EXECUTION COPY
METRIS COMPANIES INC.
Buyer
and
DIRECT MERCHANTS CREDIT CARD BANK,
NATIONAL ASSOCIATION
Seller
SECOND AMENDED AND RESTATED
BANK RECEIVABLES PURCHASE AGREEMENT
Dated as of January 22, 2002
SECOND AMENDED AND RESTATED BANK
RECEIVABLES PURCHASE AGREEMENT
SECOND AMENDED AND RESTATED BANK RECEIVABLES PURCHASE
AGREEMENT, dated as of January 22, 2002 (the "Agreement"), by and between METRIS
COMPANIES INC., a Delaware corporation ("Metris" or the "Buyer"), and DIRECT
MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION, a national banking association
("Direct Merchants" or the "Seller").
W I T N E S S E T H:
WHEREAS, the Buyer desires to purchase from time to time
certain open-end or revolving credit receivables (including, without limitation,
MasterCard, VISA and private label credit card receivables) generated on or
before April 18, 1995, or to be generated after April 18, 1995, in the normal
course of business;
WHEREAS, the Seller desires to sell and assign from time to
time such receivables to the Buyer upon the terms and conditions hereinafter set
forth;
WHEREAS, the Buyer is an Affiliate of the Seller;
WHEREAS, the Seller is the successor by merger to Direct
Merchants Credit Card Bank, National Association, a national banking association
with its principal place of business in Salt Lake City, Utah (the "Predecessor
Seller");
WHEREAS, the Predecessor Seller and Fingerhut Companies, Inc.
("Fingerhut") previously entered into that certain Amended and Restated Bank
Receivables Purchase Agreement, dated as of May 26, 1995 (the "Previously
Amended and Restated Purchase Agreement"), pursuant to which the Predecessor
Seller has previously sold to the Buyer all Receivables in all Previous
Accounts;
WHEREAS, the Predecessor Seller, the Buyer and Fingerhut
previously entered into an Assignment and Assumption Agreement, dated as of
September 16, 1996 (the "Assumption Agreement"), in which Fingerhut assigned to
Metris all of its rights arising under the Previously Amended and Restated
Purchase Agreement and Metris agreed to assume and perform all of Fingerhut's
duties and obligations under the Previously Amended and Restated Purchase
Agreement;
WHEREAS, the Seller and the Buyer previously entered into that
certain Amendment and Assumption Agreement, dated as of July 13, 1998 (the
"Amendment and Assumption Agreement"), in which the Seller assumed all of the
rights and obligations of the Predecessor Seller;
WHEREAS, the parties hereto previously entered into that
certain Amended and Restated Bank Receivables Purchase Agreement, dated as of
July 30, 1998 (the "First Amended and Restated Purchase Agreement"), pursuant to
which the Previously Amended and Restated Purchase Agreement was amended and
restated;
WHEREAS, the parties hereto desire to amend and restate the
First Amended and Restated Purchase Agreement;
WHEREAS, the Seller understands that the Buyer will be
re-selling the Receivables to a special purpose subsidiary, which will in turn
transfer the Receivables to a master trust pursuant to the Pooling and Servicing
Agreement;
NOW, THEREFORE, it is hereby agreed by and between the Buyer
and the Seller as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires, capitalized
terms used herein shall have the following meanings assigned to them:
"Account" shall mean: (a) each revolving credit card account
in which the Predecessor Seller had rights on the Closing Date; (b) each
revolving credit card account in which the Predecessor Seller acquired rights
from the Closing Date through the Assumption Date; (c) each revolving credit
card account in which the Seller had rights on the Assumption Date; and (d) each
Additional Account. The definition of "Account" shall include each Transferred
Account but shall not include Deleted Accounts and any Accounts all of the
Receivables in which are repurchased by the Seller pursuant to Article VI
hereof. The term "Account" shall refer to an Additional Account only from and
after the date the Seller acquires rights therein.
"Account Schedule" shall mean a computer file or microfiche
list containing a true and complete list of all Accounts and Excluded Accounts,
each identified by account number.
"Additional Account" shall mean each revolving credit card
account in which the Seller acquires rights after the Assumption Date other than
any Excluded Accounts.
"Affiliate" shall mean, with respect to a particular Person,
any Person that, directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person.
"Assumption Date" shall mean July 13, 1998.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in Minneapolis, Minnesota,
Scottsdale, Arizona or Tulsa, Oklahoma are authorized or obligated by law or
executive order to be closed.
"Closing Date" shall mean April 18, 1995.
"Collections" shall mean all payments received in respect of
the Receivables in the form of cash, checks or any other form of payment,
including Insurance Proceeds and Recoveries.
"Contract" shall mean an agreement between the Seller and
another Person for the extension of revolving credit, including pursuant to a
credit card, in the form of a written contract, invoice or revolving credit
agreement (but shall not include any agreement or plan relating to the extension
of credit on a closed-end basis).
"Credit Adjustment" shall have the meaning set forth in
subsection 3.2(b) hereof.
"Credit and Collection Policy" shall mean the written policies
and procedures of the Seller (a) relating to the operation of its consumer
revolving credit card business, including, without limitation, the written
policies and procedures for determining the creditworthiness of credit card
customers and the extension of credit to credit card customers, and (b) relating
to the maintenance of credit card accounts and collection of receivables with
respect thereto, as such policies and procedures may be amended, modified or
otherwise changed from time to time.
"Date of Processing" shall mean with respect to any
transaction, the date on which such transaction is first recorded according to
the Seller's computer master file of revolving credit accounts (without regard
to the effective date of such recordation).
"Defaulted Account" shall mean each Account with respect to
which, in accordance with the Credit and Collection Policy or the Servicer's
customary and usual servicing procedures, the Servicer has charged off the
Receivables in such Account as uncollectible; an Account shall become a
Defaulted Account on the day on which such Receivables are recorded as charged
off as uncollectible on the Servicer's computer master file of revolving credit
accounts. Notwithstanding any other provision hereof, any Receivables in a
Defaulted Account that are Ineligible Receivables shall be treated as Ineligible
Receivables rather than Receivables in Defaulted Accounts.
"Deleted Account" shall mean any Removed Account as to which
there are no Receivables arising therein owned by the Buyer.
