EXECUTION COPY
METRIS RECEIVABLES, INC.
Buyer
and
METRIS COMPANIES INC.
Seller
SECOND AMENDED AND RESTATED
PURCHASE AGREEMENT
Dated as of January 22, 2002
SECOND AMENDED AND RESTATED
PURCHASE AGREEMENT
SECOND AMENDED AND RESTATED PURCHASE AGREEMENT, dated as of
January 22, 2002 (the "Agreement"), by and between METRIS RECEIVABLES, INC., a
Delaware corporation (the "Buyer"), and METRIS COMPANIES INC., a Delaware
corporation (the "Seller").
W I T N E S S E T H:
WHEREAS, the Buyer desires to purchase from time to time
certain open-end or revolving credit receivables (including, without limitation,
MasterCard, VISA and private label credit card receivables) generated on or
before May 30, 1995, or to be generated after May 30, 1995, in the normal course
of business;
WHEREAS, the Seller desires to sell and assign from time to
time such receivables to the Buyer upon the terms and conditions hereinafter set
forth;
WHEREAS, the Buyer is an Affiliate of the Seller;
WHEREAS, the Buyer and Fingerhut Companies, Inc. ("Fingerhut")
previously entered into that certain Purchase Agreement, dated as of May 26,
1995 (the "Previous Purchase Agreement");
WHEREAS, the Seller, the Buyer and Fingerhut previously
entered into that certain Assignment and Assumption Agreement, dated as of
September 16, 1996 (the "Assumption Agreement"), pursuant to which Fingerhut
assigned to the Seller all of its rights arising under the Previous Purchase
Agreement and the Seller agreed to assume and perform all of Fingerhut's duties
and obligations under the Previous Purchase Agreement;
WHEREAS, the parties hereto previously entered into that
certain Amended and Restated Purchase Agreement, dated as of July 30, 1998 (the
"First Amended and Restated Purchase Agreement"), pursuant to which the Previous
Purchase Agreement was amended and restated;
WHEREAS, the parties hereto desire to amend and restate the
First Amended and Restated Purchase Agreement;
NOW, THEREFORE, it is hereby agreed by and between the Buyer
and the Seller as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires, capitalized
terms used herein shall have the following meanings assigned to them:
"Account" shall mean each revolving credit consumer credit
card account established pursuant to a Contract between a Credit Card Originator
and any Person, which is identified on an Account Schedule delivered by the
Seller to the Buyer on or after the Amendment Cut-Off Date and which on the
Initial Closing Date was an Eligible Account or, with respect to accounts
designated after the Initial Closing Date, is an Additional Account or a
Supplemental Account. The definition of "Account" shall include each Transferred
Account but shall not include Deleted Accounts and any Accounts all of the
Receivables in which are repurchased by the Seller pursuant to Article VI
hereof. The term "Account" shall refer to an Additional Account or a
Supplemental Account only from and after the Addition Date with respect thereto.
"Account Schedule" shall mean a computer file or microfiche
list containing a true and complete list of Accounts, identified by account
number and setting forth, with respect to each Account, the aggregate amount of
Principal Receivables outstanding in such Account and, except in the case of
clause (a), the aggregate amount outstanding in such Account (a) on the
Amendment Cut-Off Date (for the Account Schedule delivered on or prior to the
Amendment Closing Date), (b) on or prior to the Determination Date immediately
succeeding the related Monthly Period (for any Account Schedule relating to
Additional Accounts designated after the Amendment Closing Date) and (c) on the
Addition Cut-Off Date (for any Account Schedule relating to Supplemental
Accounts designated after the Amendment Closing Date).
"Addition Cut-Off Date" shall mean (a) for Supplemental
Accounts, the date specified in the related Assignment, and (b) for Additional
Accounts, the later of the dates on which such Additional Accounts are
originated or designated pursuant to subsection 2.2(a)(ii).
"Addition Date" shall mean (a) for Supplemental Accounts, the
date from and after which such Supplemental Accounts are to be included as
Accounts pursuant to subsection 2.2(a)(i), and (b) for Additional Accounts, the
later of the dates on which such Additional Accounts are originated or
designated pursuant to subsection 2.2(a)(ii).
"Additional Account" shall mean each revolving credit consumer
credit card account established pursuant to a Contract between a Credit Card
Originator and any Person, which account comes into existence after the Initial
Closing Date, is an Approved Account, is designated pursuant to subsection
2.2(a)(ii) to be included as an Additional Account, and is identified on or
after the Amendment Cut-Off Date on the Account Schedule delivered to the Buyer
by the Seller.
"Affiliate" shall mean, with respect to a particular Person,
any Person that, directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person.
"Amendment Closing Date" shall mean January 22, 2002.
"Amendment Cut-Off Date" shall mean October 18, 2001, but in
the case of Accounts designated in Assignment No. 40 supplementing this
Agreement, November 1, 2001.
"Approved Account" shall mean (a) each Eligible Account that
is a MasterCard or VISA account or (b) any other revolving credit consumer
credit card account the inclusion in the Trust of which would not cause a
Ratings Event.
"Assignment" shall have the meaning specified in subsection
2.2(b)(v).
"Bank" 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.
"Bank Receivables Purchase Agreement" shall mean the Second
Amended and Restated Bank Receivables Purchase Agreement, dated as of January
22, 2002, between the Bank and the Seller, as amended from time to time.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in Minneapolis, Minnesota,
Scottsdale, Arizona or Tulsa, Oklahoma are authorized or obligated by law or
executive order to be closed.
"Collection Account" shall have the meaning set forth in the
Pooling and Servicing Agreement.
"Collections" shall mean all payments received in respect of
the Receivables in the form of cash, checks or any other form of payment,
including Insurance Proceeds and Recoveries.
"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).
"Credit Adjustment" shall have the meaning set forth in
subsection 3.2(b) hereof.
"Credit and Collection Policy" shall mean the written policies
and procedures of the applicable Credit Card Originator (a) 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 and the extension of credit to credit
card customers, and (b) 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 (a) the Bank and its
successors or assigns under the Bank Receivables Purchase Agreement and/or any
transferee of the Accounts from the Bank or (b) any other originator of
revolving credit consumer credit card accounts approved by the Buyer.
"Date of Processing" shall mean with respect to any
transaction, the date on which such transaction is first recorded according to
the applicable Credit Card Originator's computer master file of revolving credit
accounts (without regard to the effective date of such recordation).
"Defaulted Account" shall mean each Account with respect to
which, in accordance 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 revolving credit
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.
"Deleted Account" shall mean any Removed Account as to which
there are no Receivables arising therein owned by the Buyer.
"Determination Date" shall have the meaning set forth in the
Pooling and Servicing Agreement.
"Eligible Account" shall mean, on the Initial Closing Date
(or, with respect to Additional Accounts and Supplemental Accounts, on the
related Addition Cut-Off Date), a revolving credit consumer credit card account
owned by a Credit Card Originator:
(a) which is payable in United States 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
in its computer master file as stolen or lost;
(d) which is not sold or pledged to any other party and which does not have
Receivables which are sold or pledged to any other party; and
(e) the Receivables in which the applicable Credit Card Originator has not
charged off (or required to be charged off) in its customary and usual manner
for charging off Receivables in such Accounts.
"Eligible Receivable" shall mean a Receivable that satisfies
each of the following criteria: (a) it arises under an Eligible Account, (b) it
is not sold or pledged to any other party, (c) it constitutes an "account" or a
"payment intangible" as defined in Article 9 of the UCC as then in effect in the
Relevant UCC State, (d) it is 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 by the Credit Card Originator in compliance, in all
material respects, with all Requirements of Law applicable to the Credit Card
Originator and pursuant to a Contract which 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 by the Credit Card Originator in connection
with the creation of such Receivable or the execution, delivery, creation and
performance of the related Contract by the Credit Card Originator have been duly
obtained or given and are in full force and effect and (g) immediately prior to
giving effect to the sale hereunder, the Seller has good and marketable title to
such Receivable free and clear of all Liens arising under or through the Seller
(other than Permitted Liens).
