any, held by the Trustee pursuant to subsection
12.3(b) of the Pooling and Servicing Agreement.
(b) In connection with such transfer, the Trustee
agrees to execute and deliver to the Transferor on or prior to
the date of this Reconveyance, such UCC termination statements as
the Transferor may reasonably request, evidencing the release by
the Trust of its lien on the Receivables.
4. Counterparts. This Reconveyance may be executed in two
or more counter parts (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.
5. Governing Law. THIS RECONVEYANCE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.
EXHIBIT G
FORM OF AGREED-UPON PROCEDURES
The Servicer and Trustee will engage a firm of nationally
recognized independent public accountants (who may also render
other services to the Servicer or any of its subsidiaries) to
perform certain agreed-upon procedures substantially similar to
the following:
1) The accountants will obtain the Master Trust schedules
showing the daily amount of eligible accounts receivable activity
(hereinafter referred to as the "Daily Report") for 5 days within
the period and compare amounts set forth on the Daily Report
representing sales, cash advances, payments, interest income, and
charge offs and miscellaneous charges and adjustments, with the
corresponding amounts set forth in the Servicer's accounts
receivable reports and recompute the mathematical accuracy of
amounts and percentages within the Daily Report.
2) For 5 days within the period, the accountants will compare
the payments appearing on the Servicer's accounts receivable
reports to an entry on the relevant Daily Report. The
accountants will compare the cash transfers indicated on the
Daily Reports to entries on the relevant Master Trust bank
statements.
3) The accountants will compare the aggregate customer balances
in the "30-59 day delinquent" and "90-119 day delinquent"
categories as reflected on the monthly Settlement Statement to
the corresponding amounts set forth in the Servicer's accounts
receivable aging reports as of 3 month-ends within the period.
4) For 5 weekly periods, the accountants will compare the
beginning of week and end of week total receivables balances on
the Servicer's accounts receivable reports with the corresponding
balances on the corresponding Daily Report and will verify the
amounts of the calculation of beginning and ending Principal
Receivable balances and beginning and ending Finance Charge
Receivables balances on each Daily Report within each weekly
period.
5) For 5 days within the period, the accountants will recompute
the daily allocation of Principal and Finance Charge Collections
to each series based upon information appearing on the Daily
Reports.
6) For one monthly Settlement Statement during the period, the
accountants will compare the amounts and percentages appearing
therein to the information appearing in the corresponding Daily
Reports for such month.
EXHIBIT H
FORM OF ASSIGNMENT OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS
ASSIGNMENT No. __ OF RECEIVABLES IN ADDITIONAL ACCOUNTS,
dated as of ________ __, ____ by and between METRIS RECEIVABLES,
INC., a corporation organized under the laws of the State of
Delaware (the "Transferor"), and The Bank of New York (Delaware),
a banking corporation organized and existing under the laws of
the State of Delaware (the "Trustee") pursuant to the Pooling and
Servicing Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Transferor and the Trustee are parties to the
Amended and Restated Pooling and Servicing Agreement, dated as of
July 30, 1998 (hereinafter as such agreement may have been, or
may from time to time be, amended, supplemented or otherwise
modified, the "Pooling and Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement,
the Transferor wishes to designate Supplemental Accounts of the
Transferor to be included as Accounts and to convey the
Receivables of such Supplemental Accounts, whether now existing
or hereafter created, to the Trust as part of the corpus of the
Trust (as each such term is defined in the Pooling and Servicing
Agreement); and
WHEREAS, the Trustee is willing to accept such designation
and conveyance subject to the terms and conditions hereof;
NOW, THEREFORE, the Transferor and the Trustee hereby agree
as follows:
(i) Defined Terms. All terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined
meanings when used herein, unless otherwise defined herein.
"Addition Date" shall mean, with respect to the
Supplemental Accounts designated hereby, ____________, ____.