"Eligible Account" shall mean, on the Assumption Date (or,
with respect to Additional Accounts, on the date the Receivables arising in such
Accounts are first sold to the Buyer), a revolving credit card account owned by
the Seller:
(a) which is payable in United States dollars;
(b) the Obligor on which has provided, as its initial billing address,
an address located in the United States or its territories or possessions
or a United States military address;
(c) which has not been identified by the Seller in its computer master
file as stolen or lost;
(d) which is not sold or pledged to any other party and which does not
have Receivables which are sold or pledged to any other party;
(e) the Receivables in which the Seller has not charged off (or
required to be charged off) in its customary and usual manner for charging
off Receivables in such Accounts; and
(f) which is not an Excluded Account.
"Eligible Receivable" shall mean a Receivable that satisfies
each of the following criteria: (a) it arises under an Eligible Account, (b) it
is not sold or pledged to any other party, (c) it constitutes an "account" or a
"payment intangible" as defined in Article 9 of the UCC as then in effect in the
Relevant UCC State, (d) it is the legal, valid and binding obligation of, or is
guaranteed by, a Person who is competent to enter into a Contract and incur
debt, and is enforceable against such Person in accordance with its terms, (e)
it was created or acquired by the Seller in compliance, in all material
respects, with all Requirements of Law applicable to the Seller and pursuant to
a Contract which complies, in all material respects, with all Requirements of
Law applicable to the Seller (including, without limitation, laws, rules and
regulations relating to truth in lending, usury, fair credit billing, fair
credit reporting, equal credit opportunity and fair debt collection practices),
(f) all material consents, licenses or authorizations of, or registrations with,
any Governmental Authority required to be obtained or given by the Seller in
connection with the creation of such Receivable or the execution, delivery,
creation and performance of the related Contract by the Seller have been duly
obtained or given and are in full force and effect and (g) immediately prior to
giving effect to the sale hereunder, the Seller has good and marketable title to
such Receivable free and clear of all Liens arising under or through the Seller
(other than Permitted Liens).
"Excluded Account" shall mean a revolving credit card account
which the Buyer and the Seller have elected to exclude from sale under this
Agreement in accordance with subsection 2.1(e) hereof.
"Finance Charge Receivables" shall mean Receivables created in
respect of (a) Periodic Finance Charges, (b) overlimit fees, (c) late charges,
(d) returned check fees, (e) annual membership fees and annual service charges,
if any, (f) transaction charges, (g) cash advance fees, (h) fees and charges
relating to debt waiver programs administered by the Seller and (i) other
similar fees and charges, but excluding fees and charges for other products and
services offered in connection with an Account.
"Governmental Authority" shall mean the United States of
America, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Ineligible Receivable" shall have the meaning set forth in
Section 6.1 hereof.
"Insurance Proceeds" shall mean any amounts recovered pursuant
to any insurance and insurance type products covering any Obligor with respect
to any Receivable under such Obligor's Account.
"Lien" shall mean any lien, security interest or other
encumbrance.
"Obligor" shall mean a Person obligated to make payments with
respect to a Receivable arising under an Account.
"Periodic Finance Charges" shall have, with respect to any
Account, the meaning set forth in the Contract applicable to such Account for
finance charges (due to periodic rate) or any similar term.
"Permitted Lien" shall mean with respect to the Receivables:
Liens that secure the payment of taxes, assessments and governmental charges or
levies, if such taxes are either (a) not delinquent or (b) being contested in
good faith by appropriate legal or administrative proceedings and as to which
adequate reserves in accordance with generally accepted accounting principles
shall have been established.
"Person" shall mean any person or entity, including any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental entity or other entity of similar nature.
"Pooling and Servicing Agreement" shall mean the Second
Amended and Restated Pooling and Servicing Agreement, dated as of January 22,
2002, as amended from time to time, by and among Direct Merchants Credit Card
Bank, National Association, as Servicer, Metris Receivables, Inc., as
Transferor, and U.S. Bank National Association, as Trustee.
"Previous Accounts" shall mean all revolving credit card
accounts specified in clauses (a) and (b) of the definition of Account.
"Principal Receivables" shall mean all Receivables other than
Finance Charge Receivables. In calculating the aggregate amount of Principal
Receivables on any day, the amount of Principal Receivables shall be reduced by
the aggregate amount of credit balances in the Accounts on such day.
"Purchase Price" shall have the meaning set forth in Section
3.1 hereof.
"Rating Agencies" shall mean the nationally-recognized
statistical rating agencies, if any, that have been identified to the Seller as
having been selected by Metris Receivables, Inc., as Transferor, to rate any
securities issued by the Trust.
"Receivable" shall mean all amounts shown on the Seller's
records as amounts payable by Obligors on any Account from time to time,
including the right to receive payment of any interest or finance charges and
other obligations of such Obligor with respect thereto. Each Receivable
includes, without limitation, all rights of the Seller under the applicable
Contract. A Receivable shall be deemed to have been created at the end of the
day on the Date of Processing of such Receivable. A Receivable shall not include
the amount of interchange fees, if any, payable to the Seller through VISA USA,
Inc. or MasterCard International, Incorporated.
"Recoveries" shall mean any amounts received with respect to
Receivables in Accounts that previously became Defaulted Accounts; provided,
however, that if any amount so recovered relates to both Receivables in
Defaulted Accounts and other receivables, and if it cannot be determined with
objective certainty whether such amount relates to Receivables in Defaulted
Accounts or other receivables, the term "Recoveries" shall mean the amount
reasonably estimated by the Servicer, and agreed by the Seller and the Buyer, as
having been recovered in respect of Receivables in Defaulted Accounts.
"Relevant UCC State" shall mean the State of Minnesota and
each jurisdiction in which the filing of a UCC financing statement is necessary
to perfect the ownership interest and security interest of the Buyer pursuant to
this Agreement.
"Removed Account" shall mean any Account as to which the
Seller has received notice from the Servicer that such Account is a "Removed
Account" as defined in the Pooling and Servicing Agreement.
"Requirements of Law" for any Person shall mean the
certificate of incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any material law,
treaty, rule or regulation, or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such Person or to which
such Person is subject.
"Sale Papers" shall have the meaning set forth in subsection
4.1(a) hereof.
"Servicer" shall mean the entity acting as Servicer under the
Pooling and Servicing Agreement.
"Stop Date" shall have the meaning specified in subsection
2.2(a) hereof.
"Termination Date" shall have the meaning set forth in Section
8.1 hereof.
"Transferred Account" shall mean an Account with respect to
which a new credit card account number has been issued by the Seller under
circumstances resulting from a lost or stolen credit card and not requiring
standard application and credit evaluation procedures under the Credit and
Collection Policy; provided that such Account can be traced or identified by
reference to or by way of the Account Schedule.
