EXHIBIT 4.1
METRIS RECEIVABLES, INC.
Transferor
DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION
Servicer
and
U.S. BANK NATIONAL ASSOCIATION
Trustee
on behalf of the Series 2001-1 Securityholders
AMENDED AND RESTATED SERIES 2001-1 SUPPLEMENT
Dated as of September 16, 2003
to
SECOND AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of January 22, 2002
METRIS MASTER TRUST
$454,972,000 Floating Rate Asset Backed
Securities, Series 2001-1, Class A
$80,884,000 Floating Rate Asset Backed
Securities, Series 2001-1, Class B
$138,177,149 Excess Collateral, Series 2001-1
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
AMENDED AND RESTATED SERIES 2001-1 SUPPLEMENT, dated as of
September 16, 2003 (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 U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as trustee (together with its
successors in trust thereunder as provided in the Agreement referred to below,
the "Trustee"), of the Metris Master Trust (the "Trust").
WHEREAS heretofore there was authorized and issued by the
Trust a Series of Investor Securities known generally as the "Series 2001-1
Securities" under an Amended and Restated Pooling and Servicing Agreement, dated
as of July 30, 1998, by and among the Transferor, the Servicer and The Bank of
New York (Delaware), as trustee (the "Prior Trustee") of the Trust (the
"Original Agreement"), as supplemented by the Series 2001-1 Supplement, dated as
of February 13, 2001 (the "Original Series Supplement"), executed in connection
with the issuance of the Series 2001-1 Securities, by and among the Transferor,
the Servicer and the Trustee;
WHEREAS the Transferor, the Servicer, the Prior Trustee and
the Trustee have entered into that certain Agreement of Resignation, Appointment
and Acceptance, dated as of December 11, 2000, pursuant to which the Trustee
assumed all of the rights and obligations of the Prior Trustee under the terms
of the Original Agreement;
WHEREAS the Transferor, the Servicer and the Trustee have
executed that certain Second Amended and Restated Pooling and Servicing
Agreement, dated as of January 22, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Agreement");
WHEREAS Section 4.20 of the Original Series Supplement
provides, among other things, that, upon satisfaction of the conditions
specified therein, the Series 2001-1 Securities will no longer be entitled to
the security interest of the Trustee in the Receivables and certain other Trust
Property and the percentages applicable to the allocation to the Series 2001-1
Securityholders of Principal Collections, Finance Charge Collections and
Receivables in Defaulted Accounts will be reduced to zero;
WHEREAS the Transferor has determined to defease the Series
2001-1 Securities in accordance with Section 4.20 of the Original Series
Supplement and on the terms and conditions set forth herein;
WHEREAS the Transferor, the Servicer and the Trustee have
agreed to amend and restate the Original Series Supplement on the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises and the
agreements contained herein, the parties hereto agree as follows:
Section 6.9 of the Agreement provides, among other things,
that the Transferor and the Trustee may at any time and from time to time enter
into a supplement to the Agreement for the purpose of authorizing the issuance
by the Trustee to the Transferor, for execution and redelivery to the Trustee
for authentication, of one or more Series of 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 2001-1 Securities." The Series 2001-1
Securities shall be issued in two Classes, which shall be designated generally
as the Floating Rate Asset Backed Securities, Series 2001-1, Class A (the "Class
A Securities"), and the Floating Rate Asset Backed Securities, Series 2001-1,
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 2001-1 (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 Investor
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 2001-1 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 2001-1 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 April 2002 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 2001-1 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 2001-1 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 2001-1
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 2001-1 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 2001-1 Finance Charge Collections" shall have the meaning
specified in subsection 4.9(a) of the Agreement.
"Available Series 2001-1 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 2001-1
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 2001-1
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 2001-1 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 January 2004
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; provided, however, that with
respect to any Business Day on and after the Defeasance Date, the numerator
specified above shall be zero.
"Class A Initial Invested Amount" shall mean the aggregate initial
principal amount of the Class A Securities, which is $454,972,000.
"Class A Interest Rate" shall mean 0.22% 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 the 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 2001-1
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 2001-1 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
2001-1 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 February 2004
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; provided, however, that with respect to any Business Day on and after
the Defeasance Date, the numerator specified above shall be zero.