"Notice Date" shall mean, with respect to the Supplemental
Accounts designated hereby, _________, ______ (which shall be a
date on or prior to the fifth Business Day prior to the Addition
Date with respect to additions pursuant to subsection 2.6(a) of
the Pooling and Servicing Agreement and the tenth Business Day
prior to the Addition Date with respect to additions pursuant to
subsection 2.6(b) of the Pooling and Servicing Agreement).
(ii) Designation of Additional Accounts. The Transferor
shall deliver to the Trustee not later than five Business Days
after the Addition Date, a computer file or microfiche list
containing a true and complete list of each MasterCardr and
VISAr account which as of the Addition Date shall be deemed to
be an Additional Account, such accounts being identified by
account number and by the amount of Receivables in such accounts
as of the close of business on the Addition Date. Such list
shall be delivered five Business Days after the date of this
Agreement and shall be marked as Schedule l to this Assignment
and, as of the Addition Date, shall be incorporated into and
made a part of this Assignment.
(iii) Conveyance of Receivables.
The Transferor does hereby transfer, assign, set-over and
otherwise convey to the Trustee, on behalf of the Trust, for the
benefit of the Securityholders, without recourse on and after the
Addition Date, all right, title and interest of the Transferor in
and to the Receivables now existing and hereafter created in the
Additional Accounts designated hereby, all monies due or to
become due with respect thereto (including all Finance Charge
Receivables) and all proceeds of such Receivables.
In connection with such transfer, the Transferor
agrees to record and file, at its own expense, a financing
statement with respect to the Receivables now existing and
hereafter created in the Additional Accounts designated
hereby (which may be a single financing statement with
respect to all such Receivables) for the transfer of
accounts as defined in Section 9-106 of the UCC as in
effect in the State of Delaware meeting the requirements of
applicable state law in such manner and such jurisdictions
as are necessary to perfect the assignment of such
Receivables to the Trust, and to deliver a file-stamped
copy of such financing statement or other evidence of such
filing (which may, for purposes of this Section 3, consist
of telephone confirmation of such filing) to the Trustee on
or prior to the date of this Assignment.
In connection with such transfer, the Transferor
further agrees, at its own expense, on or prior to the date
of this Assignment to indicate in its computer files that
Receivables created in connection with the Additional
Accounts designated hereby have been transferred to the
Trust pursuant to this Assignment for the benefit of the
Securityholders.
The Transferor hereby grants and transfers to the Trustee,
for the benefit of the Securityholders, a first priority
perfected security interest in all of the Transferor's right,
title and interest in, to and under the Receivables now existing
and hereafter created and arising in connection with the
Additional Accounts designated hereby, all monies due or to
become due with respect thereto (including all Finance Charge
Receivables) and all proceeds of such Receivables, and that this
Assignment shall constitute a security agreement under
applicable law.
(iv) Acceptance by Trustee. The Trustee hereby
acknowledges its acceptance on behalf of the Trust for the
benefit of the Securityholders of all right, title and interest
previously held by the Transferor in and to the Receivables now
existing and hereafter created, and declares that it shall
maintain such right, title and interest, upon the trust herein
set forth, for the benefit of all Securityholders.
(v) Representations and Warranties of the Transferor. The
Transferor hereby represents and warrants to the Trust as of the
Addition Date:
Legal Valid and Binding Obligation. This Assignment
consti tutes a legal, valid and binding obligation of the
Transferor enforceable against the Transferor in accordance
with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors'
rights in general and except as such enforceability may be
limited by general principles of equity (whether considered
in a suit at law or in equity).
Eligibility of Accounts and Receivables. Each
Additional Account designated hereby is an Eligible Account
and each Receivable in such Additional Account is an
Eligible Receivable. No selection procedures believed by
the Transferor to be materially adverse to the interests of
the Investor Securityholders were utilized in selecting the
Additional Accounts from the available Eligible Accounts,
provided, that, the selection of newly originated Accounts
is deemed not to be materially adverse to the interests of
the Investor Securityholders.