"Trust" shall mean the Metris Master Trust.
"Trustee" shall mean the trustee of the Trust.
"UCC" shall mean the Uniform Commercial Code, as amended from
time to time, as in effect in the applicable jurisdiction.
Section 1.2 Other Definitional Provisions. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement or any Sale
Paper shall refer to this Agreement as a whole and not to any particular
provision of this Agreement; and Section, Subsection, Schedule and Exhibit
references contained in this Agreement are references to Sections, Subsections,
Schedules and Exhibits in or to this Agreement unless otherwise specified.
[END OF ARTICLE I]
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
Section 2.1 Sale.
(a) In consideration for the Purchase Price and upon the terms and subject to
the conditions set forth herein, the Seller does hereby sell, assign, transfer,
set-over and otherwise convey to the Buyer, and the Buyer does hereby purchase
from the Seller, without recourse except as specifically set forth herein, all
of the Seller's right, title and interest in, to and under (i) the Receivables
now existing and hereafter created and arising in connection with the Accounts,
including all Additional Accounts, (ii) all monies and investments due or to
become due with respect thereto, and (iii) all Collections with respect to, and
all proceeds of, all of the foregoing. The foregoing sale, transfer, assignment,
set-over and conveyance does not constitute and is not intended to result in a
creation or an assumption by the Buyer of any obligation of the Seller in
connection with the Accounts or any agreement or instrument relating thereto,
including, without limitation, any obligation to any Obligors, merchant banks,
merchant clearance systems, VISA USA, Inc., MasterCard International,
Incorporated or insurers.
(b) In connection with the foregoing sale, the Seller agrees to record and file
a financing statement or statements (and continuation statements or other
amendments with respect to such financing statements) with respect to the
Receivables and the other property described in subsection 2.1(a) sold by the
Seller hereunder meeting the requirements of applicable state law in such manner
and in such jurisdictions as are necessary to perfect and protect the interests
of the Buyer created hereby under the applicable UCC against all creditors of
and purchasers from the Seller, and to deliver a file-stamped copy of such
financing statements and continuation statements (or other amendments) or other
evidence of such filings to the Buyer.
(c) In connection with the sale and conveyance hereunder, the Seller agrees on
or prior to the Closing Date and on each Business Day thereafter, to indicate or
cause to be indicated clearly and unambiguously in its accounting, computer and
other records that the Receivables and the other property described in
subsection 2.1(a) have been sold to the Buyer pursuant to this Agreement on the
Closing Date or such Business Day as applicable. The Seller shall not alter the
indication referenced in the preceding sentence with respect to any Account
during the term of this Agreement unless and until such Account is no longer an
Account or the Seller has taken such action as is necessary or advisable to
cause the interest of the Buyer in the Receivables and other property to
continue to be perfected and of first priority. In addition, in connection with
the sale and conveyance hereunder, the Seller shall deliver to the Buyer an
Account Schedule at any time at the reasonable request of the Buyer, and the
Account Schedules as amended and supplemented from time to time shall be
incorporated into and marked as Schedule 1 to this Agreement.
(d) It is the express intent of the Seller and the Buyer that the conveyance of
the Receivables and other property by the Seller to the Buyer pursuant to this
Agreement be construed as a sale of such Receivables and other property by the
Seller to the Buyer, including for accounting purposes. It is, further, not the
intention of the Seller and the Buyer that such conveyance be deemed a grant of
a security interest in the Receivables and other property by the Seller to the
Buyer to secure a debt or other obligation of the Seller. However, in the event
that, notwithstanding the intent of the parties, the Receivables or other
property are held to continue to be property of the Seller, then (i) this
Agreement also shall be deemed to be and hereby is a security agreement within
the meaning of the UCC, and (ii) the conveyance by the Seller provided for in
this Agreement shall be deemed to be and the Seller hereby grants to the Buyer a
security interest in all of the Seller's right, title and interest in, to and
under (x) all Receivables now existing and hereafter created and arising in
connection with the Accounts, including all Additional Accounts, (y) all monies
and investments due or to become due with respect to all of the foregoing, and
(z) all Collections with respect to, and all proceeds of, all of the foregoing,
to secure (1) the obligations of the Seller and (2) a loan to the Seller in the
amount of the Purchase Price as set forth in this Agreement. The Seller and the
Buyer shall, to the extent consistent with this Agreement, take such actions as
may be necessary to ensure that, if this Agreement were deemed to create a
security interest in the Receivables and other property, such security interest
would be a perfected security interest of first priority in favor of the Buyer
under applicable law and will be maintained as such throughout the term of this
Agreement.
(e) Each revolving credit card account initially created or acquired by the
Seller with a designation portfolio ID other than 0001, 0003, 0006, 0007 or 0008
shall be an Excluded Account. The Buyer and the Seller may designate, at the
time of (if no receivables then exist in such accounts) or prior to their
creation, other revolving credit card accounts which would otherwise be
Additional Accounts as Excluded Accounts. In addition, the Buyer and the Seller
may designate revolving credit card accounts which would otherwise be Excluded
Accounts as Additional Accounts. A designation pursuant to either of the two
immediately preceding sentences shall be evidenced (i) by a written supplement
to this Agreement executed by the Seller and the Buyer and (ii) (A) in the case
of the second preceding sentence, by the Seller indicating in the appropriate
accounting, computer and other files that receivables arising under such
Excluded Accounts have been retained by the Seller or (B) in the case of the
immediately preceding sentence, by the Seller indicating in the appropriate
accounting, computer and other files that Receivables arising under such
Additional Accounts have been sold by the Seller. The Seller shall identify all
Excluded Accounts as having been retained by the Seller, and all Additional
Accounts has having been designated for inclusion under this Agreement, in the
Account Schedule.
(f) To the extent that the Seller retains any interest in the Receivables and
the other property described in subsection 2.1(a), the Seller hereby grants to
the Trustee a security interest in all of the Seller's right, title and
interest, whether now owned or hereafter acquired, in, to and under such of
those Receivables, and the related property, that are to be conveyed to the
Trustee pursuant to the Pooling and Servicing Agreement, to secure the
performance of all of the obligations of the Seller hereunder and under the
Pooling and Servicing Agreement. With respect to such security interest and such
collateral, the Trustee shall have all of the rights that it has under the
Pooling and Servicing Agreement. The Trustee shall also have all of the rights
of a secured creditor under the UCC.
