1
Exhibit 10.a(i)
AMENDED AND RESTATED SERIES 1995-1 SUPPLEMENT,
dated as of September 16, 1996 (this "Series Supplement")
by and among METRIS RECEIVABLES, INC. (formerly Fingerhut
Financial Services Receivables, Inc.), a corporation
organized and existing under the laws of the State of
Delaware, as Transferor (the "Transferor"), DIRECT MER-
CHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION, a national
banking organization organized under the laws of the
United States, as Servicer (the "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 (together with its successors in
trust thereunder as provided in the Agreement referred to
below, the "Trustee"), under the Pooling and Servicing
Agreement dated as of May 26, 1995 as amended, supple-
mented or otherwise modified from time to time (the
"Agreement") among the Transferor, the Servicer and the
Trustee.
WHEREAS, the Series 1995-1 Supplement was
entered into among the Transferor, the Servicer and the
Trustee as of May 26, 1995;
WHEREAS, the Transferor, the Servicer and the
Trustee desire to amend and restate the Series 1995-1
Supplement to the Pooling and Servicing Agreement pursu-
ant to Section 13.1(a) therein in order to provide for
the terms contained herein;
WHEREAS, in June 1995, the Transferor caused
the Trust to issue the Class A Certificate, $64,806,000
aggregate principal amount of Class B Certificates,
$35,349,000 aggregate principal amount of Class C Certif-
icates and the Class D Certificate (collectively, the
"Previously Issued Certificates") and the Transferor
desires to cause the Trust to issue an additional
$64,806,000 aggregate principal amount of Class B Certif-
icates (the "Additional Class B Certificates") and an
additional $35,349,000 aggregate principal amount of
Class C Certificates (the "Additional Class C Certifi-
▇▇▇▇▇" and together with the Additional Class B Certifi-
▇▇▇▇▇, the "Additional Certificates"), and in connection
therewith to increase the maximum invested amounts of the
Class A Certificate and the Class D Certificate;
WHEREAS, in connection with a business realign-
ment of FCI's subsidiaries and its affiliates, FCI has
assigned to Metris Companies Inc., a Delaware corporation
("Metris"), all of its rights arising under the Bank
Receivables Purchase Agreement and the Purchase Agreement
and Metris has assumed all of FCI's obligations thereun-
der pursuant to that certain Assignment and Assumption
Agreement, dated as of September 16, 1996, by and among
FCI, Metris and DMCCB, and that certain Assignment and
Assumption Agreement, dated as of September 16, 1996, by
and among FCI, Metris and the Transferor, respectively;
2
NOW, THEREFORE, in consideration of the mutual
agreements herein contained, each party agrees for the
benefit of the other parties and the Certificateholders
that the Amended and Restated Series 1995-1 Supplement
shall read as follows: Section 6.9 of the Agreement provides, among
other things, that the Transferor and the Trustee may at
any time and from time to time enter into a supplement to
the Agreement for the purpose of authorizing the issuance
by the Trustee to the Transferor, for execution and
redelivery to the Trustee for authentication, of one or
more Series of Certificates.
Pursuant to this Series Supplement, the Trans-
feror and the Trustee shall create a new Series of Inves-
tor Certificates and shall specify the Principal Terms
thereof.
SECTION 1. Designation. There is hereby
created a Series of Investor Certificates to be issued
pursuant to the Agreement and this Series Supplement to
be known generally as the "Series 1995-1 Certificates."
The Series 1995-1 Certificates shall be issued in four
Classes, which shall be designated generally as the
Variable Funding Trust Certificate, Series 1995-1, Class
A (the "Class A Certificate"), the Floating Rate Accounts
Receivable Trust Certificates, Series 1995-1, Class B
(the "Class B Certificates"), the Floating Rate Accounts
Receivable Trust Certificates, Series 1995-1, Class C
(the "Class C Certificates") and the Variable Funding
Trust Certificate, Series 1995-1, Class D (the "Class D
Certificate").
SECTION 2. Definitions. In the event that any
term or provision contained herein shall conflict with or
be inconsistent with any provision contained in the
Agreement, the terms and provisions of this Series Sup-
plement shall govern with respect to the Series 1995-1
Certificates. All Article, Section or subsection refer-
ences herein shall mean Article, Section or subsections
of the Agreement, as amended or supplemented by this
Series Supplement, except as otherwise provided herein.
All capitalized terms not otherwise defined herein are
defined in the Agreement. Each capitalized term defined
herein shall relate only to the Series 1995-1 Certifi-
▇▇▇▇▇ and no other Series of Certificates issued by the
Trust.
"ABC Fixed/Floating Allocation Percentage"
shall mean for any Business Day the percentage equivalent
of a fraction, the numerator of which is the sum of the
Class A Adjusted Invested Amount, the Class B Invested
Amount and the Class C Invested Amount at the end of the
last day of the Revolving Period and the denominator of
which is the greater of (a) the sum of the aggregate
amount of Principal Receivables and the amount on deposit
in the Excess Funding Account at the end of the preceding
Business Day and (b) the sum of the numerators used to
calculate the allocation percentages with respect to
Principal Receivables for all Series; provided, however,
that during any Class A Pay Down Period, the numerator
used in the above calculation shall be the sum of the
Class A Invested Amount, the Class B Invested Amount and
the Class C Invested Amount as of the day immediately
preceding the commencement of the Class A Pay Down Peri-
od.
3
"ABC Investor Default Amount" shall mean (i) on
any Business Day other than a Default Recognition Date,
an amount equal to the product of (a) the sum of the
Class A Floating Allocation Percentage, the Class B
Floating Allocation Percentage and the Class C Floating
Allocation Percentage applicable on such Business Day and
(b) the aggregate Default Amount identified since the
prior reporting date and (ii) on any Default Recognition
Date, an amount equal to the product of (a) the sum of
the Class A Default Recognition Allocation Percentage,
the Class B Default Recognition Allocation Percentage and
the Class C Default Recognition Allocation Percentage
applicable on such Default Recognition Date and (b) the
Default Amount with respect to such Default Recognition
Date.
"ABC Revolving Principal Collections" shall
have the meaning specified in Section 4.9(b) of the
Agreement.
"Additional Certificates" shall have the mean-
ing specified in the third WHEREAS clause hereof.
"Additional Class A Invested Amounts" shall
have the meaning specified in Section 6.15 of the Agree-
ment.
"Additional Class B Certificates" shall have
the meaning specified in the third WHEREAS clause hereof.
"Additional Class C Certificates" shall have
the meaning specified in the third WHEREAS clause hereof.
"Additional Class D Invested Amounts" shall
have the meaning specified in Section 6.16 of the Agree-
ment.
"Additional Interest" shall mean, at any time
of determination, the sum of Class B Additional Interest
and Class C Additional Interest.
"Adjusted Portfolio Yield" shall mean for the
Series 1995-1 Certificates, with respect to any Monthly
Period, the annualized percentage equivalent of a frac-
tion, the numerator of which is an amount equal to the
sum of the aggregate amount of Available Series 1995-1
Finance Charge Collections (without giving effect to any
portion thereof representing amounts withdrawn from the
Payment Reserve Account) for such Monthly Period, minus
the aggregate Investor Default Amount for such Monthly
Period and the Series Allocation Percentage of any Ad-
justment Payments which the Transferor is required but
fails to make pursuant to the Pooling and Servicing
Agreement for such Monthly Period, and the denominator of
which is the average daily sum of the Class A Invested
Amount, the Class B Invested Amount and the Class C
Invested Amount.
4
"Administration Agreement" shall mean the
Amended and Restated Administration Agreement, dated as
of May 26, 1995, between the Fingerhut Owner Trust and
Fingerhut Corporation, as the same may from time to time
be amended, restated, modified and in effect.
"Administrator" shall mean Fingerhut Corpora-
tion as administrator under the Administration Agreement.
"Aggregate ABC Principal Amount" shall mean
with respect to any date of determination an amount equal
to the sum of the Class A Outstanding Principal Amount,
the Class B Invested Amount and the Class C Invested
Amount, each as of such date of determination.
"Aggregate Interest Rate Caps Notional Amount"
shall mean with respect to any date of determination an
amount equal to the sum of the notional amounts or equiv-
alent amounts of all outstanding Cap Agreements, Replace-
ment Interest Rate Caps and Qualified Substitute Arrange-
ments, each as of such date of determination.
"Amortization Period" shall mean the period
beginning on the day following the last day of the Re-
volving Period and ending on the Series 1995-1 Termina-
tion Date.
"Amortization Period Commencement Date" shall
mean (i) the earlier of May 28, 1999 and the Pay Out
Commencement Date or (ii) if there is any Extension, the
earlier of the date specified as such in the most recent
Extension Notice and the Pay Out Commencement Date.
"Available Series 1995-1 Finance Charge Collec-
tions" shall have the meaning specified in subsection
4.9(a) of the Agreement.
"Base Rate" shall mean, as of any Business Day,
the sum of (i) the average of (A) the Class A Certificate
Rate, (B) the Class B Certificate Rate and (C) the Class
C Certificate Rate, each of (A), (B) and (C) weighted by
the unpaid principal amount of each respective Class of
Certificates as of such Business Day, plus (ii) the
product of 2% per annum and the percentage equivalent of
a fraction the numerator of which is the sum of the Class
A Adjusted Invested Amount, the Class B Invested Amount,
the Class C Invested Amount and the Class D Invested
Amount and the denominator of which is the Invested
Amount.
"Cap Agreements" shall mean the interest rate
cap agreements, between the Transferor, the Trustee and a
Cap Provider, as amended from time to time, with respect
to the Class A Certificate Rate, Class B Certificate Rate
and Class C Certificate Rate, respectively, and any
additional interest rate protection agreement or agree-
ments, entered into between the Transferor, the Trustee
and a Cap Provider, as the same may from time to time be
amended, restated, modified and in effect.
"Cap Proceeds Account" shall have the meaning
specified in subsection 3A(b) of this Series Supplement.
5
"Cap Provider" shall mean (i) a third party cap
provider having a senior unsecured debt rating of at
least "AA" by Standard & Poor's and "Aa2" by Moody's and
(ii) a third party cap provider or its corporate parent
having a short term rating from Standard & Poor's of A-1.
"Cap Receipt Amount" shall mean, with respect
to any Business Day the amount on deposit in the Cap
Proceeds Account.
"Cap Settlement Date" shall have the meaning
specified in subsection 3A(b) of this Series Supplement.
"Carryover Class B Interest" shall mean (a) any
Class B Interest due but not paid on any previous Distri-
bution Date plus (b) any Class B Additional Interest.
"Carryover Class C Interest" shall mean (a) any
Class C Interest due but not paid on any previous Distri-
bution Date plus (b) any Class C Additional Interest.
"Class A Adjusted Invested Amount" shall mean,
with respect to any date of determination, an amount
equal to the Class A Invested Amount minus the Defeasance
Account Balance on such date of determination.
"Class A Certificateholder" shall mean the
Person in whose name a Class A Certificate is registered
in the Certificate Register.
"Class A Certificateholders' Interest" shall
mean the portion of the Series 1995-1 Certificateholders'
Interest evidenced by the Class A Certificate.
"Class A Certificate" shall mean the variable
funding certificate executed by the Transferor and au-
thenticated by or on behalf of the Trustee, substantially
in the form of Exhibit A-1 hereto.
"Class A Certificate Rate" shall mean with
respect to any Business Day, a per annum interest rate
equal to the rate which if multiplied by the Class A
Outstanding Principal Amount as of the close of business
on the preceding Business Day would produce, on the basis
of a 365- or 366-day year, as the case may be, an amount
equal to the Cost of Funds for the period from and in-
cluding the immediately preceding Business Day to but
excluding such Business Day.
6
"Class A Costs" shall mean with respect to any
Business Day, (i) the Series 1995-1 Allocation Percentage
of the sum of (x) the Liquidity Bank Increased Costs (as
defined in the Collateral Trust Agreement), (y) OTC
Article VI Costs (as defined in the Collateral Trust
Agreement) and (z) any amounts described in subsection
5.3(a)(ii)(I)(a) of the Collateral Trust Agreement, in
each case to the extent such amount is due and payable
and has not previously been paid, and (ii) (a) the Series
1995-1 Non-Utilized Allocation Percentage of any Commit-
ment Fees (as defined in the Liquidity Agreement) accrued
from and including the preceding Business Day to but
excluding such Business Day pursuant to Section 2.9 of
the Liquidity Agreement with respect to Unutilized Avail-
able Commitments (as defined in the Liquidity Agreement)
plus (b) any such Commitment Fees allocated to the Class
A Certificate which accrued with respect to prior Busi-
ness Days but have not been paid pursuant to Section 2.9
of the Liquidity Agreement.
"Class A Default Recognition Allocation Per-
centage" shall mean, with respect to each Default Recog-
nition Date, the percentage equivalent of a fraction, the
numerator of which is the Weighted Average Class A Ad-
justed Invested Amount for the related Monthly Period and
the denominator of which is the Weighted Average Princi-
pal Receivables in the Trust for the related Monthly
Period.
"Class A Event of Default" shall have the
meaning specified for the term "Event of Default" in the
Liquidity Agreement.
"Class A Floating Allocation Percentage" shall
mean, with respect to any Business Day, the percentage
equivalent of a fraction, the numerator of which is the
Class A Adjusted Invested Amount on such day after taking
into account all adjustments of the Class A Invested
Amount on such day and the denominator of which is the
greater of (a) the total amount of Principal Receivables
in the Trust and the amounts on deposit in the Excess
Funding Account as of the end of the preceding Business
Day and (b) the sum of the numerators with respect to all
Classes of all Series then outstanding used to calculate
the applicable allocation percentage.
"Class A Funding Purchase" shall have the
meaning specified in Section 4.14 of the Agreement.
"Class A Interest" shall mean the interest
distributable in respect of the Class A Certificate as
calculated in accordance with subsection 4.6(a) of the
Agreement.
"Class A Interest Adjustment" shall have the
meaning specified in Section 4.6A of the Agreement.
"Class A Interest Shortfall" shall have the
meaning specified in subsection 4.6(a) of the Agreement.
7
"Class A Invested Amount" shall mean, when used
with respect to any Business Day, an amount equal to (a)
the principal amount of Class A Certificates purchased
pursuant to any Class A Funding Purchase pursuant to
Section 4.14(b) of the Agreement, minus (b) the aggregate
amount of principal payments made to Class A Certificate-
holders through and including such Business Day, minus
(c) the aggregate amount of Class A Investor Charge-Offs
for all prior Distribution Dates, plus (d) the sum of the
aggregate amount allocated with respect to Class A Inves-
tor Charge-Offs and available on all prior Distribution
Dates pursuant to subsection 4.9(a)(viii) of the Agree-
ment and, with respect to such subsection and pursuant to
subsections 4.10(a) and (b) and Section 4.15 of the
Agreement, for the purpose of reinstating amounts reduced
pursuant to the foregoing clause (d) plus (e) the aggre-
gate principal amount of any Additional Class A Invested
Amounts purchased pursuant to Section 6.15 of the Agree-
ment.
"Class A Investor Charge-Offs" shall have the
meaning specified in subsection 4.13(d) of the Agreement.
"Class A Investor Percentage" shall mean, for
any Business Day, (a) with respect to Finance Charge
Receivables and Receivables in Defaulted Accounts at any
time or Principal Receivables during the Revolving Period
(except for any portion of the Revolving Period that
occurs during the Class A Pay Down Period), the Class A
Floating Allocation Percentage and (b) with respect to
Principal Receivables during the Amortization Period and
the Class A Pay Down Period, the ABC Fixed/Floating
Allocation Percentage.
"Class A Maximum Invested Amount" shall mean
$824,800,000.
"Class A Outstanding Principal Amount" shall
mean with respect to the Class A Certificate, when used
with respect to any Business Day, an amount equal to (a)
the principal amount of Class A Certificates purchased
pursuant to any Class A Funding Purchase pursuant to
Section 4.14(b) of the Agreement, plus (b) the aggregate
principal amount of any Additional Class A Invested
Amounts purchased by the Class A Certificateholder on or
prior to such Business Day pursuant to Section 6.15 of
the Agreement minus (c) the aggregate amount of principal
payments made to the Class A Certificateholder on or
prior to such Business Day.
8
"Class A Pay Down Period" shall have the mean-
ing specified in Section 8A of this Series Supplement.
"Class A Percentage" shall mean a fraction the
numerator of which is the Class A Invested Amount and the
denominator of which is the sum of the Class A Invested
Amount, the Class B Invested Amount and the Class C
Invested Amount.
"Class A Principal" shall mean the principal
distributable in respect of the Class A Certificate as
calculated in accordance with subsection 4.7(a) of the
Agreement.
"Class A Purchase Agreement" shall mean the
Class A Purchase Agreement, dated as of May 26, 1995,
between Fingerhut Owner Trust and the Transferor, as the
same may from time to time be amended, restated, modified
and in effect.
"Class A Required Amount" shall mean the amount
determined by the Servicer on each Business Day equal to
the excess, if any, of (x) the sum of (i) the amount
described in subsection 4.9(a)(i)(y) for such Business
Day, (ii) the Class A Floating Allocation Percentage of
the Daily Portion of the Servicing Fee for the then
current Monthly Period, (iii) the Class A Floating Allo-
cation Percentage of the Default Amount, if any, for such
Business Day and, to the extent not previously paid, for
any previous Business Day in such Monthly Period, (iv) on
each Transfer Date the Class A Percentage of the Series
Allocation Percentage of the Adjustment Payment required
to be made by the Transferor but not made on such Trans-
fer Date and (v) the amount of unreimbursed Class A
Investor Charge-Offs over (y) the Available Series 1995-1
Finance Charge Collections plus any Excess Finance Charge
Collections from other Series and any Transferor Finance
Charge Collections allocated with respect to the amounts
described in clauses (x)(i) through (iv).
"Class B Additional Interest" shall have the
meaning specified in subsection 4.6(b) of the Agreement.
"Class B Certificateholder" shall mean the
Person in whose name a Class B Certificate is registered
in the Certificate Register.
"Class B Certificateholders' Interest" shall
mean the portion of the Series 1995-1 Certificateholders'
Interest evidenced by the Class B Certificates.
"Class B Certificate Rate" shall mean with
respect to each Interest Accrual Period, a per annum rate
.625% in excess of LIBOR, as determined on the related
LIBOR Determination Date.
9
"Class B Certificates" shall mean any of the
certificates executed by the Transferor and authenticated
by or on behalf of the Trustee, substantially in the form
of Exhibit A-2 hereto.
"Class B Daily Principal Amount" shall have the
meaning specified in subsection 4.9(c)(ii) of the Agree-
ment.
"Class B Default Recognition Allocation Per-
centage" shall mean, with respect to each Default Recog-
nition Date, the percentage equivalent of a fraction, the
numerator of which is the Weighted Average Class B In-
vested Amount for the related Monthly Period and the
denominator of which is the Weighted Average Principal
Receivables in the Trust for the related Monthly Period.
"Class B Fixed/Floating Allocation Percentage"
shall mean for any Business Day the percentage equivalent
of a fraction, the numerator of which is the Class B
Invested Amount at the end of the last day of the Revolv-
ing Period and the denominator of which is the greater of
(a) the sum of the aggregate amount of Principal Receiv-
▇▇▇▇▇ and the amount on deposit in the Excess Funding
Account at the end of the preceding Business Day and (b)
the sum of the numerators used to calculate the alloca-
tion percentages with respect to Principal Collections
for all Series.
"Class B Floating Allocation Percentage" shall
mean, with respect to any Business Day, the percentage
equivalent of a fraction, the numerator of which is the
Class B Invested Amount as of the end of the preceding
Business Day and the denominator of which is the greater
of (a) the total amount of Principal Receivables in the
Trust and the amount on deposit in the Excess Funding
Account as of the end of the preceding Business Day and
(b) the sum of the numerators with respect to all Classes
of all Series then outstanding used to calculate the
applicable allocation percentage.
"Class B Full Invested Amount" shall mean $129,
612,000.
"Class B Funding Purchase" shall have the
meaning specified in Section 4.14A of the Agreement.
"Class B Interest" shall mean the interest
distributable in respect of the Class B Certificates as
calculated in accordance with subsection 4.6(b) of the
Agreement.
"Class B Interest Adjustment" shall have the
meaning specified in Section 4.6A of the Agreement.
"Class B Interest Shortfall" shall have the
meaning specified in subsection 4.6(b) of the Agreement.
10
"Class B Invested Amount" shall mean, when used
with respect to any Business Day, an amount equal to (a)
$129,612,000, minus (b) the aggregate amount of principal
payments made to Class B Certificateholders prior to such
Business Day, minus (c) the aggregate amount of Class B
Investor Charge-Offs for all prior Distribution Dates,
minus (d) the aggregate amount of Reallocated Class B
Principal Collections for which neither the Class D
Invested Amount nor the Class C Invested Amount has been
reduced for all prior Business Days, and plus (e) the sum
of the aggregate amount allocated and available on all
prior Business Days pursuant to subsection 4.9(a)(xi) of
the Agreement and, with respect to such subsection and
pursuant to subsections 4.10(a) and (b) and Section 4.15
of the Agreement, for the purpose of reinstating amounts
reduced pursuant to the foregoing clauses (c) and (d).
"Class B Investor Charge-Offs" shall have the
meaning specified in subsection 4.13(c) of the Agreement.
"Class B Investor Percentage" shall mean, for
any Distribution Date, (a) with respect to Finance Charge
Receivables and Receivables in Defaulted Accounts at any
time or Principal Receivables during the Revolving Peri-
od, the Class B Floating Allocation Percentage and (b)
with respect to Principal Receivables during the Amorti-
zation Period, the ABC Fixed/Floating Allocation Percent-
age.
"Class B Outstanding Principal Amount" shall
mean, when used with respect to any Business Day, an
amount equal to (a) the principal amount of Class B
Certificates purchased pursuant to any Class B Funding
Purchase pursuant to Section 4.14(b) of the Agreement,
minus (b) the aggregate amount of principal payments made
to Class B Certificateholders prior to such Business Day.
11
"Class B Percentage" shall mean a fraction the
numerator of which is the Class B Invested Amount and the
denominator of which is the sum of the Class A Invested
Amount, the Class B Invested Amount and the Class C
Invested Amount.
"Class B Pool Factor" shall mean, with respect
to any Record Date, a number carried out to seven decimal
places representing the ratio of the Class B Invested
Amount as of the last day of the related Monthly Period
(determined after taking into account any increases or
decreases in the Class B Invested Amount which will occur
on the following Distribution Date) to the highest Class
B Invested Amount on or prior to the last day of such
Monthly Period during the Revolving Period.
"Class B Principal" shall mean the principal
distributable in respect of the Class B Certificates as
calculated in accordance with subsection 4.7(b) of the
Agreement.
"Class B Principal Payment Commencement Date"
shall mean the earlier of (a) the first Distribution Date
in an Amortization Period on which the Class A Invested
Amount equals or is reduced to zero or, if there are no
Principal Collections allocable to the Series 1995-1
Certificates remaining after payments have been made to
the Class A Certificate on such Distribution Date, the
Distribution Date following the Distribution Date on
which the Class A Invested Amount is paid in full and (b)
the Distribution Date following a sale or repurchase of
the Receivables as set forth in Section 2.4(e), 9.2,
10.2, 12.1 or 12.2 of the Agreement or Section 3 of this
Series Supplement.
"Class B Purchase Agreement" shall mean the
Class B Purchase Agreement, dated as of May 26, 1995,
between the Transferor and the purchasers of the Class B
Certificates specified therein, as the same may from time
to time be amended, restated, modified and in effect.
12
"Class B Required Amount" shall mean the amount
determined by the Servicer on each Business Day equal to
the excess, if any, of (x) the sum of (i) the Daily
Portion of the Class B Interest for the then current
Monthly Period, (ii) any Carryover Class B Interest
previously due but not paid to the Class B Certificate-
holders on a prior Business Day, (iii) the Class B Float-
ing Allocation Percentage of the Servicing Fee for the
then current Monthly Period, (iv) the Class B Floating
Allocation Percentage of the Default Amount, if any, for
such Business Day and, to the extent not previously paid,
for any previous Business Day in such Monthly Period, (v)
the Class B Percentage of the Series Allocation Percent-
age of the Adjustment Payment required to be made by the
Transferor but not made on the related Transfer Date and
(vi) the unreimbursed amount by which the Class B Invest-
ed Amount has been reduced on prior Business Days pursu-
ant to clauses (c) and (d) of the definition of Class B
Invested Amount over (y) the Available Series 1995-1
Finance Charge Collections plus any Excess Finance Charge
Collections from other Series and any Transferor Finance
Charge Collections allocated with respect to the amounts
described in clauses (x)(i) through (v).
"Class C Additional Interest" shall have the
meaning specified in subsection 4.6(c) of the Agreement.
"Class C Certificateholder" shall mean the
Person in whose name a Class C Certificate is registered
in the Certificate Register.
"Class C Certificateholders' Interest" shall
mean the portion of the Series 1995-1 Certificateholders'
Interest evidenced by the Class C Certificates.
"Class C Certificate Rate" shall mean with
respect to each Interest Accrual Period, a per annum rate
.75% in excess of LIBOR as determined on the related
LIBOR Determination Date.
"Class C Certificates" shall mean any of the
certificates executed by the Transferor and authenticated
by or on behalf of the Trustee, substantially in the form
of Exhibit A-3 hereto.
"Class C Daily Principal Amount" shall have the
meaning specified in subsection 4.9(c)(iii) of the Agree-
ment.
"Class C Default Recognition Allocation Per-
centage" shall mean, with respect to each Default Recog-
nition Date, the percentage equivalent of a fraction, the
numerator of which is the Weighted Average Class C In-
vested Amount for the related Monthly Period and the
denominator of which is the Weighted Average Principal
Receivables in the Trust for the related Monthly Period.
"Class C Fixed/Floating Allocation Percentage"
shall mean for any Business Day the percentage equivalent
of a fraction, the numerator of which is the Class C
Invested Amount at the end of the last day of the Revolv-
ing Period and the denominator of which is the greater of
(a) the sum of the aggregate amount of Principal Receiv-
▇▇▇▇▇ and the amount on deposit in the Excess Funding
Account at the end of the preceding Business Day and (b)
the sum of the numerators used to calculate the alloca-
tion percentages with respect to Principal Collections
for all Series.
13
"Class C Floating Allocation Percentage" shall
mean, with respect to any Business Day, the percentage
equivalent of a fraction, the numerator of which is the
Class C Invested Amount as of the end of the preceding
Business Day and the denominator of which is the greater
of (a) the total amount of Principal Receivables in the
Trust and the amount on deposit in the Excess Funding
Account as of the end of the preceding Business Day and
(b) the sum of the numerators with respect to all Classes
of all Series then outstanding used to calculate the
applicable allocation percentage.
"Class C Full Invested Amount" shall mean
$70,698,000.
"Class C Funding Purchase" shall have the
meaning specified in Section 4.14 of the Agreement.
"Class C Interest" shall mean the interest
distributable in respect of the Class C Certificates as
calculated in accordance with subsection 4.6(c) of the
Agreement.
"Class C Interest Adjustment" shall have the
meaning specified in Section 4.6A of the Agreement.
"Class C Interest Shortfall" shall have the
meaning specified in subsection 4.6(c) of the Agreement.
"Class C Invested Amount" shall mean, when used
with respect to any Business Day, an amount equal to (a)
$70,698,000, minus (b) the aggregate amount of principal
payments made to Class C Certificateholders prior to such
Business Day, minus (c) the aggregate amount of Class C
Investor Charge-Offs for all prior Distribution Dates,
minus (d) the aggregate amount of Reallocated Class B
Principal Collections and Reallocated Class C Principal
Collections for which the Class D Invested Amount has not
been reduced for all prior Business Days and plus (e) the
sum of the aggregate amount allocated and available on
all prior Business Days pursuant to subsection
4.9(a)(xii) of the Agreement and, with respect to such
subsection, pursuant to subsections 4.10(a) and (b) and
Section 4.15 of the Agreement, for the purpose of rein-
stating amounts reduced pursuant to the foregoing clauses
(c) and (d).
"Class C Investor Charge-Offs" shall have the
meaning specified in subsection 4.13(b) of the Agreement.
"Class C Investor Percentage" shall mean, for
any Distribution Date, (a) with respect to Finance Charge
Receivables and Receivables in Defaulted Accounts at any
time or Principal Receivables during the Revolving Peri-
od, the Class C Floating Allocation Percentage and (b)
with respect to Principal Receivables during the Amorti-
zation Period, the ABC Fixed/Floating Allocation Percent-
age.
14
"Class C Outstanding Principal Amount" shall
mean, when used with respect to any Business Day, an
amount equal to (a) the principal amount of Class C
Certificates purchased pursuant to any Class C Funding
Purchase pursuant to Section 4.14(b) of the Agreement,
minus (b) the aggregate amount of principal payments made
to Class C Certificateholders prior to such Business Day.
"Class C Percentage" shall mean a fraction the
numerator of which is the Class C Invested Amount and the
denominator of which is the sum of the Class A Invested
Amount, the Class B Invested Amount and the Class C
Invested Amount.
"Class C Pool Factor" shall mean, with respect
to any Record Date, a number carried out to seven decimal
places representing the ratio of the Class C Invested
Amount as of the last day of the related Monthly Period
(determined after taking into account any increases or
decreases in the Class C Invested Amount which will occur
on the following Distribution Date) to the highest Class
C Invested Amount on or prior to the last day of such
Monthly Period during the Revolving Period.
"Class C Principal" shall mean the principal
distributable in respect of the Class C Certificates as
calculated in accordance with subsection 4.7(c) of the
Agreement.
"Class C Principal Payment Commencement Date"
shall mean the earlier of (a) the first Distribution Date
in an Amortization Period on which the Class B Invested
Amount is paid in full or, if there are no Principal
Collections allocable to the Series 1995-1 Certificates
remaining after payments have been made to the Class B
Certificates on such Distribution Date, the Distribution
Date following the Distribution Date on which the Class B
Invested Amount is paid in full and (b) the Distribution
Date following a sale or repurchase of the Receivables as
set forth in Sections 2.4(e), 9.2, 10.2, 12.1 or 12.2 of
the Agreement and Section 3 of this Series Supplement.
"Class C Purchase Agreement" shall mean the
Class C Purchase Agreement, dated as of May 26, 1995,
between the Transferor and the Class C Certificate pur-
chasers specified therein, as the same may from time to
time be amended, restated, modified and in effect.
15
"Class C Required Amount" shall mean the amount
determined by the Servicer on each Business Day equal to
the excess, if any, of (x) the sum of (i) Class C Inter-
est for the then current Monthly Period, (ii) any Carry-
over Class C Interest previously due but not paid to the
Class C Certificateholders on a prior Distribution Date,
(iii) the Class C Floating Allocation Percentage of the
Servicing Fee for the then current Monthly Period, (iv)
the Class C Floating Allocation Percentage of the Default
Amount, if any, for such Business Day and, to the extent
not previously paid, for any previous Business Day in
such Monthly Period, (v) the Class C Percentage of the
Series Allocation Percentage of the Adjustment Payment
required to be made by the Transferor but not made on the
related Transfer Date and (vi) the unreimbursed amount by
which the Class C Invested Amount has been reduced on
prior Business Days pursuant to clauses (c) and (d) of
the definition of Class C Invested Amount over (y) the
Available Series 1995-1 Finance Charge Collections plus
any Excess Finance Charge Collections from other Series
and any Transferor Finance Charge Collections allocated
with respect to the amounts described in clauses (x)(i)
through (v).
"Class D Certificateholder" shall mean the
Person in whose name a Class D Certificate is registered
in the Certificate Register.
"Class D Certificateholders' Interest" shall
mean the portion of the Series 1995-1 Certificateholders'
Interest evidenced by the Class D Certificate.