Insolvency. The Transferor is not insolvent and,
after giving effect to the conveyance set forth in Section
3 of this Assignment, will not be insolvent.
Security Interest. This Assignment constitutes
either (i) a valid transfer and assignment to the Trust of
all right, title and interest of the Transferor in and to
Receivables now existing and hereafter created in the
Additional Accounts designated hereby, and all proceeds (as
defined in the UCC as in effect in the State of Delaware)
of such Receivables, and such Receivables and any proceeds
thereof will be held by the Trust free and clear of any
Lien of any Person claiming through or under the Transferor
or any of its Affiliates except for (x) Liens permitted
under subsection 2.5(b) of the Pooling and Servicing
Agreement, (y) the interest of the Holder of the
Exchangeable Transferor Security and (z) the Transferor's
right to receive interest accruing on, and investment
earnings in respect of, the Finance Charge Account and the
Principal Account as provided in the Pooling and Servicing
Agreement; or (ii) a grant of a security interest (as
defined in the UCC as in effect in the State of Delaware)
in such property to the Trust, which is enforceable with
respect to the existing Receivables of the Additional
Accounts designated hereby and the proceeds (as defined in
the UCC as in effect in the State of Delaware) thereof upon
the conveyance of such Receivables to the Trust, and which
will be enforceable with respect to the Receivables
thereafter created in respect of Additional Accounts
designated hereby and the proceeds (as defined in the UCC
as in effect in the State of Delaware) thereof upon such
creation; and provided, further, that if this Assignment
constitutes the grant of a security interest to the Trust
in such property pursuant to subsection (ii) above, upon
the filing of a financing statement described in Section 3
of this Assignment with respect to the Additional Accounts
designated hereby and in the case of the Receivables of
such Additional Accounts thereafter created and the
proceeds (as defined in the UCC as in effect in the State
of Delaware) thereof upon such creation, the Trust shall
have a first priority perfected security interest in such
property, except for Liens permitted under subsection
2.5(b) of the Pooling and Servicing Agreement.
(vi) Conditions Precedent. The acceptance by the Trustee
set forth in Section 4 and the amendment of the Pooling and
Servicing Agreement set forth in Section 7 are subject to the
satisfaction, on or prior to the Addition Date, of the following
conditions precedent:
Officer's Certificate. The Transferor shall have
delivered to the Trustee a certificate of a Vice President
or more senior officer substantially in the for: of
Schedule 2 hereto, certifying that (i) all requirements set
forth in Section 2.6 of the Pooling and Servicing Agreement
for designating Additional Accounts and conveying the
Principal Receivables of such Accounts, whether now
existing or hereafter created, have been satisfied and (ii)
each of the representations and warranties made by the
Transferor in Section 5 is true and correct as of the
Addition Date. The Trustee may conclusively rely on such
Officer's Certificate, shall have no duty to make inquiries
with regard to the matters set forth therein, end shall
incur no liability In so relying.
Opinion of Counsel. The Transferor shall have
delivered to the Trustee an Opinion of Counsel with respect
to the Additional Accounts designated hereby substantially
in the form of Exhibit I to the Pooling and Servicing
Agreement.
Additional Information. The Transferor shall have
delivered to the Trustee such information as was reasonably
requested by the Trustee to satisfy itself as to the
accuracy of the representation and warranty set forth in
subsection 5(d) to this Agreement.
(vii) Amendment of the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement is hereby amended to provide
that all references therein to the "Pooling and Servicing
Agreement," to "this Agreement" and "herein" shall be deemed
from and after the Addition Date to be a dual reference to the
Pooling and Servicing Agreement as supplemented by this
Assignment. Except as expressly amended hereby, all of the
representations, warranties, terms, covenants and conditions of
the Pooling and Servicing Agreement shall remain unamended and
shall continue to be, and shall remain, in full force and effect
in accordance with its terms and except as expressly provided
herein shall not constitute or be deemed to constitute a waiver
of compliance with or a consent to noncompliance with any term
or provision of the Pooling and Servicing Agreement.