"Finance Charge Receivables" shall mean Receivables created in
respect of (a) Periodic Finance Charges, (b) overlimit fees, (c) late charges,
(d) returned check fees, (e) annual membership fees and annual service charges,
if any, (f) transaction charges, (g) cash advance fees, (h) fees and charges
relating to debt waiver programs administered by a Credit Card Originator and
(i) other similar fees and charges, but excluding fees and charges for other
products and services offered in connection with an Account.
"Governmental Authority" shall mean the United States of
America, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Ineligible Receivable" shall have the meaning set forth in
Section 6.1 hereof.
"Initial Closing Date" shall mean May 30, 1995.
"Insurance Proceeds" shall mean all Insurance Proceeds as
defined in the Bank Receivables Purchase Agreement (or, with respect to a Credit
Card Originator other than the Bank, in a similar agreement between such Credit
Card Originator and the Seller) that are paid to the Seller as provided in the
Bank Receivables Purchase Agreement (or such similar agreement).
"Lien" shall mean any lien, security interest or other
encumbrance.
"Monthly Period" shall mean the period from and including the
first day of a calendar month to and including the last day of such calendar
month.
"Obligor" shall mean a Person obligated to make payments with
respect to a Receivable arising under an Account.
"Officer's Certificate" shall mean a certificate signed by any
Vice President, Treasurer, Assistant Treasurer or more senior officer of the
Seller and delivered to the Buyer.
"Periodic Finance Charges" shall have, with respect to any
Account, the meaning set forth in the Contract applicable to such Account for
finance charges (due to periodic rate) or any similar term.
"Permitted Lien" shall mean with respect to the Receivables:
Liens that secure the payment of taxes, assessments and governmental charges or
levies, if such taxes are either (a) not delinquent or (b) being contested in
good faith by appropriate legal or administrative proceedings and as to which
adequate reserves in accordance with generally accepted accounting principles
shall have been established.
"Person" shall mean any person or entity, 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.
"Pooling and Servicing Agreement" shall mean the Second
Amended and Restated Pooling and Servicing Agreement, dated as of January 22,
2002, as amended from time to time, by and among the Bank, as Servicer, the
Buyer, as Transferor, and U.S. Bank National Association, as Trustee.
"Principal Receivables" shall mean all Receivables other than
Finance Charge Receivables. In calculating the aggregate amount of Principal
Receivables on any day, the amount of Principal Receivables shall be reduced by
the aggregate amount of credit balances in the Accounts on such day.
"Purchase Price" shall have the meaning set forth in Section
3.1 hereof.
"Rating Agencies" shall mean the nationally-recognized
statistical rating agencies, if any, that have been identified to the Seller as
having been selected by the Buyer, as Transferor, to rate any securities issued
by the Trust.
"Ratings Event" shall have the meaning set forth in the
Pooling and Servicing Agreement.
"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 Obligor with respect thereto, but
only to the extent that such amounts payable have been conveyed to the Seller
pursuant to the Bank Receivables Purchase Agreement (or, with respect to a
Credit Card Originator other than the Bank, pursuant to a similar agreement
between such Credit Card Originator and the Seller). Each Receivable includes,
without limitation, all rights of the Seller under the applicable Contract. A
Receivable shall be deemed to have been created at the end of the day on the
Date of Processing of such Receivable. A Receivable shall not include the amount
of interchange fees, if any, payable to a Credit Card Originator or the Seller
through VISA USA, Inc. or MasterCard International, Incorporated.
"Recoveries" shall mean all Recoveries as defined in the Bank
Receivables Purchase Agreement (or, with respect to a Credit Card Originator
other than the Bank, in a similar agreement between such Credit Card Originator
and the Seller) that are paid to the Seller as provided in the Bank Receivables
Purchase Agreement (or such similar agreement).
"Relevant UCC State" shall mean the State of Delaware and each
jurisdiction in which the filing of a UCC financing statement is necessary to
perfect the ownership interest and security interest of the Buyer pursuant to
this Agreement.
"Removed Account" shall mean any Account as to which the
Seller has received notice from the Servicer that such Account is a "Removed
Account" as defined in the Pooling and Servicing Agreement.
"Requirements of Law" for any Person shall mean the
certificate of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any material law,
treaty, rule or regulation, or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such Person or to which
such Person is subject.
"Sale Papers" shall have the meaning set forth in subsection
4.1(a) hereof.
"Servicer" shall mean the entity acting as Servicer under the
Pooling and Servicing Agreement.
"Stop Date" shall have the meaning specified in subsection
2.3(a) hereof.
"Supplemental Account" shall mean each revolving credit
consumer credit card account established pursuant to a Contract between a Credit
Card Originator and any Person, which account is designated pursuant to
subsection 2.2(a)(i) to be included as a Supplemental Account and is identified
on or after the Amendment Cut-Off Date on the Account Schedule delivered to the
Buyer by the Seller.
"Transferred Account" shall mean an Account with respect to
which a new credit card 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; provided that such Account can be traced or
identified by reference to or by way of the Account Schedule.
"Trust" shall mean the Metris Master Trust.
"Trustee" shall mean the trustee of the Trust.
"UCC" shall mean the Uniform Commercial Code, as amended from
time to time, as in effect in the applicable jurisdiction.
Section 1.2 Other Definitional Provisions. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement or any Sale
Paper shall refer to this Agreement as a whole and not to any particular
provision of this Agreement; and Section, Subsection, Schedule and Exhibit
references contained in this Agreement are references to Sections, Subsections,
Schedules and Exhibits in or to this Agreement unless otherwise specified.
[END OF ARTICLE I]
ARTICLE II
PURCHASE AND SALE
OF RECEIVABLES
Section 2.1 Sale.
(a) In consideration for the Purchase Price and upon the terms and subject to
the conditions set forth herein, the Seller does hereby sell, assign, transfer,
set-over and otherwise convey to the Buyer, and the Buyer does hereby purchase
from the Seller, without recourse except as specifically set forth herein, all
of the Seller's right, title and interest in, to and under (i) in the case of
Receivables arising in the Accounts designated on the Initial Closing Date
(including Transferred Accounts related to such Accounts), the Receivables
existing at the close of business on the Initial Closing Date and thereafter
created from time to time in such Accounts until the termination of this
Agreement, (ii) in the case of Receivables arising in the Additional Accounts
and the Supplemental Accounts (including Transferred Accounts related to such
Additional Accounts and Supplemental Accounts), the Receivables existing at the
close of business on the applicable Addition Cut-Off Date and thereafter created
from time to time in such Accounts until the termination of this Agreement,
(iii) all monies and investments due or to become due with respect to all of the
foregoing, (iv) all Collections with respect to, and all proceeds of, all of the
foregoing, and (v) the Bank Receivables Purchase Agreement to the extent that it
relates to the foregoing. The Receivables existing in Additional Accounts and
Supplemental Accounts at the close of business on the related Addition Cut-Off
Date and thereafter arising in such Additional Accounts and Supplemental
Accounts on or prior to the related Addition Date, and the related property,
shall be sold by the Seller and purchased by the Buyer on the related Addition
Date. Receivables arising after such Addition Date in such Additional Accounts
or Supplemental Accounts, and the related property, shall be sold by the Seller
and purchased by the Buyer on the date such Receivables arise. The foregoing
sale, transfer, assignment, set-over and conveyance does not constitute and is
not intended to result in a creation or an assumption by the Buyer of any
obligation of the applicable Credit Card Originator or the Seller in connection
with the Accounts or any agreement or instrument relating thereto, including,
without limitation, any obligation to any Obligors, merchant banks, merchant
clearance systems, VISA USA, Inc., MasterCard International, Incorporated or
insurers.