"Class D Certificate" shall mean any of the
certificates executed by the Transferor and authenticated
by or on behalf of the Trustee, substantially in the form
of Exhibit A-4 hereto.
"Class D Daily Principal" shall have the mean-
ing specified in Section 4.7(d) of the Agreement.
"Class D Default Recognition Allocation Per-
centage" shall mean with respect to each Default Recogni-
tion Date, the percentage equivalent of a fraction, the
numerator of which is the Weighted Average Class D In-
vested Amount for the related Monthly Period and the
denominator of which is the Weighted Average Principal
Receivables in the Trust for the related Monthly Period.
16
"Class D Fixed/Floating Allocation Percentage"
shall mean for any Business Day the percentage equivalent
of a fraction, the numerator of which is the Class D
Invested Amount at the end of the last day of the Revolv-
ing Period and the denominator of which is the greater of
(a) the sum of the aggregate amount of Principal Receiv-
▇▇▇▇▇ and the amount on deposit in the Excess Funding
Account as of the end of the preceding Business Day and
(b) the sum of the numerators used to calculate the
allocation percentages with respect to Principal Collec-
tions for all Series.
"Class D Floating Allocation Percentage" shall
mean with respect to any Business Day the percentage
equivalent of a fraction, the numerator of which is the
Class D Invested Amount on such day after taking into
account all adjustments of the Class D Invested Amount on
such day and the denominator of which is the greater of
(a) the total amount of Principal Receivables and the
amount on deposit in the Excess Funding Account at the
end of the preceding Business Day and (b) the sum of the
numerators with respect to all Classes of all Series then
outstanding used to calculate the applicable allocation
percentage.
"Class D Invested Amount" shall mean, when used
with respect to any Business Day, an amount equal to (a)
upon the initial issuance of the Class D Certificate the
initial amount designated by the Transferor (which shall
not be less than the Stated Class D Amount), plus (b) the
aggregate principal amount of any Additional Class D
Invested Amounts pursuant to Section 6.16 of the Agree-
ment, minus (c) the aggregate amount of principal pay-
ments made to Class D Certificateholders prior to such
Business Day, minus (d) the aggregate amount of Class D
Investor Charge-Offs for all prior Distribution Dates,
minus (e) the aggregate amount of Reallocated Principal
Collections for all prior Business Days, plus (f) the sum
of the aggregate amount allocated and available on all
prior Business Days pursuant to subsection 4.9(a)(xiii)
of the Agreement and, with respect to such subsection,
pursuant to subsections 4.10(a) and (b) of the Agreement,
for the purpose of reinstating amounts reduced pursuant
to the foregoing clauses (d) and (e).
17
"Class D Investor Charge-Offs" shall have the
meaning specified in subsection 4.13(a) of the Agreement.
"Class D Investor Default Amount" shall mean
(i) on any Business Day other than a Default Recognition
Date, for any Business Day an amount equal to the product
of (a) the Class D Floating Allocation Percentage appli-
cable on such Business Day and (b) the aggregate Default
Amount identified since the prior reporting date and (ii)
on any Default Recognition Date, an amount equal to the
product of (a) the sum of the Class D Default Recognition
Allocation Percentage applicable on such Default Recogni-
tion Date and (b) the Default Amount with respect to such
Default Recognition Date.
"Class D Investor Percentage" shall mean, for
any Business Day, (a) with respect to Finance Charge
Receivables and Receivables in Defaulted Accounts at any
time or Principal Receivables during the Revolving Peri-
od, the Class D Floating Allocation Percentage and (b)
with respect to Principal Receivables during the Amorti-
zation Period, the Class D Fixed/Floating Allocation
Percentage.
"Class D Maximum Required Amount" shall mean
$153,178,000.
"Class D Outstanding Principal Amount" shall
mean, when used with respect to any Business Day, an
amount equal to (a) upon the initial issuance of the
Class D Certificate, the initial amount designated by the
Transferor (which shall not be less than the Stated Class
D Amount), plus (b) the aggregate principal amount of any
Additional Class D Invested Amounts pursuant to Section
6.16 of the Agreement, minus (c) the aggregate amount of
principal payments made to Class D Certificateholders
prior to such Business Day.
"Class D Principal" shall mean the principal
distributable in respect of the Class D Certificate as
specified in subsection 4.7(d) of the Agreement.
"Class D Principal Payment Commencement Date"
shall mean the earlier of (a) the first Distribution Date
on which the Class C Invested Amount is paid in full or,
if there are no Principal Collections allocable to the
Series 1995-1 Certificates remaining after payments have
been made to the Class C Certificates on such Distribu-
tion Date, the Distribution Date following the Distribu-
tion Date on which the Class C Invested Amount is paid in
full and (b) the Distribution Date following a sale or
repurchase of the Receivables as set forth in Sections
2.4(e), 9.2, 10.2, 12.1 and 12.2 of the Agreement and
Section 3 of this Series Supplement.
18
"Closing Date" shall mean the date of initial
issuance of the Additional Certificates.
"Collateral Trust Agreement" shall mean the
Amended and Restated Collateral Trust Agreement dated as
of May 26, 1995, between Fingerhut Owner Trust and State
Street Bank and Trust Company, as Collateral Trustee, as
the same may from time to time be amended, restated,
modified and in effect.
"Commercial Paper" shall mean the promissory
notes issued by the Fingerhut Owner Trust in the commer-
cial paper market pursuant to the Liquidity Agreement and
the Depositary Agreement.
"Cost of Funds" shall mean with respect to any
day the sum of (a) the greater of (i) the OT Allocation
Percentage of the sum of interest on Loans outstanding
and the Interest Component of outstanding Commercial
Paper accrued with respect to such day and (ii) the
Administrator's written estimate delivered to the Trustee
on the first Business Day preceding the first day of the
then current Monthly Period, as may be modified from time
to time during such Monthly Period, of the OT Allocation
Percentage of the average daily amount of interest that
will accrue on the Loans and Commercial Paper during such
Monthly Period; provided, however, that the amount deter-
mined pursuant to this clause (a) (ii) shall not exceed
on any day (I) the product of (x) the OT Allocation
Percentage of the sum of the aggregate outstanding prin-
cipal amount of the Loans and the aggregate Principal
Component of the Commercial Paper outstanding on such
Business Day after giving effect to all transactions on
such Business Day, (y) the greater of (A) LIBOR prevail-
ing on such preceding Business Day plus .75% and (B) 12%
and (z) a fraction the numerator of which is one and the
denominator of which is the actual number of days in the
then current calendar year minus (II) the sum of the
amount determined pursuant to clause (b) below and the OT
Allocation Percentage of the Total Program Fees for such
day, (b) the OT Allocation Percentage of the amount of
any Commitment Fees (as defined in the Liquidity Agree-
ment) accrued with respect to such day pursuant to Sec-
tion 2.9 of the Liquidity Agreement with respect to
Utilized Available Commitments (as defined in the Liquid-
ity Agreement), and (c) the Series 1995-1 Allocation
Percentage of the Daily Portion of the Interest Amount
(as defined in the Owner Trust Agreement) accrued with
respect to such day.
19
"Daily Portion" shall mean, with respect to any
amount determined pursuant hereto, the product of such
amount and a fraction the numerator of which shall be the
number of days from and including the preceding Business
Day to but excluding such Business Day and the denomina-
tor of which shall be the number of days in the then
current Monthly Period.
"Defeasance Account" shall have the meaning
specified in Section 9A of this Series Supplement.
"Defeasance Account Balance" shall mean, with
respect to any date of determination, the principal
amount, if any, on deposit in the Defeasance Account on
such date of determination.
"Depositary" shall mean The First National Bank
of Chicago, any successor to the Depositary or such other
banking institution as the Fingerhut Owner Trust shall
appoint, with the prior written consent of the Majority
Lenders (as defined in the Liquidity Agreement).
"Depositary Agreement" shall mean the Amended
and Restated Depositary Agreement, dated as of May 26,
1995, between the Fingerhut Owner Trust and the Deposi-
tary, as the same may from time to time be amended,
restated, modified and in effect.
"Distribution Date" shall mean, with respect to
the Previously Issued Certificates, July 20, 1995, and
the twentieth day of each month thereafter, or if such
day is not a Business Day, the next succeeding Business
Day and, with respect to the Additional Certificates,
October 21, 1996 and the twentieth day of each month
thereafter, or if such day is not a Business Day, the
next succeeding Business Day; provided, however, that
solely with respect to the payment of principal with
respect to the Class B Certificates, Class C Certificates
and Class D Certificate during the Amortization Period,
Distribution Date shall mean the first Business Day of
each Monthly Period beginning with the Monthly Period
next succeeding the Monthly Period in which the Amortiza-
tion Period Commencement Date occurs; provided further,
that the final Distribution Date with respect to the
payment of principal and interest shall be the Scheduled
Series 1995-1 Termination Date.
"Early Amortization Period" shall mean the
period beginning on the day on which a Pay Out Event
occurs or is deemed to have occurred and ending on the
earlier of (i) the date on which the Class A Invested
Amount, the Class B Invested Amount, the Class C Invested
Amount and the Class D Invested Amount have been paid in
full and (ii) the Series 1995-1 Termination Date.
20
"Election Date" shall have the meaning speci-
fied in subsection 6.17(a) of the Agreement.
"Election Notice" shall have the meaning speci-
fied in subsection 6.17(a) of the Agreement.
"Enhancement" shall mean, with respect to the
Class A Certificate, the subordination of the Class B
Invested Amount, the Class C Invested Amount, and the
Class D Invested Amount, with respect to the Class B
Certificates, the subordination of the Class C Invested
Amount and the Class D Invested Amount, and with respect
to the Class C Certificates, the subordination of the
Class D Invested Amount.
"Excess Finance Charge Collections" shall mean,
with respect to any Business Day, as the context re-
quires, either (x) the amount described in subsection
4.9(a)(xix) of the Agreement allocated to the Series
1995-1 Certificates but available to cover shortfalls in
amounts paid from Finance Charge Collections for other
Series, if any, or (y) the aggregate amount of Finance
Charge Collections allocable to other Series in excess of
the amounts necessary to make required payments with
respect to such Series, if any, and available to cover
shortfalls with respect to the Series 1995-1 Certifi-
▇▇▇▇▇.
"Extension" shall mean the procedure by which
the Investor Certificateholders consent to the extension
of the Revolving Period to the new Amortization Period
Commencement Date set forth in the Extension Notice,
pursuant to Section 6.17 of the Agreement.
"Extension Date" shall mean April 23, 1999 or
if an Extension has already occurred, the date of the
next Extension Date set forth in the Extension Notice
relating to the Extension then in effect (or, if any such
date is not a Business Day, the next preceding Business
Day).
"Extension Notice" shall have the meaning
specified in subsection 6.17(a) of the Agreement.
"Extension Opinion" shall have the meaning
specified in subsection 6.17(a) of the Agreement.
"Extension Tax Opinion" shall have the meaning
specified in subsection 6.17(a) of the Agreement.
"Face Amount" shall mean (i) with respect to
Commercial Paper issued on a discount basis, the face
amount stated therein, and (ii) with respect to Commer-
cial Paper which is interest-bearing, the principal
amount of and interest accrued and to accrue on such
Commercial Paper to its stated maturity.
"Fingerhut Owner Trust" shall mean the Delaware
business trust created pursuant to the Owner Trust Agree-
ment.
21
"Fixed/Floating Allocation Percentage" shall
mean for any Business Day the percentage equivalent of a
fraction, the numerator of which is the Invested Amount
at the end of the last day of the Revolving Period and
the denominator of which is the greater of (a) the sum of
the aggregate amount of Principal Receivables and the
amount on deposit in the Excess Funding Account as of the
end of the preceding Business Day and (b) the sum of the
numerators with respect to all Classes of all Series then
outstanding used to calculate the applicable allocation
percentage; provided, however, that during any Class A
Pay Down Period, the numerator used in the above calcula-
tion shall be the sum of the Class A Invested Amount, the
Class B Invested Amount and the Class C Invested Amount
as of the day immediately preceding the commencement of
the Class A Pay Down Period.
"Floating Allocation Percentage" shall mean for
any Business Day the sum of the applicable Class A Float-
ing Allocation Percentage, Class B Floating Allocation
Percentage, Class C Floating Allocation Percentage, and
Class D Floating Allocation Percentage for such Business
Day.
"Initial Closing Date" shall mean the date of
initial issuance of the Previously Issued Certificates.
"Interest Accrual Period" shall mean a Monthly
Period and, with respect to a Distribution Date, the
preceding Monthly Period; provided, however, that the
initial Interest Accrual Period for the Previously Issued
Certificates shall be the period from the Initial Closing
Date to and including the last day of the Monthly Period
preceding the initial Distribution Date for the Previous-
ly Issued Certificates, and the initial Interest Accrual
Period with respect to the Additional Certificates shall
be the period from the Closing Date to and including the
last day of the Monthly Period preceding the initial
Distribution Date for the Additional Certificates.
"Interest Component" shall mean, with respect
to any Commercial Paper (i) issued on a discount basis,
the portion of the Face Amount of such Commercial Paper
representing the discount incurred in respect thereof and
(ii) issued on an interest-bearing basis, the interest
payable on such Commercial Paper (in each case including
the related Commercial Paper dealer fees payable in
connection with the issuance of such Commercial Paper).
22
"Interest Rate Caps" shall mean the interest
rate caps provided pursuant to Cap Agreements by one or
more Cap Providers to the Trustee on behalf of any of the
Certificateholders which shall entitle the Trust to
receive monthly payments equal to the product of (i) the
positive difference, if any, between LIBOR in effect for
each applicable Interest Period and 12%, (ii) the notion-
al amount of such interest rate cap and (iii) the actual
number of days in the Interest Period divided by 360.
"Invested Amount" shall mean, when used with
respect to any Business Day, an amount equal to the sum
of (a) the Class A Invested Amount as of such Business
Day, (b) the Class B Invested Amount as of such Business
Day, (c) the Class C Invested Amount as of such Business
Day and (d) the Class D Invested Amount as of such Busi-
ness Day; provided, however, that for purposes of deter-
mining the Servicing Fee and the Aggregate Invested
Amount, the Invested Amount shall mean an amount equal to
the sum of (a) the Class A Adjusted Invested Amount as of
such Business Day, (b) the Class B Invested Amount as of
such Business Day, (c) the Class C Invested Amount as of
such Business Day and (d) the Class D Invested Amount as
of such Business Day.
"Investment Earnings" shall mean, with respect
to any Business Day, the investment earnings on amounts
on deposit in (i) the Payment Reserve Account, deposited
in the Collection Account pursuant to subsection 4.17(c)
and (ii) the Defeasance Account, deposited in the Collec-
tion Account pursuant to subsection 9A(a).
"Investment Period" shall have the meaning
specified in Section 4.14 of this Series Supplement.
"Investor Certificateholder" shall mean the
Holder of record of an Investor Certificate of Series
1995-1.
"Investor Certificates" shall mean the Class A
Certificate, the Class B Certificates, the Class C Cer-
tificates and the Class D Certificate.
"Investor Charge-Offs" shall mean the sum of
Class A Investor Charge-Offs, Class B Investor Charge-
Offs, Class C Investor Charge-Offs and Class D Investor
Charge-Offs.
"Investor Default Amount" shall mean, with
respect to each Business Day, an amount equal to the
product of the Default Amount identified since the prior
reporting date and the Floating Allocation Percentage
applicable for such Business Day.
23
"Investor Percentage" shall mean for any Busi-
ness Day, (a) with respect to Finance Charge Receivables
and Receivables in Defaulted Accounts at any time or
Principal Receivables during the Revolving Period (ex-
cept, with respect to the Class A Certificates, for any
portion of the Revolving Period that occurs during the
Class A Pay Down Period), the Floating Allocation Per-
centage and (b) with respect to Principal Receivables
during the Amortization Period and the Class A Pay Down
Period, the Fixed/Floating Allocation Percentage.
"Investor Reserve Account" shall have the
meaning specified in Section 4.18 hereof.
"LIBOR" shall mean, for any Interest Accrual
Period, the London interbank offered quotations for one-
month Dollar deposits determined by the Trustee for each
Interest Accrual Period in accordance with the provisions
of Section 4.16 of the Agreement.
"LIBOR Determination Date" shall mean the
second Business Day prior to the commencement of each
Interest Accrual Period; provided, however, that with
respect to the initial Interest Accrual Period for the
Class C Certificates that are Previously Issued Certifi-
▇▇▇▇▇, LIBOR Determination Date shall mean a date select-
ed by the Transferor which shall not be in excess of two
Business Days prior to the date of initial issuance of
Certificates of the applicable Class; provided, further,
that with respect to the initial Interest Accrual Period
for the Class B Certificates and the Class C Certificates
that are Additional Certificates, LIBOR Determination
Date shall mean August 29, 1996. For purposes of this
definition, a Business Day is any day on which banks in
London and New York are open for the transaction of
international business.
"Liquidity Agreement" shall mean the Amended
and Restated Liquidity Agreement, dated as of May 26,
1995, by and among the Fingerhut Owner Trust, the several
banks signatory thereto, and Chemical Bank, as Adminis-
trative Agent, as the same may from time to time be
amended, restated, modified and in effect.
"Liquidity Bank" shall mean any liquidity bank
providing liquidity for the Commercial Paper from time to
time pursuant to the Liquidity Agreement, as evidenced by
its execution thereof, and any successor or assignee
liquidity banks under the Liquidity Agreement.
"Loans" shall mean any loans made pursuant to
the Liquidity Agreement.
"Metris" shall mean Metris Companies Inc., a
Delaware Corporation.
"Metris Receivables Note" or "FFSRI Note" shall
have the meaning specified in Section 18 of this Series
Supplement.
"Metris Receivables Note Required Amount" or
"FFSRI Note Required Amount" shall have the meaning
specified in Section 18 of this Series Supplement.
24
"Minimum Retained Percentage" shall mean 2%.
"Minimum Transferor Percentage" shall mean 0%;
provided, however, that in certain circumstances such
percentage may be increased.
"Monthly Period" shall have the meaning speci-
fied in the Agreement, except that the first Monthly
Period with respect to the Previously Issued Certificates
shall begin on and include the Initial Closing Date and
shall end on and include June 30, 1995.
"Negative Carry Amount" shall have the meaning
specified in subsection 4.10(a) of the Agreement.
"Net ABC Revolving Principal Collections" shall
have the meaning specified in Section 4.9(b) of the
Agreement.
"OT Allocation Percentage" shall mean, on any
date of determination, the percentage equivalent of a
fraction the numerator of which is the Class A Outstand-
ing Principal Amount minus the Series 1995-1 Allocation
Percentage of the Aggregate OTC Amount (as defined in the
Liquidity Agreement) and the denominator of which is the
sum of the Class A Outstanding Principal Amount and all
other outstanding principal amounts of all other certifi-
▇▇▇▇▇ or securities or interests in receivables held by
the Owner Trust less the Aggregate OTC Amount (as defined
in the Liquidity Agreement) then outstanding; provided,
however, that if the denominator of the foregoing frac-
tion is zero, then the OT Allocation Percentage shall be
zero.
"Owner Trust Agreement" shall mean the Amended
and Restated Owner Trust Agreement, dated as of May 26,
1995, between Fingerhut Receivables, Inc., as Depositor,
and Wilmington Trust Company as Owner Trustee, as the
same may from time to time be amended, restated, modified
and in effect.
"Paying Agent" shall mean, for the Series
1995-1 Certificates, the Trustee.
"Payment Reserve Account" shall have the mean-
ing specified in subsection 4.17 of the Agreement.
"Pay Out Commencement Date" shall mean the date
on which a Trust Pay Out Event is deemed to occur pursu-
ant to Section 9.1 of the Agreement or a Series 1995-1
Pay Out Event is deemed to occur pursuant to Section 8 of
this Series Supplement.
"Percentage" for each Liquidity Bank shall mean
its "Commitment Percentage" as defined in Section 1.1 of
the Liquidity Agreement.
25
"Portfolio Yield" shall mean for the Series
1995-1 Certificates, with respect to any Monthly Period,
the annualized percentage equivalent of a fraction, the
numerator of which is an amount equal to the sum of the
aggregate amount of Available Series 1995-1 Finance
Charge Collections for such Monthly Period (not including
the amounts on deposit in the Payment Reserve Account, if
any and amounts on deposit in the Investor Reserve Ac-
count, if any, calculated on a cash basis, minus the
aggregate Investor Default Amount for such Monthly Period
and the Series Allocation Percentage of any Adjustment
Payments which the Transferor is required but fails to
make pursuant to the Pooling and Servicing Agreement for
such Monthly Period, and the denominator of which is the
average daily Invested Amount.
"Previously Issued Certificates" shall have the
meaning specified in the third WHEREAS clause hereof.
"Principal Shortfalls" shall mean on any Busi-
ness Day (i) prior to the Amortization Period Commence-
ment Date other than during the Class A Pay Down Period,
zero, (ii) after the Amortization Period Commencement
Date, the Invested Amount of the class then receiving
principal payments after the application of Principal
Collections on such Business Day and (iii) during the
Class A Pay Down Period, the Class A Invested Amount
after the application of Principal Collections on such
Business Day.
"Qualified Substitute Arrangement" shall have
the meaning specified in Section 3A(d) of this Series
Supplement.
"Rating Agency" shall mean Standard & Poor's
Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇, and ▇▇▇▇▇'▇
Investors Service, Inc.
"Reallocated Class B Principal Collections"
shall have the meaning specified in subsection 4.15(c) of
the Agreement.
"Reallocated Class C Principal Collections"
shall have the meaning specified in subsection 4.15(b) of
the Agreement.
26
"Reallocated Class D Principal Collections"
shall have the meaning specified in subsection 4.15(a) of
the Agreement.
"Reallocated Principal Collections" shall mean
the sum of Reallocated Class B Principal Collections,
Reallocated Class C Principal Collections and Reallocated
Class D Principal Collections.
"Reference Banks" shall mean four major banks
in the London interbank market selected by the Trustee.
"Replacement Interest Rate Cap" shall mean one
or more Interest Rate Caps, which in combination with all
other Interest Rate Caps then in effect, after giving
effect to any planned cancellations of any presently
outstanding Interest Rate Caps satisfies the Transferor's
covenant contained in Section 3A of this Series Supple-
ment to maintain Interest Rate Caps.
"Required Amount" shall have the meaning speci-
fied in Section 4.10 of the Agreement.
"Reserve Application Date" shall mean the last
Business Day of each Monthly Period and each Determina-
tion Date.
"Revolving Period" shall mean the period from
and including the Initial Closing Date (with respect to
the Previously Issued Certificates) or the Closing Date
(with respect to the Additional Certificates), to but not
including, the Amortization Period Commencement Date.
"Scheduled Series 1995-1 Termination Date"
shall mean May 30, 2003, unless a different date shall be
set forth in any Extension Notice.
"Series 1995-1" shall mean the Series of the
Metris Master Trust (formerly Fingerhut Financial Servic-
es Master Trust) represented by the Series 1995-1 Certif-
icates.
"Series 1995-1 Allocation Percentage" shall
mean, on any date of determination, the percentage equiv-
alent of a fraction the numerator of which is the Class A
Maximum Invested Amount and the denominator of which is
the sum of the Class A Maximum Invested Amount and the
other maximum invested amounts relating to all other
certificates, securities or interests in collateral held
by the Fingerhut Owner Trust.
27
"Series 1995-1 Non-Utilized Allocation Percent-
age" shall mean, on any date of determination, the per-
centage equivalent of a fraction the numerator of which
is the Class A Maximum Invested Amount minus the sum of
(x) the Class A Outstanding Principal Amount and (y) the
Series 1995-1 Allocation Percentage of the Aggregate OTC
Amount (as defined in the Liquidity Agreement) and the
denominator of which is the sum of (i) the Class A Maxi-
mum Invested Amount minus the Class A Outstanding Princi-
pal Amount plus (ii) the other maximum invested amounts
relating to all other certificates, securities or inter-
ests in collateral held by the Fingerhut Owner Trust
minus the invested amounts or principal amounts relating
to all other series or interests in collateral held by
the Fingerhut Owner Trust minus (iii) the Aggregate OTC
Amount (as defined in the Liquidity Agreement).
"Series 1995-1 Certificates" shall mean the
Class A Certificate, the Class B Certificates, the Class
C Certificates and the Class D Certificate.
"Series 1995-1 Certificateholder" shall mean
the holder of record of any Series 1995-1 Certificate.
"Series 1995-1 Certificateholders' Interest"
shall have the meaning specified in Section 4.4 of the
Agreement.
"Series 1995-1 Pay Out Event" shall have the
meaning specified in Section 8 of this Series Supplement.
"Series 1995-1 Termination Date" shall mean the
earlier to occur of (i) the day after the Distribution
Date on which the Series 1995-1 Certificates are paid in
full, or (ii) the Scheduled Series 1995-1 Termination
Date.
"Series Servicing Fee Percentage" shall mean
2.00% per annum.
"Servicing Fee" shall mean for any Business
Day, an amount equal to the product of (i) a fraction the
numerator of which is the actual number of days from but
excluding the next preceding Business Day to and includ-
ing such Business Day and the denominator of which is 365
or 366, as the case may be, (ii) the applicable Series
Servicing Fee Percentage and (iii) the Invested Amount on
such Business Day after giving effect to all transactions
on such Business Day.
"Shared Principal Collections" shall mean, as
the context requires, either (a) the amount allocated to
the Series 1995-1 Certificates which, in accordance with
subsections 4.9(b), 4.9(c)(v), and 4.9(e)(ii) of the
Agreement, may be applied in accordance with Section
4.3(d) of the Agreement or (b) the amounts allocated to
the investor certificates (other than Transferor Retained
Certificates) of other Series which the applicable Series
Supplements for such Series specify are to be treated as
"Shared Principal Collections" and which may be applied
to cover Principal Shortfalls with respect to the Series
1995-1 Certificates.
28
"Specified Investor Reserve Amount" shall mean
an amount equal to 0% of the sum of the Class A Outstand-
ing Principal Amount, the Class B Outstanding Principal
Amount, the Class C Outstanding Principal Amount and the
Class D Outstanding Principal Amount; provided, however,
that the percentage specified above shall be 2% from the
date hereof until a date to be specified by the Transfer-
or on which date such percentage may be reduced to a
lesser percentage (but not less than 0%) so long as the
Trustee shall have received written confirmation from
Standard & Poor's that the reduction of such percentage
will not cause Standard & Poor's to lower or withdraw its
then current rating of the Investor Certificates.
"Stated Class D Amount" shall mean on any date
of determination the greater of (i) zero and (ii) a
number rounded to the nearest dollar obtained by multi-
plying the sum of the Class A Invested Amount, the Class
B Invested Amount and the Class C Invested Amount by a
fraction the numerator of which is 13 and the denominator
of which is 87; provided, however, that in no event shall
the Stated Class D Amount exceed the Class D Maximum
Required Amount; and provided further that during any
Early Amortization Period or Class A Pay Down Period the
Stated Class D Amount shall be equal to the Stated Class
D Amount immediately preceding the commencement of the
Early Amortization Period or Class A Pay Down Period.
"Termination Payment Date" shall mean the
earlier of the first Distribution Date following the
liquidation or sale of the Receivables as a result of an
Insolvency Event and the occurrence of the Scheduled
Series 1995-1 Termination Date.
"Total Program Fees" shall mean with respect to
any day, recurring fees payable to the Collateral Trustee
(as defined in the Liquidity Agreement), the Owner Trust-
ee (as defined in the Liquidity Agreement), the Adminis-
trative Agent (as defined in the Liquidity Agreement) and
the Depositary and Basic Administration Fees (as defined
in the Collateral Trust Agreement) that arise or accrue
on such day.
"Transferor Finance Charge Collections" shall
mean on any Business Day the product of (a) the Finance
Charge Collections for such Business Day, (b) the Trans-
feror Percentage and (c) the Series Allocation Percent-
age.
29
"Transferor Retained Certificates" shall mean
investor certificates of any Series, including the Class
D Certificate, which the Transferor retains, but only to
the extent that and for so long as the Transferor is the
Holder of such Certificates.
"Transferor Retained Finance Charge Collec-
tions" shall mean with respect to each Business Day other
than a Default Recognition Date, the amount specified in
subsection 4.9(a)(xix).
"Weighted Average Class A Adjusted Invested
Amount" shall mean with respect to any Monthly Period the
weighted average Class A Adjusted Invested Amount based
on the Class A Adjusted Invested Amount outstanding on
each Business Day after giving effect to all transactions
on such Business Day from but excluding the Default
Recognition Date related to the preceding Monthly Period
to and including the Default Recognition Date with re-
spect to such Monthly Period.
"Weighted Average Class B Invested Amount"
shall mean with respect to any Monthly Period the weight-
ed average Class B Invested Amount based on the Class B
Invested Amount outstanding on each Business Day after
giving effect to all transactions on such Business Day
from but excluding the Default Recognition Date related
to the preceding Monthly Period to and including the
Default Recognition Date with respect to such Monthly
Period.
"Weighted Average Class C Invested Amount"
shall mean with respect to any Monthly Period the weight-
ed average Class C Invested Amount based on the Class C
Invested Amount outstanding on each Business Day after
giving effect to all transactions on such Business Day
from but excluding the Default Recognition Date related
to the preceding Monthly Period to and including the
Default Recognition Date with respect to such Monthly
Period.
"Weighted Average Class D Invested Amount"
shall mean with respect to any Monthly Period the weight-
ed average Class D Invested Amount based on the Class D
Invested Amount outstanding on each Business Day after
giving effect to all transactions on such Business Day
from but excluding the Default Recognition Date related
to the preceding Monthly Period to and including the
Default Recognition Date with respect to such Monthly
Period.
"Weighted Average Principal Receivables" shall
mean with respect to any Monthly Period the weighted
average sum of the total amount of Principal Receivables
and the amount on deposit in the Excess Funding Account
on each Business Day after giving effect to all transac-
tions on such Business Day from but excluding the Default
Recognition Date related to the preceding Monthly Period
to and including the Default Recognition Date with re-
spect to such Monthly Period.
30
SECTION 3. Reassignment Terms. The Series
1995-1 Certificates shall be subject to termination by
the Transferor at its option, in accordance with the
terms specified in subsection 12.2(a) of the Agreement,
on any Distribution Date on or after the Distribution
Date on which the sum of the Class A Invested Amount, the
Class B Invested Amount and the Class C Invested Amount
is reduced to an amount less than or equal to 10% of the
sum of the highest Class A Invested Amount, the highest
Class B Invested Amount and the highest Class C Invested
Amount during the Revolving Period. The deposit required
in connection with any such termination and final distri-
bution shall be equal to the sum of the Class A Invested
Amount, the Class B Invested Amount and the Class C
Invested Amount plus accrued and unpaid interest on the
Series 1995-1 Certificates through the day prior to the
Distribution Date on which the final distribution occurs.
SECTION 3A. Conveyance of Interest in Interest
Rate Cap; Cap Proceeds Account. (a) The Transferor
hereby covenants and agrees that, on or prior to the
issuance of any of the Class C Certificates, it shall
obtain and at all times prior to the close of business on
the Series 1995-1 Termination Date maintain one or more
Interest Rate Caps whose notional amounts singly or taken
as a group equal or exceed the Aggregate ABC Principal
Amount. The Transferor hereby assigns, sets-over, con-
veys, pledges and grants a security interest and lien
(free and clear of all other Liens) to the Trustee for
the benefit of the Series 1995-1 Certificateholders, in
all of the Transferor's right, title and interest now
existing or hereafter arising in and to the Cap Agree-
ments and the Interest Rate Caps arising thereunder,
together with the Cap Proceeds Account and all other
proceeds thereof, as collateral security for the benefit
of the Series 1995-1 Certificateholders. The Transferor
hereby further agrees to execute all such instruments,
documents and financing statements and take all such
further action requested by the Trustee to evidence and
perfect the assignment of the Cap Agreements and the
Interest Rate Caps pursuant to this Section 3A. The
Transferor agrees that each Interest Rate Cap shall
provide for payments to the Trustee and that the Trust's
interest in respect of such payments shall be deposited
into the Cap Proceeds Account.