Section 2.2 Removal and Deletion of Accounts.
(a) If an Account becomes a Removed Account, then the Seller shall stop selling
to the Buyer Principal Receivables arising in such Removed Account effective on
the Business Day (the "Stop Date") after the date such Account becomes a Removed
Account. Notwithstanding the cessation of the sale to the Buyer of additional
Principal Receivables arising in such Removed Account, Principal Receivables
sold to the Buyer prior to the Stop Date, Collections in respect of such
Principal Receivables, Finance Charge Receivables whenever created that accrue
in respect of such Principal Receivables, and Collections in respect of such
Finance Charge Receivables, shall continue to be property of the Buyer available
for transfer by the Buyer. To the extent that it is not clear to the Seller
whether collections relate to a Principal Receivable that was sold to the Buyer
or to a principal receivable that the Seller did not sell to the Buyer, the
Seller shall allocate payments on each such Removed Account with respect to the
principal balance of such Removed Account first to the oldest principal balance
of such Removed Account.
(b) On and after the Stop Date for a Removed Account, the Seller may ▇▇▇▇ its
books and records to indicate that such Account is a Removed Account, but the
Seller shall not (i) alter the indication referenced in the first sentence of
subsection 2.1(c) with respect to such Removed Account unless and until such
Account becomes a Deleted Account or the Seller has taken such action as is
necessary or advisable to cause the interest of the Buyer in the Receivables and
other property to continue to be perfected and of first priority, or (ii) delete
such Removed Account from Schedule 1 hereto or any Account Schedule.
(c) Once a Removed Account becomes a Deleted Account, the Seller shall promptly
delete such Deleted Account from Schedule 1 hereto (by delivering a schedule of
Deleted Accounts or otherwise) and shall indicate in its accounting, computer,
and other files that such Deleted Account is no longer an Account.
[END OF ARTICLE II]
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1 Purchase Price.
(a) The Purchase Price for the Receivables and related property conveyed to the
Buyer under this Agreement shall be a dollar amount equal to, for Receivables
sold on any date, the aggregate amount of all Principal Receivables, and of all
Finance Charge Receivables as constitute fees and charges relating to the debt
waiver programs administered by the Seller, sold on such date, subject to
adjustment to reflect such factors as the Buyer and the Seller mutually agree
will result in a Purchase Price determined to equal the fair market value of
such Receivables and related property.
(b) Notwithstanding any other provision of this Agreement, the Seller shall not
be obligated to continue to sell Receivables or related property to the Buyer to
the extent that the Seller is not paid the Purchase Price therefor as provided
herein.
Section 3.2 Payment of Purchase Price.
(a) On or before the close of business on the Business Day following each
Business Day on which Receivables are sold hereunder, the Purchase Price shall
be paid in immediately available funds.
(b) The Purchase Price shall be adjusted on a daily basis (the "Credit
Adjustment") if the Seller or the Servicer (other than by reason of Servicer
error) adjusts downward the amount of any Receivable because of a rebate,
refund, unauthorized charge or billing error to an Obligor or because such
Receivable was created in respect of merchandise which was refused or returned
by an Obligor. The amount of such reduction shall equal the reduction in the
principal balance of such Receivable resulting from the occurrence of such
event. In the event that a reduction pursuant to this subsection 3.2(b) causes
the Purchase Price to be a negative number, the Seller agrees to pay the Buyer
an amount equal to the amount by which the Credit Adjustment exceeds the
unadjusted Purchase Price.
Section 3.3 Daily Reports. On each Business Day, the Seller shall deliver to the
Buyer a Daily Report (the "Daily Report") showing the aggregate Purchase Price
of Receivables generated, the aggregate amount, if any, owing to the Buyer
pursuant to Section 6.1 hereof and the aggregate net amount of cash owing for
Receivables generated in each case for the period from and including the
preceding Business Day.
Section 3.4 Use of Name, Logo and Marks. The Seller does hereby grant to the
Buyer a non-exclusive license to use its name and all related identifying trade
or service marks, signs, symbols, logos, designs, servicing software, customer
lists, and other intangibles in connection with the servicing of the Receivables
purchased hereunder. The license granted shall be co-extensive with the term of
this Agreement.
[END OF ARTICLE III]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Seller's Representations and Warranties. Without limiting the
generality of the Amendment and Assumption Agreement, the Seller hereby
expressly assumes responsibility for all representations and warranties made
until the Assumption Date by the Predecessor Seller under Section 4.1 and 4.2 of
the Previously Amended and Restated Purchase Agreement which are incorporated
herein by reference. The Seller hereby represents and warrants to the Buyer on
the Assumption Date, and as to matters involving Additional Accounts, on the
date the Receivables of such Accounts are sold to the Buyer, that:
(a) Organization and Good Standing. The Seller is a national banking association
organized and validly existing in good standing under the laws of the United
States and has the corporate power and authority and legal right to own its
properties and conduct its business as such properties are presently owned and
as such business is presently conducted and to execute, deliver and perform its
obligations under this Agreement and each other document or instrument to be
delivered by the Seller hereunder (collectively, the "Sale Papers").
(b) Due Qualification. The Seller is duly qualified to do business and is in
good standing (or is exempt from such requirements) as a foreign corporation in
any state required in order to conduct its business, and has obtained all
necessary licenses and approvals with respect to the Seller required under
applicable law; provided that no representation or warranty is made with respect
to any qualifications, licenses or approvals which the Buyer would have to
obtain to do business in any state in which the Buyer seeks to enforce any
Receivable.
(c) Due Authorization. The execution and delivery by the Seller of the Sale
Papers, and the consummation by the Seller of the transactions provided for
herein and therein, have been duly authorized by the Seller by all necessary
corporate action on its part.
(d) Binding Obligation. Each of the Sale Papers, and the consummation of the
transactions provided for therein, constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect, affecting the enforcement of creditors' rights in general and as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(e) No Conflicts. The execution and delivery by the Seller of the Sale Papers,
and the performance by the Seller of the transactions contemplated thereby, do
not (i) contravene the Seller's charter or by-laws or (ii) violate any material
provision of law applicable to it or require any filing (except for the filings
under the UCC), registration, consent or approval under any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to the Seller, except for such filings,
registrations, consents or approvals as have already been obtained and are in
full force and effect.
(f) Taxes. The Seller has filed all material tax returns required to be filed by
the Seller and has paid or made adequate provision for the payment of all
material taxes, assessments and other governmental charges due from the Seller
or is contesting any such tax, assessment or other governmental charge in good
faith through appropriate proceedings.