(b) In connection with the foregoing sale, the Seller agrees to record and file
a financing statement or statements (and continuation statements or other
amendments with respect to such financing statements) with respect to the
Receivables and the other property described in subsection 2.1(a) sold by the
Seller hereunder meeting the requirements of applicable state law in such manner
and in such jurisdictions as are necessary to perfect and protect the interests
of the Buyer created hereby under the applicable UCC against all creditors of
and purchasers from the Seller, and to deliver a file-stamped copy of such
financing statements and continuation statements (or other amendments) or other
evidence of such filings to the Buyer.
(c) In connection with the sale and conveyance hereunder, the Seller agrees on
or prior to the Initial Closing Date, in the case of Accounts designated on the
Initial Closing Date, and on or prior to the applicable Addition Date, in the
case of Additional Accounts and Supplemental Accounts, to indicate or cause to
be indicated clearly and unambiguously in its accounting, computer and other
records that the Receivables in such Accounts and the other property described
in subsection 2.1(a) have been sold to the Buyer pursuant to this Agreement,
including by identifying such Accounts in its master file maintained in its
computer files with the designation portfolio ID 0001. The Seller shall not
alter the indication referenced in the preceding sentence with respect to any
Account during the term of this Agreement unless and until such Account is no
longer an Account or the Seller has taken such action as is necessary or
advisable to cause the interest of the Buyer in the Receivables and other
property to continue to be perfected and of first priority. In addition, in
connection with the sale and conveyance hereunder, the Seller agrees on or prior
to the Amendment Closing Date, in the case of Accounts existing on the Amendment
Closing Date, and on or prior to the applicable Addition Date, in the case of
Additional Accounts and Supplemental Accounts, to deliver to the Buyer an
Account Schedule (provided that such Account Schedule shall be provided in
respect of Additional Accounts on or prior to the Determination Date immediately
succeeding the related Monthly Period during which their respective Addition
Dates occur). The Account Schedules as amended and supplemented from time to
time shall be incorporated into and marked as Schedule 1 to this Agreement.
(d) It is the express intent of the Seller and the Buyer that the conveyance of
the Receivables and other property by the Seller to the Buyer pursuant to this
Agreement be construed as a sale of such Receivables and other property by the
Seller to the Buyer, including for accounting purposes. It is, further, not the
intention of the Seller and the Buyer that such conveyance be deemed a grant of
a security interest in the Receivables and other property by the Seller to the
Buyer to secure a debt or other obligation of the Seller. However, in the event
that, notwithstanding the intent of the parties, the Receivables or other
property are held to continue to be property of the Seller, then (i) this
Agreement also shall be deemed to be and hereby is a security agreement within
the meaning of the UCC, and (ii) the conveyance by the Seller provided for in
this Agreement shall be deemed to be and the Seller hereby grants to the Buyer a
security interest in all of the Seller's right, title and interest in, to and
under (v) in the case of Receivables arising in the Accounts designated on the
Initial Closing Date (including Transferred Accounts related to such Accounts),
the Receivables existing at the close of business on the Initial Closing Date
and thereafter created from time to time in such Accounts until the termination
of this Agreement, (w) in the case of Receivables arising in the Additional
Accounts and the Supplemental Accounts (including Transferred Accounts related
to such Additional Accounts and Supplemental Accounts), the Receivables existing
at the close of business on the applicable Addition Cut-Off Date and thereafter
created from time to time in such Accounts until the termination of this
Agreement, (x) all monies and investments due or to become due with respect to
all of the foregoing, (y) all Collections with respect to, and all proceeds of,
all of the foregoing, and (z) the Bank Receivables Purchase Agreement to the
extent that it relates to the foregoing, to secure (1) the obligations of the
Seller and (2) a loan to the Seller in the amount of the Purchase Price as set
forth in this Agreement. The Seller and the Buyer shall, to the extent
consistent with this Agreement, take such actions as may be necessary to ensure
that, if this Agreement were deemed to create a security interest in the
Receivables and other property, such security interest would be a perfected
security interest of first priority in favor of the Buyer under applicable law
and will be maintained as such throughout the term of this Agreement.
Section 2.2 Addition of Accounts.
(a) (i) If, from time to time, the Buyer (A) becomes obligated to
designate Supplemental Accounts pursuant to subsection 2.6(c) of the
Pooling and Servicing Agreement, or (B) elects to designate Supplemental
Accounts pursuant to subsection 2.6(d) of the Pooling and Servicing
Agreement, then in either case the Buyer may, at its option, give the
Seller written notice thereof on or before the fifth Business Day prior to
the Addition Date therefor, and upon receipt of such notice the Seller
shall on or before the Addition Date, designate sufficient Eligible
Accounts to be included as Supplemental Accounts as requested by the Buyer;
and
(ii)Additionally, the Seller may, with the consent of the Buyer,
designate newly originated Eligible Accounts to be included as Additional
Accounts.
(b) On the Addition Date with respect to any designation of Additional Accounts
or Supplemental Accounts, such Additional Accounts or Supplemental Accounts
shall become Accounts, and the Buyer shall purchase the Seller's right, title
and interest in, to and under the Receivables in such Additional Accounts or
Supplemental Accounts, and the related property, as provided in Section 2.1,
subject to the satisfaction of the following conditions on such Addition Date:
(i) the Seller shall have delivered to the Buyer copies of UCC financing
statements covering such Additional Accounts or Supplemental Accounts,
if necessary to perfect the Buyer's interest in the Receivables arising
therein and the related property;
(ii) on each of the Addition Cut-Off Date and the Addition Date, the sale of
the Receivables arising in such Additional Accounts or Supplemental
Accounts, and the related property, to the Buyer shall not have caused
the Seller's insolvency or have been made in contemplation of the
Seller's insolvency;
(iii) no selection procedure was utilized by the Seller that would result in
a selection of such Additional Accounts or Supplemental Accounts (from
the Eligible Accounts available the Seller) that would be materially
adverse to the interests of the Buyer as of the Addition Date;
(iv) the Seller shall have indicated in its accounting, computer and other
records that Receivables created in connection with such Additional
Accounts or Supplemental Accounts, and the related property, have been
sold to the Buyer and shall have delivered to the Buyer the required
Account Schedule;
(v) the Seller and the Buyer shall have entered into a duly executed,
written assignment, substantially in the form of Exhibit A
(the "Assignment"); and
(vi) the Seller shall have delivered to the Buyer an Officer's Certificate
of the Seller, dated the Addition Date, confirming, to the extent
applicable, the items set forth in clauses (i) through (v) above.
Section 2.3 Removal and Deletion of Accounts.
(a) If an Account becomes a Removed Account, then the Seller shall stop selling
to the Buyer Principal Receivables arising in such Removed Account effective on
the Business Day (the "Stop Date") after the date such Account becomes a Removed
Account. Notwithstanding the cessation of the sale to the Buyer of additional
Principal Receivables arising in such Removed Account, Principal Receivables
sold to the Buyer prior to the Stop Date, Collections in respect of such
Principal Receivables, Finance Charge Receivables whenever created that accrue
in respect of such Principal Receivables, and Collections in respect of such
Finance Charge Receivables, shall continue to be property of the Buyer available
for transfer by the Buyer. To the extent that it is not clear to the Seller
whether collections relate to a Principal Receivable that was sold to the Buyer
or to a principal receivable that the Seller did not sell to the Buyer, the
Seller shall allocate payments on each such Removed Account with respect to the
principal balance of such Removed Account first to the oldest principal balance
of such Removed Account.
(b) On and after the Stop Date for a Removed Account, the Seller may ▇▇▇▇ its
books and records to indicate that such Account is a Removed Account, but the
Seller shall not (i) alter the indication referenced in the first sentence of
subsection 2.1(c) with respect to such Removed Account unless and until such
Account becomes a Deleted Account or the Seller has taken such action as is
necessary or advisable to cause the interest of the Buyer in the Receivables and
other property to continue to be perfected and of first priority, or (ii) delete
such Removed Account from Schedule 1 hereto or any Account Schedule.