(b) The Trustee, for the benefit of the Series
1995-1 Certificateholders, shall establish and maintain
with a Qualified Institution, which may be the Trustee,
in the name of the Trustee, on behalf of the Certificate-
holders, a certain segregated trust account (the "Cap
Proceeds Account"). All amounts paid pursuant to the
Interest Rate Caps or any Qualified Substitute Arrange-
ment on any Business Day (a "Cap Settlement Date") shall
be deposited in the Cap Proceeds Account. Any amounts
paid pursuant to the Interest Rate Caps or any Qualified
31
Substitute Arrangement on the first Business Day of any
Monthly Period shall be treated for all purposes herein,
including application in accordance with Section 4.9 of
the Agreement, as if they had been received on the last
Business Day of the preceding Monthly Period. Funds in
the Cap Proceeds Account shall be invested at the direc-
tion of the Servicer, in Cash Equivalents with maturities
not later than the next succeeding Business Day. Any
earnings on such invested funds shall be deposited and
held in the Cap Proceeds Account and applied in the same
manner and priority as payments pursuant to the Interest
Rate Caps.
(c) In the event that the Cap Provider de-
faults in its obligation to make a payment to the Trustee
under one or more Cap Agreements on any Cap Settlement
Date, the Trustee shall make a demand on such Cap Provid-
er, or any guarantor, if applicable, demanding payment by
12:30 p.m., New York time, on such date. The Trustee
shall give notice to the Certificateholders upon the
continuing failure by any Cap Provider to perform its
obligation during the two Business Days following a
demand made by the Trustee on such Cap Provider, and
shall take such action with respect to such continuing
failure directed to be taken by the Certificateholders.
(d) In the event that the senior unsecured
debt rating of a Cap Provider is withdrawn or reduced
below AA by Standard & Poor's or is withdrawn or reduced
below Aa2 by Moody's, then within 30 days after receiving
notice of such decline in the creditworthiness of the Cap
Provider as determined by the Rating Agency, either (x)
the Cap Provider, with the prior written confirmation of
the Rating Agency that such arrangement will not result
in the reduction or withdrawal of the rating of the Class
A Certificates, the Class B Certificates or the Class C
Certificates, will enter into an arrangement the purpose
of which shall be to assure performance by the Cap Pro-
vider of its obligations under the Interest Rate Cap; or
(y) the Servicer shall at its option either (i) with the
prior written confirmation of the Rating Agency that such
action will not result in a reduction or withdrawal of
the rating of the Class A Certificates, the Class B
32
Certificates or the Class C Certificates, (A) cause the
Cap Provider to pledge securities in the manner provided
by applicable law or (B) if permitted to do so, itself
pledge or cause to be pledged securities, which shall be
held by the Trustee or its agent free and clear of the
Lien of any third party, in a manner conferring on the
Trustee a perfected first Lien in such securities secur-
ing the Cap Provider's performance of its obligations
under the applicable Interest Rate Cap, or (ii) provided
that a Replacement Interest Rate Cap or Qualified Substi-
tute Arrangement meeting the requirements of Section
3A(e) has been obtained, direct the Trustee (A) to pro-
vide written notice to the Cap Provider of its intention
to terminate the applicable Interest Rate Cap within such
30-day period and (B) to terminate the applicable Inter-
est Rate Cap within such 30-day period, to request the
payment to it of all amounts due to the Trust under the
applicable Interest Rate Cap through the termination date
and to deposit any such amounts so received, on the day
of receipt, to the Cap Proceeds Account for the benefit
of the Certificateholders, or (iii) establish any other
arrangement (including an arrangement or arrangements in
addition to or in substitution for any prior arrangement
made in accordance with the provisions of this Section
3A(d)) satisfactory to the Rating Agency such that the
Rating Agency will not reduce or withdraw the rating of
the Class A Certificates, the Class B Certificates or the
Class C Certificates (a "Qualified Substitute Arrange-
ment"); provided, however, that in the event at any time
any alternative arrangement established pursuant to
clause (x) or (y)(i) or (y)(iii) above shall cease to be
satisfactory to the Rating Agency then the provisions of
this Section 3A(d) shall again be applied and in connec-
tion therewith the 30-day period referred to above shall
commence on the date the Servicer receives notice of such
cessation or termination, as the case may be.
(e) Unless an alternative arrangement pursuant
to clause (x) or (y)(i) of Section 3A(d) is being estab-
lished, the Servicer shall use its best efforts to obtain
a Replacement Interest Rate Cap or Qualified Substitute
Arrangement meeting the requirements of this Section
3A(e) during the 30-day period referred to in Section
3A(d). The Trustee shall not terminate the Interest Rate
Cap unless, prior to the expiration of the 30-day period
referred to in said Section 3A(d), the Servicer delivers
to the Trustee (i) a Replacement Interest Rate Cap or
Qualified Substitute Arrangement, (ii) to the extent
applicable, an Opinion of Counsel as to the due authori-
zation, execution and delivery and validity and enforce-
ability of such Replacement Interest Rate Cap or Quali-
fied Substitute Arrangement, as the case may be, and
(iii) a letter from the Rating Agency confirming that the
termination of the Interest Rate Cap and its replacement
with such Replacement Interest Rate Cap or Qualified
Substitute Arrangement will not adversely affect its
rating of the Class A Certificates, the Class B Certifi-
▇▇▇▇▇ or the Class C Certificates.
33
(f) The Servicer shall notify the Trustee and
the Rating Agency within five Business Days after obtain-
ing knowledge that the senior unsecured debt rating of
the Cap Provider has been withdrawn or reduced by ▇▇▇▇-
dard & Poor's or Moody's.
(g) Notwithstanding the foregoing, the
Servicer may at any time obtain a Replacement Interest
Rate Cap, provided that the Servicer delivers to the
Trustee (i) an Opinion of Counsel as to the due authori-
zation, execution and delivery and validity and enforce-
ability of such Replacement Interest Rate Cap and (ii) a
letter from the Rating Agency confirming that the termi-
nation of the then current Interest Rate Cap and its
replacement with such Replacement Interest Rate Cap will
not adversely affect its rating of the Class A Certifi-
▇▇▇▇▇, the Class B Certificates or the Class C Certifi-
▇▇▇▇▇.
(h) The Trustee hereby appoints the Adminis-
trator to perform the duties of the calculation agent
under the Interest Rate Cap and the Servicer accepts such
appointment.
(i) The Trustee, on behalf of the Certificate-
holders, upon notification from the Servicer shall, sell
all or a portion of the Interest Rate Caps subject to the
following conditions having been met:
(x) the Aggregate Interest Rate Caps
Notional Amount after giving effect to such sale shall
equal or exceed the Aggregate ABC Principal Amount as of
the date of such sale after giving effect to all payments
and allocations made pursuant to this Agreement;
(y) such sale will not result in a down-
grading or withdrawal of the then current rating on any
class of the Certificates by the Rating Agencies; and
(z) the minimum notional amount denomina-
tion of any Interest Rate Cap to be sold is $500,000.
34
The Servicer shall have the duty of obtaining a
fair market value price for the sale of the Trust's
rights under any Interest Rate Cap, notifying the Trustee
of prospective purchasers and bids, and selecting the
purchaser of such Interest Rate Cap. The Trustee upon
receipt of the purchase price in the Collection Account
shall execute all documentation necessary to effect the
transfer of the Trust's rights under the Interest Rate
Cap and to release the Lien of the Trustee on the Inter-
est Rate Cap and proceeds thereof.
Funds deposited in the Collection Account in
respect of the sale of all or a portion of an Interest
Rate Cap shall be applied as Principal Collections allo-
cable to Series 1995-1 and shall be applied on the next
Distribution Date in accordance with subsections 4.7(a),
(b) and (c) and 4.9(b), (c) and (e).
SECTION 4. Delivery and Payment for the Series
1995-1 Certificates. The Transferor shall execute and
deliver the Series 1995-1 Certificates to the Trustee for
authentication in accordance with Section 6.1 of the
Agreement. The Trustee shall deliver the Series 1995-1
Certificates to or upon the order of the Transferor when
authenticated in accordance with Section 6.2 of the
Agreement.
SECTION 5. Form of Delivery of Series 1995-1
Certificates. The Class A Certificate, the Class B
Certificates, the Class C Certificates and the Class D
Certificate shall be delivered as Registered Certificates
as provided in Section 6.1 of the Agreement.
SECTION 6. Article IV of Agreement. Sections
4.1, 4.2 and 4.3 of the Agreement shall read in their
entirety as provided in the Agreement. Article IV of the
Agreement (except for Sections 4.1, 4.2 and 4.3 thereof)
shall read in its entirety as follows and shall be appli-
cable only to the Series 1995-1 Certificates:
35
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.4 Rights of Certificateholders. The
Series 1995-1 Certificates shall represent undivided
interests in the Trust, including the right to receive,
to the extent necessary to make the required payments
with respect to such Series 1995-1 Certificates at the
times and in the amounts specified in this Agreement, (a)
the Floating Allocation Percentage and the Fixed/Floating
Allocation Percentage (as applicable from time to time)
of Collections (including Finance Charge Collections)
available in the Collection Account, (b) funds allocable
to the Series 1995-1 Certificates on deposit in the
Excess Funding Account and (c) funds on deposit in the
Interest Funding Account, the Principal Account, the
Distribution Account, the Cap Proceeds Account, the
Payment Reserve Account and the Defeasance Account (for
such Series, the "Series 1995-1 Certificateholders'
Interest"). The Class B Invested Amount, the Class C
Invested Amount and the Class D Invested Amount shall be
subordinated to the Class A Certificate; the Class C
Invested Amount and the Class D Invested Amount shall be
subordinated to the Class B Certificates; and the Class D
Invested Amount shall be subordinated to the Class C
Certificates, in each case to the extent provided in this
Article IV. The Class B Certificates will not have the
right to receive payments of principal until the Class A
Invested Amount has been paid in full. The Class C
Certificates will not have the right to receive payments
of principal until the Class A Invested Amount and the
Class B Invested Amount have been paid in full. Except
in connection with a payment of Class D Daily Principal
pursuant to subsection 4.9(f) of this Agreement, the
Class D Certificate will not have the right to receive
payments of principal until the Class A Invested Amount,
the Class B Invested Amount and the Class C Invested
Amount have been paid in full.
Section 4.5 Collections and Allocation;
Payments on Exchangeable Transferor Certificate.
(a) Collections and Allocations. The
Servicer will apply or will instruct the Trustee to apply
all funds on deposit in the Collection Account and the
Excess Funding Account allocable to the Series 1995-1
Certificates, and all funds on deposit in the Interest
Funding Account, the Principal Account, the Cap Proceeds
Account, the Distribution Account, the Payment Reserve
Account and the Defeasance Account maintained for this
Series, as described in this Article IV. On each Busi-
ness Day, (i) the amount of Finance Charge Collections
available in the Collection Account allocable to Series
1995-1 Certificates shall be determined by multiplying
the aggregate amount of such Finance Charge Collections
by the Floating Allocation Percentage, (ii) the amount of
Principal Collections available in the Collection Account
36
allocable to the Series 1995-1 Certificates shall be
determined by multiplying the aggregate amount of such
Principal Collections by (x) during the Revolving Period,
the Floating Allocation Percentage and (y) during any
Amortization Period, the Fixed/Floating Allocation Per-
centage, and (iii) the Receivables in Defaulted Accounts
allocable to the Series 1995-1 Certificates shall be
determined by multiplying the aggregate amount of such
Receivables in Defaulted Accounts by the Floating Alloca-
tion Percentage.
(b) Payments to the Holder of the Ex-
changeable Transferor Certificate. On each Business Day,
the Servicer shall determine whether a Pay Out Event is
deemed to have occurred with respect to the Series 1995-1
Certificates, and the Servicer shall allocate and pay
Collections in accordance with the Daily Report with
respect to such Business Day to the Holder of the Ex-
changeable Transferor Certificate as follows:
(i) For each Business Day with respect to the
Revolving Period, in addition to amounts allocated
and paid to the Holder of the Exchangeable Transfer-
or Certificate pursuant to subsection 4.3(b) of the
Agreement, an amount equal to (x) the product of the
Class D Floating Allocation Percentage and the
amount of Principal Collections on such Business
Day, minus (y) the Reallocated Class D Principal
Collections for such Business Day minus (z) the
amount of any Class D Daily Principal for such
Business Day;
37
(ii) For each Business Day with respect to the
Amortization Period prior to the Business Day on
which an amount equal to the Class C Invested Amount
has been deposited in the Principal Account to be
applied to the payment of Class C Principal, in
addition to amounts allocated and paid to the Holder
of the Exchangeable Transferor Certificate pursuant
to subsection 4.3(b) of the Agreement, an amount
equal to (x) the product of the Class D
Fixed/Floating Allocation Percentage and the amount
of Principal Collections on such Business Day minus
(y) the Reallocated Class D Principal Collections
for such Business Day minus (z) the amount of any
Class D Daily Principal for such Business Day; and
(iii) For each Business Day on and after the
day on which Principal Collections are being depos-
ited in the Principal Account pursuant to Section
4.9(c)(iv), the amount of payments of Principal
Collections made to the Holder of the Exchangeable
Transferor Certificate shall be determined only as
provided in subsection 4.3(b) of the Agreement.
Notwithstanding the foregoing, amounts payable
to the Transferor pursuant to subsection 4.5(b)(i) or
(ii) 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.
The allocations to be made pursuant to this
subsection 4.5(b) also apply to deposits into the Collec-
tion Account that are treated as Collections, including
Adjustment Payments, payment of the reassignment price
pursuant to Section 2.4(e) of the Agreement and proceeds
from the sale, disposition or liquidation of the Receiv-
▇▇▇▇▇ pursuant to Section 9.2, 10.2, 12.1 or 12.2 of the
Agreement and Section 3 of this Series Supplement. Such
deposits to be treated as Collections will be allocated
as Finance Charge Receivables or Principal Receivables as
provided in the Agreement.
38
Section 4.6 Determination of Interest for the
Series 1995-1 Certificates. (a) The amount of interest
(the "Class A Interest") allocable to the Class A Certif-
icate with respect to any Business Day shall be an amount
equal to the sum of (x) the Series 1995-1 Allocation
Percentage of the Total Program Fees accrued from and
including the preceding Business Day to but excluding
such Business Day and (y) the product of (i) the Class A
Certificate Rate and (ii) a fraction the numerator of
which is the actual number of days from and including the
immediately preceding Business Day to but excluding such
Business Day and the denominator of which is 365 or 366,
as the case may be, and (iii) the Class A Outstanding
Principal Amount on such Business Day after giving effect
to all transactions on such Business Day.
On each Business Day, the Servicer shall deter-
mine an amount (the "Class A Interest Shortfall") equal
to the excess, if any, of (x) the Class A Interest for
such Business Day plus the Class A Interest Shortfall for
the preceding Business Day over (y) the amount available
to be paid to the Class A Certificateholder in respect of
Class A Interest on such Business Day. The Class A
Interest Shortfall shall initially be zero.
(b) The amount of monthly interest (the
"Class B Interest") allocable to the Class B Certificates
with respect to any Interest Accrual Period shall be an
amount equal to the product of (i) the Class B Certifi-
cate Rate and (ii) a fraction the numerator of which is
the actual number of days in such Interest Accrual Period
and the denominator of which is 360 and (iii) the Class B
Invested Amount as of the close of business on the first
day of such Interest Accrual Period.
On the Determination Date preceding each Dis-
tribution Date, the Servicer shall determine an amount
(the "Class B Interest Shortfall") equal to the excess,
if any, of (x) the aggregate Class B Interest for the
Interest Accrual Period applicable to the Distribution
Date over (y) the amount available to be paid to the
Class B Certificateholders in respect of interest on such
Distribution Date. If there is a Class B Interest Short-
fall with respect to any Distribution Date, an additional
amount ("Class B Additional Interest") shall be payable
as provided herein with respect to the Class B Certifi-
▇▇▇▇▇ on each Distribution Date following such Distribu-
tion Date, to and including the Distribution Date on
which such Class B Interest Shortfall is paid to Class B
Certificateholders, equal to the product of (i) the Class
B Certificate Rate plus 2% per annum and (ii) such Class
B Interest Shortfall remaining unpaid calculated on the
basis of a fraction the numerator of which is the actual
number of days in the related Interest Accrual Period and
the denominator of which is 360. Notwithstanding any-
thing to the contrary herein, Class B Additional Interest
shall be payable or distributed to Class B Certificate-
holders only to the extent permitted by applicable law.
39
(c) The amount of monthly interest (the
"Class C Interest") allocable to the Class C Certificates
with respect to any Interest Accrual Period shall be an
amount equal to the product of (i) the Class C Certifi-
cate Rate and (ii) a fraction the numerator of which is
the actual number of days in such Interest Accrual Period
and the denominator of which is 360 and (iii) the Class C
Invested Amount as of the close of business on the first
day of such Interest Accrual Period.
On the Determination Date preceding each Dis-
tribution Date, the Servicer shall determine an amount
(the "Class C Interest Shortfall") equal to the excess,
if any, of (x) the aggregate Class C Interest for the
Interest Accrual Period applicable to the Distribution
Date over (y) the amount available to be paid to the
Class C Certificateholders in respect of interest on such
Distribution Date. If there is a Class C Interest Short-
fall with respect to any Distribution Date, an additional
amount ("Class C Additional Interest") shall be payable
as provided herein with respect to the Class C Certifi-
▇▇▇▇▇ on each Distribution Date following such Distribu-
tion Date, to and including the Distribution Date on
which such Class C Interest Shortfall is paid to Class C
Certificateholders, equal to the product of (i) the Class
C Certificate Rate plus 2% per annum and (ii) such Class
C Interest Shortfall remaining unpaid calculated on the
basis of a fraction the numerator of which is the actual
number of days in the related Interest Accrual Period and
the denominator of which is 360. Notwithstanding any-
thing to the contrary herein, Class C Additional Interest
shall be payable or distributed to Class C Certificate-
holders only to the extent permitted by applicable law.
Section 4.6A Determination of the Class A
Interest Adjustment. On each Business Day on which any
obligations of the Trust to the Class A Certificateholder
remain outstanding, the Servicer shall compute the ex-
cess, if any, of (i) the amount payable pursuant to
subsection 4.9(a)(i) over (ii) the aggregate amounts
actually paid to the Class A Certificateholder pursuant
to subsection 4.9(a)(i) on such Business Day. The great-
er of zero and the amount of the excess, if any, computed
in the immediately preceding sentence shall be the "Class
A Interest Adjustment" for such Business Day and the
Servicer shall provide the Trustee with written notice by
facsimile or otherwise of the Class A Interest Adjust-
ment. If the Class A Interest Adjustment is greater than
zero, the Trustee shall withdraw from the Interest Fund-
ing Account and deposit in the Distribution Account an
amount equal to the lesser of the aggregate amounts
deposited in the Interest Funding Account pursuant to
subsections 4.9(a)(iii) and 4.9(a)(x) of the Agreement
40
during the then current Monthly Period on and prior to
such Business Day (less the amount of any prior withdraw-
als therefrom pursuant to this third sentence of Section
4.6A on each prior Business Day in the then current
Monthly Period) and the Class A Interest Adjustment (the
greater of any such amount withdrawn and zero, the "Class
C Interest Adjustment" for such Business Day). If the
Class A Interest Adjustment for such Business Day exceeds
the Class C Interest Adjustment for such Business Day,
the Trustee shall withdraw from the Interest Funding
Account and deposit in the Distribution Account an amount
equal to the lesser of (i) the aggregate amounts deposit-
ed in the Interest Funding Account pursuant to subsection
4.9(a)(ii) and 4.9(a)(ix) of the Agreement during the
then current Monthly Period on and prior to such Business
Day (less the amount of any prior withdrawals therefrom
pursuant to this fourth sentence of Section 4.6A on each
prior Business Day in the then current Monthly Period and
(ii) the difference between the Class A Interest Adjust-
ment and the Class C Interest Adjustment (the greater of
any such amount withdrawn and zero, the "Class B Interest
Adjustment" for such Business Day).
Section 4.7 Determination of Principal
Amounts. (a) The amount of principal (the "Class A
Principal") distributable from the Distribution Account
with respect to the Class A Certificate on each Business
Day with respect to (A) the Revolving Period (except for
any portion of the Revolving Period during a Class A Pay
Down Period) shall be an amount equal to the sum of (x)
amounts deposited into the Principal Account from the
Defeasance Account pursuant to Section 9A of this Series
Supplement and (y) the amount, if any, specified in the
last sentence of Section 3A(i) of this Series Supplement
and (B) the Amortization Period or the Class A Pay Down
Period shall be equal to an amount calculated as follows:
41
the sum of (i) an amount equal to the product of the ABC
Fixed/Floating Allocation Percentage and the aggregate
amount of Principal Collections (less the amount of
Reallocated Class B Principal Collections and Reallocated
Class C Principal Collections) with respect to such
Business Day, (ii) any amount on deposit in the Excess
Funding Account allocated to the Class A Certificate
pursuant to subsection 4.9(d) with respect to such Busi-
ness Day, (iii) the amount, if any, allocated to the
Class A Certificate pursuant to subsections 4.9(a)(v),
(vii), (viii), (xi), and (xii) of the Agreement and, with
respect to such subsections, pursuant to subsections
4.10(a) and (b) and 4.15(a), (b) and (c) on such Business
Day, (iv) the amount of Shared Principal Collections
allocated to the Class A Certificate with respect to such
Business Day pursuant to Section 4.3(d) and (v) the
amount, if any, specified in the last sentence of Section
3A(i) of this Series Supplement; provided, however, that
with respect to any Business Day, Class A Principal may
not exceed the Class A Invested Amount; provided, fur-
ther, that with respect to the Scheduled Series 1995-1
Termination Date, the Class A Principal shall be an
amount equal to the Class A Invested Amount.
(b) The amount of principal (the "Class B
Principal") distributable from the Distribution Account
with respect to the Class B Certificates on each Distri-
bution Date, beginning with the Class B Principal Payment
Commencement Date, shall equal an amount calculated as
follows: the sum of (i) an amount equal to the product
of the ABC Fixed/Floating Allocation Percentage and the
aggregate amount of Principal Collections (less the
amount of Reallocated Class B Principal Collections and
Reallocated Class C Principal Collections) with respect
to the preceding Monthly Period (or, in the case of the
first Distribution Date in the Amortization Period fol-
lowing the date on which an amount equal to the Class A
Invested Amount is paid to the Class A Certificateholder
in respect of Class A Principal, the ABC Fixed/Floating
Allocation Percentage of Principal Collections from the
date on which such deposit is made), (ii) any amount on
deposit in the Excess Funding Account allocated to the
Class B Certificates pursuant to subsection 4.9(d) with
respect to the preceding Monthly Period, (iii) the
amount, if any, allocated to the Class B Certificates
pursuant to subsections 4.9(a)(v), (vii), (xi) and (xii)
42
of the Agreement and, with respect to such subsections,
pursuant to subsections 4.10(a) and (b) and 4.15(a) and
(b) of the Agreement with respect to such Distribution
Date, (iv) the amount of Shared Principal Collections
allocated to the Class B Certificates with respect to the
preceding Monthly Period pursuant to Section 4.3(d) of
the Agreement on and after the Class B Principal Payment
Commencement Date and (v) the amount, if any, specified
in the last sentence of Section 3A(i) of this Series
Supplement; provided, further, that with respect to any
Distribution Date, Class B Principal may not exceed the
Class B Invested Amount; provided, further, that with
respect to the Scheduled Series 1995-1 Termination Date,
the Class B Principal shall be an amount equal to the
Class B Invested Amount.
(c) The amount of principal (the "Class C
Principal") distributable from the Distribution Account
with respect to the Class C Certificates on each Distri-
bution Date, beginning with the Class C Principal Payment
Commencement Date, shall be an amount equal to and calcu-
lated as follows: the sum of (i) an amount equal to the
product of the ABC Fixed/Floating Allocation Percentage
and the aggregate amount of Principal Collections (less
the amount of Reallocated Class C Principal Collections)
with respect to the preceding Monthly Period (or, in the
case of the first Distribution Date following the date on
which an amount equal to the Class B Invested Amount is
deposited in the Principal Account to be applied to the
payment of Class B Principal, the ABC Fixed/Floating
Allocation Percentage of Principal Collections from the
date on which such deposit is made), (ii) any amounts on
deposit in the Excess Funding Account allocated to the
Class C Certificates pursuant to subsection 4.9(d) with
respect to the preceding Monthly Period, (iii) the
amount, if any, allocated to the Class C Certificates
pursuant to subsections 4.9(a)(v), (vii) and (xii) of the
Agreement and, with respect to such subsections, pursuant
to subsections 4.10(a) and (b) and 4.15(a) on such Busi-
ness Day, (iv) the amount of Shared Principal Collections
allocated to the Class C Certificates with respect to the
preceding Monthly Period pursuant to Section 4.3(d) of
the Agreement on and after the Class C Principal Payment
Commencement Date and (v) the amount, if any, specified
in the last sentence of Section 3A(i) of this Series
Supplement; provided that with respect to any Distribu-
tion Date, Class C Principal may not exceed the Class C
Invested Amount; provided, further, that with respect to
the Scheduled Series 1995-1 Termination Date, the Class C
Principal shall be an amount equal to the Class C Invest-
ed Amount.
43
(d) The amount of principal (the "Class D
Principal") distributable from the Distribution Account
with respect to the Class D Certificate on each Distribu-
tion Date beginning with the Class D Principal Payment
Commencement Date, or in the case of distributions of
Class D Daily Principal pursuant to the last proviso of
this subsection 4.7(d), on each Business Day, shall be an
amount equal to and calculated as follows: the sum of
(i) an amount equal to the product of the Class D
Fixed/Floating Allocation Percentage of Principal Collec-
tions (less the amount of Reallocated Class D Principal
Collections) with respect to the preceding Monthly Period
(or, in the case of the first Distribution Date following
the date on which an amount equal to the Class C Invested
Amount is deposited in the Principal Account to be ap-
plied to the payment of Class C Principal, the Class D
Fixed/Floating Allocation Percentage of Principal Collec-
tions from the date on which such deposit is made), (ii)
any amount on deposit in the Excess Funding Account
allocated to the Class D Certificate pursuant to subsec-
tion 4.9(d) with respect to the preceding Monthly Period,
and (iii) the amount, if any, allocated to the Class D
Certificate pursuant to subsections 4.9(a)(vi), (vii) and
(xiii) of the Agreement and, with respect to such subsec-
tions, pursuant to subsection 4.10(a) and (b) of the
Agreement with respect to such Distribution Date; provid-
ed, however, that with respect to the Scheduled Series
1995-1 Termination Date, the Class D Principal shall be
an amount equal to the Class D Invested Amount; provided
further, that on any Business Day during any period other
than an Early Amortization Period or Class A Pay Down
Period, the Transferor may designate that either (x) an
amount up to the lesser of (i) the excess of the Class D
Invested Amount over the Stated Class D Amount on such
day after taking into account all adjustments of the
Class A Invested Amount on such day and (ii) (I) during
the Revolving Period an amount equal to (x) the product
of the Class D Floating Allocation Percentage and the
amount of Principal Collections on such Business Day
minus (y) Reallocated Class D Principal Collections on
such Business Day or (II) after the Amortization Period
Commencement Date an amount equal to (x) the product of
the Class D Fixed/Floating Allocation Percentage and the
amount of Principal Collections on such Business Day
minus (y) Reallocated Class D Principal Collections on
such Business Day (such designated amount, the "Class D
Daily Principal") shall be distributed in accordance with
subsection 4.9(f) or (y) an amount up to the excess of
the Class D Invested Amount over the Stated Class D
Amount on such day after taking into account all adjust-
ments of the Class A Invested Amount on such day, shall
be subtracted from the Class D Invested Amount and added
to the Transferor Interest.
44
Section 4.8 Shared Principal Collections.
Shared Principal Collections allocated to the Series
1995-1 Certificates and to be applied pursuant to subsec-
tions 4.9 (b), 4.9(c)(i)(z), 4.9(c)(ii)(z),
4.9(c)(iii)(z), 4.9(c)(iv)(z) and 4.9(e)(i)(z) for any
Business Day shall mean an amount equal to the sum of
(i) the product of (x) Shared Principal Collections for
all Series for such Business Day and (y) a fraction, the
numerator of which is the Principal Shortfall for the
Series 1995-1 Certificates for such Business Day and the
denominator of which is the aggregate amount of Principal
Shortfalls for all Series for such Business Day and (ii)
Shared Principal Collections for all Series for such
Business Day, less the amount thereof to be applied with
respect to Principal Shortfalls for all Series for such
Business Day, which the Transferor has opted to apply to
the Variable Funding Certificates of Series 1995-1 in
accordance with Section 4.3(d) of the Agreement.
Section 4.9 Application of Funds. (a) On
each Business Day, the Servicer shall deliver to the
Trustee a Daily Report in which it shall instruct the
Trustee to withdraw, and the Trustee, acting in accor-
dance with such instructions, shall withdraw from the
Collection Account and the Cap Proceeds Account, to the
extent of the sum of (v) prior to the Pay Out Commence-
ment Date, the Floating Allocation Percentage of Finance
Charge Collections available in the Collection Account
or, on and after the Pay Out Commencement Date, the
Fixed/Floating Allocation Percentage of Finance Charge
Collections available in the Collection Account, (w)
Investment Earnings on deposit in the Collection Account,
(x) amounts on deposit in the Payment Reserve Account, if
any, if and to the extent so designated by the Transfer-
or, (y) the Cap Receipt Amount, if any, for such Business
Day and (z) on each Reserve Application Date amounts on
deposit in the Investor Reserve Account, if any (the
"Available Series 1995-1 Finance Charge Collections") the
amounts set forth in subsections 4.9(a)(i) through
4.9(a)(xix) in the following priority.
(i) Class A Interest. On each Business
Day during a Monthly Period, the Trustee, acting in
accordance with instructions from the Servicer,
shall withdraw first from the Cap Proceeds Account
to the extent of the Cap Receipt Amount and then
from the Collection Account and then from the Pay-
ment Reserve Account and then, on each Reserve
Application Date, from the Investor Reserve Account
and pay to the Class A Certificateholders on such
Business Day, to the extent of the Available Series
1995-1 Finance Charge Collections, an amount equal
to the lesser of (x) the Available Series 1995-1
Finance Charge Collections and (y) the sum of (A)
the lesser of (I) the Class A Interest for such
Business Day and (II) the product of (i) the greater
of LIBOR then in effect plus 0.75% per annum and 12%
45
per annum and (ii) a fraction the numerator of which
is the number of days from and including the preced-
ing Business Day to but excluding such Business Day
and the denominator of which is the actual number of
days in the then current calendar year and (iii) the
Class A Outstanding Principal Balance as of the
close of business on the preceding Business Day plus
(B) the excess, if any, of the amount payable to the
Class A Certificateholders pursuant to clause (A) on
each prior Business Day over the amount which has
been paid to the Class A Certificateholders with
respect thereto on each prior Business Day.