(g) No Violation. The execution and delivery by the Seller of the Sale Papers,
the performance by the Seller of the transactions contemplated by the Sale
Papers and the fulfillment by the Seller of the terms thereof, will not violate
any Requirements of Law applicable to the Seller, will not violate, result in
any breach of any of the material terms and provisions of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of Law
applicable to the Seller, or any material indenture, contract, agreement,
mortgage, deed of trust or other material instrument to which the Seller is a
party or by which it or its properties are bound.
(h) No Proceedings. There are no proceedings or investigations pending or, to
the best knowledge of the Seller, threatened, against the Seller before any
Governmental Authority (i) asserting the invalidity of the Sale Papers, (ii)
seeking to prevent the consummation of any of the transactions contemplated
thereby, (iii) seeking any determination or ruling that would materially and
adversely affect the performance by the Seller of its obligations thereunder or
(iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability thereof.
(i) All Consents Required. All approvals, authorizations, consents, orders or
other actions of any Governmental Authority required in connection with the
execution and delivery by the Seller of the Sale Papers, the performance by the
Seller of the transactions contemplated by the Sale Papers and the fulfillment
by the Seller of the terms hereof and thereof, have been obtained.
(j) Bona Fide Receivables. The Seller has no knowledge of any fact which should
have led it to expect at the time of the classification of any Receivable as an
Eligible Receivable that such Receivable would not be paid in full when due, and
each Receivable classified as an Eligible Receivable by the Seller in any
document or report delivered by the Seller under this Agreement satisfies on the
date of its sale hereunder the requirements of eligibility contained in the
definition of Eligible Receivable set forth herein.
(k) Place of Business. The principal executive offices of the Seller are in
Scottsdale, Arizona.
(l) Use of Proceeds. No proceeds of the sale of any Receivable hereunder
received by the Seller will be used by the Seller to purchase or carry any
margin stock.
(m) Not an Investment Company. The Seller is not an "investment company" within
the meaning of the Investment Company Act, or is exempt from all provisions of
such Act.
The representations and warranties set forth in this Section
4.1 shall survive the sale of the Receivables to the Buyer. The Seller hereby
represents and warrants to the Buyer that the representations and warranties of
the Seller set forth in Section 4.1 are true and correct on the applicable date.
Upon discovery by the Seller or the Buyer of a material breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice thereof to the other.
Section 4.2 Seller's Representations and Warranties Regarding Receivables.
(a) Valid Sale, etc. The Seller hereby (x) represents and warrants on the
Assumption Date, with respect to the Receivables created on or prior to, and
outstanding on, such date and (y) represents and warrants on the date of the
sale to the Buyer of any Receivables, with respect to such Receivables, that:
(i) This Agreement constitutes the legal, valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its
terms, except (A) as such enforceability may be limited by applicable
bankruptcy, receivership, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect, affecting the
enforcement of creditors' rights in general, and (B) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(ii) The sale of such Receivables by the Seller to the Buyer under this
Agreement constitutes a valid sale, transfer, assignment, set-over and
conveyance to the Buyer of all right, title and interest of the Seller
in and to such Receivables, free and clear of any Lien except for
Permitted Liens.
(iii) The Seller is not insolvent and will not be rendered insolvent upon the
sale of such Receivables to the Buyer.
(iv) The Seller is the legal and beneficial owner of all right, title and
interest in and to each such Receivable.
(v) All consents, licenses, approvals or authorizations of or registrations
or declarations with any Governmental Authority required of the Seller
in connection with the sale of such Receivables to the Buyer have been
obtained.
(vi) Such Receivables are Eligible Receivables.
(vii) Each such Receivable has been conveyed to the Buyer in compliance, in
all material respects, with all Requirements of Law applicable to the
Seller.
(b) Daily Representations and Warranties. On each day on which any new
Receivable is created or acquired by the Seller and sold to the Buyer hereunder,
the Seller shall represent and warrant to the Buyer that (A) each such
Receivable purchased by the Buyer on such day has been conveyed to the Buyer in
compliance, in all material respects, with all Requirements of Law applicable to
the Seller and free and clear of any Lien (other than Permitted Liens) and (B)
with respect to each such Receivable, all consents, licenses, approvals or
authorizations of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the Seller in connection
with the conveyance of such Receivable to the Buyer have been duly obtained,
effected or given and are in full force and effect.
(c) Notice of Breach. The representations and warranties set forth in this
Section 4.2 shall survive the sale, transfer and assignment of the respective
Receivables to the Buyer. Upon discovery by the Seller or the Buyer of a breach
of any of the representations and warranties set forth in this Section 4.2, the
party discovering such breach shall give prompt written notice thereof to the
other. The Seller agrees to cooperate with the Buyer in attempting to cure any
such breach.
Section 4.3 Representations and Warranties of the Buyer. The Buyer hereby
represents and warrants and agrees with the Seller, on the date hereof, and
represents and warrants on the date of the sale of any Receivables to the Buyer
hereunder, that:
(a) Organization and Good Standing. The Buyer is a corporation duly organized
and validly existing in good standing under the laws of the State of Delaware
and has the corporate power and authority and legal right to own its property
and conduct its business as such properties are presently owned and such
business is presently conducted and to execute, deliver and perform its
obligations under the Sale Papers to which it is a party.
(b) Due Qualification. The Buyer is duly qualified to do business and is in good
standing (or is exempt from such requirements) as a foreign corporation in any
state required in order to conduct its business and has obtained all necessary
licenses and approvals with respect to the Buyer required under applicable law.
(c) Due Authorization. The execution and delivery by the Buyer of the Sale
Papers to which it is a party and the consummation by the Buyer of the
transactions provided for in the Sale Papers to which it is a party have been
duly authorized by the Buyer by all necessary corporate action on its part.
(d) No Conflicts. The execution and delivery by the Buyer of the Sale Papers to
which it is a party and the performance by the Buyer of the transactions
contemplated thereby do not (i) contravene the Buyer's certificate of
incorporation or by-laws or (ii) violate any material provision of law
applicable to it, or require any filing (except for the filings under the UCC),
registration, consent or approval under any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award presently in effect having
applicability to the Buyer, except for such filings, registrations, consents or
approvals as have already been obtained and are in full force and effect.