(c) Once a Removed Account becomes a Deleted Account, the Seller shall promptly
delete such Deleted Account from Schedule 1 hereto (by delivering a schedule of
Deleted Accounts or otherwise) and shall indicate in its accounting, computer
and other files that such Deleted Account is no longer an Account.
[END OF ARTICLE II]
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1 Purchase Price.
(a) The Purchase Price for the Receivables and related property conveyed to the
Buyer under this Agreement shall be a dollar amount equal to, for Receivables
sold on any date, the aggregate amount of all Principal Receivables, and of all
Finance Charge Receivables as constitute fees and charges relating to the debt
waiver programs administered by a Credit Card Originator, sold on such date,
subject to adjustment to reflect such factors as the Buyer and the Seller
mutually agree will result in a Purchase Price determined to equal the fair
market value of such Receivables and related property.
(b) Notwithstanding any other provision of this Agreement, the Seller shall not
be obligated to continue to sell Receivables or related property to the Buyer to
the extent that the Seller is not paid the Purchase Price therefor as provided
herein.
Section 3.2 Payment of Purchase Price.
(a) On or before the close of business on the Business Day following each
Business Day on which Receivables are sold hereunder, the Purchase Price shall
be paid in immediately available funds.
(b) The Purchase Price shall be adjusted on a daily basis (the "Credit
Adjustment") if the Seller or the Servicer (other than by reason of Servicer
error) adjusts downward the amount of any Receivable because of a rebate,
refund, unauthorized charge or billing error to an Obligor or because such
Receivable was created in respect of merchandise which was refused or returned
by an Obligor. The amount of such reduction shall equal the reduction in the
principal balance of such Receivable resulting from the occurrence of such
event. In the event that a reduction pursuant to this subsection 3.2(b) causes
the Purchase Price to be a negative number, the Seller agrees to pay the Buyer
an amount equal to the amount by which the Credit Adjustment exceeds the
unadjusted Purchase Price.
Section 3.3 Daily Reports. On each Business Day, the Seller shall deliver to the
Buyer a Daily Report (the "Daily Report") showing the aggregate Purchase Price
of Receivables generated, the aggregate amount, if any, owing to the Buyer
pursuant to Section 6.1 hereof and the aggregate net amount of cash owing for
Receivables generated in each case for the period from and including the
preceding Business Day.
Section 3.4 Use of Name, Logo and Marks. The Seller does hereby grant to the
Buyer a non-exclusive license to use its name and all related identifying trade
or service marks, signs, symbols, logos, designs, servicing software, customer
lists, and other intangibles (and those of any Credit Card Originator in which
the Seller has rights) in connection with the servicing of the Receivables
purchased hereunder. The license granted shall be co-extensive with the term of
this Agreement.
[END OF ARTICLE III]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Seller's Representations and Warranties. The Seller hereby
represents and warrants to the Buyer on the Initial Closing Date, and as to
matters involving Additional Accounts or Supplemental Accounts, on the related
Addition Date, that:
(a) Organization and Good Standing. The Seller is a corporation organized and
validly existing in good standing under the laws of the State of Delaware and
has the corporate power and authority and legal right to own its properties and
conduct its business as such properties are presently owned and as such business
is presently conducted and to execute, deliver and perform its obligations under
this Agreement and each other document or instrument to be delivered by the
Seller hereunder (collectively, the "Sale Papers").
(b) Due Qualification. The Seller is duly qualified to do business and is in
good standing (or is exempt from such requirements) as a foreign corporation in
any state required in order to conduct its business, and has obtained all
necessary licenses and approvals with respect to the Seller required under
applicable law; provided that no representation or warranty is made with respect
to any qualifications, licenses or approvals which the Buyer would have to
obtain to do business in any state in which the Buyer seeks to enforce any
Receivable.
(c) Due Authorization. The execution and delivery by the Seller of the Sale
Papers, and the consummation by the Seller of the transactions provided for
herein and therein, have been duly authorized by the Seller by all necessary
corporate action on its part.
(d) Binding Obligation. Each of the Sale Papers, and the consummation of the
transactions provided for therein, constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance with its
terms, except as 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 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 by the Seller of the Sale Papers,
and the performance by the Seller of the transactions contemplated thereby, do
not (i) contravene the Seller's certificate of incorporation or by-laws or (ii)
violate any material provision of law applicable to it or require any filing
(except for the filings under the UCC), registration, consent or approval under
any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Seller,
except for such filings, registrations, consents or approvals as have already
been obtained and are in full force and effect.
(f) Taxes. The Seller has filed all material tax returns required to be filed by
the Seller and has paid or made adequate provision for the payment of all
material taxes, assessments and other governmental charges due from the Seller
or is contesting any such tax, assessment or other governmental charge in good
faith through appropriate proceedings.
(g) No Violation. The execution and delivery by the Seller of the Sale Papers,
the performance by the Seller of the transactions contemplated by the Sale
Papers and the fulfillment by the Seller of the terms thereof, will not violate
any Requirements of Law applicable to the Seller, will not violate, result in
any breach of any of the material terms and provisions of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of Law
applicable to the Seller, or any material indenture, contract, agreement,
mortgage, deed of trust or other material instrument to which the Seller is a
party or by which it or its properties are bound.
(h) No Proceedings. There are no proceedings or investigations pending or, to
the best knowledge of the Seller, threatened, against the Seller before any
Governmental Authority (i) asserting the invalidity of the Sale Papers, (ii)
seeking to prevent the consummation of any of the transactions contemplated
thereby, (iii) seeking any determination or ruling that would materially and
adversely affect the performance by the Seller of its obligations thereunder or
(iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability thereof.
(i) All Consents Required. All approvals, authorizations, consents, orders or
other actions of any Governmental Authority required in connection with the
execution and delivery by the Seller of the Sale Papers, the performance by the
Seller of the transactions contemplated by the Sale Papers and the fulfillment
by the Seller of the terms hereof and thereof, have been obtained.
(j) Bona Fide Receivables. The Seller has no knowledge of any fact which should
have led it to expect at the time of the classification of any Receivable as an
Eligible Receivable that such Receivable would not be paid in full when due, and
each Receivable classified as an Eligible Receivable by the Seller in any
document or report delivered by the Seller under this Agreement satisfies on the
date of its sale hereunder the requirements of eligibility contained in the
definition of Eligible Receivable set forth herein.
(k) Place of Business. The principal executive offices of the Seller are in
Minnetonka, Minnesota.
(l) Use of Proceeds. No proceeds of the sale of any Receivable hereunder
received by the Seller will be used by the Seller to purchase or carry any
margin stock.
(m) Not an Investment Company. The Seller is not an "investment company" within
the meaning of the Investment Company Act, or is exempt from all provisions of
such Act.
The representations and warranties set forth in this Section
4.1 shall survive the sale of the Receivables to the Buyer. The Seller hereby
represents and warrants to the Buyer that the representations and warranties of
the Seller set forth in Section 4.1 are true and correct on the applicable date.
Upon discovery by the Seller or the Buyer of a material breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice thereof to the other.
Section 4.2 Seller's Representations and Warranties Regarding Receivables.
(a) Valid Sale, etc. The Seller hereby (x) represents and warrants on the
Initial Closing Date, with respect to the Receivables created on or prior to,
and outstanding on, such date and (y) represents and warrants on the date of the
sale to the Buyer of any Receivables, with respect to such Receivables, that:
(i) This Agreement constitutes the legal, valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its
terms, except (A) as such enforceability may be limited by applicable
bankruptcy, receivership, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect, affecting the
enforcement of creditors' rights in general, and (B) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(ii) The sale of such Receivables by the Seller to the Buyer under this
Agreement constitutes a valid sale, transfer, assignment, set-over and
conveyance to the Buyer of all right, title and interest of the Seller
in and to such Receivables, free and clear of any Lien except for
Permitted Liens.
(iii) The Seller is not insolvent and will not be rendered insolvent upon the
sale of such Receivables to the Buyer.