(ii) Class B Interest. On each Business
Day during a Monthly Period, the Trustee, acting in
accordance with instructions from the Servicer,
shall allocate to the Class B Certificates and
withdraw first from the Cap Proceeds Account to the
extent of the remaining Cap Receipt Amount for such
Business Day, and then from the Collection Account
and then from the Payment Reserve Account and then,
on each Reserve Application Date, from the Investor
Reserve Account and deposit into the Interest Fund-
ing Account, to the extent of the Available Series
1995-1 Finance Charge Collections remaining after
giving effect to the withdrawal pursuant to subsec-
tion 4.9(a)(i), an amount equal to the lesser of (x)
any such remaining Available Series 1995-1 Finance
Charge Collections and (y) the sum of (A) the Daily
Portion of Class B Interest to be distributed on the
Distribution Date following such Monthly Period plus
(B) the excess, if any, of the amount required to be
46
deposited pursuant to clause (A) above on each prior
Business Day over the amount on deposit in the
Interest Funding Account with respect thereto on
such Business Day plus (C) an amount equal to the
portion of Carryover Class B Interest attributable
to amounts required to be deposited pursuant to
clause (A) above that were not so deposited prior to
such Business Day minus the amounts required to be
deposited pursuant to clause (B) above.
(iii) Class C Interest. On each Business
Day during a Monthly Period, the Trustee, acting in
accordance with instructions from the Servicer,
shall allocate to the Class C Certificates and
withdraw first from the Cap Proceeds Account, to the
extent of the remaining Cap Receipt Amount for such
Business Day and then from the Collection Account
and then from the Payment Reserve Account and then,
on each Reserve Application Date, from the Investor
Reserve Account and deposit into the Interest Fund-
ing Account, to the extent of the Available Series
1995-1 Finance Charge Collections remaining after
giving effect to the withdrawal pursuant to subsec-
tions 4.9(a)(i) and (ii), an amount equal to the
lesser of (x) any such remaining Available Series
1995-1 Finance Charge Collections and (y) the sum of
(A) the Daily Portion of Class C Interest to be
distributed on the Distribution Date following such
Monthly Period plus (B) the excess, if any, of the
amount required to be deposited pursuant to clause
(A) above on each prior Business Day over the amount
on deposit in the Interest Funding Account with
respect thereto on such Business Day plus (C) an
amount equal to the portion of Carryover Class C
Interest attributable to amounts required to be
deposited pursuant to clause (A) above that were not
so deposited prior to such Business Day minus the
amounts required to be deposited pursuant to clause
(B) above.
(iv) Servicing Fee. On each Business
Day, the Trustee, acting in accordance with instruc-
tions from the Servicer, shall withdraw first from
the Cap Proceeds Account to the extent of the re-
maining Cap Receipt Amount and then from the Collec-
tion Account and then from the Payment Reserve
Account and then, on each Reserve Application Date,
from the Investor Reserve Account and distribute to
the Servicer, to the extent of any Available Series
1995-1 Finance Charge Collections remaining after
giving effect to the withdrawals pursuant to subsec-
tions 4.9(a)(i) through (iii), an amount equal to
the lesser of (x) any such remaining Available
Series 1995-1 Finance Charge Collections and (y) the
Servicing Fee for such Business Day plus any Servic-
ing Fee due with respect to any prior Business Day
but not distributed to the Servicer
47
(v) ABC Investor Default Amount. On each
Business Day, the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw first
from the Cap Proceeds Account to the extent of the
remaining Cap Receipt Amount second, only if such
day is a Default Recognition Date, from the Trans-
feror an amount equal to the aggregate Transferor
Retained Finance Charge Collections for each day
during the related Monthly Period and then from the
Collection Account and then from the Payment Reserve
Account and then, on each Reserve Application Date,
from the Investor Reserve Account, to the extent of
any Available Series 1995-1 Finance Charge Collec-
tions remaining after giving effect to the withdraw-
als pursuant to subsections 4.9(a)(i) through (iv),
an amount equal to the lesser of (x) any such re-
maining Available Series 1995-1 Finance Charge
Collections and (y) the sum of (1) the aggregate ABC
Investor Default Amount for such Business Day plus
(2) the unpaid ABC Investor Default Amount for each
previous Business Day during such Monthly Period,
such amount to be (A) during the Revolving Period
(except for any portion of the Revolving Period
during a Class A Paydown Period) treated as Shared
Principal Collections, (B) during the Amortization
Period or the Class A Pay Down Period on and prior
to the day on which an amount equal to the Class A
Invested Amount is deposited in the Principal Ac-
count, to be deposited in the Principal Account for
distribution to the Class A Certificateholder on the
next Distribution Date, (C) during the Amortization
Period, on and after the day on which such deposit
to the Principal Account with respect to the Class A
Invested Amount has been made and on and prior to
the day on which an amount equal to the Class B
Invested Amount is deposited in the Principal Ac-
count, to be deposited in the Principal Account for
payment to the Class B Certificateholders on the
next Distribution Date, (D) during the Amortization
Period on and after the day on which such deposit to
the Principal Account with respect to the Class B
Invested Amount has been made on and prior to the
day on which an amount equal to the Class C Invested
Amount is deposited in the Principal Account, to be
deposited in the Principal Account for payment to
the Class C Certificateholders on the next Distribu-
tion Date and (E) on and after the day such deposit
to the Principal Account with respect to Class C
Invested Amount has been made, to be paid to the
Class D Certificateholders.
(vi) Class D Investor Default Amount. On
each Business Day, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw
first from the Cap Proceeds Account to the extent of
the remaining Cap Receipt Amount, second, if such
day is a Default Recognition Date, from the Trans-
feror an amount equal to the aggregate Transferor
Retained Finance Charge Collections for each day
during the related Monthly Period and then from the
Collection Account and then from the Payment Reserve
Account and then, on each Reserve Application Date,
from the Investor Reserve Account, to the extent of
any Available Series 1995-1 Finance Charge Collec-
tions remaining after giving effect to the withdraw-
als pursuant to subsections 4.9(a)(i) through (v),
an amount equal to the lesser of (x) any such re-
maining Available Series 1995-1 Finance Charge
Collections and (y) the sum of (1) the aggregate
Class D Investor Default Amount for such Business
Day plus (2) the unpaid Class D Investor Default
Amount for each previous Business Day during such
Monthly Period, such amount to be (A) paid to the
Transferor during the Revolving Period and the
Amortization Period prior to the payment in full of
the Class C Invested Amount, and (B) to the extent
allocated to Class D Principal pursuant to Section
4.7 during the Amortization Period following the
payment in full of the Class C Invested Amount,
deposited in the Principal Account for distribution
to the Class D Certificateholders on the next Dis-
tribution Date.
48
(vii) Adjustment Payment Shortfalls. On
each Business Day, the Trustee, acting in accordance
with instructions from the Servicer, shall withdraw
first from the Cap Proceeds Account to the extent of
the remaining Cap Receipt Amount and then from the
Collection Account and then from the Payment Reserve
Account and then, on each Reserve Application Date,
from the Investor Reserve Account, to the extent of
any Available Series 1995-1 Finance Charge Collec-
tions remaining after giving effect to the withdraw-
als pursuant to subsections 4.9(a)(i) through (vi),
an amount equal to the lesser of (x) any such re-
maining Available Series 1995-1 Finance Charge
Collections and (y) an amount equal to the Series
Allocation Percentage of any Adjustment Payment
which the Transferor is required but fails to make
pursuant to subsection 3.8(a) of the Agreement, such
amount, (i) during the Revolving Period (except for
any portion of the Revolving Period during a Class A
Paydown Period), to be treated as Shared Principal
Collections, (ii) during the Amortization Period or
the Class A Pay Down Period on and prior to the day
on which an amount equal to the Class A Invested
Amount is deposited in the Principal Account, to be
deposited in the Principal Account for distribution
to the Class A Certificateholder on the next Distri-
bution Date, (iii) during the Amortization Period,
on and after the day on which such deposit to the
Principal Account with respect to the Class A In-
vested Amount has been made and on and prior to the
day on which an amount equal to the Class B Invested
Amount is deposited in the Principal Account for
payment to the Class B Certificateholders on the
next Distribution Date, (iv) during the Amortization
Period on and after the day on which such deposit to
the Principal Account with respect to the Class B
Invested Amount has been made on and prior to the
day on which an amount equal to the Class C Invested
Amount is deposited in the Principal Account, to be
deposited in the Principal Account for payment to
the Class C Certificateholders on the next Distribu-
tion Date and (v) on and after the day such deposit
to the Principal Account with respect to Class C
Invested Amount has been made, to be paid to the
Class D Certificateholders.
49
(viii) Reimbursement of Class A Investor
Charge-Offs. On each Business Day, the Trustee,
acting in accordance with instructions from the
Servicer, shall withdraw first from the Cap Proceeds
Account to the extent of the remaining Cap Receipt
Amount and then from the Collection Account and then
from the Payment Reserve Account, on each Reserve
Application Date, and then from the Investor Reserve
Account, to the extent of any Available Series 1995-
1 Finance Charge Collections remaining after giving
effect to the withdrawals pursuant to subsections
4.9(a)(i) through (vii), an amount equal to the
lesser of (x) any such remaining Available Series
1995-1 Finance Charge Collections and (y) the
unreimbursed Class A Investor Charge-Offs, if any;
such amount will be applied to reimburse Class A
Investor Charge-Offs, and, during the Revolving
Period (except for any portion of the Revolving
Period during a Class A Paydown Period), will be
treated as Shared Principal Collections, and during
the Amortization Period or the Class A Pay Down
Period on and prior to the day on which an amount
equal to the Class A Invested Amount is deposited in
the Principal Account will be deposited in the
Principal Account for distribution to the Class A
Certificateholders on the next Distribution Date.
(ix) Unpaid Class B Interest. On each
Business Day, the Trustee, acting in accordance with
the instructions from the Servicer, shall allocate
to the Class B Certificates and withdraw first from
the Cap Proceeds Account, to the extent of the
remaining Cap Receipt Amount for such Business Day
and then from the Collection Account and then from
the Payment Reserve Account and then, on each Re-
serve Application Date, from the Investor Reserve
Account and deposit in the Interest Funding Account,
to the extent of the Available Series 1995-1 Finance
Charge Collections remaining after giving effect to
the withdrawals pursuant to subsections 4.9(a)(i)
through (viii), an amount equal to the lesser of (x)
any such remaining Available Series 1995-1 Finance
Charge Collections and (y) the sum of (1) the excess
of the Daily Portion of the product of (i) the Class
B Certificate Rate and (ii) a fraction the numerator
of which is the actual number of days in the then
current Interest Accrual Period and the denominator
of which is 360 and (iii) the Class B Outstanding
Principal Amount as of the close of business on the
first day of such Interest Accrual Period, over the
amount on deposit in the Interest Funding Account or
previously paid to the Class B Certificateholders
with respect thereto and (2) any additional interest
(to the extent permitted by applicable law) at the
Class B Certificate Rate plus 2% for interest that
has accrued on interest that was due during a prior
Monthly Period pursuant to this subsection but was
not deposited in the Interest Funding Account or
paid to the Class B Certificateholders.
(x) Unpaid Class C Interest. On each
Business Day, the Trustee, acting in accordance with
the instructions from the Servicer, shall allocate
to the Class C Certificates and withdraw first from
the Cap Proceeds Account, to the extent of the
remaining Cap Receipt Amount for such Business Day
and then from the Collection Account and then from
the Payment Reserve Account and then, on each Re-
serve Application Date, from the Investor Reserve
Account and deposit in the Interest Funding Account,
to the extent of any Available Series 1995-1 Finance
Charge Collections remaining after giving effect to
the withdrawals pursuant to subsections 4.9(a)(i)
through (ix), an amount equal to the lesser of (x)
any such remaining Available Series 1995-1 Finance
Charge Collections and (y) the sum of (1) the excess
of the Daily Portion of the product of (i) the Class
C Certificate Rate and (ii) a fraction the numerator
of which is the actual number of days in the then
current Interest Accrual Period and the denominator
of which is 360 and (iii) the Class C Outstanding
Principal Amount as of the close of business on the
first day of such Interest Accrual Period over the
amount on deposit in the Interest Funding Account or
previously paid to the Class C Certificateholders
with respect thereto and (2) any additional interest
(to the extent permitted by applicable law) at the
Class C Certificate Rate plus 2% for interest that
has accrued on interest that was due during a prior
Monthly Period pursuant to this subsection but was
not deposited in the Interest Funding Account or
paid to the Class C Certificateholders.
50
(xi) Reimbursement of Class B Investor
Charge-Offs. On each Business Day, the Trustee,
acting in accordance with instructions from the
Servicer, shall withdraw first from the Cap Proceeds
Account to the extent of the remaining Cap Receipt
Amount for such Business Day and then from the
Collection Account and then from the Payment Reserve
Account and then, on each Reserve Application Date,
from the Investor Reserve Account, to the extent of
any Available Series 1995-1 Finance Charge Collec-
tions remaining after giving effect to the withdraw-
als pursuant to subsections 4.9(a)(i) through (x),
an amount equal to the lesser of (x) any such re-
maining Available Series 1995-1 Finance Charge
Collections and (y) the unreimbursed amount by which
the Class B Invested Amount has been reduced on
prior Business Days pursuant to clauses (c) and (d)
of the definition of Class B Invested Amount, if
any, such amount, (i) during the Revolving Period
(except for any portion of the Revolving Period
during a Class A Paydown Period), to be treated as
Shared Principal Collections, (ii) during the Amor-
tization Period or the Class A Pay Down Period, on
and prior to the day on which an amount equal to the
Class A Invested Amount is deposited in the Princi-
pal Account, to be deposited in the Principal Ac-
count for distribution to the Class A Certificate-
holders on the next Distribution Date, and (iii)
during the Amortization Period, on and after the day
on which such deposit has been made and on and prior
to the day on which the Class B Invested Amount has
been deposited in the Principal Account, to be
deposited in the Principal Account for payment to
the Class B Certificateholders on the next Distribu-
tion Date.
(xii) Reimbursement of Class C Investor
Charge-Offs. On each Business Day, the Trustee,
acting in accordance with instructions from the
Servicer, shall withdraw first from the Cap Proceeds
Account to the extent of the remaining Cap Receipt
Amount for such Business Day and then from the
Collection Account and then from the Payment Reserve
Account and then, on each Reserve Application Date,
from the Investor Reserve Account, to the extent of
any Available Series 1995-1 Finance Charge Collec-
tions remaining after giving effect to the withdraw-
als pursuant to subsections 4.9(a)(i) through (xi),
an amount equal to the lesser of (x) any remaining
Available Series 1995-1 Finance Charge Collections
and (y) the unreimbursed amount by which the Class C
Invested Amount has been reduced on prior Business
Days pursuant to clauses (c) and (d) of the defini-
tion of Class C Invested Amount, if any, such
amount, (i) during the Revolving Period (except for
51
any portion of the Revolving Period during a Class A
Paydown Period), to be treated as Shared Principal
Collections, (ii) during the Amortization Period or
the Class A Pay Down Period, on and prior to the day
on which an amount equal to the Class A Invested
Amount is deposited in the Principal Account, to be
deposited in the Principal Account for distribution
to the Class A Certificateholders on the next Dis-
tribution Date, (iii) during the Amortization Peri-
od, on and prior to the day on which an amount equal
to the Class B Invested Amount is deposited in the
Principal Account, to be deposited in the Principal
Account for distribution to the Class B Certificate-
holders on the next Distribution Date and (iv)
during the Amortization Period, on and after the day
on which such deposit has been made and on and prior
to the day on which an amount equal to the Class C
Invested Amount is deposited in the Principal Ac-
count, to be deposited in the Principal Account for
payment to the Class C Certificateholders on the
next Distribution Date.
(xiii) Reimbursement of Class D Investor
Charge-Offs. On each Business Day, the Trustee,
acting in accordance with instructions from the
Servicer, shall withdraw first from the Cap Proceeds
Account to the extent of the remaining Cap Receipt
Amount for such Business Day and then from the
Collection Account and then from the Payment Reserve
Account and then, on each Reserve Application Date,
from the Investor Reserve Account, to the extent of
any Available Series 1995-1 Finance Charge Collec-
tions remaining after giving effect to the withdraw-
als pursuant to subsections 4.9(a)(i) through (xii),
an amount equal to the lesser of (x) any such re-
maining Available Series 1995-1 Finance Charge
Collections and (y) the unreimbursed amount by which
the Class D Invested Amount has been reduced on
prior Business Days pursuant to clauses (d) and (e)
of the definition of Class D Invested Amount, if
any, such amount, (i) during the Revolving Period to
be paid to the Transferor and (ii) during the Amor-
tization Period, to be deposited in the Principal
Account for payment pursuant to Section 4.9(c) of
the Agreement.
(xiv) Investor Reserve Account. On each
Business Day, the Trustee acting in accordance with
instructions from the Servicer, shall withdraw first
from the Cap Proceeds Account to the extent of the
remaining Cap Receipt Amount for such Business Day
and then from the Collection Account and then from
the Payment Reserve Account, to the extent of any
Available Series 1995-1 Finance Charge Collections
remaining after giving effect to withdrawals pursu-
ant to subsections 4.9(a)(i) through (xiii), an
amount equal to the lesser of (x) any such remaining
Available Series 1995-1 Finance Charge Collections
and (y) the amount by which the Specified Investor
Reserve Amount exceeds the amount on deposit in the
Investor Reserve Account, and deposit such amount,
if any, into the Investor Reserve Account.
52
(xv) Additional Class A Interest. On
each Business Day during a Monthly Period, the
Trustee, acting in accordance with instructions from
the Servicer, shall withdraw first from the Cap
Proceeds Account to the extent of the remaining Cap
Receipt Amount for such Business Day and then from
the Collection Account and then from the Payment
Reserve Account and pay to the Class A Certificate-
holder on such Business Day, to the extent of the
Available Series 1995-1 Finance Charge Collections
remaining after giving effect to the withdrawal
pursuant to subsections 4.9(a)(i) through (xiii), an
amount equal to the lesser of (x) any such remaining
Available Series 1995-1 Finance Charge Collections
and (y) the excess, if any, of (1) the sum of Class
A Interest for such Business Day and the Class A
Interest Shortfall for the preceding Business Day
over (2) the amounts previously deposited into the
Interest Funding Account on such Business Day pursu-
ant to subsection 4.9(a)(i).
(xvi) Class A Costs. On each Business
Day, the Trustee acting in accordance with instruc-
tions from the Servicer, shall withdraw first from
the Cap Proceeds Account to the extent of the re-
maining Cap Receipt Amount for such Business Day and
then from the Collection Account and then from the
Payment Reserve Account and pay to the Class A
Certificateholder, to the extent of any Available
Series 1995-1 Finance Charge Collections remaining
after giving effect to the withdrawals pursuant to
subsections 4.9(a)(i) through (xiv), an amount equal
to the lesser of (x) any such remaining Available
Series 1995-1 Finance Charge Collections and (y) the
Class A Costs for such Business Day and any such
amounts that remain unpaid from previous days to the
extent not included in Class A Costs for such Busi-
ness Day.
(xvii) Class B Increased Costs. On each
Business Day, the Trustee acting in accordance with
instructions from the Servicer, shall withdraw first
from the Cap Proceeds Account to the extent of the
remaining Cap Receipt Amount for such Business Day
and then from the Collection Account and then from
the Payment Reserve Account, to the extent of any
Available Series 1995-1 Finance Charge Collections
remaining after giving effect to the withdrawals
pursuant to subsections 4.9(a)(i) through (xv), an
amount equal to the lesser of (x) any such remaining
Available Series 1995-1 Finance Charge Collections
and (y) amounts payable to Class B Certificatehold-
ers pursuant to Section 16 of this Series Supplement
for payment to such Class B Certificateholders.
53
(xviii) Class C Increased Costs. On each
Business Day, the Trustee acting in accordance with
instructions from the Servicer, shall withdraw first
from the Cap Proceeds Account to the extent of the
remaining Cap Receipt Amount for such Business Day
and then from the Collection Account and then from
the Payment Reserve Account, to the extent of any
Available Series 1995-1 Finance Charge Collections
remaining after giving effect to the withdrawals
pursuant to subsections 4.9(a)(i) through (xvi), an
amount equal to the lesser of (x) any such remaining
Available Series 1995-1 Finance Charge Collections
and (y) amounts payable to Class C Certificatehold-
ers pursuant to Section 16 of this Series Supplement
for payment to such Class C Certificateholders.
(xix) Payment Reserve Account. On each
Business Day, the Trustee acting in accordance with
instructions from the Servicer, shall withdraw first
from the Cap Proceeds Account to the extent of the
remaining Cap Receipt Amount for such Business Day
and then from the Collection Account, to the extent
of any Available Series 1995-1 Finance Charge Col-
lections remaining after giving effect to the with-
drawals pursuant to subsections 4.9(a)(i) through
(xvii) an amount equal to the lesser of (x) any such
remaining Available Series 1995-1 Finance Charge
Collections and (y) the amount designated by the
Transferor in writing (which include facsimile
transmission) in its instructions to the Trustee on
such Business Day and deposit such amount, if any,
into the Payment Reserve Account.
(xx) Excess Finance Charge Collections.
Any amounts remaining in the Cap Proceeds Account or
the Collection Account to the extent of any Avail-
able Series 1995-1 Finance Charge Collections re-
maining after giving effect to the withdrawals
pursuant to subsection 4.9(a)(i) through (xviii),
shall be treated as Excess Finance Charge Collec-
tions, and the Servicer shall direct the Trustee in
writing on each Business Day to withdraw such
amounts from the Cap Proceeds Account, if applica-
ble, and the Collection Account and the Payment
Reserve Account and to first make such amounts
available to pay to Certificateholders of other
Series to the extent of shortfalls, if any, in
amounts payable to such certificateholders from
Finance Charge Collections allocated to such other
Series, then to pay any unpaid commercially reason-
able costs and expenses of a Successor Servicer, if
any, and then on each Business Day other than the
Default Recognition Date, pay to the Transferor to
be treated as "Transferor Retained Finance Charge
Collections," and, on each Default Recognition Date
pay any remaining Excess Finance Charge Collections
to the Transferor.
54
(b) For each Business Day with respect to the
Revolving Period (except for any portion of the Revolving
Period during a Class A Paydown Period), the funds on
deposit in the Collection Account to the extent of the
lesser of (A) the Class A Invested Amount and (B) the sum
of (x) product of (i) the sum of the Class A Floating
Allocation Percentage, the Class B Floating Allocation
Percentage and the Class C Floating Allocation Percentage
and (ii) the amount of Principal Collections on such
Business Day (such product the "ABC Revolving Principal
Collections") less the amount of Reallocated Class C
Principal Collections and Reallocated Class B Principal
Collections on such Business Day (the ABC Revolving
Principal Collections less the Class C Reallocated Prin-
cipal Collections and the Class B Reallocated Principal
Collections on the related Business Day, the "Net ABC
Revolving Principal Collections"), (y) the amount then on
deposit in the Collection Account pursuant to subsection
3A(i) of this Series Supplement and (z) the amount of
Shared Principal Collections allocated to the Series
1995-1 Certificates in accordance with Section 4.8 on
such Business Day may, at the option of the Transferor or
shall, if the Aggregate ABC Principal Amount exceeds the
Aggregate Interest Rate Caps Notional Amount on such
Business Day, pursuant to instructions delivered to the
Servicer and the Trustee by facsimile or other similar
means of documented communication, be deposited into the
Defeasance Account and applied as provided in Section
9A(b) of this Series Supplement. During the Revolving
Period (except for any portion of the Revolving Period
during a Class A Pay Down Period), an amount equal to the
Net ABC Revolving Principal Collections less any amount
deposited to the Defeasance Account pursuant to the
immediately preceding sentence shall be treated as Shared
Principal Collections and applied pursuant to the written
direction of the Servicer in the Daily Report for such
Business Day, as provided in Section 4.3(d) of the Agree-
ment.
(c) For each Business Day on and after the
Amortization Period Commencement Date, the amount of
funds on deposit in the Collection Account and the other
amounts described below will be distributed, pursuant to
the written direction of the Servicer in the Daily Report
for such Business Day in the following priority:
55
(i) on and prior to the day on which an
amount equal to the Class A Invested Amount has been
deposited in the Principal Account to be applied to
the payment of Class A Principal, an amount (not in
excess of the Class A Invested Amount) equal to the
sum of (v) the product of the ABC Fixed/Floating
Allocation Percentage and Principal Collections in
the Collection Account at the end of the preceding
Business Day (less the amount thereof to be applied
as Reallocated Class B Principal Collections or
Reallocated Class C Principal Collections on such
Business Day), (w) any amount on deposit in the
Excess Funding Account allocated to the Class A
Certificate on such Business Day pursuant to subsec-
tion 4.9(d), (x) amounts to be paid pursuant to
subsections 4.9(a)(v), (vii), (viii), (xi), (xii)
and (xiii) of the Agreement from Available Series
1995-1 Finance Charge Collections and from amounts
available pursuant to subsections 4.10(a) and (b)
and 4.15(a), (b) and (c) of the Agreement on such
Business Day, (y) any amounts specified in the last
sentence of Section 3A(i) of this Series Supplement
and (z) the amount of Shared Principal Collections
allocated to the Series 1995-1 Certificates in
accordance with Section 4.8 on such Business Day,
will be paid to the Class A Certificateholder;
(ii) on and after the day on which an
amount equal to the Class A Invested Amount has been
paid to the Class A Certificateholder, an amount
(not in excess of the Class B Invested Amount) equal
to the sum of (v) an amount equal to the product of
the ABC Fixed/Floating Allocation Percentage and
Principal Collections in the Collection Account at
the end of the preceding Business Day (less the
amount thereof to be applied as Reallocated Class B
Principal Collections or Reallocated Class C Princi-
pal Collections on such Business Day), (w) any
amount on deposit in the Excess Funding Account
allocated to the Class B Certificates on such Busi-
ness Day pursuant to subsection 4.9(d), (x) the
amount, if any, allocated to be paid to the Class B
Certificates pursuant to subsections 4.9(a)(v),
(vii), (xi), (xii) and (xiii) of the Agreement from
Available Series Finance Charge Collections and from
amounts available pursuant to subsections 4.10(a)
and (b) and 4.15(a) and (b) of the Agreement with
respect to such Business Day, (y) any amounts speci-
fied in the last sentence of Section 3A(i) of this
Series Supplement and (z) the amount of Shared
Principal Collections allocated to the Series 1995-1
Certificates in accordance with Section 4.8 on such
Business Day (such sum, the "Class B Daily Principal
Amount") will be deposited into the Principal Ac-
count;
56
(iii) on and after the day on which an
amount equal to the Class B Invested Amount has been
deposited in the Principal Account to be applied to
the payment of Class B Principal, an amount (not in
excess of the Class C Invested Amount) equal to the
sum of (v) an amount equal to the product of the ABC
Fixed/Floating Allocation Percentage and Principal
Collections in the Collection Account at the end of
the preceding Business Day (less the amount thereof
to be applied as Reallocated Class C Principal
Collections on such Business Day), (w) any amount on
deposit in the Excess Funding Account allocated to
the Class C Certificates on such Business Day pursu-
ant to subsection 4.9(d), (x) the amount, if any,
allocated to be paid to the Class C Certificates
pursuant to subsections 4.9(a)(v), (vii), (xii) and
(xiii) of the Agreement from Available Series Fi-
▇▇▇▇▇ Charge Collections and from amounts available
pursuant to subsections 4.10(a) and (b) and 4.15(a)
of the Agreement with respect to such Business Day,
(y) any amounts specified in the last sentence of
Section 3A(i) of this Series Supplement and (z) the
amount of Shared Principal Collections allocated to
the Series 1995-1 Certificates in accordance with
Section 4.8 on such Business Day (such sum, the
"Class C Daily Principal Amount") will be deposited
into the Principal Account;
(iv) on and after the day on which an
amount equal to the Class C Invested Amount has been
deposited in the Principal Account to be applied to
the payment of Class C Principal, an amount equal to
the sum of (w) an amount equal to the product of the
Class D Fixed/Floating Allocation Percentage and
Principal Collections in the Collection Account at
the end of the preceding Business Day (less the
amount thereof to be applied as Reallocated Class D
Principal Collections on such Business Day), (x) any
amount on deposit in the Excess Funding Account
allocated to the Class D Certificate on such Busi-
ness Day pursuant to subsection 4.9(d), (y) the
amount, if any, allocated to be paid to the Class D
Certificate pursuant to subsections 4.9(a)(vi),
(vii) and (xiii) of the Agreement from Available
Series Finance Charge Collections and from amounts
available pursuant to subsections 4.10(a) and (b) of
the Agreement with respect to such Business Day and
(z) the amount of Shared Principal Collections
allocated to the Series 1995-1 Certificates in
accordance with Section 4.8 on such Business Day
(such sum, the "Class D Daily Principal Amount")
will be distributed to the Class D Certificatehold-
ers; and
57
(v) an amount equal to the excess, if
any, of (A) the sum of the amounts described in
clauses (i)(v) and (x), (ii)(v) and (x) and (iii)(v)
and (x) above over (B) the sum of Class A Principal,
Class B Principal and Class C Principal will be
treated as Shared Principal Collections and applied
as provided in subsection 4.3(d) of the Agreement.
(d) On the first Business Day of the Amortiza-
tion Period, funds on deposit in the Excess Funding
Account will be deposited in the Principal Account,
provided that if any other Series enters its Amortization
Period, as defined in its related Series Supplement, the
amount of the foregoing deposit shall be equal to the
product of an amount equal to the amount of funds on
deposit in the Excess Funding Account and a fraction the
numerator of which is the Invested Amount and the denomi-
nator of which is equal to the sum of the invested
amounts of each Series then entering its related Amorti-
zation Period as defined in its related Series Supple-
ment. Amounts deposited in the Principal Account pursu-
ant to the foregoing sentence will be allocated in the
following order of priority: (i) to the Class A Certifi-
cate in an amount not to exceed the Class A Principal
after subtracting therefrom any amounts to be paid to the
Class A Certificateholders with respect thereto pursuant
to subsections 4.9(c)(i)(v), (y), and (z), (ii) to the
Class B Certificates in an amount not to exceed the Class
B Principal after subtracting therefrom any amounts to be
deposited in the Principal Account with respect thereto
pursuant to subsections 4.9(c)(ii)(v), (y) and (z), and
(iii) to the Class C Certificates in an amount not to
exceed the Class C Principal after subtracting therefrom
any amounts to be deposited in the Principal Account with
respect thereto pursuant to subsections 4.9(c)(iii)(v),
(y) and (z). On and after the Class D Principal Payment
Commencement Date any amounts remaining on deposit in the
Excess Funding Account and allocated to the Series 1995-1
Certificates will be deposited in the Principal Account
in an amount not to exceed the Class D Invested Amount
after subtracting therefrom any amounts to be deposited
in the Principal Account with respect thereto pursuant to
subsections 4.9(c)(iv)(w), (y) and (z).
(e) For each Business Day during the Class A
Pay Down Period:
(i) funds on deposit in the Collection
Account will be, pursuant to the written direction
of the Servicer in the Daily Report for such Busi-
ness Day, paid to the Class A Certificateholder in
respect of the Class A Principal in an amount (not
in excess of the Class A Invested Amount) equal to
the sum of (w) the product of the ABC Fixed/Floating
Allocation Percentage and Principal Collections in
the Collection Account at the end of the preceding
Business Day (less the amount thereof to be applied
58
as Reallocated Class B Principal Collections or
Reallocated Class C Principal Collections on such
Business Day), (x) amounts to be paid pursuant to
subsections 4.9(a)(v), (vii), (viii), (xi), (xii)
and (xiii) of the Agreement from Available Series
1995-1 Finance Charge Collections and from amounts
available pursuant to subsections 4.10(a) and (b)
and 4.15(a), (b) and (c) of the Agreement on such
Business Day, (y) any amounts specified in the last
sentence of Section 3A(i) of this Series Supplement
and (z) the amount of Shared Principal Collections
allocated to the Series 1995-1 Certificates in
accordance with Section 4.8 of the Agreement on such
Business Day;
(ii) an amount equal to the excess, if
any, of (A) the sum of the amounts described in
clauses (i)(w) and (x) above over (B) the Class A
Principal will be treated as Shared Principal Col-
lections and applied as provided in subsection
4.3(d) of the Agreement.