(viii) Counterparts. This Assignment may be executed in
two or more counterparts (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.
(ix) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO ITS CONFLICT OF LAW PROVISIONS.
IN WITNESS WHEREOF, the undersigned have caused this
Assignment of Receivables in Additional Accounts to be duly
executed and delivered by their respective duly authorized
officers on the day and year first above written.
METRIS RECEIVABLES, INC.
By:
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
By:
Name:
Title:
Schedule 1
to Assignment of
Receivables in
Supplemental Accounts
SUPPLEMENTAL ACCOUNTS
Schedule 2
to Assignment of
Receivables in
Supplemental Accounts
Metris Receivables, Inc.
Metris Master Trust
Officer's Certificate
____________________, a duly authorized officer of Metris
Receivables, Inc., a Delaware corporation (the "Transferor"),
hereby certifies and acknowledges on behalf of the Bank that to
the best of his knowledge the following statements are true on
______, ____, (the "Addition Date"), and acknowledges on behalf
of the Bank that this Officer's Certificate will be relied upon
by The Bank of New York (Delaware) as Trustee (the "Trustee") of
the Metris Master Trust in connection with the Trustee entering
into Assignment No. of Receivables in Supplemental Accounts,
dated as of the Addition Date (the "Assignment"), by and between
the Bank and the Trustee, in connection with the Amended and
Restated Pooling and Servicing Agreement, dated as of July 30,
1998, as heretofore supplemented and amended (the "Pooling and
Servicing Agreement") pursuant to which the Transferor and the
Trustee are parties. The undersigned hereby certifies and
acknowledges on behalf of the Bank that:
On or prior to the Addition Date, the Bank has delivered
to the Trustee the Assignment (including an acceptance by the
Trustee on behalf of the Trust for the benefit of the Investor
Securityholders) and the Bank has indicated in its computer files
that the Receivables created in connection with the Supplemental
Accounts have been transferred to the Trust and within five
Business Days after the Addition Date the Bank shall deliver to
the Trustee a [computer file or] microfiche list containing a
true and complete list of all Supplemental Accounts identified by
account number and the aggregate amount of the Receivables in
such Supplemental Accounts as of the Addition Date, which
computer file or microfiche list shall be as of the date of such
Assignment, incorporated into and made a part of such Assignment
and the Pooling and Servicing Agreement.
Legal Valid and Binding Obligation. The Assignment
constitutes a legal, valid and binding obligation of the Bank,
enforceable against the Bank in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect affecting the enforcement of creditors'
rights in general except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law
or in equity).
Accounts. Each Supplemental Account designated Pursuant
to the Assignment is an Eligible Account. No selection
procedures believed by the Bank to be materially adverse to the
interests of the Investor Securityholders were utilized in
selecting the Additional Accounts from the available Eligible
Accounts, provided, that, the selection of newly originated
Accounts is deemed not to be materially adverse to the interests
of the Investor Securityholders.
Insolvency. The Bank is not insolvent and, after giving
effect to the conveyance set forth in Section 3 of the
Assignment, will not be insolvent.