(iv) The Seller is the legal and beneficial owner of all right, title and
interest in and to each such Receivable.
(v) All consents, licenses, approvals or authorizations of or registrations
or declarations with any Governmental Authority required of the Seller
in connection with the sale of such Receivables to the Buyer have been
obtained.
(vi) Such Receivables are Eligible Receivables.
(vii) Each such Receivable has been conveyed to the Buyer in compliance, in
all material respects, with all Requirements of Law applicable to the
Seller.
(b) Daily Representations and Warranties. On each day on which any new
Receivable is acquired by the Seller and sold to the Buyer hereunder, the Seller
shall represent and warrant to the Buyer that (A) each such Receivable purchased
by the Buyer on such day has been conveyed to the Buyer in compliance, in all
material respects, with all Requirements of Law applicable to the Seller and
free and clear of any Lien (other than Permitted Liens) and (B) with respect to
each such Receivable, all consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by the Seller in connection with the conveyance of
such Receivable to the Buyer have been duly obtained, effected or given and are
in full force and effect.
(c) Notice of Breach. The representations and warranties set forth in this
Section 4.2 shall survive the sale, transfer and assignment of the respective
Receivables to the Buyer. Upon discovery by the Seller or the Buyer of a breach
of any of the representations and warranties set forth in this Section 4.2, the
party discovering such breach shall give prompt written notice thereof to the
other. The Seller agrees to cooperate with the Buyer in attempting to cure any
such breach.
Section 4.3 Representations and Warranties of the Buyer. The Buyer hereby
represents and warrants and agrees with the Seller, on the date hereof, and
represents and warrants on the date of the sale of any Receivables to the Buyer
hereunder, that:
(a) Organization and Good Standing. The Buyer is a corporation duly organized
and validly existing in good standing under the laws of the State of Delaware
and has the corporate power and authority and legal right to own its property
and conduct its business as such properties are presently owned and such
business is presently conducted and to execute, deliver and perform its
obligations under the Sale Papers to which it is a party.
(b) Due Qualification. The Buyer is duly qualified to do business and is in good
standing (or is exempt from such requirements) as a foreign corporation in any
state required in order to conduct its business and has obtained all necessary
licenses and approvals with respect to the Buyer required under applicable law.
(c) Due Authorization. The execution and delivery by the Buyer of the Sale
Papers to which it is a party and the consummation by the Buyer of the
transactions provided for in the Sale Papers to which it is a party have been
duly authorized by the Buyer by all necessary corporate action on its part.
(d) No Conflicts. The execution and delivery by the Buyer of the Sale Papers to
which it is a party and the performance by the Buyer of the transactions
contemplated thereby do not (i) contravene the Buyer's certificate of
incorporation or by-laws or (ii) violate any material provision of law
applicable to it, or require any filing (except for the filings under the UCC),
registration, consent or approval under any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award presently in effect having
applicability to the Buyer, except for such filings, registrations, consents or
approvals as have already been obtained and are in full force and effect.
(e) No Violation. The execution and delivery by the Buyer of the Sale Papers to
which it is a party, the performance by the Buyer of the transactions
contemplated by the Sale Papers to which it is a party, and the fulfillment by
the Buyer of the terms of the Sale Papers to which it is a party will not
violate any Requirements of Law applicable to the Buyer, will not violate,
result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under any
Requirement of Law applicable to the Buyer, or any material indenture, contract,
agreement, mortgage, deed of trust or other material instrument to which the
Buyer is a party or by which it or its properties are bound.
(f) No Proceedings. There are no proceedings or investigations pending or, to
the best knowledge of the Buyer, threatened, against the Buyer, before any
Governmental Authority (i) asserting the invalidity of the Sale Papers to which
it is a party, (ii) seeking to prevent the consummation of any of the
transactions contemplated by the Sale Papers to which it is a party, (iii)
seeking any determination or ruling that would materially and adversely affect
the performance by the Buyer of its obligations thereunder or (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of the Sale Papers to which it is a party.
(g) All Consents Required. All approvals, authorizations, consents, orders or
other actions of any Governmental Authority required in connection with the
execution and delivery by the Buyer of the Sale Papers to which it is a party,
the performance by the Buyer of the transactions contemplated by the Sale Papers
to which it is a party, and the fulfillment by the Buyer of the terms of the
Sale Papers to which it is a party have been obtained.
The representations and warranties set forth in this Section
4.3 shall survive the sale of the Receivables to the Buyer. The Buyer hereby
represents and warrants to the Seller that the representations and warranties of
the Buyer set forth in Section 4.3 are true and correct on the applicable date.
Upon discovery by the Buyer or the Seller of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other.
[END OF ARTICLE IV]
ARTICLE V
COVENANTS OF SELLER AND BUYER
Section 5.1 Seller Covenants. The Seller hereby covenants that:
(a) Receivables to be Accounts or Payment Intangibles. The Seller will take no
action to cause any Receivable to be evidenced by any instrument or chattel
paper (as defined in the UCC as in effect in the Relevant UCC State), except in
connection with the enforcement or collection of a Receivable. Except in such
circumstances, the Seller will take no action to cause any Receivable to be
anything other than an account or payment intangible (as defined in the UCC as
in effect in the Relevant UCC State).
(b) Security Interests. Except for the conveyances hereunder, the Seller will
not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien arising through or under the Seller
on, any Receivable sold hereunder, whether now existing or hereafter created, or
any interest therein; the Seller will immediately notify the Buyer of the
existence of any Lien arising through or under the Seller on any Receivable; and
the Seller shall defend the right, title and interest of the Buyer in, to and
under the Receivables, whether now existing or hereafter created, against all
claims of third parties claiming through or under the Seller; provided, however,
that nothing in this subsection 5.1(b) shall prevent or be deemed to prohibit
the Seller from suffering to exist upon any of the Receivables any Permitted
Lien.
(c) Enforcement of Agreements. The Seller hereby covenants that the Seller will
at all times enforce the covenants and agreements of the Bank under the Bank
Receivables Purchase Agreement (or, with respect to a Credit Card Originator
other than the Bank, in a similar agreement between such Credit Card Originator
and the Seller), including, without limitation, any covenants to the effect set
forth below:
(i) 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 (A) such Credit Card
Originator's reasonable expectation is that such reduction will
cause a Pay Out Event (as defined in the Pooling and Servicing
Agreement) to occur so long as there are Investor Securities (as
defined in the Pooling and Servicing Agreement) outstanding or
(B) 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.
(ii) Credit and Collection Policy and Contracts. The applicable 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 and the beneficiaries thereof. Subject to compliance
with all Requirements of Law, such 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 such
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) such
change will not be made with the intent to materially benefit the
Credit Card Originator over the applicable purchaser of the
Receivables, the Buyer, or the Trust and the beneficiaries
thereof or to materially adversely affect the applicable
purchaser of the Receivables, the Buyer, or the Trust and the
beneficiaries thereof, except as otherwise restricted by an
endorsement, sponsorship or other agreement between such Credit
Card Originator and an unrelated third party or by the terms of
the Contracts. The applicable Credit Card Originator covenants
that such Credit Card Originator will not enter into any
amendments to the Bank Receivables Purchase Agreement (or such
similar agreement) that would cause a Ratings Event (as defined
in the Pooling and Servicing Agreement) to occur so long as there
are Investor Securities outstanding.
(d) Delivery of Collections. In the event that the Seller receives Collections,
the Seller agrees to forward to the Buyer or its designee such Collections as
soon as practicable after the receipt thereof, but in no event later than the
second Business Day following receipt thereof.
(e) Notice of Liens. The Seller shall notify the Buyer promptly after becoming
aware of any Lien on any Receivable other than Permitted Liens.
(f) Separate Business. The Seller will not permit its assets to be commingled
with those of the Buyer and the Seller will maintain separate corporate records,
books of account and bank accounts from those of the Buyer. The Seller will not
conduct its business in the name of the Buyer and will not authorize the Buyer
to conduct its business in the name of the Seller so as to mislead others as to
the identity of the entity with which those others are concerned. The Seller
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 the Buyer except that the
organizational expenses of the Buyer may be paid by the Seller. The Seller will
not authorize the Buyer 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 Seller.