(f) On each Business Day on which Class D
Daily Principal has been allocated pursuant to subsection
4.7(d) of the Agreement, funds on deposit in the Collec-
tion Account in an amount equal to the Class D Daily
Principal Amount designated by the Transferor with re-
spect to such Business Day will be distributed to the
Class D Certificateholders.
Section 4.10 Coverage of Required Amount for
the Series 1995-1 Certificates. (a) To the extent that
any amounts are on deposit in the Excess Funding Account
on any Business Day, the Servicer shall apply, in the
manner specified for application of Available Series
1995-1 Finance Charge Collections in subsections
4.9(a)(i) through (xvii), Transferor Finance Charge
Collections in an amount equal to the excess of (x) the
product of (a) the Base Rate, (b) the amounts on deposit
in the Excess Funding Account and (c) the number of days
elapsed since the previous Business Day divided by the
actual number of days in such year over (y) the aggregate
amount of all earnings since the previous Business Day
available from the Cash Equivalents in which funds on
deposit in the Excess Funding Account are invested (the
"Negative Carry Amount").
59
(b) To the extent that on any Business Day
payments are being made pursuant to any of subsections
4.9(a)(i) through (xvii), respectively, and the full
amount to be paid pursuant to any such subsection receiv-
ing payments on such Business Day is not paid in full on
such Business Day, the Servicer shall apply, in the
manner specified for application of Available Series
1995-1 Finance Charge Collections in subsections
4.9(a)(i) through (xvii), all or a portion of the Excess
Finance Charge Collections from other Series with respect
to such Business Day allocable to the Series 1995-1
Certificates in an amount equal to the excess of the full
amount to be allocated or paid pursuant to the applicable
subsection over the amount applied with respect thereto
from Available Series 1995-1 Finance Charge Collections
and Transferor Finance Charge Collections on such Busi-
ness Day (the "Required Amount"). Excess Finance Charge
Collections allocated to the Series 1995-1 Certificates
for any Business Day shall mean an amount equal to the
product of (x) Excess Finance Charge Collections avail-
able from all other Series for such Business Day and (y)
a fraction, the numerator of which is the Required Amount
for such Business Day and the denominator of which is the
aggregate amount of shortfalls in required amounts or
other amounts to be paid from Finance Charge Collections
for all Series for such Business Day.
Section 4.11 Payment of Certificate Interest.
On each Transfer Date, the Trustee, acting in accordance
with instructions from the Servicer set forth in the
Daily Report for such day, shall withdraw the amount on
deposit in the Interest Funding Account with respect to
the preceding Monthly Period allocable to the Series
1995-1 Certificates and deposit such amount in the Dis-
tribution Account. On each Business Day, the Paying
Agent shall pay in accordance with Section 5.1 of the
Agreement to Class A Certificateholders from the Distri-
bution Account an amount equal to the sum of the Class C
Interest Adjustment, if any, and the Class B Interest
Adjustment, if any, deposited into the Distribution
Account pursuant to Section 4.6A. On each Distribution
Date, the Paying Agent shall pay in accordance with
Section 5.1 of the Agreement (x) to the Class B Certifi-
cateholders from the Distribution Account the amount
deposited into the Interest Funding Account during the
preceding Monthly Period pursuant to subsections
4.9(a)(ii) and (ix) and Sections 4.10 and 4.15 less the
aggregate Class B Interest Adjustment made with respect
to the related Interest Accrual Period and (y) the Class
C Certificateholders from the Distribution Account the
amount deposited into the Interest Funding Account pursu-
ant to subsections 4.9(a)(iii) and (x) and Sections 4.10
and 4.15 during the preceding Monthly Period less the
aggregate Class C Interest Adjustment made in the related
Interest Accrual Period.
60
Section 4.12 Payment of Certificate Principal.
(a) On the Transfer Date preceding the Class B
Principal Payment Commencement Date and each Distribution
Date thereafter, the Trustee, acting in accordance with
instructions from the Servicer set forth in the Daily
Report for such day, shall withdraw from the Principal
Account and deposit in the Distribution Account, to the
extent of funds available, an amount equal to the Class B
Principal for such Distribution Date. On the Class B
Principal Payment Commencement Date, after the payment of
any principal amounts to the Class A Certificate on such
day, and on each Distribution Date thereafter until the
Class B Invested Amount is paid in full, the Paying Agent
shall pay in accordance with Section 5.1 to the Class B
Certificateholders from the Distribution Account such
amount deposited into the Distribution Account on the
related Transfer Date.
(b) On the Transfer Date preceding the Class C
Principal Payment Commencement Date and each Distribution
Date thereafter, the Trustee, acting in accordance with
instructions from the Servicer set forth in the Daily
Report for such day, shall withdraw from the Principal
Account and deposit in the Distribution Account an amount
equal to the lesser of the Class C Invested Amount and
the amount on deposit in the Principal Account allocable
to the Series 1995-1 Certificates (after giving effect to
transfers pursuant to subsection 4.12(b)). On the Class
C Principal Payment Commencement Date, after the payment
of any principal amounts to the Class B Certificates on
such day, and on each Distribution Date thereafter until
the Class C Invested Amount is paid in full, the Paying
Agent shall pay in accordance with Section 5.1 to the
Class C Certificateholders from the Distribution Account
such amount deposited into the Distribution Account on
the related Transfer Date.
(c) On the Transfer Date preceding the Class D
Principal Payment Commencement Date and each Business Day
thereafter, the Trustee, acting in accordance with in-
structions from the Servicer set forth in the Daily
Report for such day, shall make payments of principal to
the Class D Certificateholders in accordance with subsec-
tion 4.9(c)(iv) of the Agreement.
(d) On each Business Day the Trustee acting in
accordance with instructions from the Servicer set forth
in the Daily Report for such Business Day shall make
payments of principal to the Class D Certificateholders
of Class D Daily Principal, if any, designated by the
Transferor pursuant to Section 4.7(d) of the Agreement.
Any amounts remaining in the Principal Account
and allocable to the Series 1995-1 Certificates, after
the Class D Invested Amount has been paid in full, will
be treated as Shared Principal Collections and applied in
accordance with Section 4.3(d) of the Agreement.
Section 4.13 Investor Charge-Offs. (a) If,
on any Determination Date, the aggregate Investor De-
fault Amount and the Series Allocation Percentage of
unpaid Adjustment Payments, if any, for each Business
Day in the preceding Monthly Period exceeded the Avail-
able Series 1995-1 Finance Charge Collections applied to
the payment thereof pursuant to subsections 4.9(a)(v),
(vi) and (vii) of the Agreement and the amount of Trans-
feror Finance Charge Collections and Excess Finance
Charge Collections allocated thereto pursuant to Section
4.10 of the Agreement, and the amount of Reallocated
Principal Collections applied with respect thereto pur-
suant to Section 4.15 of the Agreement, the Class D
Invested Amount will be reduced by the amount by which
the remaining aggregate Investor Default Amount and
Series Allocation Percentage of unpaid Adjustment Pay-
ments exceed the amount applied with respect thereto
during such preceding Monthly Period (a "Class D Inves-
tor Charge-Off").
61
(b) In the event that any such reduction of
the Class D Invested Amount would cause the Class D
Invested Amount to be a negative number, the Class D
Invested Amount will be reduced to zero, and, the Class
C Invested Amount will be reduced by the amount by which
the Class D Invested Amount would have been reduced
below zero, but not more than the aggregate Investor
Default Amount and Series Allocation Percentage of un-
paid Adjustment Payments for such Monthly Period (a
"Class C Investor Charge-Off").
(c) In the event that any such reduction of
the Class C Invested Amount would cause the Class C
Invested Amount to be a negative number, the Class C
Invested Amount will be reduced to zero, and, the Class
B Invested Amount will be reduced by the amount by which
the Class C Invested Amount would have been reduced
below zero, but not more than the remaining aggregate
Investor Default Amount and Series Allocation Percentage
of unpaid Adjustment Payments for such Monthly Period (a
"Class B Investor Charge-Off").
(d) In the event that any such reduction of
the Class B Invested Amount would cause the Class B
Invested Amount to be a negative number, the Class B
Invested Amount will be reduced to zero, and the Class A
Invested Amount will be reduced by the amount by which
the Class B Invested Amount would have been reduced
below zero, but not more than the remaining aggregate
Investor Default Amount and Series Allocation Percentage
of unpaid Adjustment Payments for such Monthly Period (a
"Class A Investor Charge-Off").
Section 4.14. Increases in the Invested
Amount During the Investment Period. (a) The "Invest-
ment Period" shall be the period, if any, beginning on
the Initial Closing Date and ending upon the issuance of
Class A Certificates in an initial amount of at least
$12,400,000.
(b) On any Business Day during the Investment
Period, the Transferor may require that: the Persons
obligated to purchase the Class C Certificates pursuant
to the Class C Purchase Agreement purchase a principal
amount of Class C Certificates equal to the Class C Full
Invested Amount (a "Class C Funding Purchase"); the
Persons obligated to purchase the Class B Certificates
pursuant to the Class B Purchase Agreement purchase a
principal amount of Class B Certificates equal to the
Class B Full Invested Amount (a "Class B Funding Pur-
chase"); and that the Person obligated to purchase the
Class A Certificate purchase a principal amount of the
Class A Certificate according to the terms of the Class
A Certificate Purchase Agreement less than or equal to
the Class A Maximum Invested Amount, but in no event
less than $12,400,000 (a "Class A Funding Purchase");
provided, however, that any Class A Funding Purchase,
Class B Funding Purchase or Class C Funding Purchase may
62
be required only upon satisfaction of the following
conditions: (i) that the purchase of the Class C Funding
Purchase be made in a single purchase on a single Busi-
ness Day and prior to or contemporaneously with the
issuance of the Class B Certificates; (ii) that the
Class B Funding Purchase be made in a single purchase on
a single Business Day and prior to or contemporaneously
with the issuance of the Class A Certificate; (iii) that
the Class A Funding Purchase be made only after or con-
temporaneously with the Class B Funding Purchase or
Class C Funding Purchase; (iv) that immediately follow-
ing the issuance of each of the Class C Certificates,
the Class B Certificates and the Class A Certificate,
the Class D Invested Amount be equal to or greater than
the Stated Class D Amount; (v) that all of the condi-
tions placed upon the issuance of a Series pursuant to
Section 6.9(b) of the Agreement be satisfied with re-
spect to the applicable Class or Classes of Certificates
as if such Class or Classes of Certificates were a Se-
▇▇▇▇, except for the requirement to deliver a Series
Supplement (as defined in the Agreement); and (vi) that
the Transferor have given the purchasers of the Class C
Certificates, the Class B Certificates or the Class A
Certificates, as applicable at least five Business Days'
notice of the date on which the purchase is to be made
in accordance with this Section 4.14A.
Upon satisfaction of the above conditions, and
in accordance with Section 6.9 of the Agreement to the
extent applicable, the Trustee shall issue the Class C
Certificates in the case of a Class C Funding Purchase,
the Class B Certificates in the case of a Class B Fund-
ing Purchase, and the Class A Certificates in the case
of a Class A Funding Purchase, as applicable, upon re-
ceipt of payment therefor.
Section 4.15 Reallocated Principal Collec-
tions for the Series 1995-1 Certificates. (a) On each
Business Day, the Servicer will determine an amount
equal to the least of (i) the Class D Invested Amount,
(ii) the product of (x)(I) during the Revolving Period,
the Class D Floating Allocation Percentage or (II) dur-
ing an Amortization Period, the Class D Fixed/Floating
Allocation Percentage and (y) the amount of Principal
Collections with respect to such Business Day and (iii)
an amount equal to the sum of (a) the Class A Required
Amount for such Business Day, (b) the Class B Required
Amount for such Business Day and (c) the Class C Re-
quired Amount for such Business Day (such amount called
"Reallocated Class D Principal Collections") and shall
apply Principal Collections in an amount equal to such
amount first to the components of the Class A Required
Amount, then to the components of the Class B Required
Amount and then to the components of the Class C Re-
quired Amount in the same priority as amounts are ap-
plied to such components from Available Series 1995-1
Finance Charge Collections pursuant to subsection
4.9(a).
63
(b) On each Business Day, the Servicer will
determine an amount equal to the least of (i) the Class
C Invested Amount, (ii) the product of (x)(I) during the
Revolving Period, the Class C Floating Allocation Per-
centage or (II) during an Amortization Period, the Class
C Fixed/Floating Allocation Percentage and (y) the
amount of Principal Collections for such Business Day
and (iii) an amount equal to the sum of (a) the Class A
Required Amount for such Business Day over the amount of
Reallocated Class D Principal Collections applied with
respect thereto for such Business Day and (b) the Class
B Required Amount for such Business Day over the amount
of Reallocated Class D Principal Collections applied
with respect thereto for such Business Day (such amount
called "Reallocated Class C Principal Collections") and
shall apply Principal Collections in an amount equal to
such amount first to the remaining components of the
Class A Required Amount and then to the remaining compo-
nents of the Class B Required Amount in the same priori-
ty as amounts are applied to such components from Avail-
able Series 1995-1 Finance Charge Collections pursuant
to subsection 4.9(a).
(c) On each Business Day, the Servicer will
determine an amount equal to the least of (i) the Class
B Invested Amount, (ii) the product of (x)(I) during the
Revolving Period, the Class B Floating Allocation Per-
centage or (II) during an Amortization Period, the Class
B Fixed/Floating Allocation Percentage and (y) the
amount of Principal Collections for such Business Day
and (iii) an amount equal to the excess, if any, of the
Class A Required Amount for such Business Day over the
sum of the amount of Reallocated Class D Principal Col-
lections and Reallocated Class C Principal Collections
applied with respect thereto for such Business Day (such
amount called "Reallocated Class B Principal Collec-
tions") and shall apply Principal Collections equal to
such amount to the remaining components of the Class A
Required Amount in the same priority as amounts are
applied to such components from Available Series 1995-1
Finance Charge Collections pursuant to subsection
4.9(a).
Section 4.16 Determination of LIBOR. (a)
"LIBOR" shall mean, for a specific Interest Accrual
Period, the rate for deposits in United States dollars
for one month (commencing on the first day of the rele-
vant Interest Accrual Period) which appears on Telerate
Page 3750 as of 11:00 A.M., London time, on the LIBOR
Determination Date for such Interest Accrual Period. If
such rate does not appear on Telerate Page 3750, the
rate for such Interest Accrual Period will be determined
on the basis of the rates at which deposits in the Unit-
ed States dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on such LIBOR
Determination Date to prime banks in the London inter-
bank market for a period equal to one month (commencing
on the first day of Interest Accrual Period). The
Trustee will request the principal London office of each
such bank to provide a quotation of its rate. If at
least two such quotations are provided, the rate for
such Interest Accrual Period will be the arithmetic mean
of the quotations. If fewer than two quotations are
provided as requested, the rate for such Interest Accru-
al Period will be the arithmetic mean of the rates quot-
ed by four major banks in New York City, selected by the
Trustee, at approximately 11:00 a.m., New York City
time, on the LIBOR Determination Date for loans in Unit-
ed States dollars to leading European banks for a period
equal to one month (commencing on the first day of such
Interest Accrual Period).
64
(b) The Class B Certificate Rate and the
Class C Certificate Rate applicable to the then current
and the immediately preceding Interest Accrual Periods
may be obtained by any Series 1995-1 Certificateholder
by telephoning the Trustee at its Corporate Trust Office
at (▇▇▇) ▇▇▇-▇▇▇▇.
(c) On each LIBOR Determination Date, the
Trustee shall send to the Servicer by facsimile notifi-
cation of LIBOR for the following Interest Accrual Peri-
od.
Section 4.17 Payment Reserve Account
(a) The Servicer shall establish and maintain
or cause to be established and maintained with a Quali-
fied Institution, which may be the Trustee, in the name
of the Trustee, on behalf of the Certificateholders, the
"Payment Reserve Account," which shall be a segregated
trust account with the corporate trust department of
such Qualified Institution, bearing a designation clear-
ly indicating that the funds deposited therein are held
for the benefit of the Certificateholders. The Trustee
shall possess all right, title and interest in all funds
on deposit from time to time in the Payment Reserve
Account and in all proceeds thereof. The Payment Re-
serve Account shall be under the sole dominion and con-
trol of the Trustee for the benefit of the Certificate-
holders. If, at any time, the institution holding the
Payment Reserve Account ceases to be a Qualified Insti-
tution, the Trustee shall within 20 Business Days estab-
lish a new Payment Reserve Account meeting the condi-
tions specified above with a Qualified Institution, and
shall transfer any cash or any investments to such new
Payment Reserve Account. From the date such new Payment
Reserve Account is established, it shall be the "Payment
Reserve Account."
(b) The Transferor, at its discretion, may
withdraw on any Determination Date a part or all of any
amounts remaining in the Payment Reserve Account after
giving effect to any withdrawals required to be made
under Section 4.9(a) above.
65
(c) Funds on deposit in the Payment Reserve
Account shall be invested in Cash Equivalents by the
Trustee (or, at the direction of the Trustee, by the
Servicer on behalf of the Trustee) at the direction of
the Servicer. Funds on deposit in the Payment Reserve
Account on any Business Day, after giving effect to any
withdrawals from the Payment Reserve Account, shall be
invested in Cash Equivalents that will mature so that
such funds will be available for withdrawal on or prior
to the following Business Day. The proceeds of any such
investments shall be invested in Cash Equivalents that
will mature so that such funds will be available for
withdrawal on or prior to the following Business Day.
On each Business Day following a deposit of funds to the
Payment Reserve Account, the aggregate proceeds of any
such investment shall be deposited in the Collection
Account and treated as Investment Proceeds for applica-
tion as Available Series 1995-1 Finance Charge Collec-
tions.
Section 4.18 Establishment of Investor Re-
serve Account.
(a) The Servicer, for the benefit of the
Investor Certificateholders, shall, on the Initial Clos-
ing Date, establish and maintain or cause to be estab-
lished and maintained with a Qualified Institution,
which may be the Trustee, in the name of the Trustee, on
behalf of the Investor Certificateholders, the "Investor
Reserve Account," which shall be a segregated trust
account with the corporate trust department of such
Qualified Institution, bearing a designation clearly
indicating that the funds deposited therein are held for
the benefit of the Investor Certificateholders. The
Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Investor
Reserve Account and in all proceeds thereof. The Inves-
tor Reserve Account shall be under the sole dominion and
control of the Trustee for the benefit of the Investor
Certificateholders. If, at any time, the institution
holding the Investor Reserve Account ceases to be a
Qualified Institution, the Trustee shall within 10 Busi-
ness Days establish a new Investor Reserve Account meet-
ing the conditions specified above with a Qualified
Institution, and shall transfer any cash or any invest-
ments to such new Investor Reserve Account. From the
date such new Investor Reserve Account is established,
it shall be the "Investor Reserve Account."
66
(b) On the Initial Closing Date, the Trustee,
at the direction of the Servicer, shall apply the pro-
ceeds from the issuance of the Previously Issued Certif-
icates to fund the Investor Reserve Account in an amount
equal to the Specified Investor Reserve Amount on the
Initial Closing Date. On the date of issuance of any
Additional Class A Invested Amount, the Trustee shall,
at the direction of the Servicer, deposit in the Inves-
tor Reserve Account in accordance with Section 6.15
proceeds of such issuance in an amount equal to the
excess of the Specified Investor Reserve Amount follow-
ing the issuance of the Additional Class A Invested
Amount (and any related increase in the Class D Invested
Amount) over the Specified Investor Reserve Amount prior
to the issuance of Additional Class A Invested Amount.
In addition, the Servicer shall on each Business Day
deposit in the Investor Reserve Account an amount equal
to the excess of the Specified Investor Reserve Amount
over the amount on deposit in the Investor Reserve Ac-
count to the extent of funds available therefor pursuant
to subsection 4.9(a)(xiv). Funds on deposit in the
Investor Reserve Account shall be withdrawn by the
Servicer and applied in accordance with Section 4.9(a).
Amounts on deposit in the Investor Reserve Account may
be subsequently released therefrom to the extent that
the amount on deposit in the Investor Reserve Account
exceeds the Specified Investor Reserve Amount and shall
be paid to the Transferor. In connection with any re-
duction of the Specified Investor Reserve Amount, the
Transferor shall provide ▇▇▇▇▇'▇ with at least 30 days
prior written notice of such proposed change.
(c) Funds on deposit in the Investor Reserve
Account shall be invested in Cash Equivalents by the
Trustee (or, at the direction of the Trustee, by the
Servicer on behalf of the Trustee) at the direction of
the Servicer. Funds on deposit in the Investor Reserve
Account on any Distribution Date, after giving effect to
any withdrawals from the Investor Reserve Account, shall
be invested in Cash Equivalents that will mature so that
such funds will be available for withdrawal on or prior
to the following Reserve Application Date. The proceeds
of any such investments shall be invested in Cash Equiv-
alents that will mature so that such funds will be
available for withdrawal on or prior to the following
Reserve Application Date. On each Business Day follow-
ing a deposit of funds to the Investor Reserve Account,
to the extent that the amount on deposit in the Investor
Reserve Account exceeds the Specified Investor Reserve
Amount, the aggregate proceeds of any such investment
shall be deposited in the Collection Account and treated
as Investment Proceeds for application as Available
Series 1995-1 Finance Charge Collections.
67
SECTION 7. Article V of the Agreement. Arti-
cle V of the Agreement shall read in its entirety as
follows and shall be applicable only to the Series 1995-
1 Certificates:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
Section 5.1 Distributions. (a) On each
Business Day, the Paying Agent shall distribute (in
accordance with the Settlement Statement delivered by
the Servicer to the Trustee and the Paying Agent pursu-
ant to subsection 3.4(c)) to the Class A Certificate-
holder of record on the preceding Record Date (other
than as provided in subsection 2.4(e) or in Section 12.3
respecting a final distribution) such
Certificateholder's pro rata share (based on the aggre-
gate Undivided Interests represented by the Class A
Certificate held by such Certificateholder) of amounts
on deposit in the Distribution Account as are payable to
the Class A Certificateholder pursuant to Section 4.11
of the Agreement and amounts deposited in the Principal
Account pursuant to subsection 9A(b) of this Supplement
and amounts on deposit in the Principal Account pursuant
to subsection 4.9(c)(i) of the Agreement by wire trans-
fer to an account or accounts designated by such Class A
Certificateholder by written notice given to the Paying
Agent not less than five days prior to such Business
Day; provided, however, that the final payment in re-
tirement of the Class A Certificate will be made only
upon presentation and surrender of the Class A Certifi-
cate at the office or offices specified in the notice of
such final distribution delivered by the Trustee pursu-
ant to Section 12.3.
(b) On each Distribution Date, the Paying
Agent shall distribute (in accordance with the Settle-
ment Statement delivered by the Servicer to the Trustee
and the Paying Agent pursuant to subsection 3.4(c)) to
each Class B Certificateholder of record on the preced-
ing Record Date (other than as provided in subsection
2.4(e) or in Section 12.3 respecting a final distribu-
tion) such Certificateholder's pro rata share (based on
the aggregate Undivided Interests represented by Class B
Certificates held by such Certificateholder) of amounts
on deposit in the Distribution Account as are payable to
the Class B Certificateholders pursuant to Sections 4.11
and 4.12 of the Agreement by wire transfer to an account
or accounts designated by such Class B Certificateholder
by written notice given to the Paying Agent not less
than five days prior to the related Distributed Date;
provided, however, that the final payment in retirement
of the Class B Certificates will be made only upon pre-
sentation and surrender of the Class B Certificates at
the office or offices specified in the notice of such
final distribution delivered by the Trustee pursuant to
Section 12.3.
68
(c) On each Distribution Date, the Paying
Agent shall distribute (in accordance with the Settle-
ment Statement delivered by the Servicer to the Trustee
and the Paying Agent pursuant to subsection 3.4(c)) to
each Class C Certificateholder of record on the preced-
ing Record Date (other than as provided in subsection
2.4(e) or in Section 12.3 respecting a final distribu-
tion) such Certificateholder's pro rata share (based on
the aggregate Undivided Interests represented by Class C
Certificates held by such Certificateholder) of amounts
on deposit in the Distribution Account as are payable to
the Class C Certificateholders pursuant to Sections 4.11
and 4.12 of the Agreement by wire transfer to each Class
C Certificateholder to an account or accounts designated
by such Class C Certificateholder by written notice
given to the Paying Agent not less than five days prior
to the related Distribution Date; provided, however,
that the final payment in retirement of the Class C
Certificates will be made only upon presentation and
surrender of the Class C Certificates at the office or
offices specified in the notice of such final distribu-
tion delivered by the Trustee pursuant to Section 12.3.
Section 5.2 Certificateholders' Statement.
(a) On the 20th day of each calendar month (or if such
day is not a Business Day the next succeeding Business
Day), the Paying Agent shall forward to each Certifi-
cateholder and the Rating Agencies a statement substan-
tially in the form of Exhibit C prepared by the Servicer
and delivered to the Trustee and the Paying Agent on the
preceding Determination Date setting forth the following
information:
(i) the total amount distributed;
(ii) the amount of such distribution
allocable to Certificate Principal;
(iii) the amount of such distribution
allocable to Certificate Interest;
(iv) the amount of Principal Collections
received in the Collection Account during the pre-
ceding Monthly Period and allocated in respect of
the Class A Certificate, the Class B Certificates,
the Class C Certificates and the Class D Certifi-
cate, respectively;
69
(v) the amount of Finance Charge Collec-
tions processed during the preceding Monthly Period
and allocated in respect of the Class A Certifi-
cate, the Class B Certificates, the Class C Certif-
icates and the Class D Certificate, respectively;
(vi) the aggregate amount of Principal
Receivables, the Invested Amount, the Class A In-
vested Amount, the Class B Invested Amount, the
Class C Invested Amount, the Class D Invested
Amount, the Floating Allocation Percentage and,
during the Amortization Period, the ABC
Fixed/Floating Allocation Percentage, Class B
Fixed/Floating Allocation Percentage, or Class C
Fixed/Floating Allocation Percentage as applicable,
as of the end of the day on the last day of the
related Monthly Period;
(vii) the aggregate outstanding balance
of Receivables which are current, 30-59, 60-89, and
90 days and over delinquent as of the end of the
day on the last day of the related Monthly Period;
(viii) the aggregate Investor Default
Amount for the preceding Monthly Period;
(ix) the aggregate amount of Class A
Investor Charge-Offs, Class B Investor Charge-Offs,
Class C Investor Charge-Offs and Class D Investor
Charge-Offs for the preceding Monthly Period;
(x) the amount of the Servicing Fee for
the preceding Monthly Period;
(xi) the Class B Pool Factor and the
Class C Pool Factor as of the end of the last day
of the Monthly Period immediately preceding the
Determination Date;
(xii) the amount of unreimbursed Reallo-
cated Class B Principal Collections, Reallocated
Class C Principal Collections and Reallocated Class
D Principal Collections for the related Monthly
Period;
(xiii) the aggregate amount of funds in
the Excess Funding Account as of the last day of
the Monthly Period immediately preceding the Dis-
tribution Date;
(xiv) the Aggregate Interest Rate Caps
Notional Amount and the amount deposited in the Cap
Proceeds Account during the related Monthly Period.
70
(b) Annual Certificateholders' Tax
Statement. On or before January 31 of each calendar
year, beginning with calendar year 1996, the Paying
Agent shall distribute to each Person who at any time
during the preceding calendar year was a Series 1995-1
Certificateholder, a statement prepared by the Servicer
containing the information required to be contained in
the regular report to Series 1995-1 Certificateholders,
as set forth in subclauses (i), (ii) and (iii) above,
aggregated for such calendar year or the applicable
portion thereof during which such Person was a Series
1995-1 Certificateholder, together with, on or before
January 31 of each year, beginning in 1996, such other
customary information (consistent with the treatment of
the Certificates as debt) as the Trustee or the Servicer
deems necessary or desirable to enable the Series 1995-1
Certificateholders to prepare their tax returns. Such
obligations of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to
any requirements of the Internal Revenue Code as from
time to time in effect.
SECTION 7A. Article VI of the Agreement.
Article VI (except for Sections 6.01 through 6.14 there-
of) shall read in its entirety as follows and shall be
applicable only to the Series 1995-1:
71
ARTICLE VI
THE CERTIFICATES
Section 6.15 Additional Class A Invested
Amounts. The Class A Certificateholder agrees, by
acceptance of the Class A Certificate, that the Trans-
feror may from time to time, other than after a Pay Out
Commencement Date, request that such Class A Certifi-
cateholder acquire on any Business Day additional undi-
vided interests in the Trust in specified amounts (such
amounts, the "Additional Class A Invested Amounts");
provided, however, that if such an increase in the Class
A Invested Amount would cause a Trust Pay Out Event or a
Series 1995-1 Pay Out Event to occur, then the amount of
the increase in the Class A Invested Amount shall be
limited on such Business Day to the maximum increase in
the Class A Invested Amount that may be obtained without
causing either a Trust Pay Out Event or a Series 1995-1
Pay Out Event to occur; and provided further, that in no
case shall the Class A Invested Amount be increased
above the Class A Maximum Invested Amount. The Addi-
tional Class A Invested Amounts on any Business Day
shall not exceed an amount equal to the excess of the
aggregate amount of Principal Receivables over the
greater of (a) the sum of (i) the aggregate invested
amount of each Series then outstanding as of such day
including the Class A Certificate (prior to the addition
of such Additional Class A Invested Amount) minus
amounts on deposit in the Principal Account for any
Series, if any, and (ii) the Minimum Transferor Interest
as of such day or (b) the Minimum Aggregate Principal
Receivables. The Class A Certificateholder shall ac-
quire such Additional Class A Invested Amount, only if
(a) the Class D Invested Amount following the acquisi-
tion of such Additional Class A Invested Amount shall be
at least equal to the Stated Class D Amount (including
increases to the Class D Invested Amount pursuant to
Section 6.16 of the Agreement), (b) the notional amount
of the Interest Rate Caps shall be at least equal to the
Aggregate ABC Principal Amount after giving effect to
the proposed increase in the Class A Invested Amount,
(c) after giving effect to the proposed increase in the
Class A Invested Amount no Series 1995-1 Pay Out Event
shall occur as a result of such increase and (d) the
conditions precedent to issuance of Commercial Paper or
making a Revolving Loan (as defined in the Liquidity
Agreement) pursuant to the Liquidity Agreement have been
met. If the Class A Certificateholder acquires such
Additional Class A Invested Amount, such Class A Certif-
icateholder shall pay an amount equal to the Additional
Class A Invested Amount to the Trustee and, in consider-
ation of such Certificateholder's payment of the Addi-
tional Class A Invested Amount, the Servicer shall ap-
propriately note such Additional Class A Invested Amount
(and the increased Class A Invested Amount) on the next
succeeding Servicer's report and direct the Trustee in
writing to first make any required deposit to the Inves-
tor Reserve Account pursuant to subsection 4.18(b) and
second pay to the Transferor an amount equal to the
remaining proceeds in an amount not to exceed such Addi-
tional Class A Invested Amount, and the Invested Amount
of the Class A Certificate will be equal to the Invested
Amount of the Class A Certificate stated in such
Servicer's report.
72
The purchase of any Additional Class A Invest-
ed Amount shall be in an aggregate principal amount that
is not less than $1,000,000 or integral multiples of
$1,000,000 in excess thereof.