Security Interest. The Assignment constitutes either (i)
a valid transfer and assignment to the Trust of all right, title
and interest of the Bank in and to Receivables now existing and
hereafter created in the Supplemental Accounts designated
pursuant to the Assignment and all proceeds (as defined in the
UCC as in effect in the State of Delaware) of such Receivables,
and such Receivables and any proceeds thereof will be held by the
Trust free and clear of any Lien of any Person claiming through
or under the Transferor or any of its Affiliates except for (x)
Liens permitted under subsection 2.5(b) of the Pooling and
Servicing Agreement, (y) the interest of the Bank as holder of
the Exchangeable Transferor Security and (z) the Bank's right to
receive interest accruing on, and investment earnings in respect
of, the Finance Charge Account and the Principal Account or any
Series Account as provided in the Pooling and Servicing Agreement
and any Supplement; or (ii) a grant of a security interest (as
defined in the UCC as in effect in the State of Delaware) in such
property to the Trust, which is enforceable with respect to the
existing Receivables of the Additional Accounts designated
pursuant to the Assignment and the proceeds (as defined in the
UCC as in effect in the State of Delaware) thereof upon the
conveyance of such Receivables to the Trust, and which will be
enforceable with respect to the Receivables thereafter created in
respect of Additional Accounts designated pursuant to the
Assignment and the proceeds (as defined in the UCC as in effect
in the State of Delaware) thereof upon such creation; and
provided, further, that if the Assignment constitutes the grant
of a security interest to the Trust in such property pursuant to
subsection (ii) above, upon the filing of a financing statement
described in Section 3 of the Assignment with respect to the
Additional Accounts designated pursuant to the Assignment and in
the case of the Receivables of such Additional Accounts
thereafter created and the proceeds (as defined in the UCC as in
effect in the State of Delaware) thereof upon such creation, the
Trust shall have a first priority perfected security Interest in
such property, except for Liens permitted under subsection 2.5(b)
of the Pooling and Servicing Agreement.
Requirements of Pooling and Servicing Agreement. All
requirements set forth in Section 2.6 of the Pooling and
Servicing Agreement for designating Additional Accounts and
conveying the Principal Receivables of such Accounts, whether now
existing or hereafter created, have been satisfied.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Pooling and Servicing
Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this
___________ day of ________ ____.
METRIS RECEIVABLES, INC.
By:
Name:
Title:
EXHIBIT I
FORM OF OPINION OF COUNSEL REGARDING SUPPLEMENTAL ACCOUNTS
PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 2.6(d)(vi)
OF THE POOLING AND SERVICING AGREEMENT
The opinions set forth below may be subject to certain
qualifications, assumptions, limitations and exceptions taken or
made in the opinion of the Transferor's counsel with respect to
similar matters delivered on the Closing Date. Such counsel may
rely as to factual matters on certificates of officers of the
Transferor and the Servicer.
(i) The Assignment has been duly authorized, executed and
delivered by the Transferor and constitutes the valid and legally
binding agreement of the Transferor, enforceable against the
Transferor in accordance with its terms, except (x) to the extent
that the enforceability thereof may be limited by (a) bankruptcy,
insolvency, receivership, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally and the rights of creditors of Delaware
chartered banks as the same may be applied in the event of the
bankruptcy, insolvency, receivership, reorganization, moratorium
or other similar event in respect of the Transferor, and (b)
general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity).
(ii) The provisions of the Pooling and Servicing Agreement
are effective to create, in favor of the Trustee, a valid
security interest (as such term is defined in Section 1-201(37)
of the Delaware UCC) in all of the Transferor's right, title and
interest in that portion of the Receivables which constitutes
accounts, general intangibles or chattel paper under the Delaware
UCC and proceeds thereof which security interest if characterized
as a transfer for security will secure all Secured Obligations
and which security interest if characterized as a sale of
accounts will constitute a valid sale of all of the Transferor's
right, title and interest in and to the Receivables and the
proceeds thereof.
(iii) A Uniform Commercial Code financing statement having
been filed in the appropriate recording offices, the security
interest (as such term is defined in Section 1-201(37) of the
Relevant UCC) in favor of the Trustee in the Receivables and
proceeds thereof has been perfected, and under the Relevant UCC
no other security interest of any other creditor of the
Transferor will be equal or prior to the security interest of the
Trustee in such Receivables and the proceeds thereof.
EXHIBIT J
FORM OF REASSIGNMENT OF RECEIVABLES
REASSIGNMENT NO. OF RECEIVABLES, dated as of
, , by and between METRIS RECEIVABLES, INC., a corporation
organized and existing under the laws of the States of Delaware
(the "Transferor"), and THE BANK OF NEW YORK (DELAWARE), a
banking corporation organized under the laws of the State of
Delaware (the "Trustee") pursuant to the Pooling and Servicing
Agreement referred to below.