The Seller will maintain an arm's length relationship with the Buyer with
respect to any transactions between the Seller, on the one hand, and the Buyer,
on the other.
Section 5.2 Buyer Covenant Regarding Sale Treatment. The Buyer agrees to treat
this conveyance for all purposes (including, without limitation, tax and
financial accounting purposes) as a sale on all relevant books, records, tax
returns, financial statements and other applicable documents.
[END OF ARTICLE V]
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1 Reassignment of Ineligible Receivables. In the event of a breach
with respect to a Receivable of any of the representations and warranties set
forth in subsection 4.1(j) or subsections 4.2(a)(iii) through (vii) or
subsection 4.2(b), such Receivable shall be designated an "Ineligible
Receivable" and the Seller shall pay to the Buyer an amount in cash equal to the
purchase price paid for any such Ineligible Receivable by the Buyer to the
Seller. Upon such payment, without further action, such Ineligible Receivable
shall be reassigned to the Seller. Such payment must be made by the close of
business on the Business Day following the day such Receivable has been
designated an Ineligible Receivable; provided, however, that such amount may be
offset against any amounts due from the Buyer to the Seller with respect to the
Purchase Price for Receivables sold to the Buyer on such day. The obligation of
the Seller set forth in this Section shall constitute the sole remedy respecting
any breach of the representations and warranties set forth in the
above-referenced subsections available to the Buyer.
Section 6.2 Reassignment of Other Receivables. In the event of a breach of any
of the representations and warranties set forth in subsections 4.1(a), (b) or
(c) or subsections 4.2(a)(i) or (ii), the Buyer, by notice given in writing to
the Seller, may require the Seller to accept a reassignment of all of the
Receivables previously sold by the Seller to the Buyer pursuant to this
Agreement; provided, however, that no such reassignment shall be required to be
made if, at any time during such applicable period, the Seller delivers to the
Buyer an Officer's Certificate of the Seller stating that the representations
and warranties contained in subsections 4.1(a), (b) and (c) and 4.2(a)(i) and
(ii) shall then be true and correct in all material respects as if made on such
day. The Seller shall pay for such reassigned Receivables by paying to the
Buyer, on the date specified in such notice, an amount equal to the purchase
price paid for such Receivables by the Buyer to the Seller. Upon such payment,
and without further action, such Receivables shall be reassigned to the Seller.
The obligation of the Seller set forth in this Section shall constitute the sole
remedy respecting any breach of the representations and warranties set forth in
the above-referenced subsections available to the Buyer.
Section 6.3 Conveyance of Reassigned Receivables. Upon the request of the
Seller, the Buyer shall execute and deliver to the Seller a reconveyance
substantially in such form and upon such terms as shall be acceptable to the
Seller, pursuant to which the Buyer evidences the conveyance to the Seller of
all of the Buyer's right, title, and interest in any Receivables and related
property reconveyed to the Seller pursuant to Section 6.1 or 6.2. The Buyer
shall execute such other documents or instruments of conveyance or take such
other actions as the Seller may reasonably require to effect any repurchase of
Receivables and related property pursuant to this Article VI.
[END OF ARTICLE VI]
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to the Buyer's Obligations Regarding Receivables. The
obligations of the Buyer to purchase the Receivables on any Business Day shall
be subject to the satisfaction of the following conditions with respect to such
Receivables:
(a) All representations and warranties of the Seller contained in this
Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on such date (unless such
representation or warranty specifically relates to an earlier date);
(b) All information concerning such Receivables provided to the Buyer
shall be true and correct in all material respects on such date;
(c) The Seller shall have substantially performed all other obligations
required to be performed by the provisions of this Agreement;
(d) The Seller shall have filed the financing statements required to be
filed pursuant to subsection 2.1(b); and
(e) All corporate and legal proceedings and all instruments in connection
with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Buyer, and the Buyer shall
have received from the Seller copies of all documents (including,
without limitation, records of corporate proceedings) relevant to the
transactions herein contemplated as the Buyer may reasonably have
requested.
Section 7.2 Conditions Precedent to the Seller's Obligations. The obligations of
the Seller to sell Receivables on any Business Day shall be subject to the
satisfaction of the following conditions with respect to such Receivables:
(a) All representations and warranties of the Buyer contained in this
Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on such date (unless such
representation or warranty specifically relates to an earlier date);
(b) Payment or provision for payment of the Purchase Price in accordance
with the provisions of Section 3.2 hereof shall have been made; and
(c) All corporate and legal proceedings and all instruments in connection with
the transactions contemplated by this Agreement shall be satisfactory in form
and substance to the Seller, and the Seller shall have received from the Buyer
copies of all documents (including, without limitation, records of corporate
proceedings) relevant to the transactions herein contemplated as the Seller may
reasonably have requested.
[END OF ARTICLE VII]
ARTICLE VIII
TERM AND TERMINATION
Section 8.1 Term. This Agreement shall commence as of the date of execution and
delivery hereof and shall continue in full force and effect until the
termination of the Trust or as otherwise agreed to in writing by the parties
hereto.
[END OF ARTICLE VIII]
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Amendment. This Agreement and any other Sale Papers and the rights
and obligations of the parties hereunder may not be changed orally, but only by
an instrument in writing signed by the Buyer and the Seller in accordance with
this Section 9.1. This Agreement and any other Sale Papers may be amended from
time to time by the Buyer and the Seller (i) to cure any ambiguity, (ii) to
correct or supplement any provisions herein which may be inconsistent with any
other provisions herein or in any such other Sale Papers, (iii) to add any other
provisions with respect to matters or questions arising under this Agreement or
any Sale Papers which shall not be inconsistent with the provisions of this
Agreement or any Sale Papers, (iv) to change or modify the Purchase Price and
(v) to change, modify, delete or add any other obligation of the Buyer or the
Seller or to otherwise change, modify, delete or add any provision of this
Agreement or any Sale Papers; provided, however, that no amendment pursuant to
clause (iv) or (v) of this Section 9.1 shall be effective unless the Buyer and
the Seller shall have received written confirmation from each Rating Agency to
the effect that the rating of any securities issued by the Trust will not be
reduced or withdrawn as a result of such amendment. Any Assignment and any
reconveyance executed in accordance with the provisions hereof shall not be
considered to be an amendment to this Agreement. A copy of any amendment to this
Agreement shall be sent to each Rating Agency.
Section 9.2 Governing Law. THIS AGREEMENT AND THE OTHER SALE PAPERS SHALL BE
CONSTRUED 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 9.3 Notices. All demands, notices and communications hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered
at, sent by facsimile to, sent by courier at or mailed by certified mail,
postage pre-paid and return receipt requested, to:
(a) in the case of the Seller, to:
Metris Companies Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Metris Companies Inc.
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Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) in the case of the Buyer, to:
Metris Receivables, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇▇ ▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party.
Section 9.4 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of the Sale Papers shall for any reason
whatsoever be held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of the Sale Papers and shall in no way affect the validity or
enforceability of the other provisions of the Sale Papers.
Section 9.5 Assignment. Notwithstanding anything to the contrary contained
herein, this Agreement may not be assigned by the Buyer or the Seller except as
contemplated by this Section 9.5. Simultaneously with the execution and delivery
of this Agreement, the Buyer shall assign all of its right, title and interest
herein to the Trustee as provided in Section 2.1 of the Pooling and Servicing
Agreement, to which the Seller hereby expressly consents. Except for the
foregoing assignment, no assignment of this Agreement shall occur unless the
Buyer shall have received confirmation from the Rating Agencies that such
assignment shall not cause a reduction or withdrawal of the rating of any Series
of Securities (as defined in the Pooling and Servicing Agreement). The Seller
agrees to perform its obligations hereunder for the benefit of the Trust and
agrees that the Trustee may enforce the provisions of this Agreement, exercise
the rights of the Buyer and enforce the obligations of the Seller hereunder
without the consent of the Buyer.