The outstanding amounts of any Additional
Class A Invested Amount purchased by the Class A Certif-
icateholder shall be evidenced by a Class A Certificate
to be issued on the Initial Closing Date substantially
in the form of Exhibit A-1 hereto. The Class A Certifi-
cateholder shall be and is hereby authorized to record
on the grid attached to its Class A Certificate (or at
such Class A Certificateholder's option, in its internal
books and records) the date and amount of any Additional
Class A Invested Amount purchased by it, and each repay-
ment thereof; provided that failure to make any such
recordation on such grid or any error in such grid shall
not adversely affect the Class A Certificateholder's
rights with respect to its Class A Invested Amount and
its right to receive interest payments in respect of the
Class A Invested Amount held by the Class A Certificate-
holder.
Section 6.16 Additional Class D Invested
Amounts.
(a) On any Business Day while any Series
1995-1 Certificates are outstanding, the Transferor may
elect to increase the Class D Invested Amount (such
additional amounts, "Additional Class D Invested
Amounts") by written notice to the Trustee on such date
which notice shall specify the effective date and the
amount of such increase in the Class D Invested Amount;
provided, however, that if such an increase in the Class
D Invested Amount would cause a Trust Pay Out Event or a
Series 1995-1 Pay Out Event to occur, then the amount of
the increase in the Class D Invested Amount shall be
limited on such Business Day to the maximum increase in
the Class D Invested Amount that may be obtained without
causing either a Trust Pay Out Event or a Series 1995-1
Pay Out Event to occur; and provided further, that in no
case shall the Class D Invested Amount be increased
above the Class D Maximum Required Amount; provided
further that no such increase in the Class D Invested
Amount shall be permitted under this Section 6.16 un-
less: (i) after giving effect to the proposed increase
in Class D Invested Amount the Transferor Interest shall
equal or exceed the Minimum Transferor Interest, (ii)
no Series 1995-1 Pay Out Event will occur as a result of
such increase in the Class D Invested Amount and (iii)
such increase in the Class D Invested Amount shall be
made concurrently with a Class A Funding Purchase, Class
B Funding Purchase or Class C Funding Purchase pursuant
to Section 4.14(b) of the Agreement or an increase in
the Class A Invested Amount pursuant to Section 6.15 of
the Agreement.
73
Section 6.17 Extension. (a) If a Pay Out
Event has not occurred or has occurred but has been
remedied on or before the 30th Business Day preceding
the Extension Date, the Transferor, in its sole discre-
tion, may deliver to the Trustee on or before such date
a notice substantially in the form of Exhibit E (the
"Extension Notice") to this Series Supplement. The
Trustee shall deliver a copy of the Extension Notice and
all documents annexed thereto to the Investor Certifi-
cateholders of record on the date of receipt thereof.
The Transferor shall state in the Extension Notice that
it intends to extend the Revolving Period until the
later Amortization Period Commencement Date set forth in
the Extension Notice. The Extension Notice shall also
set forth the next Extension Date. The following docu-
ments shall be annexed to the Extension Notice: (i) a
form of the Opinion of Counsel addressed to the Trans-
feror and the Trustee to the effect that despite the
extension the Trust will not be treated as an associa-
tion taxable as a corporation (the "Extension Tax Opin-
ion"); (ii) a form of the Opinion of Counsel addressed
to the Transferor and the Trustee (the "Extension Opin-
ion") to the effect that (A) the Transferor has the
corporate power and authority to effect the Extension,
(B) the extension has been duly authorized by the Trans-
feror, and (C) all conditions precedent to the Extension
required by this Section 6.17 have been fulfilled; (iii)
a form of Investor Certificateholder Election Notice
substantially in the form of Exhibit F (the "Election
Notice") to this Series Supplement; and (iv) a schedule
setting forth the Aggregate Interest Rate Caps Notional
Amount for the period or periods as indicated from the
Extension Date through the new Scheduled Series 1995-1
Termination Date, each as specified in the related Ex-
tension Notice. In addition, the Extension Notice shall
state that any Investor Certificateholder electing to
approve the Extension must do so on or before the Elec-
tion Date (as defined below) by returning the annexed
Election Notice properly executed to the Trustee in the
manner described below. The Extension Notice shall also
state that an Investor Certificateholder may withdraw
any such election in whole or in part on or before the
Election Date, and the Transferor, in its sole discre-
tion, may, prior to the Election Date, withdraw its
election to extend the Revolving Period. Any Holder
that elects to approve an Extension hereunder shall
deliver a duly executed Election Notice to the Trustee
at the address designated in the Extension Notice on or
before 3:00 p.m., New York City time, on or before the
fifth Business Day preceding the Extension Date (such
Business Day constituting the "Election Date").
74
(b) No extension shall occur unless each of
the following conditions have been satisfied prior to
the close of business on the Election Date: (i) no Pay
Out Event shall have occurred and be continuing, (ii)
there shall have been delivered to the Trustee (A) the
Extension Tax Opinion and the Extension Opinion, each
addressed to the Trustee and (B)(1) written confirmation
from each Rating Agency rating the Class A Certificates
that the Extension will not cause such Rating Agency to
lower or withdraw its then current rating of such Inves-
tor Certificates, (2) written confirmation from each
Rating Agency rating the Class B Certificates that the
Extension will not cause such Rating Agency to lower or
withdraw its then current rating of such Investor Cer-
tificates, and (3) written confirmation from each Rating
Agency rating its Class C Certificates that the exten-
sion will not cause such Rating Agency to lower or with-
draw its then current rating of such Investor Certifi-
▇▇▇▇▇, (iii) each of the holders of the Class A Certifi-
▇▇▇▇▇, the Class B Certificates, and the Class C Certif-
icates shall have elected to approve the Extension by
returning to the Trustee on or before the Election Date
the executed Election Notice annexed to the Extension
Notice delivered to the Certificateholders pursuant to
subsection 6.17(a) of the Agreement. If, by the close
of business on the Election Date, all of the conditions
stated in this subsection 6.17(b) of the Agreement have
not been satisfied and all such documents delivered to
the Trustee pursuant to this subsection 6.17(b) of the
Agreement are not in form satisfactory to it, or if the
Transferor has notified the Trustee, prior to the Elec-
tion Date, that the Transferor has exercised its right
to withdraw its election of an Extension, no Extension
shall occur.
(c) The execution by the required number of
Investor Certificateholders of the applicable Election
Notice and return thereof to the Trustee by the required
Date and time, the continued election by the Transferor
to extend the Revolving Period at the Election Date, and
the compliance with all of the provisions of this Sec-
tion 6.17, shall evidence an extension or renewal of the
obligations represented by the Investor Certificates,
and not a novation or extinguishment of such obligations
or a substitution with respect thereto.
75
(d) To the extent required by applicable laws
and regulations, as evidenced by an Opinion of Counsel
delivered by the Transferor to the Trustee, the provi-
sions of this Section 6.17 shall or may be modified to
comply with all applicable laws and regulations in ef-
fect at the time of the Extension.
SECTION 8. Series 1995-1 Pay Out Events. If
any one of the following events shall occur with respect
to the Series 1995-1 Certificates:
(a) failure on the part of the Transfer-
or (i) to make any payment or deposit required to be
made by the Transferor by the terms of (A) the Agreement
or (B) this Series Supplement, on or before the date
occurring five Business Days after the date such payment
or deposit is required to be made herein, (ii) to per-
form in all material respects the Transferor's covenant
not to sell, pledge, assign, or transfer to any person,
or grant any unpermitted lien on, any Receivable; or
(iii) duly to observe or perform in any material respect
any covenants or agreements of the Transferor set forth
in the Agreement or this Series Supplement, which fail-
ure has a material adverse effect on the Series 1995-1
Certificateholders and which continues unremedied for a
period of 60 days (or, in the case of a covenant pursu-
ant to Section 3A of this Series Supplement, 30 days)
after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given
to the Transferor by the Trustee, or to the Transferor
and the Trustee by the Holders of Series 1995-1 Certifi-
▇▇▇▇▇ evidencing Undivided Interests aggregating not
less than 50% of any of the Class A Invested Amount, the
Class B Invested Amount or the Class C Invested Amount,
and continues to affect materially and adversely the
interests of the Series 1995-1 Certificateholders for
such period;
76
(b) any representation or warranty made
by the Transferor in the Agreement or this Series Sup-
plement, (i) shall prove to have been incorrect in any
material respect when made, which continues to be incor-
rect 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 Transferor by the Trustee, or to the Transferor
and the Trustee by the Holders of the Series 1995-1
Certificates evidencing Undivided Interests aggregating
more than 50% of any of the Class A Invested Amount, the
Class B Invested Amount or the Class C Invested Amount,
and (ii) as a result of which the interests of the Se-
▇▇▇▇ 1995-1 Certificateholders are materially and ad-
versely affected and continue to be materially and ad-
versely affected for such period; provided, however,
that a Series 1995-1 Pay Out Event pursuant to this
subsection 8(b) shall not be deemed to have occurred
hereunder if the Transferor has accepted reassignment of
the related Receivable, or all of such Receivables, if
applicable, during such period in accordance with the
provisions of the Agreement;
(c) the average of the Portfolio Yields
for any three consecutive Monthly Periods is reduced to
a rate which is less than the weighted average Base
Rates for such three consecutive Monthly Periods;
(d) (i) the Transferor Interest shall be
less than the Minimum Transferor Interest, (ii) the
Series Allocation Percentage of the sum of the total
amount of Principal Receivables plus amounts on deposit
in the Excess Funding Account shall be less than (B) the
sum of the Class A Outstanding Principal Amount, the
Class B Outstanding Principal Amount, the Class C Out-
standing Principal Amount and the Class D Outstanding
Principal Amount or (iii) the total amount of Principal
Receivables and the amount on deposit in the Excess
Funding Account shall be less than the Minimum Aggregate
Principal Receivables, in each case as of any Determina-
tion Date;
(e) any Servicer Default shall occur
which would have a material adverse effect on the Series
1995-1 Certificateholders; or
77
(f) the amount on deposit in the Excess
Funding Account as a percentage of the sum of the aggre-
gate amount of Principal Receivables plus the amount on
deposit in the Excess Funding Account shall equal or
exceed 30% on the last day of three consecutive Monthly
Periods;
then, in the case of any event described in subparagraph
(a), (b) or (e), after the applicable grace period, if
any, set forth in such subparagraphs, the Holders of
Series 1995-1 Certificates evidencing Undivided Inter-
ests aggregating more than 50% of any of the Class A
Invested Amount, the Class B Invested Amount or the
Class C Invested Amount by notice then given in writing
to the Trustee, the Transferor, the Cap Provider and the
Servicer may declare that a pay out event (a "Series
1995-1 Pay Out Event") has occurred as of the date of
such notice, and in the case of any event described in
subparagraphs (c), (d) or (f), a Series 1995-1 Pay Out
Event shall occur without any notice or other action on
the part of the Trustee or the Series 1995-1 Certifi-
cateholders immediately upon the occurrence of such
event.
SECTION 8A. Class A Pay Down Period. If (i)
an OTC Termination Event (as defined in the Owner Trust
Agreement) or a Class A Event of Default shall have
occurred and the Trustee shall have received written
notice from Owner Trust Certificateholders (as defined
in the Owner Trust Agreement) and Lenders (as defined in
the Liquidity Agreement) whose aggregate Voting Inter-
ests (as defined in the Collateral Trust Agreement)
exceed 50 percent of the total Voting Interests or (ii)
the principal amount of the Metris Receivables Note
shall be less than the Metris Receivables Note Required
Amount or (iii) the Transferor shall sell, transfer,
assign, pledge, hypothecate, participate or otherwise
convey or encumber the Metris Receivables Note and such
action shall not be completely revoked or otherwise
remedied within five days, or (iv) the Transferor shall
permit to exist any Lien (other than a Permitted Lien)
on the Metris Receivables Note not created with the
Transferor's consent and such Lien shall not be com-
pletely removed, revoked or otherwise remedied within 30
days, then the "Class A Pay Down Period" shall commence
without notice or any action on the part of the Trustee
or the Class A Certificateholder immediately upon the
occurrence of such event and continue until the earlier
of (i) the payment in full of the Class A Certificates
and (ii) the Amortization Period Commencement Date.
78
SECTION 9. Series 1995-1 Termination. The
right of the Series 1995-1 Certificateholders to receive
payments from the Trust will terminate on the first
Business Day following the Series 1995-1 Termination
Date unless such Series is an Affected Series as speci-
fied in Section 12.1(c) of the Agreement and the sale
contemplated therein has not occurred by such date, in
which event the Series 1995-1 Certificateholders shall
remain entitled to receive proceeds of such sale when
such sale occurs.
SECTION 9A. Class A Pre-Payment. (a) During
the Revolving Period (except for any portion of the
Revolving Period during a Class A Pay Down Period), the
Holder of the Exchangeable Transferor Certificate may
specify upon an Exchange, pursuant to Section 6.9 of the
Agreement, that the purchaser of a newly issued Series
deposit payment therefor, in full or in part, in the
Defeasance Account in an amount not to exceed the Class
A Invested Amount on such date. On the Initial Closing
Date the Trustee shall, for the benefit of the Class A
Certificateholder, establish and maintain with a Quali-
fied Institution in the name of the Trust, a certain
segregated trust account (the "Defeasance Account").
Any amounts on deposit in the Defeasance Account on any
Business Day shall be invested at the direction of the
Servicer in Cash Equivalents which mature on the next
succeeding Business Day. On each Business Day following
a deposit of funds to the Defeasance Account, the aggre-
gate proceeds of any such investment shall be deposited
in the Collection Account and treated as Investment
Proceeds for application as Available Series 1995-1
Finance Charge Collections.
79
(b) Upon the direction of the Servicer
any amounts, up to the Class A Invested Amount, on de-
posit in the Defeasance Account may, or upon the occur-
rence of a Pay Out Event the amount on deposit in the
Defeasance Account shall, be deposited in the Principal
Account for distribution on the next Business Day to be
applied to the payment of Class A Principal. Such
amounts shall be applied and paid in accordance with
Sections 4.7, 4.12 and 5.1 of the Agreement. Subsequent
to any reduction of the Class A Invested Amount as a
result of payments pursuant to this Section 9A, the
Class A Invested Amount may be increased pursuant to the
terms and conditions set forth in Section 6.15 of the
Agreement.
SECTION 10. Legends; Transfer and Exchange;
Restrictions on Transfer of Series 1995-1 Certificates;
Tax Treatment.
(a) Each Class A Certificate shall bear
a legend substantially in the following form:
THIS CERTIFICATE (OR ITS PREDECESSOR) WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THIS CERTIFICATE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
ANY APPLICABLE STATE SECURITIES LAW OF ANY STATE
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED UNLESS REGISTERED PURSUANT TO OR EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT AND ANY
OTHER APPLICABLE SECURITIES LAW. THE TRANSFER OF
THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS
SET FORTH IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
(b) Each Class A Certificate, Class B Certif-
icate, Class C Certificate and Class D Certificate shall
bear a legend substantially in the following form:
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE
BENEFIT OF METRIS RECEIVABLES, INC. (FORMERLY
FINGERHUT FINANCIAL SERVICES RECEIVABLES, INC.)
THAT, UNLESS SUCH PURCHASER, AT ITS EXPENSE, DELIV-
ERS TO THE TRUSTEE, THE SERVICER AND THE TRANSFEROR
AN OPINION OF COUNSEL SATISFACTORY TO THEM TO THE
EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS A
CERTIFICATE, CLASS B CERTIFICATE, CLASS C CERTIFI-
CATE OR CLASS D CERTIFICATE BY SUCH PURCHASER WILL
NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED
TO BE "ASSETS OF THE BENEFIT PLAN" AND SUBJECT TO
THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND
THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
TRANSFEROR OR THE SERVICER TO ANY OBLIGATION IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND
SERVICING AGREEMENT, SUCH PURCHASER IS NOT (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3)
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DE-
SCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVE-
NUE CODE OF 1986, AS AMENDED, OR (III) AN ENTITY
WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY
REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
80
(c) Each Class B and Class C Certificate
will bear a legend substantially in the following form:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECU-
RITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE LAWS AND ONLY PURSUANT TO RULE
144A UNDER THE SECURITIES ACT TO AN INSTITUTIONAL
INVESTOR THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A ("QIB") PURCHASING FOR ITS OWN ACCOUNT OR
A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE
HOLDER HAS INFORMED, IN EACH CASE, THAT THE
REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, OR TO THE TRANSFER-
OR. EACH CERTIFICATE OWNER BY ACCEPTING A BENEFI-
CIAL INTEREST IN THIS CERTIFICATE IS DEEMED TO
REPRESENT THAT IT IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF
ANOTHER QIB.
(d) Each Class C Certificate shall bear
a legend substantially in the following form:
NO SALE, ASSIGNMENT, PARTICIPATION, PLEDGE,
HYPOTHECATION, TRANSFER OR OTHER DISPOSITION OF A
CLASS C CERTIFICATE (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.
(e) Each Class D Certificate will bear a
legend substantially in the following form:
THIS CERTIFICATE (OR ITS PREDECESSOR) WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THIS CERTIFICATE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
ANY APPLICABLE STATE SECURITIES LAW OF ANY STATE
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED UNLESS REGISTERED PURSUANT TO OR EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT AND ANY
OTHER APPLICABLE SECURITIES LAW. METRIS RECEIV-
▇▇▇▇▇, INC. (FORMERLY FINGERHUT FINANCIAL SERVICES
RECEIVABLES, INC.) SHALL BE PROHIBITED FROM TRANS-
FERRING ANY INTEREST IN OR PORTION OF THIS CERTIFI-
CATE UNLESS, PRIOR TO SUCH TRANSFER, IT SHALL HAVE
DELIVERED TO THE TRUSTEE AN OPINION OF COUNSEL TO
THE EFFECT THAT SUCH PROPOSED TRANSFER WILL NOT
ADVERSELY AFFECT THE FEDERAL, MINNESOTA OR DELAWARE
INCOME TAX CHARACTERIZATION OF ANY OUTSTANDING
SERIES OF INVESTOR CERTIFICATES OR THE TAXABILITY
(OR TAX CHARACTERIZATION) OF THE TRUST UNDER ▇▇▇▇▇-
AL, MINNESOTA OR DELAWARE INCOME TAX LAWS. THE
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
81
(f) Upon surrender for registration of
transfer of a Class B Certificate or Class C Certificate
at the office of the Transfer Agent and Registrar, ac-
companied by a certification by the Class B Certificate-
holder or Class C Certificateholder, as applicable,
substantially in the form attached as Exhibit D if the
new purchaser is a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933
and by a written instrument of transfer in the form
approved by the Transferor and the Trustee (it being
understood that, until notice to the contrary is given
to Class B Certificateholders or Class C Certificate-
holders, the Transferor and the Trustee shall each be
deemed to have approved the form of instrument of trans-
fer, if any printed on any definitive Class B Certifi-
cate or Class C Certificate), executed by the registered
owner, in person or by such Class B Certificateholder's
or Class C Certificateholder's attorney thereunto duly
authorized in writing, such Class B Certificate or Class
C Certificate shall be transferred upon the register,
and the Transferor shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated
transferees one or more new registered Class C Certifi-
▇▇▇▇▇ of any authorized denominations and of a like
aggregate principal amount and tenor. Transfers and
exchanges of Class B Certificates or Class C Certifi-
▇▇▇▇▇ shall be subject to such restrictions as shall be
set forth in the text of the Class B Certificates or
Class C Certificates and such reasonable regulations as
may be prescribed by the Transferor. Successive regis-
trations and registrations of transfers as aforesaid may
be made from time to time as desired, and each such
registration shall be noted on the register.
(g) Metris Receivables, Inc. (formerly
Fingerhut Financial Services Receivables, Inc.) shall be
prohibited from transferring any interest in or portion
of the Class D Certificate unless, prior to such Trans-
fer, it shall have delivered to the Trustee an Opinion
of Counsel to the effect that such proposed Transfer
will not adversely affect the Federal, Minnesota or
Delaware income tax characterization of any outstanding
Series of Investor Certificates or the taxability (or
tax characterization) of the Trust under Federal, Minne-
sota or Delaware income tax laws. In no event shall any
interest in or portion of the Class D Certificate be
transferred to FCI. As a condition to transfer of an
interest in or portion of the Class D Certificate the
transferee shall be required to agree not to institute
against, or join any other Person in instituting
against, the Trust any bankruptcy, reorganization, ar-
rangement, insolvency or liquidation proceeding, or
other proceeding under any federal or state bankruptcy
or similar law, for one year and one day after all In-
vestor Certificates are paid in full. The Transferor
shall provide prompt written notice to the Rating Agen-
cies of any such transfer.
82
(h) No transfer of a Class B Certifi-
cate, Class C Certificate or Class D Certificate will be
permitted to be made to a Benefit Plan unless such Bene-
fit Plan, at its expense, delivers to the Trustee, the
Servicer and the Transferor an opinion of counsel satis-
factory to them to the effect that the purchase or hold-
ing of a Class B Certificate, Class C Certificate or
Class D Certificate by such Benefit Plan will not result
in the assets of the Trust being deemed to be "assets of
the Benefit Plan" and subject to the prohibited transac-
tion provisions of ERISA and the Code and will not sub-
ject the Trustee, the Transferor or the Servicer to any
obligation in addition to those undertaken in the Agree-
ment. Unless such opinion is delivered, each person
acquiring a Class B Certificate, Class C Certificate or
Class D Certificate or the beneficial ownership of a
Class B Certificate, Class C Certificate or Class D
Certificate will be deemed to represent to the Trustee,
the Transferor and the Servicer that it is not (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.
(i) The Class B Certificateholders or
Class C Certificateholders shall comply with their obli-
gations under Section 3.7 of the Agreement with respect
to the tax treatment of the Class B Certificates or
Class C Certificates, except to the extent that a rele-
vant taxing authority has disallowed such treatment.
(j) In accordance with Section 6.2 of
the Agreement, no sale, assignment, participation,
pledge, hypothecation, transfer or other disposition of
a Class C Certificate (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; provided, however, that
for purposes of this sentence, it shall in all cases be
reasonable for the Transferor or the Servicer to with-
hold consent to such proposed sale, assignment, partici-
pation, pledge, hypothecation, transfer or other dispo-
sition of all or any part of a Class C Certificate (or
any interest therein) if the transaction would, if ef-
fected, give rise to any adverse tax consequence, as
determined in the sole and absolute discretion of the
Transferor or the Servicer.
83
SECTION 11. Ratification of Agreement. (a)
As supplemented by this Series Supplement, the Agreement
is in all respects ratified and confirmed and the Agree-
ment as so supplemented by this Series Supplement shall
be read, taken, and construed as one and the same in-
strument.
(b) For so long as any of the Class B
Certificates or the Class C Certificates are outstand-
ing, each of the Transferor, the Servicer and the Trust-
ee agree to cooperate with each other to provide to any
Class B Certificateholders or Class C Certificatehold-
ers, as applicable, and to any prospective purchaser of
Class B Certificates or Class C Certificates designated
by such a Class B Certificateholder or Class C Certifi-
cateholder upon the request of such Class B Certificate-
holder or Class C Certificateholder or prospective pur-
chaser, 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 12. Counterparts. This Series Sup-
plement may be executed in any number of counterparts,
each of which so executed shall be deemed to be an orig-
inal, but all of such counterparts shall together con-
stitute but one and the same instrument.
SECTION 13. GOVERNING LAW. THIS SERIES SUP-
PLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS CON-
FLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 14. Instructions in Writing. All
instructions or other communications given by the
Servicer or any other person to the Trustee pursuant to
this Series Supplement shall be in writing, and, with
respect to the Servicer, may be included in a Daily
Report or Settlement Statement.
SECTION 15. Amendments. Solely with respect
to any amendment pursuant to Section 13.1(b) of the
Agreement and any consent required pursuant thereto from
the Holders of Investor Certificates of Series 1995-1,
this Series Supplement and the Agreement may be amended
from time to time by the Servicer, the Transferor and
the Trustee with the consent of the Holders of Investor
Certificates evidencing Undivided Interests aggregating
not less than 66 2/3% of the Invested Amount of the
Series 1995-1 Certificates and (y) not less than 51% of
each of the Class A Invested Amount, the Class B Invest-
ed Amount and the Class C Invested Amount to the extent
that such classes would be adversely affected, for the
purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this
Series Supplement or the Agreement or of modifying in
any manner the rights of the Certificateholders of any
Class of the Series 1995-1 Certificates then issued and
outstanding; provided, however, that no such amendment
84
under this Section 15 shall (i) reduce in any manner the
amount of, or delay the timing of, distributions which
are required to be made on any Investor Certificate of
such Class without the consent of all of the related
Investor Certificateholders; (ii) change the definition
of or the manner of calculating the interest of any
Investor Certificate of such Class without the consent
of the related Investor Certificateholders or (iii)
reduce the aforesaid percentage required to consent to
any such amendment, in each case without the consent of
all such Investor Certificateholders.
SECTION 16. Increased Costs. (a) Notwith-
standing any other provision herein, if after the Effec-
tive Date (as defined in the Liquidity Agreement), any
change in applicable law or regulation or in the inter-
pretation or administration thereof by any Governmental
Authority charged with the interpretation or administra-
tion thereof (whether or not having the force of law)
shall change the basis of taxation of payments to any
Class B or Class C Certificateholder that is a commer-
cial bank or controlled by a commercial bank of the
principal of or interest on any Class B or Class C Cer-
tificate (other than changes in respect of taxes imposed
on the overall net income of such Certificateholder by
the jurisdiction in which such Certificateholder has its
principal office or by any political subdivision or
taxing authority therein), or shall impose, modify or
deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the
account of or credit extended by such Certificateholder,
or shall impose on such Certificateholder or the London
interbank market any other condition affecting this
Series Supplement or any Class B or Class C Certificate
owned by such Certificateholder, and the result of any
of the foregoing shall be to increase the cost to such
Certificateholder of holding any Class B or Class C
Certificate or to reduce the amount of any sum received
or receivable by such Certificateholder hereunder
(whether of principal or interest) in respect thereof by
an amount deemed by such Certificateholder to be materi-
al, then the Trustee will pay to such Certificateholder
upon demand such additional amount or amounts as will
compensate such Certificateholder for such additional
costs incurred or reduction suffered. Any Class B or
Class C Certificateholder claiming any additional
amounts payable pursuant to this Section 16 shall use
reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document re-
quested by the Transferor or the Trustee or to change
the jurisdiction of its applicable lending office if the
making of such a filing or change would avoid the need
for or reduce the amount of any additional amount which
may thereafter accrue and would not, in the sole deter-
mination of such Certificateholder, be otherwise disad-
vantageous to such Certificateholder.
85
(b) If any Class B or Class C Certifi-
cateholder that is a commercial bank or controlled by a
commercial bank shall have determined that the adoption
after the Effective Date (as defined in the Liquidity
Agreement) of any other law, rule, regulation or guide-
line regarding capital adequacy, or any change in any of
the foregoing or in the interpretation or administration
of any of the foregoing by any Governmental Authority,
central bank or comparable agency charged with the in-
terpretation or administration thereof, or compliance by
any such Certificateholder (or any lending office of
such Certificateholder) or any such Certificateholder's
holding company with any request or directive regarding
capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the
rate of return on such Certificateholder's capital or on
the capital of such Certificateholder's holding company,
if any, as a consequence of this Series Supplement or
the Class B or Class C Certificates owned by such Cer-
tificateholder to a level below that which such Certifi-
cateholder or such Certificateholder's holding company
could have achieved but for such adoption, change or
compliance (taking into consideration such
Certificateholder's policies and the policies of such
Certificate-holder's holding company with respect to
such capital adequacy) by an amount deemed by such Cer-
tificateholder to be material, then from time to time
the Trustee shall pay to such Certificateholder such
additional amount or amounts as will compensate such
Certificateholder or such Trustee's holding company for
any such reduction suffered after the date hereof.
(c) A certificate of a Class B or Class
C Certificateholder setting forth such amount or
amounts, along with such Certificateholder's method of
computation of such amounts, as shall be necessary to
compensate such Certificateholder as specified in para-
graph (a) or (b) above, as the case may be, shall be
delivered to the Trustee and shall be conclusive absent
manifest error. The Trustee shall pay each Certificate-
holder the amount shown as due on any such certificate
delivered by it no later than the Distribution Date
immediately succeeding the date of delivery of such
certificate.
86
(d) Failure on the part of any eligible
Class B or Class C Certificateholder to demand compensa-
tion for any increased costs or reduction in amounts
received or receivable or reduction in return on capital
with respect to any period shall not constitute a waiver
of such Certificateholder's right to demand compensation
with respect to such period or any other period; provid-
ed, however, that no Certificateholder shall be entitled
to compensation for any such increased costs or reduc-
tions unless it shall have submitted a certificate under
paragraph (c) above with respect thereto not more than
90 days after the date that such Certificateholder knows
that such increased costs have been incurred or such
reduction suffered. Notwithstanding any other provision
of this Section 16, no Certificateholder shall demand
compensation for any increased cost or reduction re-
ferred to above if it shall not at the time be the gen-
eral policy of such Certificateholder to demand such
compensation in similar circumstances under comparable
provisions of other credit agreements, and each Certifi-
cateholder shall in good faith endeavor to allocate
increased costs or reductions fairly among all of its
affected commitments and credit extensions (whether or
not it seeks compensation from all affected borrowers).
The protection of this Section 16 shall be available to
each Class B or Class C Certificateholder that is a
commercial bank or controlled by a commercial bank re-
gardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline
or other change or condition which shall have occurred
or been imposed.
(e) The amounts owing by the Trustee
pursuant to this Section 16 shall be payable solely from
amounts available therefor pursuant to subsections
4.9(a)(xvi) and (xvii) of the Agreement.
SECTION 17. Replacement of Certain Investor
Certificateholders. In the event that (i) a Class B or
Class C Certificateholder requests compensation pursuant
to Section 16, (ii) a Holder of Investor Certificates (a
"Non-Consenting Holder") does not consent to an amend-
ment, supplement, waiver or other modification with
respect to this Series Supplement or to the Agreement,
as provided in Section 15 within the time period speci-
fied for delivery of such consent pursuant to the docu-
mentation associated therewith and the amendment, sup-
plement, waiver or other modification is not approved in
accordance with said Section 15, or (iii) an Investor
Certificateholder fails to approve any Extension re-
quested by the Transferor pursuant to Section 6.17 of
87
the Agreement, the Transferor shall have the right to
replace such Holder with a Person or Persons meeting the
requirements of Section 10, by giving three Business
Days prior written notice to the Trustee and such Hold-
er, specifying the date on which such Holder s Certifi-
▇▇▇▇▇ shall be transferred; provided, however that, (a)
such transfer shall not conflict with any law, rule or
regulation or order of any court or other Governmental
Authority, and (b) in the case of clause (ii) above, all
Non-Consenting Holders with respect to any one proposed
amendment, supplement, waiver or other modification or
Extension must be concurrently replaced in accordance
with this Section 17. In the event of the replacement
of an Investor Certificateholder, such Investor Certifi-
cateholder agrees to assign, without recourse, its
rights and obligations hereunder to a replacement Holder
selected by the Transferor upon payment by the replace-
ment Holder to such Investor Certificateholder in imme-
diately available funds of the principal amount of such
Investor Certificateholder's outstanding Certificates
and any interest accrued and unpaid thereon and all
other amounts owing to such Investor Certificateholder
hereunder and to execute and/or deliver any certifica-
tion or other document required to be delivered pursuant
to Section 10.