"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; provided, however, that with respect to any Business Day
on and after the Defeasance Date, the numerator specified above shall be zero.
"Class B Initial Invested Amount" shall mean the aggregate initial
principal amount of the Class B Securities, which is $80,884,000.
"Class B Interest Rate" shall mean 0.80% 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 2001-1
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 2001-1 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
2001-1 Securityholders' Interest evidenced by the Class B Security.
"Closing Date" shall mean February 13, 2001.
"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, $22,748,600; provided, however, that if the Accumulation
Period Length is determined to be less than 20 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.
"Defeasance Date" shall mean September 16, 2003.
"Deposit Account Collateral" shall have the meaning specified in Section
20.
"Distribution Date" shall mean March 20, 2001 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 2001-1 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 Daily Principal" shall have the meaning specified in
subsection 4.7(c) of the Agreement.
"Excess Collateral Expected Final Payment Date" shall mean the February
2004 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; provided, however, that with respect to any Business Day on and after
the Defeasance Date, the numerator specified above shall be zero.
"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; provided, however, that with respect to any
Business Day on and after the Defeasance Date, the numerator specified above
shall be zero.
"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
2001-1 Securityholders' Interest evidenced by the Excess Collateral.
"Excess Collateral Initial Amount" shall mean the aggregate initial
principal amount of the Excess Collateral, which is $138,177,149.
"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 1.95% 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 53.66%.
"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 2001-1 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 2001-1 Securities.
"FASIT" shall have the meaning specified in Section 17 of this Series
Supplement.
"Fitch" shall mean Fitch, 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;
provided, however, that with respect to any Business Day on and after the
Defeasance Date, the numerator specified above shall be zero.
"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 $674,033,149.
"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 10.50%, (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 2001-1.
"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) February 9, 2001 with respect to
the period from the Closing Date through February 19, 2001 (ii) February 16,
2001 with respect to the period from February 20, 2001 through March 19, 2001,
and (iii) the second Business Day prior to the commencement of each Interest
Accrual Period beginning with the Interest Accrual Period commencing on March
20, 2001. 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 2001-1 Securities shall
begin on and include the Closing Date and shall end on and include February 28,
2001.
"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
2001-1 Pay Out Event is deemed to occur pursuant to Section 8 of this Series
Supplement.
"Paying Agent" shall mean, for the Series 2001-1 Securities, initially U.S.
Bank National Association and, in certain limited circumstances, Deutsche Bank
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 2001-1 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 2001-1 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 2001-1 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 2001-1 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, 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, 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
2001-1, (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 2001-1.
"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 2001-1 Termination Date" shall mean the December 2007
Distribution Date.
"Series 2001-1" shall mean the Series of the Metris Master Trust
represented by the Series 2001-1 Securities.
"Series 2001-1 Pay Out Event" shall have the meaning specified in Section 8
of this Series Supplement.
"Series 2001-1 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 2001-1 Securities" shall mean the Class A Securities, the Class B
Securities and the Excess Collateral.
"Series 2001-1 Securityholder" shall mean the holder of record of any
Series 2001-1 Security.
"Series 2001-1 Securityholders' Interest" shall have the meaning specified
in Section 4.4 of the Agreement.
"Series 2001-1 Termination Date" shall mean the earlier to occur of (i) the
day after the Distribution Date on which the Series 2001-1 Securities are paid
in full, or (ii) the Scheduled Series 2001-1 Termination Date. "Series Account
Collateral" shall have the meaning specified in Section 20.
"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 2001-1 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
2001-1 Securities.
"Stated Amount" shall mean, when used with respect to any date of
determination, an amount equal to the product of (i) 102% times (ii) the sum of
(a) the Class A Outstanding Principal Amount, (b) the Class B Outstanding
Principal Amount and (c) the outstanding principal amount of the notes issued by
the Metris Secured Note Trust 2001-1, which is $74,144,000 on the date hereof.
"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 2001-1 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 February 13, 2001, 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 2001-1 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 2001-1, the portion of the Excess
Collateral represented by the Owner Certificate in the Metris Secured Note Trust
2001-1 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. Reserved.