(e) No Violation. The execution and delivery by the Buyer of the Sale Papers to
which it is a party, the performance by the Buyer of the transactions
contemplated by the Sale Papers to which it is a party, and the fulfillment by
the Buyer of the terms of the Sale Papers to which it is a party will not
violate any Requirements of Law applicable to the Buyer, will not violate,
result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under any
Requirement of Law applicable to the Buyer, or any material indenture, contract,
agreement, mortgage, deed of trust or other material instrument to which the
Buyer is a party or by which it or its properties are bound.
(f) No Proceedings. There are no proceedings or investigations pending or, to
the best knowledge of the Buyer, threatened, against the Buyer, before any
Governmental Authority (i) asserting the invalidity of the Sale Papers to which
it is a party, (ii) seeking to prevent the consummation of any of the
transactions contemplated by the Sale Papers to which it is a party, (iii)
seeking any determination or ruling that would materially and adversely affect
the performance by the Buyer of its obligations thereunder or (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of the Sale Papers to which it is a party.
(g) All Consents Required. All approvals, authorizations, consents, orders or
other actions of any Governmental Authority required in connection with the
execution and delivery by the Buyer of the Sale Papers to which it is a party,
the performance by the Buyer of the transactions contemplated by the Sale Papers
to which it is a party, and the fulfillment by the Buyer of the terms of the
Sale Papers to which it is a party have been obtained.
The representations and warranties set forth in this Section
4.3 shall survive the sale of the Receivables to the Buyer. The Buyer hereby
represents and warrants to the Seller that the representations and warranties of
the Buyer set forth in Section 4.3 are true and correct on the applicable date.
Upon discovery by the Buyer or the Seller of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other.
[END OF ARTICLE IV]
ARTICLE V
COVENANTS OF SELLER AND BUYER
Section 5.1 Seller Covenants. The Seller hereby covenants that:
(a) Receivables to be Accounts or Payment Intangibles. The Seller will take no
action to cause any Receivable to be evidenced by any instrument or chattel
paper (as defined in the UCC as in effect in the Relevant UCC State), except in
connection with the enforcement or collection of a Receivable. Except in such
circumstances, the Seller will take no action to cause any Receivable to be
anything other than an account or payment intangible (as defined in the UCC as
in effect in the Relevant UCC State).
(b) Security Interests. Except for the conveyances hereunder, the Seller will
not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien arising through or under the Seller
on, any Receivable sold hereunder, whether now existing or hereafter created, or
any interest therein; the Seller will immediately notify the Buyer of the
existence of any Lien arising through or under the Seller on any Receivable; and
the Seller shall defend the right, title and interest of the Buyer in, to and
under the Receivables, whether now existing or hereafter created, against all
claims of third parties claiming through or under the Seller; provided, however,
that nothing in this subsection 5.1(b) shall prevent or be deemed to prohibit
the Seller from suffering to exist upon any of the Receivables any Permitted
Lien.
(c) Periodic Finance Charges and Other Fees. Except as otherwise required by any
Requirement of Law, or as is deemed by the Seller in its sole discretion to be
necessary in order to maintain its credit card business on a competitive basis,
it shall not at any time reduce the annual percentage rates of the Periodic
Finance Charges assessed on the Receivables or other fees charged on any of the
Accounts if, as a result of any such reduction, either (i) the Seller's
reasonable expectation is that such reduction will cause a Pay Out Event (as
defined in the Pooling and Servicing Agreement) to occur so long as there are
Investor Securities (as defined in the Pooling and Servicing Agreement)
outstanding or (ii) such reduction is not also applied to any comparable segment
of consumer revolving credit card accounts owned by the Seller that have
characteristics the same as, or substantially similar to, such Accounts.
(d) Credit and Collection Policy and Contracts. The Seller shall comply with and
perform its obligations under the Contracts relating to the Accounts and the
Credit and Collection Policy except insofar as any failure so to comply or
perform would not materially and adversely affect the rights of the Trust and
the beneficiaries thereof. Subject to compliance with all Requirements of Law,
the Seller may change the terms and provisions of the Contracts or the Credit
and Collection Policy with respect to any of the Accounts in any respect
(including the calculation of the amount, or the timing, of charge-offs and the
Periodic Finance Charges and other fees to be assessed thereon) only if in the
reasonable judgment of the Seller (i) (if it owns a comparable segment of
receivables) such change is made applicable to any comparable segment of the
consumer revolving credit card accounts owned by the Seller which have
characteristics the same as, or substantially similar to, such Accounts or (ii)
(if it does not own such a comparable segment of receivables) such change will
not be made with the intent to materially benefit the Seller over the Buyer,
Metris Receivables, Inc., or the Trust and the beneficiaries thereof or to
materially adversely affect the Buyer, Metris Receivables, Inc., or the Trust
and the beneficiaries thereof, except as otherwise restricted by an endorsement,
sponsorship or other agreement between the Seller and an unrelated third party
or by the terms of the Contracts. The Seller further covenants that the Seller
will not enter into any amendments to this Agreement that would cause a Ratings
Event (as defined in the Pooling and Servicing Agreement) to occur so long as
there are Investor Securities outstanding.
(e) Delivery of Collections. In the event that the Seller receives Collections,
the Seller agrees to forward to the Buyer or its designee such Collections as
soon as practicable after the receipt thereof, but in no event later than the
second Business Day following the Date of Processing thereof.
(f) Notice of Liens. The Seller shall notify the Buyer promptly after becoming
aware of any Lien on any Receivable other than Permitted Liens.
(g) Separate Business. The Seller shall maintain separate corporate records and
books of account from those of the Buyer. The Seller will not conduct its
business in the name of the Buyer so as not to mislead others as to the identity
of the entity with which those others are concerned.
Section 5.2 Addition of Accounts. Unless excluded pursuant to Section 2.1(e)
hereof, all revolving credit card accounts shall be included as Accounts from
and after the date upon which the Seller acquires rights in such Additional
Accounts, and all Receivables in such Additional Accounts, whether such
Receivables are then existing or thereafter created or acquired, shall be
automatically sold to the Buyer. For the purposes of this Agreement, all
receivables of such Additional Accounts shall be treated as Receivables upon
their creation.
Section 5.3 Buyer Covenant Regarding Sale Treatment. The Buyer agrees to treat
this conveyance for all purposes (including, without limitation, tax and
financial accounting purposes) as a sale on all relevant books, records, tax
returns, financial statements and other applicable documents.
[END OF ARTICLE V]
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1 Breach of Warranty. In the event of a breach with respect to a
Receivable of any of the representations and warranties set forth in subsection
4.1(j) or subsections 4.2(a)(iii) through (vii) or subsection 4.2(b), such
Receivable shall be designated an "Ineligible Receivable" and the Seller shall
pay to the Buyer an amount in cash equal to the purchase price paid for any such
Ineligible Receivable by the Buyer to the Seller. Upon such payment, without
further action, such Ineligible Receivable shall be reassigned to the Seller.
Such payment must be made by the close of business on the Business Day following
the day such Receivable has been designated an Ineligible Receivable; provided,
however, that such amount may be offset against any amounts due from the Buyer
to the Seller with respect to the Purchase Price for Receivables sold to the
Buyer on such day. The obligation of the Seller set forth in this Section shall
constitute the sole remedy respecting any breach of the representations and
warranties set forth in the above-referenced subsections available to the Buyer.
Section 6.2 Conveyance of Reassigned Receivables. Upon the request of the
Seller, the Buyer shall execute and deliver to the Seller a reconveyance
substantially in such form and upon such terms as shall be acceptable to the
Seller, pursuant to which the Buyer evidences the conveyance to the Seller of
all of the Buyer's right, title, and interest in any Receivables and related
property reconveyed to the Seller pursuant to Section 6.1. The Buyer shall
execute such other documents or instruments of conveyance or take such other
actions as the Seller may reasonably require to effect any repurchase of
Receivables and related property pursuant to this Article VI.
[END OF ARTICLE VI]
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to the Buyer's Obligations Regarding Receivables. The
obligations of the Buyer to purchase the Receivables on any Business Day shall
be subject to the satisfaction of the following conditions with respect to such
Receivables:
(a) All representations and warranties of the Seller contained in this Agreement
shall be true and correct with the same effect as though such representations
and warranties had been made on such date (unless such representation or
warranty specifically relates to an earlier date);
(b) All information concerning such Receivables provided to the Buyer shall be
true and correct in all material respects on such date;
(c) The Seller shall have substantially performed all other obligations required
to be performed by the provisions of this Agreement;
(d) The Seller shall have filed the financing statements required to be filed
pursuant to subsection 2.1(b); and
(e) All corporate and legal proceedings and all instruments in connection with
the transactions contemplated by this Agreement shall be satisfactory in form
and substance to the Buyer, and the Buyer shall have received from the Seller
copies of all documents (including, without limitation, records of corporate
proceedings) relevant to the transactions herein contemplated as the Buyer may
reasonably have requested.
Section 7.2 Conditions Precedent to the Seller's Obligations. The obligations of
the Seller to sell Receivables on any Business Day shall be subject to the
satisfaction of the following conditions with respect to such Receivables:
(a) All representations and warranties of the Buyer contained in this Agreement
shall be true and correct with the same effect as though such representations
and warranties had been made on such date (unless such representation or
warranty specifically relates to an earlier date);
(b) Payment or provision for payment of the Purchase Price in accordance with
the provisions of Section 3.2 hereof shall have been made; and
(c) All corporate and legal proceedings and all instruments in connection with
the transactions contemplated by this Agreement shall be satisfactory in form
and substance to the Seller, and the Seller shall have received from the Buyer
copies of all documents (including, without limitation, records of corporate
proceedings) relevant to the transactions herein contemplated as the Seller may
reasonably have requested.
[END OF ARTICLE VII]
ARTICLE VIII
TERM AND TERMINATION
Section 8.1 Term. This Agreement shall commence as of the date of execution and
delivery hereof and shall continue in full force and effect until the earlier
of: (a) such date as may be agreed to in writing by the Buyer and the Seller, or
(b) the occurrence of any of the following events: the Buyer or the Seller shall
(i) become insolvent, (ii) fail to pay its debts generally as they become due,
(iii) voluntarily seek, consent to or acquiesce in the benefit or benefits of
any debtor relief law, (iv) become a party to (or be made the subject of) any
proceeding provided for by any debtor relief law, other than as a creditor or
claimant, and, in the event such proceeding is involuntary, the petition
instituting same is not dismissed within 60 days after its filing, or (v) become
unable for any reason to purchase or re-purchase Receivables in accordance with
the provisions of this Agreement or default in its obligations hereunder, which
default continues unremedied for more than 30 days after written notice is
delivered to the defaulting party by the non-defaulting party (any such date set
forth in clause (a) or (b) hereof being a "Termination Date"); provided,
however, that the termination of this Agreement pursuant to this Section 8.1
shall not discharge any Person from any obligations incurred prior to such
termination, including, without limitation, any obligations to make any payments
with respect to Receivables sold prior to such termination. Notwithstanding any
cessation of the sale to the Buyer of additional Principal Receivables,
Principal Receivables sold to the Buyer prior to such Termination Date,
Collections in respect of such Principal Receivables, Finance Charge Receivables
(whenever created) accrued in respect of such Principal Receivables and
Collections in respect of such Finance Charge Receivables, shall continue to be
property of the Buyer available for transfer by the Buyer. To the extent that it
is not clear to the Seller whether collections relate to a Principal Receivable
that was sold to the Buyer or to a principal receivable that the Seller has not
sold to the Buyer, the Seller agrees that it shall allocate payments on each
Account with respect to the principal balance of such Account first to the
oldest principal balance of such Account.
Section 8.2 Effect of Termination. No termination or rejection of or failure to
assume the executory obligations of this Agreement in the event of the
receivership of the Seller or bankruptcy of the Buyer shall be deemed to impair
or affect the obligations pertaining to any executed sale or executed
obligations, including, without limitation, pre-termination breaches of
representations and warranties by the Seller or the Buyer.
[END OF ARTICLE VIII]
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Amendment. This Agreement and any other Sale Papers and the rights
and obligations of the parties hereunder may not be changed orally, but only by
an instrument in writing signed by the Buyer and the Seller in accordance with
this Section 9.1. This Agreement and any other Sale Papers may be amended from
time to time by the Buyer and the Seller (i) to cure any ambiguity, (ii) to
correct or supplement any provisions herein which may be inconsistent with any
other provisions herein or in any such other Sale Papers, (iii) to add any other
provisions with respect to matters or questions arising under this Agreement or
any Sale Papers which shall not be inconsistent with the provisions of this
Agreement or any Sale Papers, (iv) to change or modify the Purchase Price and
(v) to change, modify, delete or add any other obligation of the Buyer or the
Seller or to otherwise change, modify, delete or add any provision to this
Agreement or any Sale Papers; provided, however, that no amendment pursuant to
clause (iv) or (v) of this Section 9.1 shall be effective unless the Buyer and
the Seller shall have received written confirmation from each Rating Agency to
the effect that the rating of any securities issued by the Trust will not be
reduced or withdrawn as a result of such amendment. Any reconveyance executed in
accordance with the provisions hereof shall not be considered to be an amendment
to this Agreement. A copy of any amendment to this Agreement shall be sent to
each Rating Agency.