W I T N E S S E T H
WHEREAS, the Transferor and the Trustee are parties to the
Amended and Restated Pooling and Servicing Agreement, dated as of
July 30,1998 (hereinafter as such agreement may have been, or may
from time to time be, amended, supplemented or otherwise
modified, the "Pooling and Servicing Agreement") by and among the
Transferor, Federated Department Stores, Inc. as Servicer, and
the Trustee;
WHEREAS, pursuant to Section 2.7 of the Pooling and
Servicing Agreement, the Transferor wishes to remove all
Receivables from certain designated Accounts (collectively, the
"Removed Accounts") and to cause the Trustee to reconvey the
Receivables of such Removed Accounts, whether now existing or
hereafter created, from the Trust to the Transferor (as each such
term is defined in the Pooling and Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such designation
and to reconvey the Receivables in the Removed Accounts subject
to the terms and conditions hereof.
NOW THEREFORE, the Transferor and the Trustee hereby agree
as follows:
(x) Defined Terms. All terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined
meanings when used herein, unless otherwise defined herein.
"Removal Date" shall mean, with respect to the Removed
Accounts designated hereby, , .
"Removal Notice Date" shall mean, with respect to the
Removed Accounts designated hereby, , (which shall be
a date on or prior to the fifth Business Day prior to the Removal
Date).
(xi) Designation of Removed Accounts. The Transferor shall
deliver to the Trustee or the bailee of the Trustee, not later
than five Business Days after the Removal Date, a computer file
or microfiche list containing a true and complete list of each
revolving consumer credit card account which as of the Removal
Date shall be deemed to be a Removed Account, such accounts being
identified by account number and by the aggregate amount of
Receivables in such accounts as of the close of business on the
Removal Date. Such list shall be marked as Schedule 1 to this
Reassignment and shall be incorporated into and made a part of
this Reassignment as of the Removal Date.
(xii) Conveyance of Receivables
The Trustee does hereby reconvey to the Transferor, without
recourse, representation or warranty, on and after the Removal
Date, all right, title and interest of the Trust in and to the
Receivables now existing and hereafter created in the Removed
Accounts designated hereby, all monies due or to become due with
respect thereto (including all Finance Charge Receivables) and
all proceeds (as defined in Section 9-306 of the UCC as in effect
in the [Relevant UCC State]) of such Receivables.
In connection with such transfer, the Trustee agrees to
execute and deliver to the Transferor on or prior to the date of
this Reassignment, a termination statement with respect to the
Receivables now existing and hereafter created in the Removed
Accounts designated hereby evidencing the release by the Trust of
its Lien on the Receivables in the Removed Accounts, and meeting
the requirements of applicable state law, in such manner and such
jurisdictions as are necessary to remove such Lien.
(xiii) Representations and Warranties of the Transferor.
The Transferor hereby represents and warrants to the Trust as of
the Removal Date:
Legal, Valid and Binding Obligation. This
Reassignment constitutes a legal, valid and binding obligation of
the Transferor enforceable against the Transferor in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
Selection Procedures. No selection procedures
believed by the Trans feror to be materially adverse to the
interests of the Investor Securityholders were utilized in
selecting the Removed Accounts designated hereby.
(xiv) Conditions Precedent. The amendment of the Pooling
and servicing Agreement set forth in Section 6 hereof is subject
to the satisfaction, on or prior to the Removal Date, of the
following condition precedent:
The Transferor shall have delivered to the Trustee an
Officer's Certificate certifying that (i) as of the Removal Date,
all requirements set forth in Section 2.7 of the Pooling and
Servicing Agreement for designating Removed Accounts and
reconveying the Receivables of such Removed Accounts, whether now
existing or hereafter created, have been satisfied, and (ii) each
of the representations and warranties made by the Transferor in
Section 4 hereof is true and correct as of the Removal Date. The
Trustee may conclusively rely on such Officer's Certificate,
shall have no duty to make inquiries with regard to the matters
set forth therein and shall incur no liability in so relying.