Section 9.6 Further Assurances. The Buyer and the Seller agree to do and
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the other party more fully to
effect the purposes of the Sale Papers, including, without limitation, the
execution of any financing statements or continuation statements (or other
amendments thereto) or equivalent documents relating to the Receivables for
filing under the provisions of the UCC or other laws of any applicable
jurisdiction.
Section 9.7 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Buyer or the Seller, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.
Section 9.8 Counterparts. The Sale Papers may each be executed in two or more
counterparts including telefax transmission thereof (and by different parties on
separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
Section 9.9 Binding Effect; Third Party Beneficiaries. The Sale Papers will
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns. The Trustee shall be considered a third-party
beneficiary of the Sale Papers.
Section 9.10 Merger and Integration. Except as specifically stated otherwise
herein, the Sale Papers set forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, written or
oral, are superseded by the Sale Papers. The Sale Papers may not be modified,
amended, waived or supplemented except as provided herein.
Section 9.11 Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Section 9.12 Schedules and Exhibits. The schedules and exhibits attached hereto
and referred to herein shall constitute a part of this Agreement and are
incorporated into this Agreement for all purposes.
Section 9.13 Nonpetition Covenant. To the fullest extent permitted by applicable
law, notwithstanding any prior termination of this Agreement, the Seller shall
not, prior to the date which is one year and one day after the termination of
this Agreement, acquiesce, petition or otherwise invoke or cause the Buyer or
the Trust to invoke the process of any Governmental Authority for the purpose of
commencing or sustaining a case against the Buyer or the Trust under any
bankruptcy, insolvency or similar law or appointing a receiver, conservator,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Buyer or the Trust or any substantial part of its property or ordering
the winding-up or liquidation of the affairs of the Buyer or the Trust.
Section 9.14 Merger or Consolidation of, or Assumption of the Obligations of,
the Seller. The Seller 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:
(a) the corporation formed by such consolidation or into which the
Seller is merged or the Person which acquires by conveyance or transfer the
properties and assets of the Seller substantially as an entirety shall be a
corporation organized and existing under the laws of the United States of
America or any State or the District of Columbia and, if the Seller is not
the surviving entity, shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Buyer in form satisfactory to the
Buyer, the performance of every covenant and obligation of the Seller
hereunder (to the extent that any right, covenant or obligation of the
Seller, 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); and
(b) the Seller shall have delivered to the Buyer an Officer's
Certificate of the Seller that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section 9.14 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
successor entity 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.
The Rating Agencies shall receive prompt written notice from the Seller of such
merger or consolidation of the Seller.
Section 9.15 Protection of Right, Title and Interest to Receivables.
(a) The Seller shall cause this Agreement, all amendments hereto and/or all
financing statements, and continuation statements and other amendments thereto,
and any other necessary documents covering the sale hereunder to be promptly
recorded, registered and filed, and at all times to be kept recorded, registered
and filed, all in such manner and in such places as may be required by law fully
to preserve and protect the right, title and interest of the Buyer hereunder to
the Receivables and the proceeds thereof. The Seller shall deliver to the Buyer
file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. The Buyer shall cooperate fully with the
Seller in connection with the obligations set forth above and will execute any
and all documents reasonably required to fulfill the intent of this subsection
9.15(a).
(b) The Seller shall not change its name or its type or jurisdiction of
organization without previously having delivered to the Buyer an opinion of
counsel to the effect that all actions have been taken, and all filings have
been made, as are necessary to continue and maintain the first-priority
perfected ownership interest of the Buyer in the Receivables and the related
property.
[END OF ARTICLE IX]
IN WITNESS WHEREOF, the Buyer and the Seller each have caused
this Agreement to be duly executed by their respective officers as of the day
and year first above written.
METRIS COMPANIES INC.,
as Seller
By:
Name:
Title:
METRIS RECEIVABLES, INC.,
as Buyer
By:
Name:
Title:
[Signature page to Second Amended and Restated Purchase Agreement]
Schedule 1
ACCOUNT SCHEDULE
EXHIBIT A
FORM OF ASSIGNMENT OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS
ASSIGNMENT NO. __ OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS, dated as of
___________, by and between METRIS RECEIVABLES, INC., a Delaware corporation
(the "Buyer"), and METRIS COMPANIES INC., a Delaware corporation (the "Seller"),
pursuant to the Receivables Purchase Agreement referred to below.
WITNESSETH:
WHEREAS, the Seller and the Buyer are parties to the Second
Amended and Restated Receivables Purchase Agreement, dated as of January 22,
2002 (hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Receivables Purchase
Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement, the
Seller wishes to designate Supplemental Accounts to be included as Accounts, and
the Seller wishes to sell its right, title and interest in and to the
Receivables of such Supplemental Accounts, whether existing on the Addition
Cut-Off Date or thereafter created, to the Buyer pursuant to this Assignment and
the Receivables Purchase Agreement; and
WHEREAS, the Buyer is willing to accept such designation and
sale subject to the terms and conditions hereof.
NOW, THEREFORE, the Seller and the Buyer hereby agree as
follows:
1. Defined Terms. All capitalized terms used herein shall have the meanings
ascribed to them in the Receivables Purchase Agreement unless otherwise defined
herein.
"Addition Cut-Off Date" shall mean, with respect to the Supplemental
Accounts, __________.
"Addition Date" shall mean, with respect to the Supplemental Accounts,
__________.
"Supplemental Accounts" shall mean the Supplemental Accounts, as defined in
the Receivables Purchase Agreement, that are designated hereby and listed on
Schedule 1 hereto.
"Additional Purchased Assets" shall have the meaning set forth in
subsection 3(a).
2. Designation of Supplemental Accounts. The Seller delivers herewith an
Account Schedule containing a true and complete list of the Supplemental
Accounts. Such Account Schedule is incorporated into and made part of this
Assignment, shall be Schedule 1 to this Assignment and shall supplement Schedule
1 to the Receivables Purchase Agreement.
3. Sale of Receivables.
(a) The Seller does hereby sell, transfer, assign, set over and otherwise
convey to the Buyer, without recourse except as provided in the Receivables
Purchase Agreement, all of the Seller's right, title and interest in, to and
under (i) the Receivables existing in the Supplemental Accounts at the close of
business on the Addition Cut-Off Date and thereafter created from time to time
in the Supplemental Accounts until the termination of the Receivables Purchase
Agreement, (ii) all monies and investments due or to become due with respect to
all of the foregoing, and (iii) all Collections with respect to, and all
proceeds of, all of the foregoing (collectively, the "Additional Purchased
Assets").
(b) In connection with the foregoing sale and if necessary, the Seller
agrees to record and file one or more financing statements (and continuation
statements or other amendments with respect to such financing statements when
applicable) with respect to the Additional Purchased Assets meeting the
requirements of applicable state law in such manner and in such jurisdictions as
are necessary to perfect the sale of the Additional Purchased Assets to the
Buyer, and to deliver a file-stamped copy of such financing statements and
continuation statements (or other amendments) or other evidence of such filing
to the Buyer.
(c) In connection with the foregoing sale, the Seller further agrees, on or
prior to the date of this Assignment, to indicate in its accounting, computer
and other records that the Additional Purchased Assets have been sold to the
Buyer pursuant to this Assignment, including by identifying the Supplemental
Accounts in its master file maintained in its computer files with the
designation portfolio ID 0001.
(d) The parties hereto intend that the conveyance of the Seller's right,
title and interest in and to the Additional Purchased Assets shall constitute an
absolute sale, conveying good title free and clear of any liens, claims,
encumbrances or rights of others from the Seller to the Buyer. It is the
intention of the parties hereto that the arrangements with respect to the
Additional Purchased Assets shall constitute a purchase and sale of such
Additional Purchased Assets and not a loan, including for accounting purposes.
In the event, however, that it were to be determined that the transactions
evidenced hereby constitute a loan and not a purchase and sale, it is the
intention of the parties hereto that this Assignment shall constitute a security
agreement under applicable law and that the Seller shall be deemed to have
granted, and the Seller does hereby grant, to the Buyer a first priority
perfected security interest in all of the Seller's right, title and interest,
whether now owned or hereafter acquired, in, to and under the Additional
Purchased Assets to secure the obligations of the Seller hereunder and under the
Receivables Purchase Agreement.
4. Acceptance by the Buyer. The Buyer hereby acknowledges that, prior to or
simultaneously with the execution and delivery of this Assignment, the Seller
delivered to the Buyer the Account Schedule described in Section 2 of this
Assignment with respect to all Supplemental Accounts.
5. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Buyer on the Addition Date that:
(a) Organization and Good Standing. The Seller is a corporation organized
and validly existing in good standing under the laws of the State of Delaware
and has the corporate power and authority and legal right to own its properties
and conduct its business as such properties are presently owned and as such
business is presently conducted and to execute, deliver and perform its
obligations under this Assignment.
(b) Due Qualification. The Seller is duly qualified to do business and is
in good standing (or is exempt from such requirements) as a foreign corporation
in any state required in order to conduct its business, and has obtained all
necessary licenses and approvals with respect to the Seller required under
applicable law; provided that no representation or warranty is made with respect
to any qualifications, licenses or approvals which the Buyer would have to
obtain to do business in any state in which the Buyer seeks to enforce any
Receivable.
(c) Due Authorization. The execution and delivery by the Seller of this
Assignment, and the consummation by the Seller of the transactions provided for
herein, have been duly authorized by the Seller by all necessary corporate
action on its part.
(d) Binding Obligation. This Assignment, and the consummation of the
transactions provided for herein, constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance with its
terms, except as 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 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 by the Seller of this
Assignment, and the performance by the Seller of the transactions contemplated
hereby, do not (i) contravene the Seller's certificate of incorporation or
by-laws or (ii) violate any material provision of law applicable to it or
require any filing (except for the filings under the UCC), registration, consent
or approval under any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to the
Seller, except for such filings, registrations, consents or approvals as have
already been obtained and are in full force and effect.
(f) Taxes. The Seller has filed all material tax returns required to be
filed by the Seller and has paid or made adequate provision for the payment of
all material taxes, assessments and other governmental charges due from the
Seller or is contesting any such tax, assessment or other governmental charge in
good faith through appropriate proceedings.
(g) No Violation. The execution and delivery by the Seller of this
Assignment, the performance by the Seller of the transactions contemplated by
this Assignment and the fulfillment by the Seller of the terms hereof, will not
violate any Requirements of Law applicable to the Seller, will not violate,
result in any breach of any of the material terms and provisions of or
constitute (with or without notice or lapse of time or both) a default under any
Requirement of Law applicable to the Seller, or any material indenture,
contract, agreement, mortgage, deed of trust or other material instrument to
which the Seller is a party or by which it or its properties are bound.
(h) No Proceedings. There are no proceedings or investigations pending or,
to the best knowledge of the Seller, threatened, against the Seller before any
Governmental Authority (i) asserting the invalidity of this Assignment, (ii)
seeking to prevent the consummation of any of the transactions contemplated
hereby, (iii) seeking any determination or ruling that would materially and
adversely affect the performance by the Seller of its obligations hereunder or
(iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability hereof.
(i) All Consents Required. All approvals, authorizations, consents, orders
or other actions of any Governmental Authority required in connection with the
execution and delivery by the Seller of this Assignment, the performance by the
Seller of the transactions contemplated by this Assignment and the fulfillment
by the Seller of the terms hereof, have been obtained.
(j) Bona Fide Receivables. The Seller has no knowledge of any fact which
should have led it to expect at the time of the classification of any Receivable
in a Supplemental Account as an Eligible Receivable that such Receivable would
not be paid in full when due, and each Receivable in a Supplemental Account
classified as an Eligible Receivable by the Seller in any document or report
delivered by the Seller under this Assignment satisfies on the date of its sale
hereunder the requirements of eligibility contained in the definition of
Eligible Receivable set forth in the Receivables Purchase Agreement.
(k) Place of Business. The principal executive offices of the Seller are in
Minnetonka, Minnesota.
(l) Use of Proceeds. No proceeds of the sale of any Receivable hereunder
received by the Seller will be used by the Seller to purchase or carry any
margin stock.
(m) Not an Investment Company. The Seller is not an "investment company"
within the meaning of the Investment Company Act, or is exempt from all
provisions of such Act.
6. Ratification of the Receivables Purchase Agreement. The Receivables
Purchase Agreement is hereby ratified, and all references to the "Receivables
Purchase Agreement," to "this Agreement" and "herein" shall be deemed from and
after the Addition Date to be a reference to the Receivables Purchase Agreement
as supplemented and amended by this Assignment. Except as expressly amended
hereby, all the representations, warranties, terms, covenants and conditions of
the Receivables Purchase 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 consent to non-compliance with any
term or provision of the Receivables Purchase Agreement.
7. Counterparts. This Assignment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument.
8. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED 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.
[The remainder of this page is left blank intentionally.]
IN WITNESS WHEREOF, the Buyer and the Seller each has caused
this Assignment to be duly executed by their respective officers as of the day
and year first written above.
METRIS COMPANIES INC.,
as Seller
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:Senior Vice President
Assistant Secretary
METRIS RECEIVABLES, INC.,
as Buyer
By:/s/ ▇▇▇▇▇ ▇. Than
Name: ▇▇▇▇▇ ▇. Than
Title: Senior Vice President, Treasurer
Schedule 1
SCHEDULE OF SUPPLEMENTAL ACCOUNTS
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions......................................................2
Section 1.2 Other Definitional Provisions....................................7
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
Section 2.1 Sale.............................................................9
Section 2.2 Addition of Accounts............................................10
Section 2.3 Removal and Deletion of Accounts................................12
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1 Purchase Price..................................................13
Section 3.2 Payment of Purchase Price.......................................13
Section 3.3 Daily Reports...................................................13
Section 3.4 Use of Name, Logo and Marks.....................................13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Seller's Representations and Warranties.........................14
Section 4.2 Seller's Representations and Warranties Regarding Receivables...16
Section 4.3 Representations and Warranties of the Buyer.....................17
ARTICLE V
COVENANTS OF SELLER AND BUYER
Section 5.1 Seller Covenants................................................19
Section 5.2 Buyer Covenant Regarding Sale Treatment.........................21
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1 Reassignment of Ineligible Receivables..........................22
Section 6.2 Reassignment of Other Receivables...............................22
Section 6.3 Conveyance of Reassigned Receivables............................22
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to the Buyer's Obligations Regarding Receivables.....23
Section 7.2 Conditions Precedent to the Seller's Obligations................23
ARTICLE VIII
TERM AND TERMINATION
Section 8.1 Term............................................................25
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Amendment.......................................................26
Section 9.2 Governing Law...................................................26
Section 9.3 Notices.........................................................26
Section 9.4 Severability of Provisions......................................27
Section 9.5 Assignment......................................................27
Section 9.6 Further Assurances..............................................27
Section 9.7 No Waiver; Cumulative Remedies..................................27
Section 9.8 Counterparts....................................................27
Section 9.9 Binding Effect; Third Party Beneficiaries.......................28
Section 9.10 Merger and Integration..........................................28
Section 9.11 Headings........................................................28
Section 9.12 Schedules and Exhibits..........................................28
Section 9.13 Nonpetition Covenant............................................28
Section 9.14 Merger or Consolidation of, or Assumption of the Obligations of,
the Seller......................................................28
Section 9.15 Protection of Right, Title and Interest to Receivables..........29
SCHEDULES AND EXHIBITS
Schedule 1 ACCOUNT SCHEDULE
EXHIBIT A FORM OF ASSIGNMENT OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS
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