SECTION 18. Metris Receivables Note. The
Transferor has received a note from Metris Companies
Inc. in the amount of $33,000,000 (such note, together
with any additional notes of Metris Companies Inc. held
by the Transferor at any time other than a certain ▇▇-
▇▇▇▇ note in the amount of $10,000,000 issued on Septem-
ber 16, 1996, the "Metris Receivables Note" or "FFSRI
Note"). The Transferor hereby agrees that at no time
shall the principal amount of the Metris Receivables
Note be less than $31,000,000 (the "Metris Receivables
Note Required Amount" or "FFSRI Note Required Amount).
The Metris Receivables Note may not be sold, trans-
ferred, assigned, pledged, hypothecated, participated or
otherwise conveyed or encumbered, nor may the Transferor
grant any security interest in the Metris Receivables
Note.
88
IN WITNESS WHEREOF, the Transferor, the
Servicer and the Trustee have caused this Amended and
Restated Series 1995-1 Supplement 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, N.A.
Servicer
By:_________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
Trustee
By:_________________________
Name:
Title:
EXHIBIT A-1
[FORM OF VARIABLE FUNDING CERTIFICATE]
THIS CERTIFICATE (OR ITS PREDECESSOR) WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THIS CER-
TIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OR ANY APPLICABLE STATE SECURI-
TIES LAW OF ANY STATE AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
REGISTERED PURSUANT TO OR EXEMPT FROM REGIS-
TRATION UNDER THE SECURITIES ACT AND ANY OTHER
APPLICABLE SECURITIES LAW. THE TRANSFER OF
THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDI-
TIONS SET FROTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
89
EACH PURCHASER REPRESENTS AND WARRANTS
FOR THE BENEFIT OF METRIS RECEIVABLES, INC.
(FORMERLY KNOWN AS FINGERHUT FINANCIAL SERVIC-
ES RECEIVABLES, INC.) THAT, UNLESS SUCH PUR-
CHASER, AT ITS EXPENSE, DELIVERS TO THE TRUST-
EE, THE SERVICER AND THE TRANSFEROR AN OPINION
OF COUNSEL SATISFACTORY TO THEM TO THE EFFECT
THAT THE PURCHASE OR HOLDING OF A CLASS A CER-
TIFICATE BY SUCH PURCHASER WILL NOT RESULT IN
THE ASSETS OF THE TRUST BEING DEEMED TO BE
"ASSETS OF THE BENEFIT PLAN" AND SUBJECT TO
THE PROHIBITED TRANSACTION PROVISIONS OF ERISA
AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
THE TRANSFEROR OR THE SERVICER TO ANY OBLIGA-
TION IN ADDITION TO THOSE UNDERTAKEN IN THE
POOLING AND SERVICING AGREEMENT, SUCH PURCHAS-
ER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS
DEFINED IN SECTION 3(3) OF THE EMPLOYEE RE-
TIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA")) THAT IS SUBJECT TO THE PRO-
VISIONS OF TITLE I OF ERISA, (II) A PLAN DE-
SCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR (III) AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN
ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE
ENTITY.
No. ____ Percentage Interest: ___%
METRIS MASTER TRUST
VARIABLE FUNDING TRUST
CERTIFICATE, SERIES 1995-1, CLASS A
Evidencing an undivided interest in a trust,
the corpus of which consists of receivables generated
from time to time in the ordinary course of business
from a portfolio of open end or revolving credit receiv-
▇▇▇▇▇ generated or to be generated by Direct Merchants
Credit Card Bank, National Association (the "Bank" or
the "Servicer") and other assets and interests consti-
tuting the Trust under the Agreement described below.
(Not an interest in or a recourse obligation
of Metris Receivables, Inc., the Bank or any affiliate
of either of them.)
90
This certifies that _________ (the "Certifi-
cateholder") is the registered owner of a fractional
undivided interest in the Metris Master Trust (the
"Trust") issued pursuant to the Pooling and Servicing
Agreement, dated as of May 26, 1995 (the "Pooling and
Servicing Agreement"; such term to include any amendment
thereto) by and between Metris Receivables, Inc., as
Transferor (the "Transferor"), the Bank, as the
Servicer, and The Bank of New York (Delaware), as Trust-
ee (the "Trustee"), and the Amended and Restated Series
1995-1 Supplement, dated as of September 16, 1996 (the
"Amended and Restated Series 1995-1 Supplement"), among
the Transferor, the Bank, as Servicer and the Trustee
(the Pooling and Servicing Agreement, as supplemented by
the Amended and Restated Series 1995-1 Supplement, is
herein referred to as the "Agreement"). The corpus of
the Trust consists of all of the Transferor's right,
title and interest in, to and under (i) the Trust Prop-
erty (as defined in the Agreement) and (ii) the property
described in Section 3A of the Amended and Restated
Series 1995-1 Supplement and Section 4.4 of the Agree-
ment.
This Certificate does not purport to summarize
the Agreement and reference is made to the Agreement for
information with respect to the interests, rights, bene-
fits, obligations, proceeds, and duties evidenced hereby
and the rights, duties and obligations of the Trustee.
To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the
Agreement. This Certificate is entitled the "Metris
Master Trust Variable Funding Trust Certificate, Series
1995-1, Class A" (the "Class A Certificate"), and repre-
sents a fractional undivided interest in the Trust, and
is issued under and is subject to the terms, provisions
and conditions of the Agreement, to which Agreement, as
amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the
Certificateholder is bound. In the case of any conflict
between terms specified in this Certificate and terms
specified in the Agreement, the terms of the Agreement
shall govern.
91
The Transferor has structured the Agreement,
the Class A Certificate, the Metris Master Trust Float-
ing Rate Accounts Receivable Trust Certificates, Series
1995-1, Class B (the "Class B Certificates ) and the
Metris Master Trust Accounts Receivable Trust Certifi-
▇▇▇▇▇, Series 1995-1, Class C (the "Class C Certifi-
▇▇▇▇▇") with the intention that the Class A Certificate,
the Class B Certificates and the Class C Certificates
will qualify under applicable tax law as indebtedness,
and both the Transferor and each holder of a Class A
Certificate (a "Class A Certificateholder") or any in-
terest therein by acceptance of its Certificate or any
interest therein, agrees to treat the Class A Certifi-
cate for purposes of federal, state and local income or
franchise taxes and any other tax imposed on or measured
by income, as indebtedness.
Except in limited circumstance described in
the third succeeding paragraph no principal will be
payable to the Class A Certificateholder before the
first Business Day in the Amortization Period. No prin-
cipal will be payable to the Class B Certificateholders,
or Class C Certificateholders until all principal pay-
ments have been made to the Class A Certificateholders.
Except in connection with a payment of Class D Daily
Principal, the Class D Certificate will not have the
right to receive payments of principal until the Class A
Invested Amount, the Class B Invested Amount and the
Class C Invested Amount have been paid in full.
Upon issuance, the Class A Certificate repre-
sents the right to receive, on each Business Day, an
amount equal to the lesser of (x) the Available Series
1995-1 Finance Charge Collections for such Business Day
and (y) the sum of (A) the lesser of (I) the sum of (a)
the Total Program Fees, and (b) the product of (i) the
Class A Certificate Rate, (ii) a fraction the numerator
of which is the actual number of days from and including
the next preceding Business Day to but excluding such
Business Day and the denominator of which is 365 or 366,
as the case may be, and (iii) the Class A Outstanding
Principal Amount as of the closed of business on the
preceding Business Day and (II) the product of (X) the
greater of LIBOR as then in effect plus 0.75% per annum
and 0.12% per annum and (Y) a fraction the numerator of
which is the number of days from and including the pre-
ceding Business Day to but excluding such Business Day
and the denominator of which is the actual number of
days in the then current calendar year and (iii) the
Class A Outstanding Principal Balance as of the close of
business on the preceding Business Day plus (B) the
excess, if any, of the amount payable to the Class A
Certificateholders pursuant to clause (A) on each prior
Business Day over the amount which has been paid to the
Class A Certificateholders with respect thereto on each
prior Business Day.
92
Unless there is any Extension, on the earlier
of April 23, 1999 and the Pay Out Commencement Date,
interest and principal will be distributed to the Class
A Certificateholders on each Business Day prior to the
Series Termination Date. If in accordance with Section
6.17 of the Agreement, the Transferor elects to issue an
Extension Notice and the conditions precedent for Exten-
sion specified therein have been satisfied, no principal
will be payable with respect to the Class A Certificate
until the date specified in such Extension Notice or in
the last of any subsequent Extension Notices. Interest
for any Business Day due but not paid on any Business
Day will be due on the next succeeding Business Day.
On any Business Day during the Revolving Peri-
od, except during a Class A Pay Down Period, the Trans-
feror may specify an amount, not to exceed the Net ABC
Revolving Principal Collections, to be deposited into
the Defeasance Account. Any amounts so deposited, shall
be paid to the Class A Certificateholder in accordance
with Section 9A of the Agreement and upon payment shall
reduce the Class A Invested Amount by an amount equal to
any such payment. In addition the Transferor may speci-
fy, upon the issuance of a new Series pursuant to an
Exchange made at any time during the Revolving Period,
except during a Class A Pay Down Period, that the pro-
ceeds of such issuance be deposited into the Defeasance
Account for payment to the Class A Certificateholder
pursuant to Section 9A of the Agreement. The Class A
Invested Amount will be reduced by an amount equal to
the amount of any such payments made.
In addition, pursuant to Section 6.15 of the
Agreement, the holders of this Certificate may from time
to time be required, prior to the commencement of the
Amortization Period for the Certificates or the Class A
Paydown Period, to purchase Additional Class A Invested
Amounts on the terms and conditions specified therein.
The holder of this Certificate is authorized to record
on the grid attached to its Class A Certificate (or at
such Certificateholder's option, in its internal books
and records) the date and amount of any Additional In-
vested Amount purchased by it, and each repayment there-
of; provided that failure to make any such recordation
on such grid or any error in such grid shall not ad-
versely affect such Certificateholder's rights with
respect to its Class A Invested Amount and its right to
receive interest payments in respect of the Class A
Invested Amount held by such Certificateholder.
93
"Class A Invested Amount" means, when used
with respect to any Business Day, an amount equal to (a)
the initial principal amount of Class A Certificates
purchased pursuant to any Class A Funding Purchase pur-
suant to Section 4.14(b) of the Agreement, minus (b) the
aggregate amount of principal payments made to Class A
Certificateholders through and including such Business
Day minus (c) the aggregate amount of Class A Investor
Charge-Offs for all prior Distribution Dates, and plus
(d) the sum of the aggregate amount allocated with re-
spect to Class A Investor Charge-Offs and available on
all prior Distribution Dates pursuant to subsection
4.9(a)(viii) of the Agreement and, with respect to such
subsection and pursuant to subsections 4.10(a) and (b)
and Section 4.15 of the Agreement for the purpose of
reinstating amounts reduced pursuant to the foregoing
clause (d) plus (e) the aggregate principal amount of
any Additional Class A Invested Amounts purchased pursu-
ant to Section 6.15 of the Agreement.
Subject to the Agreement, payments of princi-
pal are limited to the unpaid Class A Invested Amount of
the Class A Certificate, which may be less than the
unpaid balance of the Class A Certificate pursuant to
the terms of the Agreement. All principal of and inter-
est on the Class A Certificate is due and payable no
later than May 30, 2003 (the "Series 1995-1 Termination
Date"). After the Series 1995-1 Termination Date nei-
ther the Trust nor the Transferor will have any further
obligation to distribute principal or interest on the
Class A Certificate. In the event that the Class A
Invested Amount is greater than zero on the Series Ter-
mination Date, the Trustee will sell or cause to be
sold, to the extent necessary, an amount of interests in
the Receivables or certain of the Receivables up to 110%
of the Class A Invested Amount, the Class B Invested
Amount, the Class C Invested Amount and the Class D
Invested Amount at the close of business on such date
(but not more than the total amount of Receivables allo-
cable to the Investor Certificates), and shall pay the
proceeds to the Class A Certificateholders pro rata in
final payment of the Class A Certificate, then to the
Class B Certificateholders pro rata in final payment of
94
the Class B Certificates, then to the Class C Certifi-
cateholders pro rata in final payment of the Class C
Certificates and finally to the Class D Certificatehold-
ers pro rata in final payment of the Class D Certifi-
cate.
Unless the certificate of authentication here-
on has been executed by or on behalf of the Trustee, by
manual signature, this Certificate shall not be entitled
to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Transferor has caused
this Certificate to be duly executed under its official
seal.
METRIS RECEIVABLES, INC.
By:____________________________
Name:
Title:
Dated:
CERTIFICATE OF AUTHENTICATION
This is the Class A Certificate referred to in
the within-mentioned Pooling and Servicing Agreement.
THE BANK OF NEW YORK, as
Authenticating Agent for
the Trustee
By: _______________________
Authorized Signatory
Beginning Ending
Principal Principal
Date Balance Additions Payments Balance
Exhibit A-2
[FORM OF CLASS B INVESTOR CERTIFICATE]
METRIS MASTER TRUST
FLOATING RATE ACCOUNTS RECEIVABLE TRUST
CERTIFICATE, SERIES 1995-1, CLASS B
95
THIS CERTIFICATE HAS NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAW. THE HOLDER HEREOF,
BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COM-
PLIANCE WITH THE SECURITIES ACT AND OTHER AP-
PLICABLE LAWS AND ONLY PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT TO AN INSTITUTIONAL
INVESTOR THAT THE HOLDER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A ("QIB") PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE
ACCOUNT OF A QIB, WHOM THE HOLDER HAS IN-
FORMED, IN EACH CASE, THAT THE REOFFER, RE-
SALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, OR TO THE TRANSFER-
OR. EACH CERTIFICATE OWNER BY ACCEPTING A
BENEFICIAL INTEREST IN THIS CERTIFICATE IS
DEEMED TO REPRESENT THAT IT IS A QIB PURCHAS-
ING FOR ITS OWN ACCOUNT OR A QIB PURCHASING
FOR THE ACCOUNT OF ANOTHER QIB.
EACH PURCHASER REPRESENTS AND WARRANTS
FOR THE BENEFIT OF METRIS RECEIVABLES, INC.
(FORMERLY KNOWN AS FINGERHUT FINANCIAL SERVIC-
ES RECEIVABLES, INC.) THAT, UNLESS SUCH PUR-
CHASER, AT ITS EXPENSE, DELIVERS TO THE TRUST-
EE, THE SERVICER AND THE TRANSFEROR AN OPINION
OF COUNSEL SATISFACTORY TO THEM TO THE EFFECT
THAT THE PURCHASE OR HOLDING OF A CLASS B CER-
TIFICATE BY SUCH PURCHASER WILL NOT RESULT IN
THE ASSETS OF THE TRUST BEING DEEMED TO BE
"ASSETS OF THE BENEFIT PLAN" AND SUBJECT TO
THE PROHIBITED TRANSACTION PROVISIONS OF ERISA
AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
THE TRANSFEROR OR THE SERVICER TO ANY OBLIGA-
TION IN ADDITION TO THOSE UNDERTAKEN IN THE
POOLING AND SERVICING AGREEMENT, SUCH PURCHAS-
ER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS
DEFINED IN SECTION 3(3) OF THE EMPLOYEE RE-
TIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA")) THAT IS SUBJECT TO THE PRO-
VISIONS OF TITLE I OF ERISA, (II) A PLAN DE-
SCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR (III) AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN
ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE
ENTITY.
96
No. B- $____________
METRIS MASTER TRUST
FLOATING RATE ACCOUNTS RECEIVABLE TRUST
CERTIFICATE, SERIES 1995-1, CLASS B
Evidencing an undivided interest in a trust,
the corpus of which consists of receivables generated
from time to time in the ordinary course of business
from a portfolio of open end or revolving credit receiv-
▇▇▇▇▇ generated or to be generated by Direct Merchants
Credit Card Bank, National Association (the "Bank" or
the "Servicer") and other assets and interests consti-
tuting the Trust under the Agreement described below.
(Not an interest in or a recourse obligation
of Metris Receivables, Inc., the Bank or any affiliate
of either of them.)
This certifies that ________________________
____________________________________________________
(the "Certificateholder") is the registered owner of a
fractional undivided interest in the Metris Master Trust
(the "Trust") issued pursuant to the Pooling and Servic-
ing Agreement, dated as of May 26, 1995 (the "Pooling
and Servicing Agreement"; such term to include any
amendment thereto) by and between Metris Receivables,
Inc., as Transferor (the "Transferor"), the Bank, as the
Servicer, and The Bank of New York (Delaware), as Trust-
ee (the "Trustee"), and the Amended and Restated Series
1995-1 Supplement, dated as of September 16, 1996 (the
"Amended and Restated Series 1995-1 Supplement"), among
the Transferor, the Bank, as Servicer and the Trustee
(the Pooling and Servicing Agreement, as supplemented by
the Amended and Restated Series 1995-1 Supplement, is
herein referred to as the "Agreement"). The corpus of
the Trust consists of all of the Transferor's right,
title and interest in, to and under (i) the Trust Prop-
erty (as defined in the Agreement) and (ii) the property
described in Section 3A of the Amended and Restated
Series 1995-1 Supplement and Section 4.4 of the Agree-
ment.
97
This Certificate does not purport to summarize
the Agreement and reference is made to the Agreement for
information with respect to the interests, rights, bene-
fits, obligations, proceeds, and duties evidenced hereby
and the rights, duties and obligations of the Trustee.
To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the
Agreement. This Certificate is one of a series of Cer-
tificates entitled "Metris Master Trust Floating Rate
Accounts Receivable Trust Certificates, Series 1995-1,
Class B" (the "Class B Certificates"), each of which
represents a fractional undivided interest in the Trust,
and is issued under and is subject to the terms, provi-
sions and conditions of the Agreement, to which Agree-
ment, as amended from time to time, the Certificatehold-
er by virtue of the acceptance hereof assents and by
which the Certificateholder is bound. In the case of
any conflict between terms specified in this Certificate
and terms specified in the Agreement, the terms of the
Agreement shall govern.
The Transferor has structured the Agreement,
the Class B Certificates, the Metris Master Trust Vari-
able Funding Trust Certificate, Series 1995-1, Class A
(the "Class A Certificate ) and the Metris Master Trust
Accounts Receivable Trust Certificates, Series 1995-1,
Class C (the "Class C Certificates") with the intention
that the Class A Certificate, the Class B Certificates
and the Class C Certificates will qualify under applica-
ble tax law as indebtedness, and both the Transferor and
each holder of a Class B Certificate (a "Class B Certif-
icateholder") or any interest therein by acceptance of
its Certificate or any interest therein, agrees to treat
the Class B Certificate for purposes of federal, state
and local income or franchise taxes and any other tax
imposed on or measured by income, as indebtedness.
No principal will be payable to the Class B
Certificateholders until the Class B Principal Payment
Commencement Date, which is the Distribution Date either
on or following the Distribution Date, on which the
Class A Invested Amount had been paid in full. No prin-
cipal will be payable to the Class B Certificateholders
until all principal payments have been made to the Class
A Certificateholders. No principal payments will be
made to the Class C Certificateholder until the Distri-
bution Date either on or following the Distribution Date
on which the Class B Invested Amount has been paid in
full. Except in connection with a payment of Class D
Daily Principal, the Class D Certificate will not have
the right to receive payments of principal until the
Class A Invested Amount, the Class B Invested Amount and
the Class C Invested Amount have been paid in full.
98
Each Class B Certificate represents the right
to receive interest at the rate of .625% per annum above
LIBOR (as determined on the related LIBOR Determination
Date, and such rate, as in effect from time to time, the
"Class B Certificate Rate" ) on the 20th day of each
month after the issuance of the Class B Certificates, or
if such day is not a business day, on the next succeed-
ing business day (each, a "Distribution Date"), in an
amount equal to the product of (a) the actual number of
days in the related Interest Accrual Period divided by
360, (b) the Class B Certificate Rate and (c) the Class
B Invested Amount as of the close of business on the
first day of the related Interest Accrual Period.
Interest for any Distribution Date will in-
clude accrued interest at the Class B Certificate Rate
from and including the preceding Distribution Date or,
in the case of the first Distribution Date from and
including the Closing Date, to but excluding such Dis-
tribution Date. Interest for any Distribution Date due
but not paid on any Distribution Date will be due on the
next succeeding Distribution Date together with, to the
extent permitted by applicable law, additional interest
on such amount at the Class B Certificate Rate plus 2%.
"Class B Invested Amount" shall mean, when
used with respect to any Business Day, an amount equal
to (a) $129,612,000, minus (b) the aggregate amount of
principal payments made to Class B Certificateholders
prior to such Business Day, minus (c) the aggregate
amount of Class B Investor Charge-Offs for all prior
Distribution Dates, minus (d) the aggregate amount of
Reallocated Class B Principal Collections for which
neither the Class D Invested Amount nor the Class C
Invested Amount has been reduced for all prior Business
Days, and plus (e) the sum of the aggregate amount allo-
cated and available on all prior Business Days pursuant
to subsection 4.9(a)(xi) of the Agreement and, with
respect to such subsection and pursuant to subsections
4.10(a) and (b) and Section 4.15 of the Agreement, for
the purpose of reinstating amounts reduced pursuant to
the foregoing clauses (c) and (d).
99
Subject to the Agreement, payments of princi-
pal are limited to the unpaid Class B Invested Amount of
the Class B Certificate, which may be less than the
unpaid balance of the Class B Certificate pursuant to
the terms of the Agreement. All principal of and inter-
est on the Class B Certificate is due and payable no
later than May 30, 2003, unless a different date is set
forth in the Extension Notice (the "Series 1995-1 Termi-
nation Date"). After the Series 1995-1 Termination Date
neither the Trust nor the Transferor will have any fur-
ther obligation to distribute principal or interest on
the Class B Certificate. In the event that the Class B
Invested Amount is greater than zero on the Series 1995-
1 Termination Date, the Trustee will sell or cause to be
sold, to the extent necessary, an amount of interests in
the Receivables or certain of the Receivables up to 110%
of the Class A Invested Amount, the Class B Invested
Amount, the Class C Invested Amount and the Class D
Invested Amount at the close of business on such date
(but not more than the total amount of Receivables allo-
cable to the Investor Certificates), and shall pay the
proceeds to the Class A Certificateholders pro rata in
final payment of the Class A Certificate, then to the
Class B Certificateholders pro rata in final payment of
the Class B Certificates, then to the Class C Certifi-
cateholders pro rata in final payment of the Class C
Certificates and finally to the Class D Certificatehold-
ers pro rata in final payment of the Class D Certifi-
cate.
Unless the certificate of authentication here-
on has been executed by or on behalf of the Trustee, by
manual signature, this Certificate shall not be entitled
to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Transferor has caused
this Certificate to be duly executed under its official
seal.
METRIS RECEIVABLES, INC.
By:____________________________
Name:
Title:
Dated:
100
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates
referred to in the within-mentioned Pooling and Servic-
ing Agreement.
THE BANK OF NEW YORK, as
Authenticating Agent for
the Trustee
By: _______________________
Authorized Signatory
Exhibit A-3
[FORM CLASS C INVESTOR CERTIFICATE]
METRIS MASTER TRUST
FLOATING RATE ACCOUNTS RECEIVABLE TRUST
CERTIFICATE, SERIES 1995-1, CLASS C
THIS CERTIFICATE HAS NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAW. THE HOLDER HEREOF,
BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COM-
PLIANCE WITH THE SECURITIES ACT AND OTHER AP-
PLICABLE LAWS AND ONLY PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT TO AN INSTITUTIONAL
INVESTOR THAT THE HOLDER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A ("QIB") PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE
ACCOUNT OF A QIB, WHOM THE HOLDER HAS IN-
FORMED, IN EACH CASE, THAT THE REOFFER, RE-
SALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, OR TO THE TRANSFER-
OR. EACH CERTIFICATE OWNER BY ACCEPTING A
BENEFICIAL INTEREST IN THIS CERTIFICATE IS
DEEMED TO REPRESENT THAT IT IS A QIB PURCHAS-
ING FOR ITS OWN ACCOUNT OR A QIB PURCHASING
FOR THE ACCOUNT OF ANOTHER QIB.
EACH PURCHASER REPRESENTS AND WARRANTS
FOR THE BENEFIT OF METRIS RECEIVABLES, INC.
(FORMERLY KNOWN AS FINGERHUT FINANCIAL SERVIC-
ES RECEIVABLES, INC.) THAT, UNLESS SUCH PUR-
CHASER, AT ITS EXPENSE, DELIVERS TO THE TRUST-
EE, THE SERVICER AND THE TRANSFEROR AN OPINION
OF COUNSEL SATISFACTORY TO THEM TO THE EFFECT
THAT THE PURCHASE OR HOLDING OF A CLASS C CER-
TIFICATE BY SUCH PURCHASER WILL NOT RESULT IN
THE ASSETS OF THE TRUST BEING DEEMED TO BE
"ASSETS OF THE BENEFIT PLAN" AND SUBJECT TO
THE PROHIBITED TRANSACTION PROVISIONS OF ERISA
AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
THE TRANSFEROR OR THE SERVICER TO ANY OBLIGA-
TION IN ADDITION TO THOSE UNDERTAKEN IN THE
POOLING AND SERVICING AGREEMENT, SUCH PURCHAS-
ER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS
DEFINED IN SECTION 3(3) OF THE EMPLOYEE RE-
TIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA")) THAT IS SUBJECT TO THE PRO-
VISIONS OF TITLE I OF ERISA, (II) A PLAN DE-
SCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR (III) AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN
ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE
ENTITY.
101
NO SALE, ASSIGNMENT, PARTICIPATION,
PLEDGE, HYPOTHECATION, TRANSFER OR OTHER DIS-
POSITION OF A CLASS C CERTIFICATE (OR ANY IN-
TEREST THEREIN) SHALL BE MADE UNLESS THE
TRANSFEROR AND THE SERVICER SHALL HAVE GRANTED
THEIR PRIOR CONSENT THERETO, WHICH CONSENT MAY
NOT BE UNREASONABLY WITHHELD.
No. C- $_____________
METRIS MASTER TRUST
FLOATING RATE ACCOUNTS RECEIVABLE TRUST
CERTIFICATE, SERIES 1995-1, CLASS C
Evidencing an undivided interest in a trust,
the corpus of which consists of receivables generated
from time to time in the ordinary course of business
from a portfolio of open end or revolving credit receiv-
▇▇▇▇▇ generated or to be generated by Direct Merchants
Credit Card Bank, National Association (the "Bank" or
the "Servicer") and other assets and interests consti-
tuting the Trust under the Agreement described below.
(Not an interest in or a recourse obligation
of Metris Receivables, Inc., the Bank or any affiliate
of either of them.)
This certifies that _______________________
________________________________________________________
(the "Certificateholder") is the registered owner of a
fractional undivided interest in the Metris Master Trust
(the "Trust") issued pursuant to the Pooling and Servic-
ing Agreement, dated as of May 26, 1995 (the "Pooling
and Servicing Agreement"; such term to include any
amendment thereto) by and between Metris Receivables,
Inc., as Transferor (the "Transferor"), the Bank, as the
Servicer, and The Bank of New York (Delaware), as Trust-
ee (the "Trustee"), and the Amended and Restated Series
1995-1 Supplement, dated as of September 16, 1996 (the
"Amended and Restated Series 1995-1 Supplement"), among
the Transferor, the Bank, as Servicer and the Trustee
(the Pooling and Servicing Agreement, as supplemented by
the Amended and Restated Series 1995-1 Supplement, is
herein referred to as the "Agreement"). The corpus of
the Trust consists of all of the Transferor's right,
title and interest in, to and under (i) the Trust Prop-
erty (as defined in the Agreement) and (ii) the property
described in Section 3A of the Amended and Restated
Series 1995-1 Supplement and Section 4.4 of the Agree-
ment.
102
This Certificate does not purport to summarize
the Agreement and reference is made to the Agreement for
information with respect to the interests, rights, bene-
fits, obligations, proceeds, and duties evidenced hereby
and the rights, duties and obligations of the Trustee.
To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the
Agreement. This Certificate is one of a series of Cer-
tificates entitled "Metris Master Trust Floating Rate
Accounts Receivable Trust Certificates, Series 1995-1,
Class C" (the "Class C Certificates"), each of which
represents a fractional undivided interest in the Trust,
and is issued under and is subject to the terms, provi-
sions and conditions of the Agreement, to which Agree-
ment, as amended from time to time, the Certificatehold-
er by virtue of the acceptance hereof assents and by
which the Certificateholder is bound. In the case of
any conflict between terms specified in this Certificate
and terms specified in the Agreement, the terms of the
Agreement shall govern.
The Transferor has structured the Agreement,
the Class C Certificates, the Metris Master Trust Vari-
able Funding Trust Certificate, Series 1995-1, Class A
(the "Class A Certificate ) and the Metris Master Trust
Accounts Receivable Trust Certificates, Series 1995-1,
Class B (the "Class B Certificates") with the intention
that the Class A Certificate, the Class B Certificates
and the Class C Certificates will qualify under applica-
ble tax law as indebtedness, and both the Transferor and
each holder of a Class C Certificate (a "Class C Certif-
icateholder") or any interest therein by acceptance of
its Certificate or any interest therein, agrees to treat
the Class C Certificate for purposes of federal, state
and local income or franchise taxes and any other tax
imposed on or measured by income, as indebtedness.
No principal will be payable to the Class C
Certificateholders until the Class C Principal Payment
Commencement Date, which is the Distribution Date either
on or following the Distribution Date, on which the
Class B Invested Amount had been paid in full. No prin-
cipal will be payable to the Class C Certificateholders
until all principal payments have been made to the Class
B Certificateholders. Except in connection with a pay-
ment of Class D Daily Principal, the Class D Certificate
will not have the right to receive payments of principal
until the Class A Invested Amount, the Class B Invested
Amount and the Class C Invested Amount have been paid in
full.
103
Each Class C Certificate represents the right
to receive interest at the rate of .75% per annum above
LIBOR (as determined on the related LIBOR Determination
Date, and such rate, as in effect from time to time, the
"Class C Certificate Rate" ) on the 20th day of each
month after the issuance of the Class C Certificates, or
if such day is not a business day, on the next succeed-
ing business day (each, a "Distribution Date"), in an
amount equal to the product of (a) the actual number of
days in the related Interest Accrual Period divided by
360, (b) the Class C Certificate Rate and (c) the Class
C Invested Amount as of the close of business on the
first day of the related Interest Accrual Period.
Interest for any Distribution Date will in-
clude accrued interest at the Class C Certificate Rate
from and including the preceding Distribution Date or,
in the case of the first Distribution Date from and
including the Closing Date, to but excluding such Dis-
tribution Date. Interest for any Distribution Date due
but not paid on any Distribution Date will be due on the
next succeeding Distribution Date together with, to the
extent permitted by applicable law, additional interest
on such amount at the Class C Certificate Rate plus 2%.
"Class C Invested Amount" shall mean, when
used with respect to any Business Day, an amount equal
to (a) $70,698,000, minus (b) the aggregate amount of
principal payments made to Class C Certificateholders
prior to such Business Day, minus (c) the aggregate
amount of Class C Investor Charge-Offs for all prior
Distribution Dates, minus (d) the aggregate amount of
Reallocated Class C Principal Collections for which the
Class D Invested Amount has not been reduced for all
prior Business Days and plus (e) the sum of the aggre-
gate amount allocated and available on all prior Busi-
ness Days pursuant to subsection 4.9(a)(xii) of the
Agreement and, with respect to such subsection, pursuant
to subsections 4.10(a) and (b) and Section 4.15 of the
Agreement, for the purpose of reinstating amounts re-
duced pursuant to the foregoing clauses (c) and (d).