(xv) Amendment of the Pooling and Servicing Agreement. The
Pooling and Servicing Agreement is hereby amended to provide that
all references therein to the "Pooling and Servicing Agreement",
to "this Agreement" and "herein" shall be deemed from and after
the Removal Date to be a dual reference to the Pooling and
Servicing Agreement as supplemented by this Reassignment. Except
as expressly amended hereby, all of the representations,
warranties, terms, covenants and conditions of the Pooling and
Servicing Agreement shall remain unamended and shall continue to
be, and shall remain, in full force and effect in accordance with
its terms and except as expressly provided herein shall not
constitute or be deemed to constitute a waiver of compliance with
or a consent to non-compliance with any term or provision of the
Pooling and Servicing Agreement.
(xvi) Counterparts. This Reassignment may be executed in
two or more counterparts, 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.
(xvii) Governing Law. THIS REASSIGNMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.
IN WITNESS WHEREOF, the undersigned have caused this
Reassignment of Receivables to be duly executed and delivered by
their respective duly authorized officers on the day and year
first above written.
METRIS RECEIVABLES INC.
By:
Name:
Title:
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By:
Name:
Title:
METRIS RECEIVABLES, INC.,
Transferor
DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION,
Servicer
and
THE BANK OF NEW YORK (DELAWARE),
Trustee
on behalf of Securityholders
of the Metris Master Trust
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of July 30, 1998
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS 1
Section 1.1 Definitions 1
Section 1.2 Other Definitional Provisions 21
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF SECURITIES 22
Section 2.1 Conveyance of Receivables 23
Section 2.2 Acceptance by Trustee 23
Section 2.3 Representations and Warranties of
the Transferor 24
Section 2.4 Representations and Warranties of the
Transferor Relating to the Agreement
and the Receivables 27
Section 2.5 Covenants of the Transferor 31
Section 2.6 Addition of Accounts 32
Section 2.7 Removal of Accounts 37
Section 2.8 Discount Option 38
Section 2.9 Covenants of the Transferor with Respect
to the Purchase Agreement 38
Section 2.10. Receivables in Defaulted Accounts 39
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES 41
Section 3.1 Acceptance of Appointment and Other Matters
Relating to the Servicer 41
Section 3.2 Servicing Compensation 42
Section 3.3 Representations and Warranties of the
Servicer 43
Section 3.4 Reports and Records for the Trustee 45
Section 3.5 Annual Servicer's Certificate 46
Section 3.6 Annual Independent Accountants'
Servicing Report 47
Section 3.7 Tax Treatment 47
Section 3.8 Adjustments 48
Section 3.9 Notices to DMCCB 48
ARTICLE IV
RIGHTS OF SECURITYHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS 50
Section 4.1 Rights of Securityholders 50
Section 4.2 Establishment of Accounts 50
Section 4.3 Collections and Allocations 53
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL BE SPECIFIED IN ANY
SUPPLEMENT WITH RESPECT TO ANY SERIES] 56
ARTICLE VI
THE SECURITIES 57
Section 6.1 The Securities 57
Section 6.2 Authentication of Securities 57
Section 6.3 Registration of Transfer and Exchange of
Securities 58
Section 6.4 Mutilated, Destroyed, Lost or Stolen
Securities 61
Section 6.5 Persons Deemed Owners 61
Section 6.6 Appointment of Paying Agent 62
Section 6.7 Access to List of Securityholders'
Names and Addresses 63
Section 6.8 Authenticating Agent 63