Section 9.2 Governing Law. THIS AGREEMENT AND THE OTHER SALE PAPERS SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 9.3 Notices. All demands, notices and communications hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered
at, sent by facsimile to, sent by courier at or mailed by certified mail,
postage pre-paid and return receipt requested, to:
(a) in the case of the Seller, to:
Direct Merchants Credit Card Bank, National Association
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) in the case of the Buyer, to:
Metris Companies Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Metris Companies Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or, as to the party, at such other address as shall be designated by such party
in a written notice to each other party.
Section 9.4 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of the Sale Papers shall for any reason
whatsoever be held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of the Sale Papers and shall in no way affect the validity or
enforceability of the other provisions of the Sale Papers.
Section 9.5 Further Assurances. The Buyer and the Seller agree to do and
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the other party more fully to
effect the purposes of the Sale Papers, including, without limitation, the
execution of any financing statements or continuation statements (or other
amendments thereto) or equivalent documents relating to the Receivables for
filing under the provisions of the UCC or other laws of any applicable
jurisdiction.
Section 9.6 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Buyer or the Seller, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.
Section 9.7 Counterparts. The Sale Papers may each be executed in two or more
counterparts including telefax transmission thereof (and by different parties on
separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
Section 9.8 Binding Effect; Third Party Beneficiaries. The Sale Papers will
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns. The Seller hereby acknowledges that the Buyer
has assigned certain of its rights hereunder to Metris Receivables, Inc. and
Metris Funding Corporation, respectively, that the Buyer may from time to time
assign certain of its rights hereunder to one or more other entities, including
Metris Asset Funding Co., in connection with warehousing or other financing
arrangements involving a transfer to such entity or entities of the Buyer's
right, title and interest to all or any portion of the Receivables and the
proceeds thereof, and that such entities are third party beneficiaries
hereunder.
Section 9.9 Merger and Integration. Except as specifically stated otherwise
herein, the Sale Papers set forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, written or
oral, are superseded by the Sale Papers. The Sale Papers may not be modified,
amended, waived or supplemented except as provided herein.
Section 9.10 Headings. The headings herein are for purposes of reference only
and shall not otherwise affect the meaning or interpretation of any provision
hereof.
Section 9.11 Schedules and Exhibits. The schedules and exhibits attached hereto
and referred to herein shall constitute a part of this Agreement and are
incorporated into this Agreement for all purposes.
Section 9.12 Protection of Right, Title and Interest to Receivables.
(a) The Seller shall cause this Agreement, all amendments hereto and/or all
financing statements, and continuation statements and other amendments thereto,
and any other necessary documents covering the sale hereunder to be promptly
recorded, registered and filed, and at all times to be kept recorded, registered
and filed, all in such manner and in such places as may be required by law fully
to preserve and protect the right, title and interest of the Buyer hereunder to
the Receivables and the proceeds thereof. The Seller shall deliver to the Buyer
file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. The Buyer shall cooperate fully with the
Seller in connection with the obligations set forth above and will execute any
and all documents reasonably required to fulfill the intent of this subsection
9.12(a).
(b) The Seller shall not change its name or its type or jurisdiction of
organization without previously having delivered to the Buyer an opinion of
counsel to the effect that all actions have been taken, and all filings have
been made, as are necessary to continue and maintain the first-priority
perfected ownership interest of the Buyer in the Receivables and the related
property.
[END OF ARTICLE IX]
IN WITNESS WHEREOF, the Buyer and the Seller each have caused
this Agreement to be duly executed by their respective officers as of the day
and year first above written.
DIRECT MERCHANTS CREDIT CARD
BANK, NATIONAL ASSOCIATION,
as Seller
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
METRIS COMPANIES INC.,
as Buyer
By: /s/ ▇▇▇▇▇ ▇. Than
Name: ▇▇▇▇▇ ▇. Than
Title: Senior Vice President
Treasurer
Acknowledged and Accepted:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇
Title: Vice President
[Signature page to Second Amended and Restated Bank Receivables
Purchase Agreement]
Schedule 1
ACCOUNT SCHEDULE
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions......................................................2
Section 1.2 Other Definitional Provisions....................................6
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
Section 2.1 Sale.............................................................8
Section 2.2 Removal and Deletion of Accounts.................................9
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1 Purchase Price..................................................11
Section 3.2 Payment of Purchase Price.......................................11
Section 3.3 Daily Reports...................................................11
Section 3.4 Use of Name, Logo and Marks.....................................11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Seller's Representations and Warranties.........................12
Section 4.2 Seller's Representations and Warranties Regarding Receivables...14
Section 4.3 Representations and Warranties of the Buyer.....................15
ARTICLE V
COVENANTS OF SELLER AND BUYER
Section 5.1 Seller Covenants................................................17
Section 5.2 Addition of Accounts............................................18
Section 5.3 Buyer Covenant Regarding Sale Treatment.........................18
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1 Breach of Warranty..............................................19
Section 6.2 Conveyance of Reassigned Receivables............................19
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to the Buyer's Obligations Regarding Receivables.....20
Section 7.2 Conditions Precedent to the Seller's Obligations................20
ARTICLE VIII
TERM AND TERMINATION
Section 8.1 Term............................................................22
Section 8.2 Effect of Termination...........................................22
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Amendment.......................................................23
Section 9.2 Governing Law...................................................23
Section 9.3 Notices.........................................................23
Section 9.4 Severability of Provisions......................................24
Section 9.5 Further Assurances..............................................24
Section 9.6 No Waiver; Cumulative Remedies..................................24
Section 9.7 Counterparts....................................................24
Section 9.8 Binding Effect; Third Party Beneficiaries.......................24
Section 9.9 Merger and Integration..........................................25
Section 9.10 Headings........................................................25
Section 9.11 Schedules and Exhibits..........................................25
Section 9.12 Protection of Right, Title and Interest to Receivables..........25
SCHEDULES
Schedule 1 ACCOUNT SCHEDULE
An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.