SECTION 3A. Reserved.
SECTION 4. Reserved.
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 have been 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 have been 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 2001-1
Securities:
ARTICLE IV
RIGHTS OF SECURITYHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.4. Rights of Securityholders. On and after the Defeasance Date,
the Series 2001-1 Securities will no longer be entitled to the security interest
of the Trustee in the Receivables and, except to the extent provided in this
Article IV, the other Trust Property and the Investor Percentages applicable to
the allocation to the Series 2001-1 Securityholders of Principal Collections,
Finance Charge Collections and Receivables in Defaulted Accounts will be reduced
to zero. 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, in each case to the extent provided in this Article IV.
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. Except in connection
with the payment of Excess Collateral Daily Principal pursuant to subsection
4.12(d) hereof, 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 Interest Funding Account, the
Principal Account, the Principal Funding Account, the Accumulation Period
Reserve Account and the Distribution Account, as described in this Article IV.
(b) [Reserved].
SECTION 4.6. Determination of Interest for the Series 2001-1 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 in effect with respect to the related Interest Accrual Period,
(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; provided, however, that, with respect
to the first Interest Accrual Period commencing on or after a Pay Out
Commencement Date arising solely as a result of the Pay Out Event set forth in
subsection 8(g) of this Series Supplement and for each Interest Accrual Period
thereafter through and including the Interest Accrual Period ending on January
19, 2004, the figure used in clause (iii) of the above calculation shall be the
Class A Outstanding Principal Amount as of the close of business on the day
immediately preceding such Pay Out Commencement Date.
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 in effect with respect to the related Interest Accrual Period,
(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; provided, however, that, with respect
to the first Interest Accrual Period commencing on or after a Pay Out
Commencement Date arising solely as a result of the Pay Out Event set forth in
subsection 8(g) of this Series Supplement and for each Interest Accrual Period
thereafter through and including the Interest Accrual Period ending on February
19, 2004, the figure used in clause (iii) of the above calculation shall be the
Class B Outstanding Principal Amount as of the close of business on the day
immediately preceding such Pay Out Commencement Date.
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 in effect with respect to such
Interest Accrual Period, (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)(a) for the Interest Accrual Period ending in the November
2003 Monthly Period, the Excess Collateral Outstanding Principal Amount as of
the close of business on the first day of such Interest Accrual Period and (b)
for each subsequent Interest Accrual Period, the Excess Collateral Outstanding
Principal Amount as of the close of business on the day immediately preceding
the Defeasance Date; provided, however, that, with respect to the first Interest
Accrual Period commencing on or after a Pay Out Commencement Date arising solely
as a result of the Pay Out Event set forth in subsection 8(g) of this Series
Supplement and for each Interest Accrual Period thereafter through and including
the Interest Accrual Period ending on January 19, 2004, the figure used in
clause (iii) of the above calculation shall be the Excess Collateral Outstanding
Principal Amount as of the close of business on the day immediately preceding
such Pay Out Commencement Date.
SECTION 4.7. Determination of Principal Amounts.
(a) The amount of principal (the "Class A Principal") distributable from
the Distribution Account with respect to the Class A Securities for each
Distribution Date shall equal (x) with respect to each of the November 2003 and
December 2003 Distribution Dates, zero, and (y) with respect to the January 2004
Distribution Date, the Class A Outstanding Principal Amount; provided, however,
that, on and after the Pay Out Commencement Date, Class A Principal
distributable from the Distribution Account with respect to the Class A
Securities for each Distribution Date shall equal the Class A Outstanding
Principal Amount.
(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 the Distribution Date following the
Distribution Date on which the Class A Outstanding Principal Amount is paid in
full, shall equal the Class B Outstanding Principal Amount; provided, however,
that, on and after the Pay Out Commencement Date, Class B Principal
distributable from the Distribution Account with respect to the Class B
Securities for each Distribution Date, beginning with the Distribution Date on
which the Class A Outstanding Principal Amount is paid in full, shall equal the
Class B Outstanding Principal Amount.