104
Subject to the Agreement, payments of princi-
pal are limited to the unpaid Class C Invested Amount of
the Class C Certificate, which may be less than the
unpaid balance of the Class C Certificate pursuant to
the terms of the Agreement. All principal of and inter-
est on the Class C Certificate is due and payable no
later than May 30, 2003 unless a different date is set
forth in the Extension Notice (the "Series 1995-1 Termi-
nation Date"). After the Series 1995-1 Termination Date
neither the Trust nor the Transferor will have any fur-
ther obligation to distribute principal or interest on
the Class C Certificate. In the event that the Class C
Invested Amount is greater than zero on the Series 1995-
1 Termination Date, the Trustee will sell or cause to be
sold, to the extent necessary, an amount of interests in
the Receivables or certain of the Receivables up to 110%
of the Class A Invested Amount, the Class B Invested
Amount, the Class C Invested Amount and the Class D
Invested Amount at the close of business on such date
(but not more than the total amount of Receivables allo-
cable to the Investor Certificates), and shall pay the
proceeds to the Class A Certificateholders pro rata in
final payment of the Class A Certificate, then to the
Class B Certificateholders pro rata in final payment of
the Class B Certificates, then to the Class C Certifi-
cateholders pro rata in final payment of the Class C
Certificates and finally to the Class D Certificatehold-
ers pro rata in final payment of the Class D Certifi-
cate.
Unless the certificate of authentication here-
on has been executed by or on behalf of the Trustee, by
manual signature, this Certificate shall not be entitled
to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Transferor has caused
this Certificate to be duly executed under its official
seal.
METRIS RECEIVABLES, INC.
By:_____________________________
Name:
Title:
Dated:
105
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates
referred to in the within-mentioned Pooling and Servic-
ing Agreement.
THE BANK OF NEW YORK, as
Authenticating Agent for
the Trustee
By: _______________________
Authorized Signatory
Exhibit A-4
[FORM OF CLASS D INVESTOR CERTIFICATE]
METRIS MASTER TRUST
FLOATING RATE ACCOUNTS RECEIVABLE TRUST
CERTIFICATE, SERIES 1995-1, CLASS D
THIS CERTIFICATE WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THIS CERTIFICATE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OR
ANY APPLICABLE STATE SECURITIES LAW OF ANY
STATE AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED UNLESS REGISTERED PURSU-
ANT TO OR EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT AND ANY OTHER APPLICABLE SECU-
RITIES LAW. METRIS RECEIVABLES, INC. SHALL BE
PROHIBITED FROM TRANSFERRING ANY INTEREST IN
OR PORTION OF THIS CERTIFICATE UNLESS, PRIOR
TO SUCH TRANSFER, IT SHALL HAVE DELIVERED TO
THE TRUSTEE AN OPINION OF COUNSEL TO THE EF-
FECT THAT SUCH PROPOSED TRANSFER WILL NOT AD-
VERSELY AFFECT THE FEDERAL, MINNESOTA OR DELA-
WARE INCOME TAX CHARACTERIZATION OF ANY OUT-
STANDING SERIES OF INVESTOR CERTIFICATES OR
THE TAXABILITY (OR TAX CHARACTERIZATION) OF
THE TRUST UNDER FEDERAL, MINNESOTA OR DELAWARE
INCOME TAX LAWS. THE TRANSFER OF THIS CERTIF-
ICATE IS SUBJECT TO CERTAIN CONDITIONS SET
FORTH IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
106
EACH PURCHASER REPRESENTS AND WARRANTS
FOR THE BENEFIT OF METRIS RECEIVABLES, INC.
(FORMERLY KNOWN AS FINGERHUT FINANCIAL SERVIC-
ES RECEIVABLES, INC.) THAT SUCH PURCHASER IS
NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED
IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA")) THAT IS SUBJECT TO THE PROVISIONS
OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN
SECTION 4975(E)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, OR (III) AN ENTITY
WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY
REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
No. ___ $_________
METRIS MASTER TRUST
FLOATING RATE ACCOUNTS RECEIVABLE TRUST
CERTIFICATE, SERIES 1995-1, CLASS D
Evidencing an undivided interest in a trust,
the corpus of which consists of receivables generated
from time to time in the ordinary course of business
from a portfolio of open end or revolving credit receiv-
▇▇▇▇▇ generated or to be generated by Direct Merchants
Credit Card Bank, National Association (the "Bank" or
the "Servicer") and other assets and interests consti-
tuting the Trust under the Agreement described below.
(Not an interest in or a recourse obligation
of Metris Receivables, Inc., the Bank or any affiliate
of either of them.)
This certifies that METRIS RECEIVABLES, INC.
(the "Certificateholder") is the registered owner of a
fractional undivided interest in the Metris Master Trust
(the "Trust") issued pursuant to the Pooling and Servic-
ing Agreement, dated as of May 26, 1995 (the "Pooling
and Servicing Agreement"; such term to include any
amendment or Series Supplement thereto) by and between
Metris Receivables, Inc., as Transferor (the "Transfer-
or"), the Bank, as the Servicer, and The Bank of New
York (Delaware), as Trustee (the "Trustee"), and the
Amended and Restated Series 1995-1 Supplement, dated as
of September 16, 1996 (the "Amended and Restated Series
1995-1 Supplement"), among the Transferor, the Bank, as
Servicer and the Trustee (the Pooling and Servicing
Agreement, as supplemented by the Amended and Restated
Series 1995-1 Supplement, is herein referred to as the
"Agreement"). The corpus of the Trust consists of all
of the Transferor's right, title and interest in, to and
under (i) the Trust Property (as defined in the Agree-
ment) and (ii) the property described in Section 3A of
the Amended and Restated Series 1995-1 Supplement and
Section 4.4 of the Agreement.
107
This Certificate does not purport to summarize
the Agreement and reference is made to the Agreement for
information with respect to the interests, rights, bene-
fits, obligations, proceeds, and duties evidenced hereby
and the rights, duties and obligations of the Trustee.
To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the
Agreement. This Certificate is one of a series of Cer-
tificates entitled "Metris Master Trust Floating Rate
Accounts Receivable Trust Certificates, Series 1995-1,
Class D" (the "Class D Certificate"), each of which
represents a fractional undivided interest in the Trust,
and is issued under and is subject to the terms, provi-
sions and conditions of the Agreement, to which Agree-
ment, as amended from time to time, the Certificatehold-
er by virtue of the acceptance hereof assents and by
which the Certificateholder is bound.
Metris Receivables, Inc. shall be prohibited
from Transferring any interest in or portion of the
Class D Certificate unless, prior to such Transfer, it
shall have delivered to the Trustee an Opinion of Coun-
sel to the effect that such proposed Transfer will not
adversely affect the Federal, Minnesota or Delaware
income tax characterization of any outstanding Series of
Investor Certificate or the taxability (or tax charac-
terization) of the Trust under Federal, Minnesota or
Delaware income tax laws.
Except in connection with a payment of Class D
Daily Principal, no principal will be payable to the
Class D Certificateholders until the Class D Payment
Commencement Date, which is the Distribution Date either
on or following the Distribution Date on which the Class
C Invested Amount had been paid in full. No principal
will be payable to the Class D Certificateholders until
all principal payments have first been made to the Class
A Certificateholders and then on and after the Class B
Principal Payment Commencement Date, after all principal
payments have been made to the Class B Certificatehold-
ers and then on and after the Class C Principal Payment
Commencement Date, after all payments have been made to
the Class C Certificateholders.
Interest will not accrue on the unpaid princi-
pal amount of the Class D Certificate.
"Class D Invested Amount" shall mean, when
used with respect to any Business Day, an amount equal
to (a) upon the initial issuance of the Class D Certifi-
cate the initial amount designated by the Transferor
(which shall not be less than the Stated Class D
Amount), plus (b) the aggregate principal amount of any
Additional Class D Invested Amounts pursuant to Section
6.16 of the Agreement, minus (c) the aggregate amount of
principal payments made to Class D Certificateholders
108
prior to such Business Day, minus (d) the aggregate
amount of Class D Investor Charge-Offs for all prior
Distribution Dates, minus (e) the aggregate amount of
Reallocated Principal Collections for all prior Business
Days, plus (f) the sum of the aggregate amount allocated
and available on all prior Business Days pursuant to
subsection 4.9(a)(xiii) of the Agreement and, with re-
spect to such subsection, pursuant to subsections
4.10(a) and (b) of the Agreement, for the purpose of
reinstating amounts reduced pursuant to the foregoing
clauses (d) and (e).
Subject to the Agreement, payments of princi-
pal are limited to the unpaid Class D Invested Amount of
the Class D Certificate, which may be less than the
unpaid balance of the Class D Certificate pursuant to
the terms of the Agreement. All principal of and inter-
est on the Class D Certificate is due and payable no
later than May 30, 2003 (the "Series 1995-1 Termination
Date"). After the Series 1995-1 Termination Date nei-
ther the Trust nor the Transferor will have any further
obligation to distribute principal or interest on the
Class C Certificates. In the event that the Class D
Invested Amount is greater than zero on the Series 1995-
1 Termination Date, the Trustee will sell or cause to be
sold, to the extent necessary, an amount of interests in
the Receivables or certain of the Receivables up to 110%
of the Class A Invested Amount, the Class B Invested
Amount, the Class C Invested Amount and the Class D
Invested Amount at the close of business on such date
(but not more than the total amount of Receivables allo-
cable to the Investor Certificates), and shall pay the
proceeds to the Class A Certificateholders pro rata in
final payment of the Class A Certificate, then to the
Class B Certificateholders pro rata in final payment of
the Class B Certificates, then to the Class C Certifi-
cateholders pro rata in final payment of the Class C
Certificates and finally to the Class D Certificatehold-
ers pro rata in final payment of the Class D Certifi-
cate.
109
Unless the certificate of authentication here-
on has been executed by or on behalf of the Trustee, by
manual signature, this Certificate shall not be entitled
to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Transferor has caused
this Certificate to be duly executed under its official
seal.
METRIS RECEIVABLES, INC.
By:________________________
Name:
Title:
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificate re-
ferred to in the within-mentioned Pooling and Servicing
Agreement.
THE BANK OF NEW YORK, as
Authenticating Agent for
the Trustee
By:________________________
Authorized Signatory
EXHIBIT B
[RESERVED]
EXHIBIT C
[Form of Monthly Certificateholders' Statement]
EXHIBIT D
Form of 144A Exchange Notice and Certification
, 199
Metris Receivables, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
[Trustee]
{Trustee Address]
Ladies and Gentlemen:
This is to notify you as to the transfer of $
of Floating Rate Accounts Receivable Trust
Certificates, Series 1995-1, Class C (the "Class C Cer-
tificates") of Metris Master Trust (the "Company").
110
The undersigned is the holder of the Certifi-
▇▇▇▇▇ and with this notice hereby deposits with the
Trustee $ principal amount of Class C
Certificates and requests that Class C Certificates in
the same principal amount be issued and executed by the
Company and authenticated by the Trustee and registered
to the purchaser on , 19 , as speci-
fied in the Pooling and Servicing Agreement, as supple-
mented by the Amended and Restated Series 1995-1 Supple-
ment thereto, as follows:
Name: Denominations:
Address:
Taxpayer I.D. No.:
The undersigned represents and warrants that
the undersigned (i) reasonably believes the purchaser is
a "qualified institutional buyer," as defined in Rule
144A under the Securities Act of 1933 (the "Act"), (ii)
such purchaser has acquired the Certificates in a trans-
action effected in accordance with the exemption from
the registration requirements of the Act provided by
Rule 144A and, (iii) if the purchaser has purchased the
Certificates for one or more accounts for which it is
acting as fiduciary or agent, (A) each such account is a
qualified institutional buyer and (B) each such account
is acquiring Notes for its own account or for one or
more institutional accounts for which it is acting as
fiduciary or agent in a minimum amount equivalent to not
less than U.S. $250,000 for each such account.
Very truly yours,
[NAME OF HOLDER OF CERTIFICATE]
By:_____________________________
[Name], [Chief Financial
or other Executive Officer]
Exhibit E
FORM OF EXTENSION NOTICE
FINGERHUT CARD MASTER TRUST, SERIES 1995-1
The undersigned, a duly authorized representa-
tive of Metris Receivables, Inc. (formerly known as
Fingerhut Financial Services Receivables, Inc.), a Dela-
ware corporation (the "Transferor"), as Transferor pur-
suant to the Pooling and Servicing Agreement dated as of
May 26, 1995 (the "Pooling and Servicing Agreement";
such term to include any amendment thereto), by and
between the Transferor, as transferor, Direct Merchants
Credit Card Bank, National Association, as servicer (the
"Servicer"), and The Bank of New York (Delaware), as
trustee (the "Trustee"), as supplemented by the Amended
and Restated Series 1995-1 Supplement, dated September
16, 1996 (the "Amended and Restated Series 1995-1 Sup-
plement"), by and between the Transferor, the Servicer
and the Trustee (the Pooling and Servicing Agreement, as
supplemented by the Amended and Restated Series 1995-1
Supplement, or as the Pooling and Servicing Agreement
may from time to time be amended, supplemented, or modi-
fied, the "Agreement"), does hereby notify the Trustee
(or any successor Trustee) and the Investor Certificate-
holders:
111
A. Capitalized terms used but not defined in
this Certificate shall have the respective meanings set
forth in the Agreement. References herein to certain
sections and subsections are references to the respec-
tive sections and subsections of the Agreement.
B. The undersigned is a [Vice President] or
more senior officer of the Transferor who is duly autho-
rized to execute and deliver this Certificate on behalf
of the Transferor.
C. This Certificate is being delivered pursu-
ant to Section 6.17(a) of the Agreement.
D. The Transferor is the Transferor under the
Agreement.
E. No Pay Out Event has occurred that has not
been remedied pursuant to the provisions of the Agree-
ment.
F. The Certificate is being delivered to the
Trustee on or before the date specified in subsection
6.17(a) for delivery.
G. NOTIFICATION OF EXTENSION
Pursuant to subsection 6.17(a) and in respect
of [ , ] (the "Current Extension Date"), the
Transferor hereby notifies the Trustee and the Investor
Certificateholders of the Transferor's intention to
extend the Revolving Period in respect of Series 1995-1
on the Current Extension Date pursuant to the provisions
of Section 6.17, until the date set forth below (such
extension, the "Extension").
112
H. REQUIREMENTS TO COMPLETE EXTENSION
(1) Annexed hereto is an election notice
(an "Election Notice") to be returned by any Investor
Certificateholder electing to approve the Extension. No
Extension shall occur unless Investor Certificateholders
holding at least more than fifty percent of each of the
aggregate principal amount of Class A Certificates,
Class B Certificates, Class C Certificates and Class D
Certificate, respectively, shall return properly execut-
ed Election Notices approving the Extension by the Elec-
tion Date (as defined below). Any Investor Certificate-
holder electing to approve the Extension must deliver a
properly executed Election Notice at the office of the
Trustee, [ ] on or before 3:00 p.m.,
[ ] time, on [ , ] (the "Election
Date"). Any Investor Certificateholder may withdraw any
Election Notice delivered by it to the Trustee by noti-
fying the Trustee in writing at the address set forth in
the previous sentence on or prior to the Election Date.
(2) THE EXTENSION SHALL NOT OCCUR UNTIL
PRIOR SATISFACTION OF CERTAIN CONDITIONS PRECEDENT BY
THE CLOSE OF BUSINESS ON THE ELECTION DATE, INCLUDING
THE APPROVAL OF SUCH EXTENSION BY THE INVESTOR CERTIFI-
CATEHOLDERS HOLDING THE REQUIRED AGGREGATE PRINCIPAL
AMOUNT OF CLASS A CERTIFICATES, CLASS B CERTIFICATES,
CLASS C CERTIFICATES AND Class D Certificate, THAT NO
PAY OUT EVENT SHALL HAVE OCCURRED AND BE CONTINUING, AND
THAT CERTAIN LEGAL OPINIONS AND RATING AGENCY CONFIRMA-
TIONS SHALL HAVE BEEN DELIVERED TO THE TRANSFEROR AND
THE TRUSTEE PURSUANT TO SECTION 6.17(b). THE TRANSFEROR
MAY IN ITS SOLE DISCRETION WITHDRAW THIS EXTENSION NO-
▇▇▇▇ AT ANY TIME ON OR PRIOR TO THE ELECTION DATE BY
DELIVERING NOTICE OF SUCH WITHDRAWAL IN WRITING TO THE
TRUSTEE. IF ANY SUCH NOTICE OF WITHDRAWAL SHALL BE SO
DELIVERED, NO EXTENSION SHALL OCCUR.
I. NEW PROVISIONS TO BECOME EFFECTIVE ON THE
EXTENSION DATE
(1) The new Amortization Period Com-
mencement Date shall be the earlier of (a) [ ,
] or (b) the Pay Out Commencement Date.
(2) The new Extension Date shall be
[ , ].
[(3) The new Scheduled Series 1995-1
Termination Date shall be [ , ].]
(4) The new Class A Expected Payment
Date is ______.
(5) The new Class B Expected Payment
Date is ______.
(6) The new Class C Expected Payment
Date is ______.
[(7) The following are additional provi-
sions that will apply to the Investor Certificates on
and after the Extension Date:
113
INSERT PROVISIONS]
J. Annexed hereto are the following:
(1) the form of Extension Tax Opinion.
(2) the form of Extension Opinion.
(3) the Election Notice.
IN WITNESS WHEREOF, the undersigned has duly
executed this certificate this [ ] day of
[ , ].
METRIS RECEIVABLES, INC.
By:_________________________
Name:
Title:
EXHIBIT F
FORM OF INVESTOR CERTIFICATEHOLDER ELECTION NOTICE
[INSERT NAME
AND ADDRESS OF TRUSTEE]
Re: Metris Master Trust:
Election Notice to Extend Series 1995-1
Ladies and Gentlemen:
The undersigned hereby elects to approve the
extension of the Revolving Period for Series 1995-1
until the Amortization Period Commencement Date set
forth in the Extension Notice dated [ ,
] (the "Extension Notice") and delivered to the under-
signed pursuant Section 6.17(a) of the Pooling and Ser-
vicing Agreement, dated as of May 26, 1995, including
the Amended and Restated Series 1995-1 Supplement there-
to, dated as of September 16, 1996, each by and among
Metris Receivables, Inc., as transferor, Direct Mer-
chants Credit Card Bank, N.A., as servicer, and
________________________, as trustee (the "Pooling and
Servicing Agreement"; such term to include any amendment
thereto). The undersigned hereby acknowledges that,
commencing on the Current Extension Date (as defined in
the Extension Notice), the terms and provisions of the
Pooling and Servicing Agreement shall be modified as set
forth in the Extension Notice.
114
IN WITNESS WHEREOF, the undersigned registered
owner(s) has [have] executed this Election Notice as of
the date set forth below.
Dated:
Name(s):_______________________
Address:_______________________
(Please Print)
Signature(s):__________________
TABLE OF CONTENTS
PAGE
SECTION 1. Designation . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Definitions . . . . . . . . . . . . . . . . . . . 1
SECTION 3. Reassignment Terms . . . . . . . . . . . . . . . 31
SECTION 3A. Conveyance of Interest in Interest
Rate Cap; Cap Proceeds Account . . . . . . . . . 31
SECTION 4. Delivery and Payment for the Series 1995-1
Certificates . . . . . . . . . . . . . . . . . . 36
SECTION 5. Form of Delivery of Series 1995-1
Certificates . . . . . . . . . . . . . . . . . . 36
SECTION 6. Article IV of Agreement . . . . . . . . . . . . . 36
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS . . . . 36
Section 4.4 Rights of Certificateholders . . . . 36
Section 4.5 Collections and Allocation; Pay-
ments on Exchangeable Transferor
Certificate . . . . . . . . . . . . 37
Section 4.6 Determination of Interest for the
Series 1995-1 Certificates . . . . . 39
Section 4.6A Determination of the Class A
Interest Adjustment . . . . . . . 41
Section 4.7 Determination of Principal
Amounts . . . . . . . . . . . . . . 42
Section 4.8 Shared Principal Collections . . . . 46
Section 4.9 Application of Funds . . . . . . . . 46
Section 4.10 Coverage of Required Amount for
the Series 1995-1 Certificates . . . 63
Section 4.11 Payment of Certificate Interest . . 63
Section 4.12 Payment of Certificate Principal . . 64
Section 4.13 Investor Charge-Offs . . . . . . . . 65
Section 4.14 Increases in the Invested Amount
During the Investment Period . . . . 67
Section 4.15 Reallocated Principal Collec-
tions for the Series 1995-1
Certificates . . . . . . . . . . . . 68
Section 4.16 Determination of LIBOR . . . . . . . 69
PAGE
Section 4.17 Payment Reserve Account . . . . . . 70
Section 4.18 Establishment of Investor Reserve
Account . . . . . . . . . . . . . . 73
SECTION 7. Article V of the Agreement . . . . . . . . . . . 71
115
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS . . . . . . . . . 72
Section 5.1 Distributions . . . . . . . . . . . . 72
Section 5.2 Certificateholders' Statement . . . . 73
SECTION 7A. Article VI of the Agreement . . . . . . . . . . 75
ARTICLE VI
THE CERTIFICATES . . . . . . . . . . 76
Section 6.15 Additional Class A Invested
Amounts . . . . . . . . . . . . . . 76
Section 6.16 Additional Class D Invested
Amounts. . . . . . . . . . . . . . . 77
Section 6.17 Extension . . . . . . . . . . . . . 78
SECTION 8. Series 1995-1 Pay Out Events . . . . . . . . . 80
SECTION 8A. Class A Pay Down Period . . . . . . . . . . . . 83
SECTION 9. Series 1995-1 Termination . . . . . . . . . . . 83
SECTION 9A. Class A Pre-Payment . . . . . . . . . . . . . . 83
SECTION 10. Legends; Transfer and Exchange; Restric-
tions on Transfer of Series 1995-1
Certificates; Tax Treatment . . . . . . . . . . 84
SECTION 11. Ratification of Agreement . . . . . . . . . . . 88
SECTION 12. Counterparts . . . . . . . . . . . . . . . . . . 89
SECTION 13. GOVERNING LAW . . . . . . . . . . . . . . . . . 89
SECTION 14. Instructions in Writing . . . . . . . . . . . . 89
SECTION 15. Amendments . . . . . . . . . . . . . . . . . . . 89
SECTION 16. Increased Costs . . . . . . . . . . . . . . . . 90
SECTION 17. Replacement of Certain Investor
Certificateholders . . . . . . . . . . . . . . 92
SECTION 18. Metris Receivables Note . . . . . . . . . . . . 93
116
EXHIBITS
EXHIBIT A-1 Form of Variable Funding Certificate
EXHIBIT A-2 Form of Class B Investor Certificate
EXHIBIT A-3 Form of Class C Investor Certificate
EXHIBIT A-4 Form of Class D Investor Certificate
EXHIBIT B [RESERVED]
EXHIBIT C Form of Monthly Certificateholders' Statement
EXHIBIT D Form of 144A Exchange Notice and Certification
EXHIBIT E Form of Extension Notice
EXHIBIT F Form of Investor Certificateholder Election Notice
117
_________________________________________________________
METRIS RECEIVABLES, INC.
Transferor
DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION
Servicer
and
THE BANK OF NEW YORK (DELAWARE)
Trustee
on behalf of the Series 1995-1 Certificateholders
AMENDED AND RESTATED SERIES 1995-1 SUPPLEMENT
Dated as of September 16, 1996
to
POOLING AND SERVICING AGREEMENT
Dated as of May 26, 1995
____________________________________
METRIS MASTER TRUST
Variable Funding Trust
Certificate, Series 1995-1, Class A
$129,612,000 Floating Rate Accounts Receivable Trust
Certificates, Series 1995-1, Class B
$70,698,000 Floating Rate Accounts Receivable Trust
Certificates, Series 1995-1, Class C
0% Variable Funding Trust
Certificate, Series 1995-1, Class D
_________________________________________________________
118
Exhibit 10.a(iv)
AMENDMENT NO. 2, dated as of September 16, 1996
(this "Agreement"), by and among METRIS RECEIVABLES, INC.
(formerly Fingerhut Financial Services 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, to the POOLING AND
SERVICING AGREEMENT, dated as of May 26, 1995 (as hereto-
fore amended, the "Pooling and Servicing Agreement"), by
and among the Transferor, the Servicer and the Trustee.
W I T N E S S E T H:
WHEREAS, the Transferor, the Servicer and the
Trustee entered into Amendment No. 1 to the Pooling and
Servicing Agreement dated as of June 10, 1996;
WHEREAS, the Transferor, the Servicer and the
Trustee desire to amend the Pooling and Servicing Agree-
ment pursuant to Section 13.1(a) therein in order to
provide for the terms contained herein;
WHEREAS, in connection with a business realign-
ment of FCI's subsidiaries, FCI has assigned to Metris
Companies Inc., a Delaware corporation ("Metris"), all of
its rights arising under the Bank Receivables Purchase
Agreement and the Purchase Agreement and Metris has
assumed all of FCI's obligations thereunder pursuant to
that certain Assignment and Assumption Agreement, dated
as of September 16, 1996, by and among FCI, Metris and
DMCCB, and that certain Assignment and Assumption Agree-
ment, dated as of September 16, 1996, by and among FCI,
Metris and the Transferor, respectively;
NOW, THEREFORE, in consideration of the mutual
agreements herein contained, each party agrees as follows
for the benefit of the other parties and the Certificate-
holders:
Section 1. Definitions. Except as provided
herein, all capitalized terms used in this Agreement but
not defined herein shall have their respective meanings
in the Pooling and Servicing Agreement.
Section 2. Name of Trust. The name of the
Trust shall be "Metris Master Trust."
Section 3. Amendments to Section 1.1. (a)
Section 1.1 of the Pooling and Servicing Agreement shall
be amended by adding the following defined terms in
appropriate alphabetical order:
"Automatic Addition Suspension Date" shall mean the
Business Day specified in Section 2.6(a) hereof.
"Automatic Addition Termination Date" shall mean the
Business Day specified by the Transferor pursuant to
Section 2.6(a) hereof as of which new open end
credit card accounts designated by the Transferor
shall cease to become Additional Accounts.
"Bank Receivables Purchase Agreement Assignment"
shall mean the Assignment and Assumption Agreement
dated as of September 16, 1996 by and among FCI as
assignor, Metris as assignee, and DMCCB.
"Metris" shall mean Metris Companies Inc., a corpo-
ration organized and existing under the laws of the
State of Delaware.
119
"Metris Receivables" shall mean Metris Receivables,
Inc., a corporation organized and existing under the
laws of the State of Delaware.
"Purchase Agreement Assignment" shall mean the
Assignment and Assumption Agreement dated as of
September 16, 1996 by and among FCI as assignor,
Metris as assignee, and the Transferor.
"Restart Date" shall mean the date specified in the
notice delivered by the Transferor to the Trustee
pursuant to Section 2.6(a) hereof.
(b) Section 1.1 of the Pooling and Servicing
Agreement shall be amended by deleting the definition of
"Transferor" in its entirety and replacing it with the
following:
"Transferor" shall mean Metris Receivables, Inc., a
corporation organized and existing under the laws of
the State of Delaware, and any successor thereto.
(c) Section 1.1 of the Pooling and Servicing
Agreement shall be amended by deleting the definition of
"Bank Receivables Purchase Agreement" in its entirety and
replacing it with the following:
"Bank Receivables Purchase Agreement" shall mean the
amended and restated receivables purchase agreement
dated as of May 26, 1995 between FCI, as buyer of
receivables, and DMCCB, as seller of receivables, as
amended from time to time and as assigned by FCI to
Metris pursuant to the Bank Receivables Purchase
Agreement Assignment, and any other receivables
purchase agreement between Metris, as purchaser of
receivables, and a Credit Card Originator, as seller
of receivables.
(d) Section 1.1 of the Pooling and Servicing
Agreement shall be amended by deleting the definition of
"Purchase Agreement" in its entirety and replacing it
with the following:
"Purchase Agreement" shall mean the purchase agree-
ment dated as of May 26, 1995 between the Transfer-
or, as buyer of receivables, and FCI, as seller of
receivables, as amended from time to time and as
assigned by FCI to Metris pursuant to the Purchase
Agreement Assignment.
Section 4. References to FCI. (a) Except for
the definition of "FCI" in Section 1.1 of the Pooling and
Servicing Agreement and as otherwise provided by Section
3 and by Section 4(b), (c), and (d) hereof, the Pooling
and Servicing Agreement shall be amended by replacing all
references to "FCI" with "Metris."
(b) Section 3.9 of the Pooling and Servicing
Agreement shall be amended by deleting the reference to
"FCI" therein and replacing it with "Metris and, for so
long as FCI owns any common stock of Metris, FCI."
(c) Section 9.2(a) of the Pooling and Servic-
ing Agreement shall be amended by deleting (i) the phrase
"or FCI" therein, and (ii) the following at the end of
the third sentence of Section 9.2(a)(ii):
"; provided, however, that in the event the Insol-
vency Event at issue shall have occurred with re-
spect to FCI, the Trust shall not be reconstituted
unless the Trustee shall have first received an
Opinion of Counsel to the effect that the Trust, as
reconstituted, shall not be subject to Federal or
any Applicable Tax State income tax on its income."
120
(d) Schedule 1 to the Pooling and Servicing
Agreement entitled "Tax Returns and Payments" shall be
amended by deleting all references to "FCI" therein and
replacing them with "FCI, for so long as FCI owns 80% or
more of the common stock of Metris," and such schedule
may be replaced in its entirety at such time as FCI owns
less than 80% of the common stock of Metris. Schedule 1
to the Pooling and Servicing Agreement shall be further
amended to (i) add to the list of states in the second
sentence thereof the states of Oklahoma, South Dakota and
Utah, (ii) add to the list of states in the third sen-
tence thereof the states of Indiana, New Jersey, Pennsyl-
vania and Virginia and (iii) add the following language
at the end:
In addition, because one of the subsidiaries of
Metris, Direct Merchants Credit Card Bank, National
Association, is a national banking entity (established in
1995) 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 ▇▇▇▇▇-
cial 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 Minnesota
California New Mexico
Hawaii Tennessee
Indiana
Massachusetts
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.
Section 5. Amendment to Section 2.6(a).
Section 2.6(a) of the Pooling and Servicing Agreement
shall be amended to read as follows:
"(a) Unless otherwise specified in any
Supplement, all accounts which meet the definition
of Additional Accounts shall be included as Accounts
from and after the date upon which such Additional
Accounts are created and all Receivables in such
Additional Accounts, whether such Receivables are
then existing or thereafter created, shall be trans-
ferred automatically to the Trust upon purchase by
the Transferor. For all purposes of this Agreement,
all receivables of such Additional Accounts shall be
treated as Receivables upon their creation and shall
be subject to the eligibility criteria specified in
the definitions of "Eligible Receivable" and "Eligi-
ble Account." Notwithstanding the foregoing, the
Transferor may elect at any time, or may be required
pursuant to Section 2.6(f), 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 writ-
ing 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
121
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 Termina-
tion Date."
Section 6. Conditions to Effectiveness. This
Agreement shall become effective upon the satisfaction of
the following conditions:
(i) the Servicer shall have provided an Officer's
Certificate to the Trustee to the effect that this
Agreement will not materially and adversely affect
the interests of the Certificateholders;
(ii) the receipt by the Trustee of an Opinion of
Counsel pursuant to clause (ii) of the second para-
graph of Section 13.1(a) of the Pooling and Servic-
ing Agreement;
(iii) the Servicer shall have provided at least ten
Business Days prior written notice to each Rating
Agency of this Agreement 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 this Agreement; and
(iv) the execution of this Agreement by each of the
parties hereto.
Section 7. Governing Law. THIS AGREEMENT
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 ACCOR-
DANCE WITH SUCH LAWS.
Section 8. 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.
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.,
as Transferor
By:
------------------------
Name:
Title:
DIRECT MERCHANTS CREDIT CARD
BANK, NATIONAL ASSOCIATION,
as Servicer
By:
------------------------
Name:
Title:
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By:
------------------------
Name:
Title: