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 2000-1 Securityholders
SERIES 2000-1 SUPPLEMENT
Dated as of March 20, 2000
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of July 30, 1998
METRIS MASTER TRUST
$447,514,000 Floating Rate Asset Backed
Securities, Series 2000-1, Class A
$67,956,000 Floating Rate Asset Backed
Securities, Series 2000-1, Class B
$147,513,425 Excess Collateral, Series 2000-1
EXHIBITS
Exhibit A-1 Form of Class A Investor Security
Exhibit A-2 Form of Class B Investor Security
Exhibit B Form of Monthly Securityholder's Statement
Exhibit C Form of Excess Collateral Investment Letter
SERIES 2000-1 SUPPLEMENT, dated as of March 20, 2000 (this "Series Supplement")
by and among METRIS RECEIVABLES, INC., a corporation organized and existing
under the laws of the State of Delaware, as Transferor (the "Transferor"),
DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION, a national banking
association 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 Amended and Restated Pooling and
Servicing Agreement dated as of July 30, 1998 as amended, supplemented or
otherwise modified from time to time (the "Agreement") among the Transferor, the
Servicer and the Trustee.
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 Securities.
Pursuant to this Series Supplement, the Transferor and the
Trustee shall create a new Series of Investor Securities and shall specify the
Principal Terms thereof.
Section 1. Designation. (a) There is hereby created a Series of Investor
Securities to be issued pursuant to the Agreement and this Series Supplement to
be known generally as the "Series 2000-1 Securities." The Series 2000-1
Securities shall be issued in two Classes, which shall be designated generally
as the Floating Rate Asset Backed Securities, Series 2000-1, Class A (the "Class
A Securities"), and the Floating Rate Asset Backed Securities, Series 2000-1,
Class B (the "Class B Securities"). In addition, there is hereby created a third
Class of an uncertificated interest in the Trust which shall be deemed to be an
"Investor Security" for all purposes under the Agreement and this Series
Supplement, except as expressly provided herein, and which shall be known as the
Excess Collateral, Series 2000-1 (the "Excess Collateral").
(b) The Excess Collateral Holder, as holder of an "Investor
Security" under the Agreement, shall be entitled to the benefits of the
Agreement and this Series Supplement upon payment by the Excess Collateral
Holder of amount owing on the Closing Date as agreed to by the Transferor and
the Excess Collateral Holder. Notwithstanding the foregoing, except as expressly
provided herein, (i) the provisions of Article VI and Article XII of the
Agreement relating to the registration, authentication, delivery, presentation,
cancellation and surrender of the Registered Securities and the provisions of
subsection 6.9(b) of the Agreement with respect to the effect that a newly
issued series of Investors Securities will be treated as debt for Federal income
tax purposes shall not be applicable to the Excess Collateral and (ii) the
provisions of Section 3.7 of the Agreement shall not apply to cause the Excess
Collateral to be treated as debt for federal, state and local income and
franchise tax purposes, but rather the Transferor intends and, together with the
Excess Collateral Holder, agrees to treat the Excess Collateral for federal,
state and local income and franchise tax purposes as representing an equity
interest in the assets of the Trust.
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 Supplement shall govern with
respect to the Series 2000-1 Securities. All Article, Section or subsection
references herein shall mean Articles, Sections 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 2000-1 Securities and no other Series of Securities issued by the Trust.
"Accumulation Period" shall mean the period commencing at the
close of business on the last day of the January 2004 Monthly Period or such
later date as is determined in accordance with Section 4.19 of the Agreement and
ending on the first to occur of (a) the commencement of the Early Amortization
Period and (b) the Series 2000-1 Termination Date.
"Accumulation Period Factor" shall mean, for any Monthly
Period, a fraction, the numerator of which is equal to the sum of the numerators
with respect to all Classes of all Series then outstanding used to calculate the
allocation percentages applicable for Principal Collections, and the denominator
of which is equal to the sum of (a) the Class A Invested Amount, (b) the sum of
the numerators with respect to all Classes of all Series then outstanding used
to calculate the allocation percentages applicable for Principal Collections of
all other Series which are not expected to be in their revolving periods during
such Monthly Period, and (c) the sum of the numerators used to calculate the
allocation percentages applicable for Principal Collections of all Classes of
other outstanding Series which are not allocating Shared Principal Collections
and are expected to be in their revolving periods during such Monthly Period.
"Accumulation Period Length" shall have the meaning assigned
such term in Section 4.19 of the Agreement.
"Accumulation Period Reserve Account" shall have the meaning
specified in subsection 4.18(a) of the Agreement.
"Accumulation Shortfall" shall initially mean zero and
thereafter shall mean, with respect to any Monthly Period during the
Accumulation Period, the excess, if any, of the Controlled Deposit Amount for
the previous Monthly Period over the amount deposited into the Principal Funding
Account pursuant to Section 4.12 of the Agreement with respect to the Series
2000-1 Securities for the previous Monthly Period.
"Additional Interest" shall mean, at any time of
determination, the sum of the Class A Additional Interest and Class B Additional
Interest.
"Adjusted Invested Amount" shall mean as of any Business Day,
(i) the Invested Amount minus (ii) the sum of the amounts then on deposit in the
Principal Account and the Principal Funding Account and the Series 2000-1
Percentage of the amount then on deposit in the Excess Funding Account.
"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 equivalent amounts of all outstanding Cap Agreements, Replacement
Interest Rate Caps and Qualified Substitute Arrangements, each as of such date
of determination.
"Amortization Period" shall mean the period commencing on the
Amortization Period Commencement Date and continuing until the Series 2000-1
Termination Date.
"Amortization Period Commencement Date" shall mean the
earliest of the first day of the Accumulation Period and the Pay Out
Commencement Date.
"Assignee" shall have the meaning specified in subsection
11(a).
"Available Reserve Account Amount" shall mean, with respect to
any Transfer Date, the lesser of (a) the amount on deposit in the Accumulation
Period Reserve Account as of such date (before giving effect to any withdrawal
made or to be made pursuant to subsection 4.18(c) of the Agreement from the
Accumulation Period Reserve Account on such Transfer Date) and (b) the Required
Reserve Account Amount for such Transfer Date.
"Available Series 2000-1 Finance Charge Collections" shall
have the meaning specified in subsection 4.9(a) of the Agreement.
"Available Series 2000-1 Principal Collections" shall mean,
with respect to any Monthly Period, or portion thereof commencing on the
Amortization Period Commencement Date, an amount equal to the sum of (i) an
amount equal to the Fixed/Floating Percentage of all Principal Collections (less
the amount of Redirected Principal Collections) received during such Monthly
Period, (ii) any amount on deposit in the Excess Funding Account allocated to
the Series 2000-1 Securities pursuant to subsection 4.9(d) of the Agreement with
respect to such period, (iii) the sum of the aggregate amount allocated with
respect to the Series Default Amount with respect to such period and the Series
2000-1 Percentage of any unpaid Adjustment Payments paid pursuant to subsections
4.9(a)(v) and 4.9(a)(vi) of the Agreement with respect to such period, any
reimbursements of unreimbursed Charge-Offs pursuant to subsections 4.9(a)(vii),
(viii) and (ix) of the Agreement with respect to such period plus in each case,
amounts applied with respect thereto pursuant to subsections 4.10(a) and (b),
4.14(a) and (b), 4.17(b) and 4.18(b), (c) and (d) of the Agreement, (iv) the
aggregate Shared Principal Collections allocated to the Series 2000-1 Securities
pursuant to Section 4.8 of the Agreement with respect to such period and (v) the
proceeds of the sale of all or a portion of an Interest Rate Cap with respect to
such Monthly Period.
"Base Rate" shall mean, with respect to any Monthly Period,
the sum of (i) the weighted average of the Class A Interest Rate, the Class B
Interest Rate and the Excess Collateral Minimum Rate, in each case as of the
last day of such Monthly Period (weighted based on the Class A Invested Amount,
the Class B Invested Amount and the Excess Collateral Amount, respectively, as
of the last day of such Monthly Period) plus (ii) the product of 2.00% per annum
and the percentage equivalent of a fraction the numerator of which is the
Adjusted Invested Amount and the denominator of which is the Invested Amount,
each as of the last day of such Monthly Period.
"Cap Agreements" shall mean each interest rate cap agreement,
between the Transferor, the Trustee and a Cap Provider, as amended from time to
time, and any additional interest rate protection agreement or agreements,
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.
"Cap Provider" shall mean a third party cap provider having a
rating acceptable to the Rating Agencies.
"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 A Interest" shall mean with respect to any
Business Day (a) any Class A Monthly Interest due but not paid on any previous
Distribution Date plus (b) any Class A Additional Interest due on the next
succeeding Distribution Date.
"Carryover Class B Interest" shall mean with respect to any
Business Day (a) any Class B Monthly Interest due but not paid on any previous
Distribution Date plus (b) any Class B Additional Interest due on the next
succeeding Distribution Date.
"Carryover Excess Collateral Minimum Interest" shall mean with
respect to any Business Day any Excess Collateral Minimum Monthly Interest due
but not paid on any previous Distribution Date.
"Charge-Offs" shall mean the sum of Class A Charge-Offs, Class
B Charge-Offs and Excess Collateral Charge-Offs.
"Class A Additional Interest" shall have the meaning specified
in subsection 4.6(a) of the Agreement.
"Class A Adjusted Invested Amount" shall mean, for any date of
determination, an amount not less than zero equal to the then current Class A
Invested Amount minus the sum of the Principal Funding Account Balance and the
amount then on deposit in the Principal Account for the benefit of the Class A
Securities on such date of determination.
"Class A Charge-Offs" shall have the meaning specified in
subsection 4.13(c) of the Agreement.
"Class A Expected Final Payment Date" shall mean the February
2005 Distribution Date.
"Class A Floating 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 as of the end of the preceding Business Day
and the denominator of which is the greater of (a) the sum of the aggregate
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 Initial Invested Amount" shall mean the aggregate
initial principal amount of the Class A Securities, which is $447,514,000.
"Class A Interest Rate" shall mean 0.30% per annum in excess
of LIBOR as determined on the related LIBOR Determination Date.
"Class A Interest Shortfall" shall have the meaning specified
in subsection 4.6(a) of the Agreement.
"Class A Invested Amount" shall mean, when used with respect
to any Business Day, the greater of (x) zero and (y) an amount equal to (a) the
Class A Initial Invested Amount, minus (b) the aggregate amount of principal
payments made to Class A Securityholders through and including such Business
Day, minus (c) the aggregate amount of Class A Charge-Offs for all prior
Distribution Dates, plus (d) the sum of the aggregate amount reimbursed with
respect to reductions of the Class A Invested Amount through and including such
Business Day pursuant to subsection 4.9(a)(vii) of the Agreement plus, with
respect to such subsection, amounts applied thereto pursuant to subsections
4.10(a) and (b), 4.14(a) and (b), 4.17(b) and 4.18(b), (c) and (d) of the
Agreement, for the purpose of reimbursing amounts deducted pursuant to the
foregoing clause (c).
"Class A Monthly Interest" shall mean the interest
distributable in respect of the Class A Securities as calculated in accordance
with subsection 4.6 of the Agreement.
"Class A Outstanding Principal Amount" shall mean with respect
to the Class A Securities, when used with respect to any Business Day, an amount
equal to (a) the Class A Initial Invested Amount minus (b) the aggregate amount
of principal payments made to the Class A Securityholders on or prior to such
Business Day.
"Class A Percentage" shall mean a fraction the numerator of
which is the Class A Initial Invested Amount and the denominator of which is the
Initial Invested Amount.
"Class A Principal" shall mean the principal distributable in
respect of the Class A Securities as specified in subsection 4.7(a) of this
Agreement.
"Class A Required Amount" shall mean the amount determined by
the Servicer for each Business Day equal to the excess, if any, of (x) the sum
of (i) the Class A Monthly Interest for the Interest Accrual Period beginning in
the then current Monthly Period, (ii) any Carryover Class A Interest, (iii) the
Class A Percentage of the Servicing Fee for the then current Monthly Period,
(iv) the Class A Floating 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 and (v) the Class A Floating Percentage of the Series
2000-1 Percentage of any Adjustment Payment the Transferor is required but fails
to make pursuant to subsection 3.8(a) of the Agreement on such Business Day and
on each previous Business Day during such Monthly Period over (y) the Available
Series 2000-1 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)
above with respect to such Business Days and all previous Business Days in such
Monthly Period.
"Class A Securities" shall mean any of the securities executed
by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-1 hereto.
"Class A Securityholder" shall mean the Person in whose name a
Class A Security is registered in the Security Register.
"Class A Securityholders' Interest" shall mean the portion of
the Series 2000-1 Securityholders' Interest evidenced by the Class A Security.
"Class B Additional Interest" shall have the meaning specified
in subsection 4.6(b) of the Agreement.
"Class B Charge-Offs" shall have the meaning specified in
subsection 4.13(b) of the Agreement.
"Class B Expected Final Payment Date" shall mean the March
2005 Distribution Date.
"Class B Fixed/Floating 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 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 percentages with respect to Principal
Collections for all Series.
"Class B Floating 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 at the end of the preceding Business Day 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 with
respect to all Classes of all Series then outstanding used to calculate the
applicable allocation percentage.
"Class B Initial Invested Amount" shall mean the aggregate
initial principal amount of the Class B Securities, which is $67,956,000.
"Class B Interest Rate" shall mean 0.68% per annum in excess
of LIBOR as determined on the related LIBOR Determination Date.
"Class B Interest Shortfall" shall have the meaning specified
in subsection 4.6(b) of the Agreement.
"Class B Invested Amount" shall mean, when used with respect
to any Business Day, the greater of (x) zero and (y) an amount equal to (a) the
Class B Initial Invested Amount, minus (b) the aggregate amount of principal
payments made to Class B Securityholders through and including such Business
Day, minus (c) the aggregate amount of Class B Charge-Offs for all prior
Distribution Dates, minus (d) the aggregate amount of Redirected Class B
Principal Collections for which the Excess Collateral Amount has not been
reduced for all prior Distribution Dates plus (e) the sum of the aggregate
amount reimbursed with respect to reductions of the Class B Invested Amount
through and including such Business Day pursuant to subsection 4.9(a)(viii) of
the Agreement plus, with respect to such subsection, amounts applied thereto
pursuant to subsections 4.10(a) and (b), 4.14(a) and (b), 4.17(b) and 4.18(b),
(c) and (d) of the Agreement, for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c) and (d).
"Class B Monthly Interest" shall mean the interest
distributable in respect of the Class B Securities as calculated in accordance
with subsection 4.6(b) of the Agreement.
"Class B Outstanding Principal Amount" shall mean, when used
with respect to any Business Day, an amount equal to (a) the Class B Initial
Invested Amount minus (b) the aggregate amount of principal payments made to
Class B Securityholders prior to such Business Day.
"Class B Percentage" shall mean a fraction the numerator of
which is the Class B Initial Invested Amount and the denominator of which is the
Initial Invested Amount.
"Class B Principal" shall mean the principal distributable in
respect of the Class B Securities as specified in subsection 4.7(b) of the
Agreement.
"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 Class B Monthly Interest for the Interest Accrual Period beginning in
the then current Monthly Period, (ii) any Carryover Class B Interest, (iii) the
Class B Percentage of the Servicing Fee for the then current Monthly Period,
(iv) the Class B Floating 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 Floating Percentage of the Series
2000-1 Percentage of the Adjustment Payment the Transferor is required but fails
to make pursuant to subsection 3.8(a) of the Agreement on such Business Day and
on each previous Business Day during such Monthly Period and (vi) 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 over (y) the Available Series 2000-1 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 (vi) above with respect to such Business Days and all
previous Business Days in such Monthly Period.
"Class B Securities" shall mean any of the securities executed
by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-2 hereto.
"Class B Securityholder" shall mean the Person in whose name a
Class B Security is registered in the Security Register.
"Class B Securityholders' Interest" shall mean the portion of
the Series 2000-1 Securityholders' Interest evidenced by the Class B Security.
"Closing Date" shall mean March 20, 2000.
"Controlled Accumulation Amount" shall mean, for any Transfer
Date with respect to the Accumulation Period (a) prior to the payment in full of
the Class A Invested Amount, $37,292,834; provided, however, that if the
Accumulation Period Length is determined to be less than 12 months pursuant to
Section 4.19 of the Agreement, the Controlled Accumulation Amount for each
Transfer Date with respect to the Accumulation Period prior to the payment in
full of the Class A Invested Amount will be equal to (i) the product of (x) the
Class A Initial Invested Amount and (y) the Accumulation Period Factor for the
Monthly Period preceding such Transfer Date divided by (ii) the Required
Accumulation Factor Number and (b) after payment in full of the Class A Invested
Amount, an amount equal to the sum of the Class B Invested Amount and the Excess
Collateral Amount on such Transfer Date.
"Controlled Deposit Amount" shall mean, with respect to any
Transfer Date, the sum of (a) the Controlled Accumulation Amount for such
Transfer Date and (b) any existing Accumulation Shortfall.
"Covered Amount" shall mean, with respect to any Interest
Accrual Period during the Accumulation Period prior to the payment in full of
the Class A Invested Amount, the product of (a) the Class A Interest Rate in
effect with respect to such Interest Accrual Period, (b) 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 and (c) the Principal Funding Account
Balance as of the last day of the Monthly Period preceding the Monthly Period in
which such Interest Accrual Period ends.
"Default Amount" shall mean, (i) on any Business Day other
than the Default Recognition Date, the aggregate amount of Principal Receivables
in Accounts which became Defaulted Accounts on such Business Day and (ii) on any
Default Recognition Date the aggregate amount of Principal Receivables in
Accounts which became Defaulted Accounts during the then current Monthly Period
(other than such Accounts which were included in clause (i)).
"Default Recognition Allocation Percentage" shall mean, with
respect to each Default Recognition Date, the percentage equivalent of a
fraction, the numerator of which is the Weighted Average Invested 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.
"Default Recognition Date" shall mean the last day of each
calendar month; provided, however, that with respect to any Monthly Period the
"related Default Recognition Date" shall mean the Default Recognition Date
occurring closest to the last day of such Monthly Period and any amounts
allocated or applied on such Default Recognition Date shall be deemed to apply
to the related Monthly Period.
"Distribution Date" shall mean April 20, 2000, and the
twentieth day of each month thereafter, or if such day is not a Business Day,
the next succeeding Business Day.
"DTC" shall mean The Depository Trust Company.
"Early Amortization Period" shall mean the period beginning on
the earliest of (a) the day on which a Pay Out Event occurs or is deemed to have
occurred, (b) the Class A Expected Final Payment Date if the Class A Invested
Amount has not been paid in full on such date, (c) the Class B Expected Final
Payment Date if the Class B Invested Amount has not been paid in full on such
date and (d) the Excess Collateral Expected Final Payment Date if the Excess
Collateral Amount has not been paid in full on such date, and ending on the
earlier of (i) the date on which the Class A Invested Amount, the Class B
Invested Amount and the Excess Collateral Amount have been paid in full and (ii)
the Scheduled Series 2000-1 Termination Date.
"Enhancement" shall mean, with respect to the Class A
Securities, the subordination of the Class B Invested Amount and the Excess
Collateral Amount and the benefits of the Interest Rate Caps, with respect to
the Class B Securities, the subordination of the Excess Collateral Amount and
the benefits of the Interest Rate Caps and, with respect to the Excess
Collateral the benefits of the Interest Rate Caps.
"Excess Collateral" shall mean a fractional undivided interest
in the Trust which shall consist of the right to receive to the extent necessary
to make the required payments to the Excess Collateral Holder under this Series
Supplement, the portion of Collections allocable thereto under the Agreement and
this Series Supplement, funds on deposit in the Collection Account allocable
thereto pursuant to the Agreement and this Series Supplement, and funds on
deposit in any other Series Account (and any investment earnings thereon, net of
investment expenses and losses, if and to the extent specifically provided
herein) allocable thereto pursuant to the Agreement and this Series Supplement.
"Excess Collateral Amount" shall mean, when used with respect
to any Business Day, the greater of (x) zero and (y) an amount equal to (a) the
Excess Collateral Initial Amount minus (b) the aggregate amount of principal
payments made to the Excess Collateral Holder through and including such
Business Day, minus (c) the aggregate amount of Excess Collateral Charge-Offs
for all prior Distribution Dates, minus (d) the aggregate amount of Redirected
Principal Collections for all prior Distribution Dates, plus (e) the sum of the
aggregate amount reimbursed with respect to reductions of the Excess Collateral
Amount through and including such Business Day pursuant to subsection 4.9(ix) of
the Agreement plus, with respect to such subsection, pursuant to subsections
4.10(a) and (b), 4.14(a), 4.17(b) and 4.18(b), (c) and (d) of the Agreement, for
the purpose of reimbursing amounts deducted pursuant to the foregoing clauses
(c) and (d).
"Excess Collateral Charge-Offs" shall have the meaning
specified in subsection 4.13(a) of the Agreement.
"Excess Collateral Expected Final Payment Date" shall mean the
March 2005 Transfer Date.
"Excess Collateral Fixed/Floating Percentage" shall mean for
any Business Day the percentage equivalent of a fraction, the numerator of which
is the Excess Collateral 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 with respect to all Classes of all Series then outstanding
used to calculate the applicable allocation percentages with respect to
Principal Collections for all Series.
"Excess Collateral Floating Percentage" shall mean with
respect to any Business Day the percentage equivalent of a fraction, the
numerator of which is the Excess Collateral Amount at the end of the preceding
Business Day 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 with respect to all Classes of all Series then outstanding
used the calculate the applicable allocation percentage.
"Excess Collateral Holder" shall mean the entity so designated
in writing by the Transferor to the Trustee.
"Excess Collateral Holder's Interest" shall mean the portion
of the Series 2000-1 Securityholders' Interest evidenced by the Excess
Collateral.
"Excess Collateral Initial Amount" shall mean the aggregate
initial principal amount of the Excess Collateral, which is $147,513,425.
"Excess Collateral Interest Shortfall" shall have the meaning
specified in subsection 4.6(c) of the Agreement.
"Excess Collateral Minimum Monthly Interest" shall mean the
interest distributable in respect of the Excess Collateral as calculated in
accordance with subsection 4.6(c) of the Agreement.
"Excess Collateral Minimum Rate" shall mean, for any Interest
Accrual Period, the rate per annum specified in the Transfer and Administration
Agreement; provided, however, that the Excess Collateral Minimum Rate shall not
exceed a rate of 1.5% per annum in excess of LIBOR as determined on the related
LIBOR Determination Date.
"Excess Collateral Monthly Principal" shall mean the principal
distributable in respect of the Excess Collateral as specified in subsection
4.7(c) of this Agreement.
"Excess Collateral Notional Percentage" shall mean 57.3%.
"Excess Collateral Outstanding Principal Amount" shall mean,
when used with respect to any Business Day, and amount equal to (a) the Excess
Collateral Initial Amount minus (b) the aggregate amount of principal payments
made to the Excess Collateral Holder prior to such Business Day.
"Excess Finance Charge Collections" shall mean, with respect
to any Business Day, as the context requires, either (x) the amount described in
subsection 4.9(a) of the Agreement allocated to the Series 2000-1 Securities 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 2000-1 Securities.
"FASIT" shall have the meaning specified in Section 17 of this
Series Supplement.
"Fitch" shall mean Fitch IBCA, Inc., or its successor.
"Fixed/Floating 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, on and after the Pay Out
Commencement Date, with respect to the allocations of Collections of Finance
Charge Receivables, the numerator used in the above calculation shall be the
Adjusted Invested Amount as of the day immediately preceding the Pay Out
Commencement Date.
"Floating Percentage" shall mean for any Business Day the sum
of the applicable Class A Floating Percentage, Class B Floating Percentage and
Excess Collateral Floating Percentage for such Business Day.
"Initial Invested Amount" shall mean $662,983,425.
"Interest Accrual Period" shall mean, with respect to a
Distribution Date, the period from and including the preceding Distribution Date
to but excluding such Distribution Date; provided, however, that the initial
Interest Accrual Period shall be the period from the Closing Date to but
excluding the initial Distribution Date.
"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 Securityholders 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 Accrual Period and 8.25%,
(ii) the notional 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, (b)
the Class B Invested Amount and (c) the Excess Collateral Amount, in each case
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 4.16(c),
(ii) the Principal Funding Account, deposited in the Collection Account pursuant
to subsection 4.17(b) and (iii) the Accumulation Period Reserve Account,
deposited in the Collection Account pursuant to subsection 4.18(b).
"Investment Letter" shall have the meaning specified in
subsection 11(a).
"Investor Percentage" shall mean, for any Business Day, (a)
with respect to Finance Charge Collections prior to the Pay Out Commencement
Date, Receivables in Defaulted Accounts at any time and Principal Collections
during the Revolving Period, the Floating Percentage and (b) with respect to
Finance Charge Collections on and after the Pay Out Commencement Date and
Principal Collections during the Amortization Period, the Fixed/Floating
Percentage.
"Investor Securities" shall mean the Class A Securities, the
Class B Securities, and the Excess Collateral.
"Investor Securityholder" shall mean the Holder of record of
an Investor Security of Series 2000-1.
"LIBOR" shall mean, as of any LIBOR Determination Date, 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 4.15 of the Agreement.
"LIBOR Determination Date" shall mean (i) March 16, 2000 with
respect to the period from the Closing Date through April 19, 2000 and (ii) the
second Business Day prior to the commencement of each Interest Accrual Period
beginning with Interest Accrual Period commencing on April 20, 2000. 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.
"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 specified in the
Agreement, except that the first Monthly Period with respect to the Series
2000-1 Securities shall begin on and include the Closing Date and shall end on
and include March 31, 2000.
"Negative Carry Amount" shall have the meaning specified in
subsection 4.10(a) of the Agreement.
"Paired Series" shall have the meaning specified in Section 18
of this Series Supplement.
"Pay Out Commencement Date" shall mean the date on which a
Trust Pay Out Event is deemed to occur pursuant to Section 9.1 of the Agreement
or a Series 2000-1 Pay Out Event is deemed to occur pursuant to Section 8 of
this Series Supplement.
"Paying Agent" shall mean, for the Series 2000-1 Securities,
initially The Bank of New York and, in certain limited circumstances, the Banque
Generale du Luxembourg, S.A.
"Payment Reserve Account" shall have the meaning specified in
subsection 4.16(a) of the Agreement.
"Permitted Assignee" shall mean any Person who, if it were the
Excess Collateral Holder or holder of an interest in the Trust, as applicable,
would not cause the Trust to be characterized as a publicly traded partnership
taxable as a corporation for federal income tax purposes.
"Portfolio Adjusted Yield" shall mean, with respect to any
Monthly Period, the average of the percentages obtained for each of the three
preceding Monthly Periods by subtracting the Base Rate for such Monthly Period
from the Portfolio Yield for such Monthly Period.
"Portfolio Yield" shall mean for the Series 2000-1 Securities,
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 2000-1 Finance Charge Collections for such Monthly
Period (not including the amounts on deposit in the Payment Reserve Account and
Adjustment Payments made by the Transferor with respect to Adjustment Payments
required to be made but not made in prior Monthly Periods, if any) plus the
Principal Funding Account Investment Proceeds and amounts withdrawn from the
Accumulation Period Reserve Account, if any, with respect to such Monthly Period
calculated on a cash basis, minus the aggregate Series Default Amount for such
Monthly Period and the Series 2000-1 Percentage of any Adjustment Payments which
the Transferor is required but fails to make pursuant to the Agreement for such
Monthly Period, and the denominator of which is the average daily Invested
Amount; provided, however, that Excess Finance Charge Collections applied for
the benefit of the Series 2000-1 Securityholders may be added to the numerator
if the Transferor shall have provided ten Business Days prior written notice of
such action to each Rating Agency and the Transferor, the Servicer and the
Trustee shall have received notification in writing that such action will not
result in Standard & Poor's reducing or withdrawing its then existing rating of
the Investor Securities of any outstanding Series or Class with respect to which
it is a Rating Agency.
"Principal Funding Account" shall have the meaning set forth
in subsection 4.17 of the Agreement.
"Principal Funding Account Balance" shall mean, with respect
to any date of determination during the Accumulation Period, the principal
amount, if any, on deposit in the Principal Funding Account on such date of
determination.
"Principal Funding Account Investment Proceeds" shall mean,
with respect to each Interest Accrual Period during the Accumulation Period, the
investment earnings on funds on deposit in the Principal Funding Account (net of
investment losses and expenses) for such Interest Accrual Period.
"Principal Shortfalls" shall mean on any Business Day (x) for
Series 2000-1, (i) during the Accumulation Period, the amount, if any, by which
the Controlled Deposit Amount for the Transfer Date immediately following the
then current Monthly Period exceeds the total of the amounts described in
clauses (v), (w), (x) and (y) of subsection 4.9(c)(i), and (ii) at all other
times, the Invested Amount of the class then receiving principal payments after
the application of Principal Collections on such Business Day, or (y) for any
other Series, the amounts specified as such in the Supplement for such other
Series.
"Qualified Substitute Arrangement" shall mean an arrangement
in addition to or in substitution for any prior interest rate cap arrangement
satisfactory to the Rating Agencies.
"Rating Agencies" shall mean Standard & Poor's, Xxxxx'x and
Fitch.
"Redirected Class B Principal Collections" shall have the
meaning specified in subsection 4.14(b) of the Agreement.
"Redirected Excess Collateral Principal Collections" shall
have the meaning specified in subsection 4.14(a) of the Agreement.
"Redirected Principal Collections" shall mean the sum of
Redirected Class B Principal Collections and Redirect Excess Collateral
Principal Collections.
"Reference Banks" shall mean four major banks in the London
interbank market selected by the Servicer.
"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 Supplement to maintain Interest Rate Caps.
"Required Accumulation Factor Number" shall be equal to a
fraction, rounded upwards to the nearest whole number, the numerator of which is
one and the denominator of which is equal to the lowest monthly principal
payment rate on the Receivables, expressed as a decimal, for the 12 months
preceding the date of such calculation.
"Required Amount" shall have the meaning specified in
subsection 4.10(b) of the Agreement.
"Required Reserve Account Amount" shall mean, for any date on
or after the Reserve Account Funding Date an amount equal to (a) 0.75% of the
Class A Invested Amount or (b) any other amount designated by the Transferor;
provided, that if such designation is of a lesser amount, the Transferor shall
have (i) provided the Servicer and the Trustee with evidence that the Rating
Agency Condition has been satisfied and (ii) delivered to the Trustee a
certificate of an authorized officer to the effect that, based on the facts
known to such officer at such time, in the reasonable belief of the Transferor,
such designation will not cause a Pay Out Event or an event that, after giving
of notice or the lapse of time, would cause a Pay Out Event to occur with
respect to Series 2000-1.
"Reserve Account Funding Date" shall mean the earliest of (a)
the first day of the third Monthly Period preceding the first full day of the
Accumulation Period; (b) the Determination Date occurring in the first Monthly
Period for which the Portfolio Adjusted Yield is less than 2.0%, but in such
event the Reserve Account Funding Date shall not be required to occur earlier
than the first day of the Monthly Period which commences 12 months prior to the
first full day of the Accumulation Period; (c) the Determination Date occurring
in the first Monthly Period for which the Portfolio Adjusted Yield is less than
3.0%, but in such event the Reserve Account Funding Date shall not be required
to occur earlier than the first day of the Monthly Period which commences 6
months prior to the first full day of the Accumulation Period; or (d) the
Determination Date occurring in the first Monthly Period for which the Portfolio
Adjusted Yield is less than 3.5%, but in such event the Reserve Account Funding
Date shall not be required to occur earlier than the first day of the Monthly
Period which commences 4 months prior to the first full day of the Accumulation
Period.
"Revolving Period" shall mean the period from and including
the Closing Date to, but not including, the Amortization Period Commencement
Date.
"Scheduled Series 2000-1 Termination Date" shall mean the
August 2008 Distribution Date.
"Series 2000-1" shall mean the Series of the Metris Master
Trust represented by the Series 2000-1 Securities.
"Series 2000-1 Pay Out Event" shall have the meaning specified
in Section 8 of this Series Supplement.
"Series 2000-1 Percentage" shall mean, on any date of
determination, the percentage equivalent of a fraction the numerator of which is
the Invested Amount and the denominator of which is the sum of the Invested
Amounts relating to all other Series then outstanding.
"Series 2000-1 Securities" shall mean the Class A Securities,
the Class B Securities and the Excess Collateral.
"Series 2000-1 Securityholder" shall mean the holder of record
of any Series 2000-1 Security.
"Series 2000-1 Securityholders' Interest" shall have the
meaning specified in Section 4.4 of the Agreement.
"Series 2000-1 Termination Date" shall mean the earlier to
occur of (i) the day after the Distribution Date on which the Series 2000-1
Securities are paid in full, or (ii) the Scheduled Series 2000-1 Termination
Date.
"Series 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 Percentage applicable for such
Business Day.
"Series Servicing Fee Percentage" shall mean 2.00% per annum.
"Servicing Fee" shall mean for any Monthly Period, an amount
equal to the product of (i) a fraction the numerator of which is the actual
number of days in such Monthly Period and the denominator of which is 365 or
366, (ii) the Series Servicing Fee Percentage and (iii) the Adjusted Invested
Amount as of the beginning of the day on the first day of such Monthly Period.
"Shared Principal Collections" shall mean, as the context
requires, either (a) the amount allocated to the Series 2000-1 Securities which,
in accordance with subsections 4.9(b) and 4.9(c)(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 securities 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 2000-1 Securities.
"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 2000-1
Termination Date.
"Transfer" shall have the meaning specified in Section 11 of
this Series Supplement.
"Transfer and Administration Agreement" shall mean the
agreement among the Transferor, Metris, as administrator, and the Excess
Collateral Holder, dated as of March 20, 2000 as amended or modified from time
to time, relating to the transfer of the Excess Collateral.
"Transferor Finance Charge Collections" shall mean on any
Business Day the product of (a) the Finance Charge Collections for such Business
Day, (b) the Transferor Percentage and (c) the Series 2000-1 Percentage.
"Transferor Retained Securities" shall mean investor
securities of any Series which the Transferor is required to retain pursuant to
the terms of any Supplement and with respect to Series 2000-1, the portion of
the Excess Collateral represented by the Owner Certificate in the Metris Secured
Note Trust 2000-1 for so long as the Owner Certificate is retained by the
Transferor.
"Transferor Retained Finance Charge Collections" shall mean
with respect to each Business Day other than a Default Recognition Date, the
amount specified in subsection 4.9(a)(v) of the Agreement, which amount shall be
deposited in an account maintained with a Qualified Institution and shall be
invested in Cash Equivalents maturing no later than the next succeeding Default
Recognition Date.
"Weighted Average Invested Amount" shall mean with respect to
any Monthly Period the weighted average Adjusted Invested Amount based on the
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 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 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.
Section 3. Reassignment Terms. The Series 2000-1 Securities 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 Invested Amount would be reduced to an
amount less than or equal to 10% of the highest Invested Amount during the
Revolving Period. The deposit required in connection with any such termination
and final distribution shall be equal to the unpaid Invested Amount plus accrued
and unpaid interest on the Series 2000-1 Securities through the day prior to the
Distribution Date on which the final distribution occurs, in each case after
giving effect to any payments on such date.
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 the Series 2000-1 Securities, it shall obtain and at
all times prior to the close of business on the Series 2000-1 Termination Date
maintain one or more Interest Rate Caps whose notional amounts singly or taken
as a group equal or exceed the sum of (i) the Class A Outstanding Principal
Amount, (ii) the Class B Outstanding Principal Amount and (iii) the Excess
Collateral Outstanding Principal Amount. The Transferor hereby assigns,
sets-over, conveys, pledges and grants a security interest and lien (free and
clear of all other Liens) to the Trustee for the benefit of the Series 2000-1
Securityholders, in all of the Transferor's right, title and interest now
existing or hereafter arising in and to the Cap Agreements 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 2000-1
Securityholders. 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 2000-1
Securityholders, shall establish and maintain with the Trustee, in the name of
the Trustee, on behalf of the Securityholders, a certain segregated trust
account (the "Cap Proceeds Account"). All amounts paid pursuant to the Interest
Rate Caps or any Qualified Substitute Arrangement 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 Substitute Arrangement
on the Transfer Date in any Monthly Period shall be treated for all purposes
herein, including application in accordance with subsection 4.9(a) 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 direction 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 defaults 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 Provider,
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 Securityholders 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 Securityholders.
(d) In the event that the Cap Provider is downgraded below the
rating required by a Rating Agency, then within 30 days after receiving notice
of such decline in the creditworthiness of the Cap Provider as determined by the
Rating Agencies, either (x) the Cap Provider, with the prior written
confirmation of the Rating Agencies that such arrangement will not result in the
reduction or withdrawal of the rating of the Class A Securities, the Class B
Securities or the securities secured by the Excess Collateral, will enter into
an arrangement the purpose of which shall be to assure performance by the Cap
Provider 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
Agencies that such action will not result in a reduction or withdrawal of the
rating of the Class A Securities, the Class B Securities or the securities
secured by the Excess Collateral, cause the Cap Provider to pledge securities in
the manner provided by applicable law 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 securing 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
Substitute Arrangement meeting the requirements of Section 3A(e) has been
obtained, direct the Trustee (A) to provide 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 Interest 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 Series 2000-1 Securityholders, 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 Agencies such that
the Rating Agencies will not reduce or withdraw the rating of the Class A
Securities, the Class B Securities or the securities secured by the Excess
Collateral (a "Qualified Substitute Arrangement"); 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
Agencies then the provisions of this Section 3A(d) shall again be applied and in
connection 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 established, 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 authorization, execution and
delivery and validity and enforceability of such Replacement Interest Rate Cap
or Qualified Substitute Arrangement, as the case may be, and (iii) a letter from
each of the Rating Agencies 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
Securities, the Class B Securities or the securities secured by the Excess
Collateral.
(f) The Servicer shall notify the Trustee and the Rating
Agencies within five Business Days after obtaining knowledge that the senior
unsecured debt rating of the Interest Rate Cap Provider has been withdrawn or
reduced by either of the Rating Agencies.
(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 authorization, execution
and delivery and validity and enforceability of such Replacement Interest Rate
Cap and (ii) a letter from each of the Rating Agencies confirming that the
termination 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 Securities, the Class B Securities or the securities secured by the Excess
Collateral.
(h) The Trustee, on behalf of the Securityholders, 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 sum of (i)
the Class A Outstanding Principal Amount, (ii) the Class B Outstanding
Principal Amount and (iii) the product of (a) the Excess Collateral
Outstanding Principal Amount times (b) the Excess Collateral Notional
Percentage, in each case 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 downgrading or
withdrawal of the then current rating on the Class A Securities, the
Class B Securities or the securities secured by the Excess Collateral
by the Rating Agencies; and
(z) the minimum notional amount denomination of any
Interest Rate Cap to be sold is $1,000,000.
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 Interest Rate Cap to the extent of such
sale 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 allocable to Series 2000-1 and shall be applied on the next
Distribution Date in accordance with subsections 4.7(a), (b) and (c) and 4.9(b)
and (c).
Section 4. Delivery and Payment for the Class A Securities and the Class B
Securities. The Transferor shall execute and deliver the Class A Securities and
the Class B Securities to the Trustee for authentication in accordance with
Section 6.1 of the Agreement. The Trustee shall deliver the Class A Securities
and the Class B Securities 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 the Class A Securities and the Class B
Securities; Denominations. (a) The Class A Securities and the Class B
Securities, shall be delivered as Book-Entry Securities as provided in Sections
6.1 and 6.10 of the Agreement. The Class A Securities and the Class B Securities
shall be issued in minimum denominations of $1,000 and integral multiples
thereof.
(b) The Depositary for the Class A Securities and the Class B Securities shall
be DTC and the Class A Securities and the Class B Securities shall be initially
registered in the name of Cede & Co., its nominee, and will initially be held by
the Trustee as custodian for DTC.
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 applicable only to the Series 2000-1
Securities:
ARTICLE IV
RIGHTS OF SECURITYHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.4. Rights of Securityholders. The Series 2000-1
Securities 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 2000-1 Securities at the times and in the amounts specified in
this Agreement, (a) the Floating Percentage and the Fixed/Floating Percentage
(as applicable from time to time) of Collections (including Finance Charge
Collections) available in the Collection Account, (b) funds allocable to the
Series 2000-1 Securities on deposit in the Excess Funding Account and (c) funds
on deposit in the Interest Funding Account, the Principal Account, the Principal
Funding Account, the Accumulation Period Reserve Account, the Distribution
Account, the Cap Proceeds Account and the Payment Reserve Account (for such
Series, the "Series 2000-1 Securityholders' Interest"). The Class B Securities
and the Excess Collateral shall be subordinated to the Class A Securities; and
the Excess Collateral shall be subordinated to the Class B Securities. The Class
B Securities will not have the right to receive payments of principal until the
Class A Invested Amount has been paid in full. The Excess Collateral will not
have the right to receive payments of principal until the Transfer Date
immediately preceding the Distribution Date on which the Class B Invested Amount
will be paid in full.
SECTION 4.5. Collections and Allocation; Payments on
Exchangeable Transferor Security.
(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 2000-1 Securities, and all funds on
deposit in the Interest Funding Account, the Principal Account, the Cap Proceeds
Account, the Principal Funding Account, the Accumulation Period Reserve Account,
the Distribution Account and the Payment Reserve Account, as described in this
Article IV. On each Business Day, (i) the amount of Finance Charge Collections
available in the Collection Account allocable to the Series 2000-1 Securities
shall be determined by multiplying the aggregate amount of such Finance Charge
Collections by (x) prior to the Pay Out Commencement Date, the Floating
Percentage and (y) on and after the Pay Out Commencement Date, the
Fixed/Floating Percentage, (ii) the amount of Principal Collections available in
the Collection Account allocable to the Series 2000-1 Securities shall be
determined by multiplying the aggregate amount of such Principal Collections by
(x) during the Revolving Period, the Floating Percentage and (y) during the
Amortization Period, the Fixed/Floating Percentage, and (iii) the Receivables in
Defaulted Accounts allocable to the Series 2000-1 Securities shall be determined
by multiplying the Default Amount by the Floating Percentage.
(b) Payments to the Holder of the Exchangeable Transferor Security. On each
Business Day, the Servicer shall allocate and pay Collections in accordance with
the Daily Report with respect to such Business Day to the Holder of the
Exchangeable Transferor Security in accordance with subsection 4.3(b) of the
Agreement; provided, however, that such amounts shall be applied in accordance
with Section 4.10 hereof to the extent specified therein.
Notwithstanding the foregoing and any other provisions of
this Supplement, amounts payable to the Transferor 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.
SECTION 4.6. Determination of Interest for the Series 2000-1
Securities.
(a) The amount of monthly interest (the "Class A Monthly
Interest") which shall accrue for the benefit of the Class A Securities with
respect to any Interest Accrual Period shall be an amount equal to the product
of (i) the Class A Interest Rate, (ii) 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 and (iii) the Class A Outstanding Principal Amount as of the
close of business on the first day of such Interest Accrual Period.
On the Determination Date preceding each Distribution Date,
the Servicer shall determine an amount (the "Class A Interest Shortfall") equal
to the excess, if any, of (x) the Class A Monthly Interest for the Interest
Accrual Period applicable to the Distribution Date over (y) the amount available
to be paid to the Class A Securityholders in respect of interest on such
Distribution Date. If there is a Class A Interest Shortfall with respect to any
Distribution Date, an additional amount ("Class A Additional Interest") shall be
payable as provided herein with respect to the Class A Securities on each
Distribution Date following such Distribution Date on which there was a Class A
Interest Shortfall, to and including the Distribution Date on which such Class A
Interest Shortfall is paid to Class A Securityholders, equal to the product of
(i) the Class A Interest Rate, (ii) 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 and (iii) such Class A Interest Shortfall remaining unpaid.
Notwithstanding anything to the contrary herein, Class A Additional Interest
shall be payable or distributed to Class A Securityholders only to the extent
permitted by applicable law.
(b) The amount of monthly interest (the "Class B Monthly
Interest") which shall accrue for the benefit of the Class B Securities with
respect to any Interest Accrual Period shall be an amount equal to the product
of (i) the Class B Interest Rate, (ii) 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 and (iii) the Class B Outstanding Principal Amount as of the
close of business on the first day of such Interest Accrual Period.
On the Determination Date preceding each Distribution 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 Securityholders in respect of interest on such
Distribution Date. If there is a Class B Interest Shortfall 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 Securities on each
Distribution Date following such Distribution Date, to and including the
Distribution Date on which such Class B Interest Shortfall is paid to Class B
Securityholders, equal to the product of (i) the Class B Interest Rate, (ii) 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 and (iii) such Class
B Interest Shortfall remaining unpaid. Notwithstanding anything to the contrary
herein, Class B Additional Interest shall be payable or distributed to Class B
Securityholders only to the extent permitted by applicable law.
(c) The amount of monthly interest (the "Excess Collateral
Minimum Monthly Interest") which shall accrue for the benefit of the Excess
Collateral with respect to any Interest Accrual Period shall be an amount equal
to the product of (i) the Excess Collateral Minimum Rate, (ii) 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 and (iii) the Excess Collateral
Outstanding Principal Amount as of the close of business on the first day of
such Interest Accrual Period.
SECTION 4.7. Determination of Principal Amounts. (a) The
amount of principal (the "Class A Principal") distributable from the
Distribution Account or available for deposit into the Principal Funding Account
with respect to the Class A Securities for each Distribution Date with respect
to the Amortization Period shall be equal to the least of (i) the Available
Series 2000-1 Principal Collections on deposit in the Principal Account with
respect to the related Transfer Date, (ii) for each Distribution Date with
respect the Accumulation Period, prior to the payment in full of the Class A
Invested Amount and on or prior to the Class A Expected Final Payment Date, the
applicable Controlled Deposit Amount for such Transfer Date and (iii) the Class
A Adjusted Invested Amount on the related Transfer Date.
(b) The amount of principal (the "Class B Principal") distributable from the
Distribution Account with respect to the Class B Securities for each
Distribution Date, beginning with (x) during the Accumulation Period, the
Distribution Date following the Distribution Date on which the Class A Invested
Amount is paid in full and (y) during the Early Amortization Period, the
Distribution Date on which the Class A Invested Amount is paid in full, shall be
equal to the lesser of (i) the Available Series 2000-1 Principal Collections
remaining on deposit in the Principal Account with respect to the related
Transfer Date after application thereof to Class A Principal, if any, and (ii)
the Class B Invested Amount on such Transfer Date.
(c) The amount of principal (the "Excess Collateral Monthly Principal")
distributable from the Distribution Account with respect to the Excess
Collateral for each Transfer Date, beginning with the Transfer Date immediately
preceding the Distribution Date on which the Class B Invested Amount will be
paid in full, prior to payment in full of the Excess Collateral Amount, shall be
equal to the lesser of (i) the Available Series 2000-1 Principal Collections
remaining on deposit in the Principal Account with respect to the related
Transfer Date after application thereof to Class A Principal and Class B
Principal, if any, and (ii) the Excess Collateral Amount on such Transfer Date.
SECTION 4.8. Shared Principal Collections. Shared Principal
Collections allocated to Available Series 2000-1 Principal Collections for the
Series 2000-1 Securities and to be applied to Class A Principal, Class B
Principal and Excess Collateral Monthly Principal pursuant to subsection
4.9(c)(i)(y) of the Agreement for any Business Day with respect to the
Amortization Period shall mean an amount equal to 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 2000-1
Securities for such Business Day and the denominator of which is the aggregate
amount of Principal Shortfalls for all Series for such Business Day. For any
Business Day with respect to the Revolving Period, Shared Principal Collections
allocated to Available Series 2000-1 Principal Collections for the Series 2000-1
Securities shall be zero.
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 accordance with
such instructions, shall withdraw from the Collection Account and the Cap
Proceeds Account, to the extent of the sum of (w) prior to the Pay Out
Commencement Date, the Floating Percentage of the sum of Finance Charge
Collections and the amount of Adjustment Payments made by the Transferor with
respect to Adjustment Payments required to be made but not made in a prior
Monthly Period, available in the Collection Account or, on and after the Pay Out
Commencement Date, the Fixed/Floating Percentage of the sum of Finance Charge
Collections and the amount of Adjustment Payments made by the Transferor with
respect to Adjustment Payments required to be made but not made in a prior
Monthly Period, available in the Collection Account, (x) Investment Earnings on
deposit in the Collection Account, (y) amounts on deposit in the Payment Reserve
Account, if any, if and to the extent the Transferor designates that such
amounts are to be so applied, and (z) the Cap Receipt Amount, if any, for such
Business Day (the "Available Series 2000-1 Finance Charge Collections" the
amounts required to be withdrawn from the Collection Account pursuant to
subsections 4.9(a)(i) through 4.9(a)(xi) of the Agreement.
(i) Class A Monthly 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 Payment Reserve Account, and deposit into the Interest Funding
Account for distribution on the next Distribution Date to the Class A
Securityholders, to the extent of the Available Series 2000-1 Finance
Charge Collections for such Business Day, an amount equal to the lesser of
(x) the Available Series 2000-1 Finance Charge Collections and (y) the
excess of (1) the sum of Class A Monthly Interest for the Interest Accrual
Period beginning in such Monthly Period and Carryover Class A Interest over
(2) any amounts with respect thereto previously deposited into the Interest
Funding Account on any prior Business Day during such Monthly Period.
Notwithstanding anything to the contrary herein, the portion of Carryover
Class A Interest that constitutes Class A Additional Interest shall be
payable or distributable to Class A Securityholders only to the extent
permitted by applicable law.
(ii) Class B 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
Payment Reserve Account, and deposit into the Interest Funding Account for
distribution on the next Distribution Date to the Class B Securityholders,
to the extent of any Available Series 2000-1 Finance Charge Collections
remaining after giving effect to the withdrawal pursuant to subsection
4.9(a)(i) of the Agreement, an amount equal to the lesser of (x) any such
remaining Available Series 2000-1 Finance Charge Collections and (y) the
excess of (1) the sum of Class B Monthly Interest for the Interest Accrual
Period beginning in such Monthly Period and Carryover Class B Interest over
(2) any amounts with respect thereto previously deposited into the Interest
Funding Account on any prior Business Day during such Monthly Period.
Notwithstanding anything to the contrary herein, the portion of Carryover
Class B Interest that constitutes Class B Additional Interest shall be
payable or distributable to Class B Securityholders only to the extent
permitted by applicable law.
(iii) Excess Collateral Minimum Monthly 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 Payment Reserve Account, and
distribute to the Excess Collateral Holder, on such Business Day, to the
extent of any Available Series 2000-1 Finance Charge Collections remaining
after giving effect to the withdrawals pursuant to subsections 4.9(a)(i)
and (ii) of the Agreement, an amount equal to the lesser of (x) any such
remaining Available Series 2000-1 Finance Charge Collections and (y) the
excess of (1) the sum of Excess Collateral Minimum Monthly Interest for the
Interest Accrual Period beginning in such Monthly Period and Carryover
Excess Collateral Minimum Interest over (2) any amounts with respect
thereto previously distributed to the Excess Collateral Holder on any prior
Business Day during such Monthly Period. Notwithstanding anything to the
contrary herein, the portion of Carryover Excess Collateral Minimum
Interest that constitutes Excess Collateral Additional Interest shall be
payable or distributable to Excess Collateral Holders only to the extent
permitted by applicable law.
(iv) Investor Servicing Fee. 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 Cap Receipt Amount and
then from the Collection Account and then from the Payment Reserve Account,
and distribute to the Servicer, to the extent of any Available Series
2000-1 Finance Charge Collections remaining after giving effect to the
withdrawals pursuant to subsection 4.9(a)(i) through (iii) of the
Agreement, an amount equal to the lesser of (x) any such remaining
Available Series 2000-1 Finance Charge Collections and (y) the excess of
(i) the Servicing Fee for such Monthly Period plus any unpaid Servicing
Fees from prior Monthly Periods over (ii) any amounts with respect thereto
previously distributed to the Servicer during such Monthly Period.
(v) Series Default Amount. On each Business Day, first if such day is
the Default Recognition Date for the related Monthly Period, the Transferor
will deposit (as described below) an amount equal to the amount paid to the
Transferor pursuant to subsection 3.02 (a)(vii) of the Transfer and
Administration Agreement on each Business Day other than a Default
Recognition Date to be treated as "Transferor Retained Finance Charge
Collections" for each prior day in the current Monthly Period and second
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
Payment Reserve Account, to the extent of any Available Series 2000-1
Finance Charge Collections remaining after giving effect to the withdrawals
pursuant to subsections 4.9(a)(i) through (iv) of the Agreement, an amount
equal to the lesser of (x) any such remaining Available Series 2000-1
Finance Charge Collections and, if such day is the related Default
Recognition Date for such Monthly Period, an amount equal to the aggregate
Transferor Retained Finance Charge Collections for each prior day during
the related Monthly Period and (y) the sum of (1) the aggregate Series
Default Amount for such Business Day plus (2) the unpaid Series Default
Amount for each previous Business Day during such Monthly Period, such
amount to be (A) treated as Shared Principal Collections during the
Revolving Period, and (B) treated as Available Series 2000-1 Principal
Collections during the Amortization Period.
(vi) 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 Cap Receipt Amount
and then from the Collection Account and then from the Payment Reserve
Account, to the extent of any Available Series 2000-1 Finance Charge
Collections remaining after giving effect to the withdrawals pursuant to
subsections 4.9(a)(i) through (v) of the Agreement, an amount equal to the
lesser of (x) any such remaining Available Series 2000-1 Finance Charge
Collections and (y) an amount equal to the Series 2000-1 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, to be treated as Shared Principal Collections, and (ii)
during the Amortization Period, to be treated as Available Series 2000-1
Principal Collections.
(vii) Reimbursement of Class A 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 Cap
Receipt Amount and then from the Collection Account and then from the
Payment Reserve Account, to the extent of any Available Series 2000-1
Finance Charge Collections remaining after giving effect to the withdrawals
pursuant to subsections 4.9(a)(i) through (vi) of the Agreement, an amount
equal to the lesser of (x) any such remaining Available Series 2000-1
Finance Charge Collections and (y) the unreimbursed Class A Charge-Offs, if
any, will be applied to reimburse Class A Charge-Offs, such amount during
the Revolving Period, to be treated as Shared Principal Collections, and
during the Amortization Period, to be treated as Available Series 2000-1
Principal Collections.
(viii) Reimbursement of Class B 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 Cap
Receipt Amount and then from the Collection Account and then from the
Payment Reserve Account, to the extent of any Available Series 2000-1
Finance Charge Collections remaining after giving effect to the withdrawals
pursuant to subsections 4.9(a)(i) through (vii) of the Agreement, an amount
equal to the lesser of (x) any such remaining Available Series 2000-1
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, to be treated as Shared
Principal Collections, and (ii) during the Amortization Period, to be
treated as Available Series 2000-1 Principal Collections.
(ix) Reimbursement of Excess Collateral 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 Cap
Receipt Amount and then from the Collection Account and then from the
Payment Reserve Account, to the extent of any Available Series 2000-1
Finance Charge Collections remaining after giving effect to the withdrawals
pursuant to subsections 4.9(a)(i) through (viii) of the Agreement, an
amount equal to the lesser of (x) any such remaining Available Series
2000-1 Finance Charge Collections and (y) the unreimbursed amount by which
the Excess Collateral Amount has been reduced on prior Business Days
pursuant to clauses (c) and (d) of the definition of Excess Collateral
Amount, if any, such amount, (i) during the Revolving Period, to be treated
as Shared Principal Collections, and (ii) during the Amortization Period,
to be treated as Available Series 2000-1 Principal Collections.
(x) Accumulation Period Reserve Account. On each Business Day on and
after the Reserve Account Funding Date, but prior to the date on which the
Accumulation Period Reserve Account terminates pursuant to subsection
4.18(d) of the Agreement, 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 Payment Reserve Account, and
distribute to the Servicer, to the extent of any Available Series 2000-1
Finance Charge Collections remaining after giving effect to the withdrawals
pursuant to subsections 4.9(a)(i) through (ix) of the Agreement, an amount
equal to the lesser of (x) any such remaining Available Series 2000-1
Finance Charge Collections and (y) the excess, if any, of the Required
Reserve Account Amount over the Available Reserve Account Amount and the
Servicer shall deposit such amount, if any, in the Accumulation Period
Reserve Account.
(xi) Payments to Excess Collateral Holder. Any amounts remaining in
the Cap Proceeds Account, Collection Account and the Payment Reserve
Account, to the extent of any Available Series 2000-1 Finance Charge
Collections remaining after giving effect to the withdrawals pursuant to
subsections 4.9(a)(i) through (x) of the Agreement, shall be distributed to
the Excess Collateral Holder.
On each Business Day during a Monthly Period, any amount distributed to the
Trustee pursuant to subsection 3.02(a)(v) of the Transfer and Administration
Agreement to be deposited in the Payment Reserve Account shall be deposited in
the Payment Reserve Account.
On each Business Day during a Monthly Period, any amount distributed to the
Trustee pursuant to subsection 3.02(a)(vi) of the Transfer And Administration
Agreement shall be treated as Excess Finance Charge Collections, and the
Servicer shall direct the Trustee in writing on each Business Day to first make
such amounts available to pay Securityholders of other Series to the extent of
shortfalls, if any, in amounts payable to such Securityholders from Finance
Charge Collections allocated to such other Series, then to pay any unpaid
commercially reasonable costs and expenses of a Successor Servicer, if any.
Notwithstanding the foregoing, if on any Default Recognition Date the sum of the
amount of Available Series 2000-1 Finance Charge Collections (including, all
amounts on deposit in the Payment Reserve Account) and Transferor Retained
Finance Charge Collections is less than the Series Default Amount for such
Default Recognition Date, the Servicer shall apply (i) amounts deposited in the
Accumulation Period Reserve Account pursuant to subsection 4.9(a)(x) of the
Agreement during the then current Monthly Period and (ii) any amount distributed
to the Trustee pursuant to subsection 3.02(a) of the Transfer and Administration
Agreement for application in accordance with the instructions of the Servicer in
respect of such shortfall, in accordance with subsection 4.9(a)(v) of the
Agreement to the extent of such shortfall.
(b) For each Business Day with respect to the Revolving Period, the funds on
deposit in the Collection Account to the extent of the product of (i) the
Floating Percentage and (ii) Principal Collections with respect to such Business
Day (less the amount of Redirected Principal Collections on such Business Day)
will 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 Agreement.
(c) For each Business Day on and after the Amortization Period Commencement
Date, the amount of funds on deposit in the Collection Account, the Excess
Funding Account and other accounts as 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:
(i) an amount (not in excess of the Adjusted Invested Amount) equal to
the sum of (v) the product of the Fixed/Floating Percentage and Principal
Collections in the Collection Account at the end of the preceding Business
Day (less the amount thereof applied as Redirected Principal Collections on
such Business Day), (w) any amount on deposit in the Excess Funding Account
allocated to the Series 2000-1 Securities on such Business Day pursuant to
subsection 4.9(d) of the Agreement, (x) amounts to be paid pursuant to
subsections 4.9(a)(v), (vi), (vii), (viii) and (ix) of the Agreement from
Available Series 2000-1 Finance Charge Collections and from amounts
available pursuant to subsections 4.10(a) and (b), 4.14, 4.17(b) and
4.18(b), (c) and (d) of the Agreement on such Business Day, and (y) the
amount of Shared Principal Collections allocated to the Series 2000-1
Securities in accordance with Section 4.8 of the Agreement on such Business
Day, will be deposited into the Principal Account; provided, however that
with respect to any Monthly Period during the Accumulation Period, the
aggregate amount required to be deposited in the Principal Account pursuant
to this subsection 4.9(c)(i) shall not exceed the sum of the Controlled
Deposit Amount.
(ii) an amount equal to the excess, if any, of (A) the sum of the
amounts described in clauses (i)(v) and (x) above over (B) the sum of the
Class A Principal, the Class B Principal and the Excess Collateral Monthly
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 Amortization Period funds on deposit in the
Excess Funding Account will be deposited in the Principal Account to the extent
of the lesser of (x) the Invested Amount and (y) the product of (i) the amount
on deposit in the Excess Funding Account at the beginning of the Amortization
Period and (ii) a fraction, the numerator of which is equal to the Invested
Amount and the denominator of which is equal to the sum of the invested amounts
of all Series in amortization periods on such day.
SECTION 4.10. Coverage of Required Amount for the Series
2000-1 Securities.
(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 2000-1 Finance Charge Collections in subsections
4.9(a)(i) through (xi) of the Agreement, 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").
(b) To the extent that on any Business Day payments are being made pursuant to
any of subsections 4.9(a)(i) through (x) of the Agreement, respectively, and the
full amount to be paid pursuant to any such subsection receiving 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 2000-1
Finance Charge Collections in subsections 4.9(a)(i) through (x) of the
Agreement, all or a portion of the Excess Finance Charge Collections from other
Series with respect to such Business Day allocable to the Series 2000-1
Securities 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 2000-1 Finance Charge Collections and
Transferor Finance Charge Collections on such Business Day (the "Required
Amount").
Excess Finance Charge Collections allocated to the Series
2000-1 Securities for any Business Day shall mean an amount equal to the product
of (x) Excess Finance Charge Collections available 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 Interest on Class A Securities and
Class B Securities. 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 Class A Securities and
the Class B Securities and deposit such amount in the Distribution Account. On
each Distribution Date, the Paying Agent shall pay in accordance with Section
5.1 of the Agreement to (x) the Class A Securityholders from the Distribution
Account such amount deposited into the Distribution Account on the related
Transfer Date allocable thereto pursuant to subsection 4.9(a)(i) of the
Agreement and (y) the Class B Securityholders from the Distribution Account the
amount deposited into the Distribution Account on the related Transfer Date
allocable thereto pursuant to subsections 4.9(a)(ii) of the Agreement.
SECTION 4.12. Payment of Security Principal. (a) On the
Transfer Date preceding each Distribution Date with respect to the Amortization
Period, 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 into the Distribution Account with respect to the Early
Amortization Period, or the Principal Funding Account with respect to the
Accumulation Period, to the extent of funds available, an amount equal to the
Class A Principal for such Distribution Date. On each Distribution Date with
respect to the Early Amortization Period until the Class A Invested Amount is
paid in full, or on the Class A Expected Final Payment Date with respect to the
Accumulation Period following any deposit to the Distribution Account pursuant
to subsection 4.12(e) of the Agreement, the Paying Agent shall pay in accordance
with Section 5.1 of the Agreement to the Class A Securityholders from the
Distribution Account such amounts deposited with respect to Class A Principal
into the Distribution Account on the related Transfer Date.
(b) (i) During the Accumulation Period, on each Transfer Date after the
Distribution Date on which the Class A Invested Amount is paid in full and (ii)
during the Early Amortization Period on each Transfer Date commencing with the
Transfer Date immediately preceding the Distribution Date on which the Class A
Invested Amount will be paid in full, 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 the
related Distribution Date. On and after the Class A Invested Amount has been
paid in full, 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 of the Agreement to the Class B Securityholder from the Distribution
Account such amounts deposited with respect to Class B Principal into the
Distribution Account on the related Transfer Date.
(c) On the Transfer Date immediately preceding the Distribution Date on which
the Class B Invested Amount will be paid in full and on each Transfer 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 Excess Collateral Monthly Principal for
such Transfer Date. On and after the Transfer Date immediately preceding the
Distribution Date on which the Class B Invested Amount will be paid in full, and
on each Distribution Date thereafter until the Excess Collateral Amount is paid
in full, the Paying Agent shall pay in accordance with Section 5.1 of the
Agreement to the Excess Collateral Holder from the Distribution Account such
amounts deposited with respect to Excess Collateral Monthly Principal into the
Distribution Account on such Transfer Date.
(d) Any amounts remaining in the Principal Account and allocable to the Series
2000-1 Securities, after the Excess Collateral 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.
(e) On the earlier to occur of (i) the first Transfer Date with respect to the
Early Amortization Period and (ii) the Transfer Date immediately preceding the
Class A Expected Final Payment Date, the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Principal Funding
Account and deposit in the Distribution Account the amount on deposit in the
Principal Funding Account for distribution to the Class A Securityholders up to
an amount equal to the Class A Invested Amount.
SECTION 4.13. Series Charge-Offs. (a) If, on any Determination
Date, the aggregate Series Default Amount and the Series 2000-1 Percentage of
unpaid Adjustment Payments, if any, for each Business Day in the preceding
Monthly Period exceeded the Available Series 2000-1 Finance Charge Collections
applied to the payment thereof pursuant to subsections 4.9(a)(v) and (vi) of the
Agreement, the amount of Transferor Finance Charge Collections and Excess
Finance Charge Collections allocated thereto pursuant to Section 4.10 of the
Agreement, the amount of Redirected Principal Collections applied with respect
thereto pursuant to Section 4.14 of the Agreement, the amount of Principal
Funding Account Investment Proceeds applied with respect thereto pursuant to
subsection 4.17(b) and amounts withdrawn from the Accumulation Period Reserve
Account pursuant to subsection 4.18(b), (c) and (d) and applied with respect to
the Series Default Amount and the Series 2000-1 Percentage of unpaid Adjustment
Payments with respect to such Monthly Period, the Excess Collateral Amount will
be reduced by the amount by which the remaining aggregate Series Default Amount
and Series 2000-1 Percentage of unpaid Adjustment Payments exceed the amount
applied with respect thereto during such preceding Monthly Period (an "Excess
Collateral Charge-Off").
(b) In the event that any such reduction of the Excess Collateral Amount would
cause the Excess Collateral Amount to be a negative number, the Excess
Collateral Amount will be reduced to zero, and the Class B Invested Amount will
be reduced by the amount by which the Excess Collateral Amount would have been
reduced below zero, but not more than the remaining aggregate Series 2000-1
Default Amount and Series 2000-1 Percentage of unpaid Adjustment Payments for
such Monthly Period (a "Class B Charge-Off").
(c) 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 Series 2000-1 Default Amount and
Series 2000-1 Percentage of unpaid Adjustment Payments for such Monthly Period
(a "Class A Charge-Off").
SECTION 4.14. Redirected Principal Collections for the
Series 2000-1 Securities.
(a) On each Business Day, the Servicer will determine an amount equal to the
least of (i) the Excess Collateral Amount, (ii) the product of (x)(I) during the
Revolving Period, the Excess Collateral Floating Percentage or (II) during an
Amortization Period, the Excess Collateral Fixed/Floating 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 and (b) the
Class B Required Amount for such Business Day (such amount called "Redirected
Excess Collateral Principal Collections") and shall apply Principal Collections
in an amount equal to such amount first to the components of the Class A
Required Amount and then to the components of the Class B Required Amount in the
same priority as amounts are applied to such components from Available Series
2000-1 Finance Charge Collections pursuant to subsection 4.9(a) of the
Agreement.
(b) 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 Percentage or (II) during an Amortization
Period, the Class B Fixed/Floating Percentage and (y) the amount of Principal
Collections with respect to 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
amount of Redirected Excess Collateral Principal Collections applied with
respect thereto for such Business Day (such amount called "Redirected Class B
Principal Collections") and shall apply Principal Collections in an amount equal
to such amount to the components of the Class A Required Amount as amounts are
applied to such components from Available Series 2000-1 Finance Charge
Collections pursuant to subsection 4.9(a) of the Agreement.
SECTION 4.15. Determination of LIBOR. (a) "LIBOR" shall mean,
as of any LIBOR Determination Date, the offered rate for deposits in United
States dollars for one month (commencing on the first day of the relevant
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 LIBOR
Determination Date will be determined on the basis of the rates at which
deposits in the United 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 interbank market for a period equal to one month (commencing
on the first day of the relevant 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 LIBOR
Determination Date will be the arithmetic mean of the quotations. If fewer than
two quotations are provided as requested, the rate for such LIBOR Determination
Date will be the arithmetic mean of the rates quoted 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 United States dollars to
leading European banks for a period equal to one month (commencing on the first
day of such Interest Accrual Period).
(b) On each LIBOR Determination Date, the Trustee shall send to the Servicer by
facsimile notification of LIBOR for such LIBOR Determination Date.
SECTION 4.16. Payment Reserve Account. (a) The Servicer shall
establish and maintain or cause to be established and maintained with a
Qualified Institution, which may be the Trustee, in the name of the Trustee, on
behalf of the Securityholders, the "Payment 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 Securityholders. 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 Reserve
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Securityholders. If, at any time, the institution holding the
Payment Reserve Account ceases to be a Qualified Institution, the Trustee shall
within 10 Business Days establish a new Payment Reserve Account meeting the
conditions 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 on any Business Day withdraw all or a
part of any amounts then on deposit in the Payment Reserve Account and apply
such funds as Available Series 2000-1 Finance Charge Collections in accordance
with Section 4.9(a) of the Agreement.
(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 application as Available Series
2000-1 Finance Charge Collections.
SECTION 4.17. Principal Funding Account. (a) The Servicer
shall establish and maintain or cause to be established and maintained with a
Qualified Institution, which may be the Trustee, in the name of the Trustee, on
behalf of the Securityholders, the "Principal Funding 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 Series 2000-1 Securityholders. The
Trustee shall possess all right, title and interest in all funds on deposit from
time to time in the Principal Funding Account and in all proceeds thereof. The
Principal Funding Account shall be under the sole dominion and control of the
Trustee for the benefit of the Series 2000-1 Securityholders. If, at any time,
the institution holding the Principal Funding Account ceases to be a Qualified
Institution, the Trustee shall within 10 Business Days establish a new Principal
Funding Account meeting the conditions specified above with a Qualified
Institution, and shall transfer any cash or any investments to such new
Principal Funding Account. From the date such new Principal Funding Account is
established, it shall be the "Principal Funding Account." The Trustee, at the
written direction of the Servicer, shall (i) make withdrawals from the Principal
Funding Account from time to time, in the amounts and for the purposes set forth
in this Series Supplement, and (ii) on each Transfer Date (from and after the
commencement of the Accumulation Period) prior to termination of the Principal
Funding Account make a deposit into the Principal Funding Account in the amount
specified in, and otherwise in accordance with, subsection 4.12(a) of the
Agreement.
(b) Funds on deposit in the Principal Funding Account shall be invested by the
Trustee at the direction of the Servicer in Cash Equivalents maturing no later
than the following Transfer Date. On the Transfer Date occurring in the month
following the commencement of the Accumulation Period and on each Transfer Date
thereafter with respect to the Accumulation Period, the Trustee, at the
Servicer's written direction, shall transfer from the Principal Funding Account
to the Collection Account the Principal Funding Account Investment Proceeds on
deposit in the Principal Funding Account, but not in excess of the Covered
Amount, and shall apply such amount as if such amounts were Available Series
2000-1 Finance Charge Collections available to be applied pursuant to subsection
4.9(a) on the last Business Day of the preceding Monthly Period. Principal
Funding Account Investment Proceeds (including reinvested interest) shall not be
considered part of the amounts on deposit in the Principal Funding Account for
purposes of this Series Supplement.
SECTION 4.18. Accumulation Period Reserve Account. (a) The
Servicer shall establish and maintain or cause to be established and maintained
with a Qualified Institution, which may be the Trustee, in the name of the
Trustee, on behalf of the Securityholders, the "Accumulation Period 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
Series 2000-1 Securityholders. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Accumulation Period
Reserve Account and in all proceeds thereof. The Accumulation Period Reserve
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Series 2000-1 Securityholders. If, at any time, the institution
holding the Accumulation Period Reserve Account ceases to be a Qualified
Institution, the Trustee shall within 10 Business Days establish a new
Accumulation Period Reserve Account meeting the conditions specified above with
a Qualified Institution, and shall transfer any cash or any investments to such
new Accumulation Period Reserve Account. From the date such new Accumulation
Period Reserve Account is established, it shall be the "Accumulation Period
Reserve Account." The Trustee, at the written direction of the Servicer, shall
(i) make withdrawals from the Accumulation Period Reserve Account from time to
time, in the amounts and for the purposes set forth in this Series Supplement,
and (ii) on each Transfer Date (from and after the Reserve Account Funding Date)
prior to termination of the Accumulation Period Reserve Account make a deposit
into the Accumulation Period Reserve Account in the amount specified in, and
otherwise in accordance with, subsection 4.9(a)(x) of the Agreement.
(b) Funds on deposit in the Accumulation Period Reserve Account shall be
invested by the Trustee at the direction of the Servicer in Cash Equivalents
maturing no later than the following Transfer Date. The interest and other
investment income (net of investment expenses and losses) earned on such
investments will be retained in the Accumulation Period Reserve Account (to the
extent the amount on deposit therein is less than the Required Reserve Account
Amount) or deposited in the Collection Account and treated as Investment
Proceeds for application as Available Series 2000-1 Finance Charge Collections
available to be applied pursuant to subsection 4.9(a) on the last Business Day
of the preceding Monthly Period.
(c) On or before each Transfer Date with respect to the Accumulation Period and
on the first Transfer Date with respect to the Early Amortization Period, the
Trustee at the direction of the Servicer shall withdraw from the Accumulation
Period Reserve Account, up to the Available Reserve Account Amount, an amount
equal to the excess of the Covered Amount for the related Interest Accrual
Period over the Principal Funding Account Investment Proceeds with respect to
such Transfer Date, and the amount of such withdrawal shall be applied as if
such amount were Available Series 2000-1 Finance Charge Collections available to
be applied pursuant to subsection 4.9(a) on the last Business Day of the
preceding Monthly Period.
(d) The Accumulation Period Reserve Account shall be terminated following the
earliest to occur of (a) the termination of the Trust pursuant to the Agreement,
(b) the date on which the Class A Invested Amount is paid in full, (c) if the
Accumulation Period has not commenced, the occurrence of a Pay Out Event with
respect to the Series 2000-1 Securities and (d) if the Accumulation Period has
commenced, the earlier of the first Transfer Date with respect to the Early
Amortization Period and the Class A Expected Final Payment Date. Upon the
termination of the Accumulation Period Reserve Account, all amounts on deposit
therein (after giving effect to any withdrawal from the Accumulation Period
Reserve Account on such date as described above) shall be applied as if they
were Available Series 2000-1 Finance Charge Collections available to be applied
pursuant to subsection 4.9(a) on the last Business Day of the preceding Monthly
Period.
SECTION 4.19. Postponement of Accumulation Period. The
Accumulation Period is scheduled to commence at the close of business on the
last day of the January 2004 Monthly Period; provided, however, that, if the
Accumulation Period Length (determined as described below) is less than 12
months, the date on which the Accumulation Period actually commences may, at the
option of the Servicer, upon written notice to the Trustee, be delayed to the
first Business Day of the month that is the number of months prior to the
Expected Final Payment Date at least equal to the Accumulation Period Length
and, as a result, the number of Monthly Periods in the Accumulation Period will
at least equal the Accumulation Period Length. On each Determination Date until
the Accumulation Period begins, the Servicer will determine the "Accumulation
Period Length" which will equal the number of months such that the sum of the
Accumulation Period Factors for each Monthly Period during such period will be
equal to or greater than the Required Accumulation Factor Number; provided,
however, that the Accumulation Period Length will not be less than one month.
SECTION 4.20. Defeasance. On the date that the following
conditions shall have been satisfied: (i) the Transferor shall have deposited
(x) in the Principal Funding Account, an amount such that the amount on deposit
in the Principal Funding Account following such deposit is equal to the Class A
Outstanding Principal Amount, (y) in the Principal Account, an amount equal to
the sum of the Class B Outstanding Principal Balance and Excess Collateral
Outstanding Principal Balance and (z) in the Accumulation Period Reserve
Account, an amount equal to or greater than the accrued and unpaid interest on
the Investor Securities through the day preceding the date on which the
Defeasance occurs; (ii) the Transferor shall have delivered to the Trustee (a)
an Opinion of Counsel to the effect that such deposit will not result in the
Trust being required to register as an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, (b) an Opinion of Counsel to
the effect that following such deposit none of the Trust, the Accumulation
Period Reserve Account or the Principal Funding Account will be deemed to be an
association (or publicly traded partnership) taxable as a corporation, (c) a
certificate of an officer of the Transferor stating that the Transferor
reasonably believes that such deposit will not cause a Pay Out Event or any
event that, with the giving of notice or the lapse of time, or both, would
constitute a Pay Out Event, to occur; and (iii) a Ratings Event will not occur,
the Series 2000-1 Securities will no longer be entitled to the security interest
of the Trust in the Receivables and, except those set forth in clause (i) above,
other Trust assets and the percentages applicable to the allocation to the
Series 2000-1 Securityholders of Principal Collections, Finance Charge
Collections and Defaulted Receivables will be reduced to zero.
Section 7. Article V of the Agreement. Article V of the Agreement shall read in
its entirety as follows and shall be applicable only to the Series 2000-1
Securities:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
SECURITYHOLDERS
SECTION 5.1. Distributions. (a) On each Distribution Date, the
Paying Agent shall distribute (in accordance with the Settlement Statement
delivered by the Servicer to the Trustee and the Paying Agent pursuant to
subsection 3.4(c)) to each Class A Securityholder 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 Securityholder's pro rata share (based on
the aggregate Undivided Interests represented by each Class A Security held by
such Securityholder) of amounts on deposit in the Distribution Account as are
payable to each Class A Securityholder pursuant to Sections 4.11 and 4.12 of the
Agreement by check mailed to each Class A Securityholder at such
Securityholder's address as it appears on the Security Register or, in the case
of Class A Securityholders holding Class A Securities evidencing not less than
80% of the Class A Invested Amount, by wire transfer, at the expense of such
Class A Securityholder, to an account or accounts designated by such Class A
Securityholder 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 A Securities will be made only upon
presentation and surrender of the Class A Securities at the office or offices
specified in the notice of such final distribution delivered by the Trustee
pursuant to Section 12.3 of the Agreement.
(b) On each Distribution Date, the Paying Agent shall distribute (in accordance
with the Settlement Statement delivered by the Servicer to the Trustee and the
Paying Agent pursuant to subsection 3.4(c) of the Agreement) to each Class B
Securityholder of record other than the Transferor on the preceding Record Date
(other than as provided in subsection 2.4(e) of the Agreement or in Section 12.3
of the Agreement respecting a final distribution) such Securityholder's pro rata
share (based on the aggregate Undivided Interests represented by Class B
Securities held by such Securityholder) of amounts on deposit in the
Distribution Account as are payable to each Class B Securityholder pursuant to
Sections 4.11 and 4.12 of the Agreement by check mailed to each Class B
Securityholder at such Securityholder's address as it appears on the Security
Register or, in the case of Class B Securityholders holding Class B Securities
evidencing Undivided Interest aggregating not less than 80% of the Invested
Amount, by wire transfer, at the expense of such Class B Securityholder, to an
account or accounts designated by such Class B Securityholder 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 B Securities will be made only upon presentation and surrender of the
Class B Securities at the office or offices specified in the notice of such
final distribution delivered by the Trustee pursuant to Section 12.3 of the
Agreement.
SECTION 5.2. Securityholders' Statement. (a) On the twentieth
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 Securityholder
and the Rating Agencies a statement substantially in the form of Exhibit B
prepared by the Servicer and delivered to the Trustee and the Paying Agent on
the preceding Determination Date setting forth the following information (which,
in the case of (i), (ii) and (iii) below, shall be stated on the basis of an
original principal amount of $1,000 per Security and, in the case of (ix) and
(x), shall be stated on an aggregate basis and on the basis of an original
principal amount of $1,000 per Security):
(i) the total amount distributed;
(ii) the amount of such distribution allocable to Class A Principal, Class B
Principal and Excess Collateral Monthly Principal;
(iii) the amount of such distribution allocable to Class A Monthly Interest
and Carryover Class A Monthly Interest Class B Monthly Interest and
Carryover Class B Monthly Interest and Excess Collateral Minimum
Monthly Interest and Carryover Excess Collateral Minimum Interest;
(iv) the amount of Principal Collections received in the Collection Account
during the preceding Monthly Period and allocated in respect of the
Class A Securities, the Class B Securities and the Excess Collateral,
respectively;
(v) the amount of Finance Charge Collections processed during the preceding
Monthly Period and allocated in respect of the Class A Securities, the
Class B Securities and the Excess Collateral, respectively, and the
amount of Principal Funding Account Investment Proceeds and investment
earnings on amounts on deposit in the Accumulation Period Reserve
Account;
(vi) the aggregate amount of Principal Receivables, the Invested Amount, the
Class A Invested Amount, the Class B Invested Amount, the Excess
Collateral Amount, the Floating Percentage and, during the Amortization
Period, the Fixed/Floating Percentage, 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 Series Default Amount for the preceding Monthly Period;
(ix) the aggregate amount of Class A Charge-Offs, Class B Charge-Offs and
Excess Collateral Charge-Offs for the preceding Monthly Period;
(x) the amount of the Servicing Fee for the preceding Monthly Period;
(xi) the amount of unreimbursed Redirected Class B Principal Collections and
Redirected Excess Collateral Principal Collections for the related
Monthly Period;
(xii) the aggregate amount of funds in the Excess Funding Account as of the
last day of the Monthly Period immediately preceding the Distribution
Date;
(xiii) the number of new Accounts the Receivables in which have been added to
the Trust during the related Monthly Period;
(xiv) the Portfolio Yield for the related Monthly Period;
(xv) the Base Rate for the related Monthly Period;
(xvi) the Principal Funding Account Balance on the related Transfer Date;
(xvii) the Accumulation Shortfall;
(xviii) the scheduled date for the commencement of the Accumulation Period and
the Accumulation Period Length;
(xix) the amount of Principal Funding Account Investment Proceeds deposited
in the Collection Account on the related Transfer Date, the Required
Reserve Account Amount and the Available Reserve Account Amount as of
the related Transfer Date, and the Covered Amount for the related
Interest Accrual Period; and
(xx) the Aggregate Interest Rate Caps Notional Amount and the amount
deposited in the Cap Proceeds Account during the related Monthly
Period.
(b) Annual Securityholders' Tax Statement. On or before January 31 of each
calendar year, beginning with calendar year 2001, the Paying Agent shall
distribute to each Person who at any time during the preceding calendar year was
a Series 2000-1 Securityholder, a statement prepared by the Servicer containing
the information required to be contained in the regular report to Series 2000-1
Securityholders, 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 2000-1 Securityholder, together with, on or before
January 31 of each year, beginning in 2001, such other customary information
(consistent with the treatment of the Series 2000-1 Securities as debt) as the
Trustee or the Servicer deems necessary or desirable to enable the Series 2000-1
Securityholders 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 8. Series 2000-1 Pay Out Events. If any one of the following
events shall occur with respect to the Series 2000-1 Securities:
(a) failure on the part of the Transferor (i) to make any payment or deposit
required to be made by the Transferor by the terms of the Agreement or 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 perform 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 failure has a material adverse effect on the Series 2000-1
Securityholders and which continues unremedied for a period of sixty 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 2000-1 Securities evidencing
Undivided Interests aggregating not less than 50 percent of the Invested Amount
and continues to affect materially and adversely the interests of the Series
2000-1 Securityholders for such period;
(b) any representation or warranty made by the Transferor in the Agreement or
this Series Supplement, (i) shall prove to have been incorrect in any material
respect when made, which continues to be incorrect in any material respect for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Transferor by
the Trustee, or to the Transferor and the Trustee by the Holders of Series
2000-1 Securities evidencing Undivided Interests aggregating more than 50% of
the Invested Amount of this Series 2000-1, and (ii) as a result of which the
interests of the Series 2000-1 Securityholders are materially and adversely
affected and continue to be materially and adversely affected for such period;
provided, however, that a Series 2000-1 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 (or such longer period as the Trustee may
specify) 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 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 2000-1 Percentage of the sum of the total amount of
Principal Receivables plus amounts on deposit in the Excess Funding Account
shall be less than the sum of the Class A Outstanding Principal Amount, the
Class B Outstanding Principal Amount and the Excess Collateral Outstanding
Principal Amount, (iii) the total amount of Principal Receivables and the
amounts on deposit in the Excess Funding Account, the Principal Account and the
Principal Funding Account shall be less than the Minimum Aggregate Principal
Receivables or (iv) the Retained Percentage shall be equal to or less than 2%,
in each case as of any Determination Date;
(e) any Servicer Default shall occur which would have a material adverse
effect on the Series 2000-1 Securityholders; or
(f) failure of any Cap Provider to make any payment under an Interest Rate Cap
within 30 days of the date such payment was due; 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 2000-1 Securities
evidencing Undivided Interests aggregating more than 50% of the Invested Amount
of this Series 2000-1, by notice then given in writing to the Trustee, the
Transferor and the Servicer may declare that a pay out event (a "Series 2000-1
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 2000-1 Pay Out
Event shall occur without any notice or other action on the part of the Trustee
or the Series 2000-1 Securityholders immediately upon the occurrence of such
event.
Section 9. Series 2000-1 Termination. The right of the Series 2000-1
Securityholders to receive payments from the Trust will terminate on the first
Business Day following the Series 2000-1 Termination Date unless such Series is
an Affected Series as specified in Section 12.1(c) of the Agreement and the sale
contemplated therein has not occurred by such date, in which event the Series
2000-1 Securityholders shall remain entitled to receive proceeds of such sale
when such sale occurs.
Section 10. Legends; Transfer and Exchange; Restrictions on Transfer of Class A
Securities and Class B Securities. (a) Each Class A Security and Class B
Security that is a Global Security deposited with DTC, or a custodian on behalf
of DTC, shall bear the following legend, substantially in the following form:
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
(b) Each Class A Security and Class B Security will bear a legend substantially
in the following form:
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF
METRIS RECEIVABLES, INC. AND THE TRUSTEE 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
(THE "CODE") THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (III) A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO
THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE,
(IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS (AS DEFINED
IN 29 C.F.R. SECTION 2510.3-101 OR OTHERWISE UNDER ERISA) BY REASON OF
A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING PLAN ASSETS
OF ANY SUCH PLAN (INCLUDING WITHOUT LIMITATION, FOR PURPOSES OF CLAUSE
(IV) AND THIS CLAUSE (V), AS APPLICABLE, AN INSURANCE COMPANY GENERAL
ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED).
Section 11. Transfers of the Excess Collateral.
(a) Unless otherwise consented to by the Transferor, no portion of the Excess
Collateral or any interest therein may be sold, conveyed, assigned,
hypothecated, pledged, participated, exchanged or otherwise transferred (each, a
"Transfer") except in accordance with this Section 11 and only to a Permitted
Assignee. Any attempted or purported transfer, assignment, exchange, conveyance,
pledge, hypothecation or grant other than to a Permitted Assignee shall be void.
Unless otherwise consented to by the Transferor, no portion of the Excess
Collateral or any interest therein may be Transferred to any Person (each such
Person acquiring the Excess Collateral or any interest therein, an "Assignee")
unless such Assignee shall have executed and delivered to the Transferor on or
before the effective date of any Transfer a letter substantially in the form
attached hereto as Exhibit C (an "Investment Letter"), executed by such
Assignee, with respect to the related Transfer to such Assignee of all or a
portion of the Excess Collateral.
(b) Each Assignee will certify that the Excess Collateral or the interest
therein purchased by such Assignee will be acquired for investment only and not
with a view to any public distribution thereof, and that such Assignee will not
offer to sell or otherwise dispose of the Excess Collateral or any interest
therein so acquired by it in violation of any of the registration requirements
of the Securities Act, or any applicable state or other securities laws. Each
Assignee will acknowledge and agree that (i) it has no right to require the
Transferor to register under the Securities Act or any other securities law the
Excess Collateral or the interest therein to be acquired by the Assignee and
(ii) the sale of the Excess Collateral is not being made by means of the
Prospectus. Each Assignee will agree with the Transferor that: (a) such Assignee
will deliver to the Transferor on or before the effective date of any Transfer a
letter in the form annexed hereto as Exhibit C (an "Investment Letter"),
executed by such Assignee with respect to the purchase by such Assignee of all
or a portion of the Excess Collateral and (b) all of the statements made by such
Assignee in its Investment Letter shall be true and correct as of the date made.
(c) No portion of the Excess Collateral or any interest therein may be
Transferred to, and each Assignee will certify that it is not, (a) an "employee
benefit plan" (as defined in Section 3(3) of ERISA), including governmental
plans and church plans, (b) any "plan" (as defined in Section 4975(e)(1) of the
Code) including individual retirement accounts and Xxxxx plans, or (c) any other
entity whose underlying assets include "plan assets" (within the meaning of
Department of Labor Regulation Section 2510.3-101, 29 C.F.R. ss. 2510.3-101 or
otherwise under ERISA) by reason of a plan's investment in the entity,
including, without limitation, an insurance company general account.
Section 12. Ratification of Agreement. As supplemented by this Series
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Series Supplement shall be read, taken, and
construed as one and the same instrument. The Transferor hereby confirms the
conveyance of the Trust Property to the Trustee for the benefit of the Series
2000-1 Securityholders.
SECTION 13. [Reserved].
Section 14. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which so executed shall Be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
Section 15. GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 16. 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 17. Amendment for FASIT Purposes. Each Series 2000-1 Securityholder, by
acquiring an interest in a Series 2000-1 Security, is deemed to consent to any
amendment to the Agreement or this Series Supplement necessary for the
Transferor to elect for the Trust or any portion thereof to be treated as a
financial asset securitization investment trust ("FASIT") within the meaning of
Section 860L of the Internal Revenue Code (or any successor provision thereto),
provided, that such election may not be made unless the Transferor delivers an
opinion to the Trustee and the Servicer to the effect that such election will
not adversely affect the Federal or Applicable Tax State income tax
characterization of any outstanding Series of Investor Securities or the
taxability of the Trust under Federal or Applicable Tax State income tax laws.
Section 18. Paired Series. Subject to obtaining confirmation by each Rating
Agency of the then existing ratings of each class of Securities which is then
rated, and prior to the commencement of the Early Amortization Period, the
Series 2000-1 Securities may be paired with one or more other Series (each a
"Paired Series"). Each Paired Series either will be pre-funded with an initial
deposit to a pre-funding account in an amount up to the initial principal
balance of such Paired Series and primarily from the proceeds of the sale of
such Paired Series or will have a variable principal amount. Any such
pre-funding account will be held for the benefit of such Paired Series and not
for the benefit of the Securityholders. As principal is deposited in the
Principal Account or the Principal Funding Account or is paid with respect to
the Series 2000-1 Securities, either (i) in the case of a pre-funded Paired
Series, an equal amount of funds on deposit in any pre-funding account for such
pre-funded Paired Series will be released (which funds will be distributed to
the Transferor) or (ii) in the case of a Paired Series having a variable
principal amount, an interest in such variable Paired Series in an equal or
lesser amount may be sold by the Trust (and the proceeds thereof will be
distributed to the Transferor) and, in either case, the invested amount in the
Trust of such Paired Series will increase by up to a corresponding amount. Upon
payment in full of the Series 2000-1 Securities, assuming that there have been
no unreimbursed charge-offs with respect to any related Paired Series, the
aggregate invested amount of such related Paired Series will have been increased
by an amount up to an aggregate amount equal to the Invested Amount paid to the
Securityholders since the issuance of such Paired Series. The issuance of a
Paired Series will be subject to the conditions described in subsection 6.9(b)
of the Agreement.
Section 19. Third Party Beneficiaries. The Agreement as supplemented by
this Series Supplement shall inure to the benefit of and be binding upon the
parties hereto, the Securityholders and their respective successors and
permitted assigns.
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have caused
this Series 2000-1 Supplement to be duly executed by their respective officers
as of the day and year first above written.
METRIS RECEIVABLES, INC.
Transferor
By: /s/
Name: Xxxx Xxxxxx
Title: Senior Vice President and Treasurer
DIRECT MERCHANTS CREDIT CARD BANK,
NATIONAL ASSOCIATION
Servicer
By: /s/
Name: Xxxx X. Xxxxxx
Title: Chief Financial Officer and Controller
THE BANK OF NEW YORK (DELAWARE)
Trustee
By: /s/
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
Exhibit A-1
FORM OF CLASS A INVESTOR SECURITY
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO. HAS AN INTEREST HEREIN.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF
METRIS RECEIVABLES, INC. AND THE TRUSTEE 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
(THE "CODE") THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (III) A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO
THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE,
(IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS (AS DEFINED
IN 29 C.F.R. SECTION 2510.3-101 OR OTHERWISE UNDER ERISA) BY REASON OF
A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING PLAN ASSETS
OF ANY SUCH PLAN (INCLUDING WITHOUT LIMITATION, FOR PURPOSES OF CLAUSE
(IV) AND THIS CLAUSE (V), AS APPLICABLE, AN INSURANCE COMPANY GENERAL
ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED).
No. $
CUSIP NO. 00000XXX0
METRIS MASTER TRUST
FLOATING RATE ASSET BACKED
SECURITY, SERIES 2000-1, 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 revolving consumer credit card accounts
transferred or to be transferred by Metris Receivables, Inc. (the "Transferor")
and other assets and interests constituting the Trust under the Agreement
described below.
(Not an interest in or a recourse obligation of Metris
Receivables, Inc., Direct Merchants Credit Card Bank, National Association or
any affiliate of either of them.)
This certifies that (the "Securityholder") is the registered
owner of a fractional undivided interest in the Metris Master Trust (the
"Trust") issued pursuant to the Amended and Restated Pooling and Servicing
Agreement, dated as of July 30, 1998 (the "Pooling and Servicing Agreement";
such term to include any amendment thereto) by and between the Transferor,
Direct Merchants Credit Card Bank, National Association, as Servicer (the
"Servicer"), and The Bank of New York (Delaware) as Trustee (the "Trustee"), and
the Series 2000-1 Supplement, dated as of March 20, 2000 (the "Series 2000-1
Supplement"), among the Transferor, the Servicer and the Trustee. The Pooling
and Servicing Agreement, as supplemented by the Series 2000-1 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 the Trust
Property (as defined in the Agreement).
This Security does not purport to summarize the Agreement and
reference is made to that Agreement for information with respect to the
interests, rights, benefits, 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 Security is one of a series of Securities entitled "Metris
Master Trust Floating Rate Asset Backed Securities, Series 2000-1, Class A" (the
"Class A Securities"), each of which represents 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 Securityholder by virtue of the acceptance hereof assents and by which the
Securityholder is bound.
The Transferor has structured the Agreement, the Class A
Securities, the Metris Master Trust Floating Rate Asset Backed Securities,
Series 2000-1, Class B (the "Class B Securities" and collectively with the Class
A Securities, the "Offered Securities") with the intention that the Offered
Securities will qualify under applicable tax law as indebtedness, and both the
Transferor and each holder of a Class A Security (a "Class A Securityholder") or
any interest therein by acceptance of its Securities or any interest therein,
agrees to treat the Class A Securities 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 A Securityholders
until the earlier of the Class A Expected Final Payment Date and, upon the
occurrence of a Pay Out Event, the Distribution Date following the Monthly
Period in which the Pay Out Event occurs. No principal will be payable to the
Class B Securityholders until all principal payments have been made to the Class
A Securityholders.
Interest on the Class A Securities will be payable on April 20, 2000 and on the
20th day of each month thereafter or, if such day is not a business day, on the
next succeeding business day (each, a "Distribution Date"), in an amount equal
to the product of (i) the Class A Interest Rate, (ii) 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 and (iii) the outstanding principal balance of
the Class A Securities as of the close of business on the first day of such
Interest Accrual Period.
Interest payments on the Class A Securities on each
Distribution Date will be funded from Available Series 2000-1 Finance Charge
Collections with respect to the preceding Monthly Period and from certain other
funds allocated as set forth in the Pooling and Servicing Agreement to the
respective classes of the Series 2000-1 Securities and deposited on each
business day during such Monthly Period in the Interest Funding Account.
"Class A Invested Amount" shall mean, when used with respect
to any Business Day, the greater of (x) zero and (y) an amount equal to (a) the
Class A Initial Invested Amount minus (b) the aggregate amount of principal
payments made to Class A Securityholders through and including such Business
Day, minus (c) the aggregate amount of Class A Charge-Offs for all prior
Distribution Dates, plus (d) the sum of the aggregate amount reimbursed with
respect to reductions of the Class A Invested Amount through and including such
Business Day pursuant to subsection 4.9(a)(vii) of the Agreement plus, with
respect to such subsection, amounts applied thereto pursuant to subsections
4.10(a) and (b), 4.14(a) and (b), 4.17(b) and 4.18(b), (c) and (d) of the
Agreement, for the purpose of reimbursing amounts deducted pursuant to the
foregoing clause (c).
Subject to the Agreement, payments of principal are limited to
the unpaid Class A Invested Amount of the Class A Securities, which may be less
than the unpaid balance of the Class A Securities pursuant to the terms of the
Agreement. All principal on the Class A Securities is due and payable no later
than the August 2008 Distribution Date (or if such day is not a Business Day,
the next succeeding Business Day) (the "Scheduled Series 2000-1 Termination
Date"). After the earlier to occur of (i) the Scheduled Series 2000-1
Termination Date and (ii) the day after the Distribution Date on which the
Series 2000-1 Securities are paid in full (the "Series 2000-1 Termination Date")
neither the Trust nor the Transferor will have any further obligation to
distribute principal or interest on the Class A Securities. In the event that
the Class A Invested Amount is greater than zero on the Series 2000-1
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 and the Excess Collateral Amount at the close of business on such date
(but not more than the total amount of Receivables allocable to the Investor
Securities), and shall pay the proceeds to the Class A Securityholders pro rata
in final payment of the Class A Securities, then to the Class B Securityholders
pro rata in final payment of the Class B Securities and then to the Excess
Collateral Holder pro rata in final payment of the Excess Collateral.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Security
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Transferor has caused this Security to
be duly executed.
METRIS RECEIVABLES, INC.
By:
Name:
Title:
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Securities referred to in the
within-mentioned Pooling and Servicing Agreement.
THE BANK OF NEW YORK
By:
Name:
Title:
Exhibit A-2
FORM OF CLASS B INVESTOR SECURITY
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF
METRIS RECEIVABLES, INC. AND THE TRUSTEE 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 (THE "CODE") THAT IS SUBJECT TO
SECTION 4975 OF THE CODE, (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32)
OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL
EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS (AS DEFINED IN
29 C.F.R. SECTION 2510.3-101 OR OTHERWISE UNDER ERISA) BY REASON OF A PLAN'S
INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING PLAN ASSETS OF ANY SUCH PLAN
(INCLUDING WITHOUT LIMITATION, FOR PURPOSES OF CLAUSE (IV) AND THIS CLAUSE (V),
AS APPLICABLE, AN INSURANCE COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
No. $
CUSIP NO. 00000XXX0
METRIS MASTER TRUST
FLOATING RATE ASSET BACKED
SECURITY, SERIES 2000-1, 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 revolving consumer credit card accounts
transferred or to be transferred by Metris Receivables, Inc. (the "Transferor")
and other assets and interests constituting the Trust under the Agreement
described below.
(Not an interest in or a recourse obligation of Metris
Receivables, Inc., Direct Merchants Credit Card Bank, National Association or
any affiliate of either of them.)
This certifies that _______________________ (the
"Securityholder") is the registered owner of a fractional undivided interest in
the Metris Master Trust (the "Trust") issued pursuant to the Amended and
Restated Pooling and Servicing Agreement, dated as of July 30, 1998 (the
"Pooling and Servicing Agreement"; such term to include any amendment or
Supplement thereto) by and between the Transferor, Direct Merchants Credit Card
Bank, National Association, as Servicer (the "Servicer"), and The Bank of New
York (Delaware), as Trustee (the "Trustee"), and the Series 2000-1 Supplement,
dated as of March 20, 2000 (the "Series 2000-1 Supplement"), among the
Transferor, the Servicer and the Trustee. The Pooling and Servicing Agreement,
as supplemented by the Series 2000-1 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 the Trust Property (as defined in the
Agreement).
This Security does not purport to summarize the Agreement and
reference is made to that Agreement for information with respect to the
interests, rights, benefits, 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 Securities is one of a series of Securities entitled "Metris
Master Trust Floating Rate Asset Backed Securities, Series 2000-1, Class B" (the
"Class B Securities"), each of which represents 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 Securityholder by virtue of the acceptance hereof assents and by which the
Securityholder is bound.
The Transferor has structured the Agreement, the Class B
Securities, the Metris Master Trust Floating Rate Asset Backed Securities,
Series 2000-1, Class A (the "Class A Securities" and collectively with the Class
B Securities, the "Offered Securities") with the intention that the Offered
Securities will qualify under applicable tax law as indebtedness, and both the
Transferor and each holder of a Class B Security (a "Class B Securityholder") or
any interest therein by acceptance of its Securities or any interest therein,
agrees to treat the Class B Securities 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 Securityholders
until the earlier of the Class B Expected Final Payment Date and, upon the
occurrence of a Pay Out Event, the Distribution Date following the Monthly
Period in which the Pay Out Event occurs but in no event earlier than the
Distribution Date either on or following the Distribution Date on which Class A
Invested Amount has been paid in full. No principal will be payable to the Class
B Securityholders until all principal payments have first been made to the Class
A Securityholders.
"Class B Invested Amount" shall mean, when used with respect
to any Business Day, the greater of (x) zero and (y) an amount equal to (a) the
Class B Initial Invested Amount, minus (b) the aggregate amount of principal
payments made to Class B Securityholders through and including such Business
Day, minus (c) the aggregate amount of Class B Charge-Offs for all prior
Distribution Dates, minus (d) the aggregate amount of Redirected Class B
Principal Collections for which the Excess Collateral Amount has not been
reduced for all prior Distribution Dates plus (e) the sum of the aggregate
amount reimbursed with respect to reductions of the Class B Invested Amount
through and including such Business Day pursuant to subsection 4.9(a)(viii) of
the Agreement plus, with respect to such subsection, amounts applied thereto
pursuant to subsections 4.10(a) and (b), 4.17(b) and 4.18(b), (c) and (d) of the
Agreement, for the purpose of reimbursing amounts deducted pursuant to the
foregoing clauses (c) and (d).
Subject to the Agreement, payments of principal are limited to
the unpaid Class B Invested Amount of the Class B Securities, which may be less
than the unpaid balance of the Class B Securities pursuant to the terms of the
Agreement. All principal on the Class B Securities is due and payable no later
than the August 2008 Distribution Date (or if such day is not a Business Day,
the next succeeding Business Day) (the "Scheduled Series 2000-1 Termination
Date"). After the earlier to occur of (i) the Scheduled Series 2000-1
Termination Date or (ii) the day after the Distribution Date on which the Series
2000-1 Securities are paid in full (the "Series 2000-1 Termination Date")
neither the Trust nor the Transferor will have any further obligation to
distribute principal or interest on the Class B Securities. In the event that
the Class B Invested Amount is greater than zero on the Series 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 and the Excess Collateral
Amount at the close of business on such date (but not more than the total amount
of Receivables allocable to the Investor Securities), and shall pay the proceeds
to the Class A Securityholders pro rata in final payment of the Class A
Securities, then to the Class B Securityholders pro rata in final payment of the
Class B Securities and then to the Excess Collateral Holder pro rata in final
payment of the Excess Collateral.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Security
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Transferor has caused this Security to
be duly executed.
METRIS RECEIVABLES, INC.
By:
Name:
Title:
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Securities referred to in the within-mentioned
Pooling and Servicing Agreement.
THE BANK OF NEW YORK
By:
Name:
Title:
EXHIBIT B
Metris Receivables, Inc. Metris Master Trust Monthly Report
Securityholders' Statement Series 2000-1 Month-Year
Section 5.2 Class A Class B Total
(i) Outstanding Principal Amount
(ii) Security Principal Distributed
(iii) Security Interest Distributed
(iv) Principal Collections
(v) Finance Charge Collections
Recoveries
Initial Interest Funding Account Deposit
Interest Earned on Accounts
Total Finance Charge Collections
Total Collections
(vi) Aggregate Amount of Principal Receivables
Invested Amount (End of Month)
Floating Allocation Percentage
Fixed/Floating Allocation Percentage
Invested Amount (Beginning of Month)
Average Daily Invested Amount
(vii) Receivable Delinquencies (As a % of Total
Receivables)
Current
30 Days to 59 Days
(1 to 29 Days Contractually Delinquent)
60 Days to 89 Days
(30 to 59 Days Contractually Delinquent)
90 Days and Over
(60+ Days Contractually Delinquent)
Total Receivables
(viii) Aggregate Investor Default Amount
As a % of Average Daily Invested Amount
(Annualized based on 365 days/year)
(ix) Charge-Offs
(x) Servicing Fee
(xi) Unreimbursed Redirected Principal Collections
(xii) Excess Funding Account Balance
(xiii) New Accounts Added
(xiv) Average Gross Portfolio Yield
Average Net Portfolio Yield
(xv) Minimum Base Rate
Excess Spread
(xvi) Principal Funding Account Balance
(xvii) Accumulation Shortfall
(xviii)Scheduled date for the commencement
of the Accumulation Period
Accumulation Period Length
(xix) Principal Funding Account Investment
Proceeds Deposit
Required Reserve Account Amount
Available Reserve Account Amount
Covered Amount
(xx) Aggregate Interest Rate Caps Notional Amount
Deposit to the Caps Proceeds Account
EXHIBIT C
FORM OF INVESTMENT LETTER
[Date]
Re Metris Master Trust;
Purchases of Series 2000-1 Excess Collateral
Ladies and Gentlemen:
This letter (the "Investment Letter") is delivered by the
undersigned (the "Purchaser") pursuant to Section 11 of the Series 2000-1
Supplement dated as of[________ __], 2000 (the "Series Supplement") to the
Amended and Restated Pooling and Servicing Agreement dated as of July 30, 1998
(as amended and supplemented, the "Agreement"), each among The Bank of New York
(Delaware), as Trustee, Direct Merchants Credit Card Bank, National Association,
as Servicer and Metris Receivables, Inc., as Transferor. Capitalized terms used
herein without definition shall have the meanings set forth in the Agreement.
The Purchaser represents to and agrees with the Transferor as follows:
(a) The Purchaser has such knowledge and experience in
financial and business matters as to be capable of evaluating the
merits and risks of its investment in the Excess Collateral and is able
to bear the economic risk of such investment.
(b) The Purchaser is an "accredited investor", as defined in
Rule 501, promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), or is a sophisticated institutional investor. The
Purchaser understands that the offering and sale of the Excess
Collateral has not been and will not be registered under the Securities
Act and has not and will not be registered or qualified under any
applicable "Blue Sky" law, and that the offering and sale of the Excess
Collateral has not been reviewed by, passed on or submitted to any
federal or state agency or commission, securities exchange or other
regulatory body.
(c) The Purchaser is acquiring an interest in the Excess
Collateral without a view to any distribution, resale or other transfer
thereof except, with respect to any Excess Collateral or any interest
or participation therein, as contemplated in the following sentence.
The Purchaser will not resell or otherwise transfer any interest or
participation in the Excess Collateral, except in accordance with
Section 11 of the Series Supplement and (i) in a transaction exempt
from the registration requirements of the Securities Act of 1933, as
amended, and applicable state securities or "blue sky" laws; (ii) to
the Transferor or any affiliate of the Transferor; or (iii) to a person
who the Purchaser reasonably believes is a qualified institutional
buyer (within the meaning thereof in Rule 144A under the Securities
Act) that is aware that the resale or other transfer is being made in
reliance upon Rule 144A. In connection therewith, the Purchaser hereby
agrees that it will not resell or otherwise transfer the Excess
Collateral or any interest therein unless the purchaser thereof
provides to the addressee hereof a letter substantially in the form
hereof.
(d) No portion of the Excess Collateral or any interest
therein may be Transferred, and each Assignee will certify that it is
not, (a) an "employee benefit plan" (as defined in Section 3(3) of
ERISA), including governmental plans and church plans, (b) any "plan"
(as defined in Section 4975(e)(1) of the Code) including individual
retirement accounts and Xxxxx plans, or (c) any other entity whose
underlying assets include "plan assets" (within the meaning of
Department of Labor Regulation Section 2510.3-101, 29 C.F.R. ss.
2510.3-101 or otherwise under ERISA) by reason of a plan's investment
in the entity, including, without limitation, an insurance company
general account.
(e) This Investment Letter has been duly executed and
delivered and constitutes the legal, valid and binding obligation of
the Purchaser, enforceable against the Purchaser in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable
principles affecting the enforcement of creditors' rights generally and
general principles of equity.
Very truly yours,
[NAME OF PURCHASER]
By:
Name:
Title
AGREED TO AS OF THE DATE
FIRST ABOVE WRITTEN:
METRIS RECEIVABLES, INC.
By:
Name:
Title:
TABLE OF CONTENTS
Section 1. Designation.........................................1
Section 2. Definitions.........................................2
Section 3. Reassignment Terms.................................17
Section 3A. Conveyance of Interest in Interest Rate Cap; Cap
Proceeds Account...................................17
Section 4. Delivery and Payment for the Class A Securities and
the Class B Securities.............................20
Section 5. Form of Delivery of the Class A Securities and the
Class B Securities; Denominations..................20
Section 6. Article IV of Agreement............................20
ARTICLE IV
RIGHTS OF SECURITYHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.4 Rights of Securityholders...............................20
Section 4.5. Collections and Allocation; Payments on
Exchangeable Transferor Security........................21
Section 4.6. Determination of Interest for the Series
2000-1 Securities.......................................21
Section 4.7. Determination of Principal Amounts......................23
Section 4.8. Shared Principal Collections............................23
Section 4.9. Application of Funds....................................23
Section 4.10. Coverage of Required Amount for the Series
2000-1 Securities.....................................29
Section 4.11. Payment of Interest on Class A Securities and
Class B Securities.....................................29
Section 4.12. Payment of Security Principal..........................30
Section 4.13. Series Charge-Offs.....................................31
Section 4.14. Redirected Principal Collections for the
Series 2000-1 Securities...............................31
Section 4.15. Determination of LIBOR.................................32
Section 4.16. Payment Reserve Account................................32
Section 4.17. Principal Funding Account..............................33
Section 4.18. Accumulation Period Reserve Account....................34
Section 4.19. Postponement of Accumulation Period....................35
Section 4.20. Defeasance.............................................35
Section 7. Article V of the Agreement.........................36
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR SECURITYHOLDERS
Section 5.1. Distributions...........................................36
Section 5.2. Securityholders' Statement..............................37
Section 8. Series 2000-1 Pay Out Events.......................39
Section 9. Series 2000-1 Termination..........................40
Section 10. Legends; Transfer and Exchange; Restrictions
on Transfer of Class A Securities and Class B
Securities.........................................40
Section 11. Transfers of the Excess Collateral.................41
Section 12. Ratification of Agreement..........................42
Section 13. [Reserved].........................................42
Section 14. Counterparts.......................................42
Section 15. GOVERNING LAW......................................42
Section 16. Instructions in Writing............................42
Section 17. Amendment for FASIT Purposes.......................42
Section 18. Paired Series......................................42
Section 19. Third Party Beneficiaries..........................43
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