Section 6.9 Tender of Exchangeable Transferor Security 64
Section 6.10 Book-Entry Securities 67
Section 6.11 Notices to Clearing Agency 68
Section 6.12 Definitive Securities 68
Section 6.13 Global Security; Euro-Security Exchange
Date 69
Section 6.14 Meetings of Securityholders 69
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR 70
Section 7.1 Liability of the Transferor 70
Section 7.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Transferor 70
Section 7.3 Limitation on Liability 71
Section 7.4 Liabilities 72
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER 73
Section 8.1 Liability of the Servicer 73
Section 8.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Servicer 73
Section 8.3 Limitation on Liability of the Servicer
and Others 73
Section 8.4 Servicer Indemnification of the Transferor,
the Trust and the Trustee 74
Section 8.5 The Servicer Not to Resign 75
Section 8.6 Access to Certain Documentation and
Information Regarding the Receivables 75
Section 8.7 Delegation of Duties 76
ARTICLE IX
PAY OUT EVENTS 77
Section 9.1 Pay Out Events 77
Section 9.2 Additional Rights Upon the Occurrence of
Certain Events 77
ARTICLE X
SERVICER DEFAULTS 80
Section 10.1 Servicer Defaults 80
Section 10.2 Trustee to Act; Appointment of Successor 82
Section 10.3 Notification to Securityholders 84
Section 10.4 Waiver of Past Defaults 84
ARTICLE XI
THE TRUSTEE 85
Section 11.1 Duties of Trustee 85
Section 11.2 Certain Matters Affecting the Trustee 87
Section 11.3 Trustee Not Liable for Recitals in
Securities 88
Section 11.4 [Reserved] 88
Section 11.5 The Servicer to Pay Trustee's Fees and
Expenses 88
Section 11.6 Eligibility Requirements for Trustee 89
Section 11.7 Resignation or Removal of Trustee 89
Section 11.8 Successor Trustee 90
Section 11.9 Merger or Consolidation of Trustee 91
Section 11.10 Appointment of Co-Trustee or Separate
Trustee 91
Section 11.11 Tax Returns 92
Section 11.12 Trustee May Enforce Claims Without
Possession of Securities 92
Section 11.13 Suits for Enforcement 93
Section 11.14 Rights of Securityholders to Direct Trustee 93
Section 11.15 Representations and Warranties of Trustee 93
Section 11.16 Maintenance of Office or Agency 94
ARTICLE XII
TERMINATION 95
Section 12.1 Termination of Trust 95
Section 12.2 Optional Termination 96
Section 12.3 Final Payment with Respect to any Series 97
Section 12.4 Termination Rights of Holder of
Exchangeable Transferor Security 98
ARTICLE XIII
MISCELLANEOUS PROVISIONS 99
Section 13.1 Amendment 99
Section 13.2 Protection of Right, Title and Interest
to Trust 101
Section 13.3 Limitation on Rights of Securityholders 101
Section 13.4 Governing Law 102
Section 13.5 Notices 102
Section 13.6 Severability of Provisions 103
Section 13.7 Assignment 103
Section 13.8 Securities Non-Assessable and Fully Paid 103
Section 13.9 Further Assurances 103
Section 13.10 No Waiver; Cumulative Remedies 104
Section 13.11 Counterparts 104
Section 13.12 Third-Party Beneficiaries 104
Section 13.13 Actions by Securityholders 104
Section 13.14 Rule 144A Information 105
Section 13.15 Merger and Integration 105
Section 13.16 Headings 105
SCHEDULES AND EXHIBITS
Schedule 1 Tax Returns and Payments
Exhibit A Form of Exchangeable Transferor Security
Exhibit B Form of Daily Report
Exhibit C Form of Settlement Statement
Exhibit D Form of Annual Servicer's Certificate
Exhibit E Form of Annual Opinion of Counsel
Exhibit F Form of Reconveyance of Receivables
Exhibit G Form of Agreed-Upon Procedures
Exhibit H Form of Assignment of Receivables in Supplemental
Accounts
Exhibit I Form of Opinion of Counsel Regarding Supplemental
Accounts
Exhibit J Form of Reassignment