(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 Outstanding Principal
Amount will be paid in full, shall equal the Excess Collateral Outstanding
Principal Amount; provided, however, that, on and after the Pay Out Commencement
Date, 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 Outstanding Principal Amount will be paid in full, shall equal the
Excess Collateral Outstanding Principal Amount; provided further, however, that
on any Business Day on and after the Defeasance Date, the Transferor may
designate that an amount equal to the excess of the amount on deposit in the
Principal Funding Account on such day over the Stated Amount on such day, after
taking into account all principal payments on such day (such designated amount,
the "Excess Collateral Daily Principal"), shall be withdrawn from the Principal
Funding Account and distributed on such Business Day in accordance with
subsection 4.12(d) of the Agreement.
SECTION 4.8. [Reserved.]
SECTION 4.9. [Reserved.]
SECTION 4.10. [Reserved.]
SECTION 4.11. Payment of Interest on Class A Securities and Class B
Securities. On the September 2003 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 the September 2003 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 September 2003 Transfer Date allocable thereto pursuant to
subsection 4.9(a)(i) of Article IV of the Agreement under Section 6 of the
Original Series Supplement and (y) the Class B Securityholders from the
Distribution Account the amount deposited into the Distribution Account on the
September 2003 Transfer Date allocable thereto pursuant to subsection 4.9(a)(ii)
of Article IV of the Agreement under Section 6 of the Original Series
Supplement.
SECTION 4.12. Payment of Security Principal.
(a) (i) On the Transfer Date preceding the January 2004 Distribution Date
or (ii) in the event there shall have occurred a Pay Out Commencement Date, on
the Transfer Date preceding each Distribution Date thereafter, the Trustee,
acting in accordance with instructions from the Servicer set forth in the Daily
Report for such day, shall withdraw from the Principal Funding Account and
deposit into the Distribution Account, to the extent of funds available, an
amount equal to the Class A Principal for such Distribution Date. On the January
2004 Distribution Date or, in the event there shall have occurred a Pay Out
Commencement Date, on each Distribution Date thereafter until the Class A
Outstanding Principal Amount is paid in full, 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) On the Transfer Date preceding the February 2004 Distribution Date
or (ii) in the event there shall have occurred a Pay Out Commencement Date, on
each Transfer Date, commencing with the Transfer Date immediately preceding the
Distribution Date on which the Class A Outstanding Principal 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
Funding 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 the February 2004 Distribution Date or, in the event there shall have
occurred a Pay Out Commencement Date, on each Distribution Date, commencing with
the Distribution Date on which the Class A Outstanding Principal Amount has been
paid in full, until the Class B Outstanding Principal Amount is paid in full,
the Paying Agent shall pay in accordance with Section 5.1 of the Agreement to
the Class B Securityholders 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 Outstanding Principal 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 Funding Account
and distribute to the Excess Collateral Holder, to the extent of funds
available, an amount equal to the Excess Collateral Monthly Principal for such
Transfer Date.
(d) On each Business Day on or after the Defeasance Date, the Trustee,
acting in accordance with instructions from the Servicer set forth in the Daily
Report for such Business Day, shall make payments of principal to the Excess
Collateral Holder of Excess Collateral Daily Principal, if any, designated by
the Transferor pursuant to subsection 4.7(c) of the Agreement. Notwithstanding
the foregoing, if so designated in writing by the Transferor, any such payment
of Excess Collateral Daily Principal on the Defeasance Date shall not be made to
the Excess Collateral Holder and shall instead be made to the Transferor but
such amount shall nonetheless be subtracted from each of the Excess Collateral
Amount and the Excess Collateral Outstanding Principal Amount.
(e) Any amounts remaining in the Principal Funding Account and allocable to
the Series 2001-2 Securities, after the Excess Collateral Outstanding Principal
Amount has been paid in full, will be withdrawn from the Principal Funding
Account and distributed to the Excess Collateral Holder.
SECTION 4.13. Servicing Compensation. As additional compensation for the
performance of the Servicer's obligations under this Series Supplement, the
Servicer shall be entitled to $500 per month which shall be payable on each
Distribution Date by the Transferor.
SECTION 4.14. [Reserved.]
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. Reserved.
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 2001-1 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
2001-1 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
make withdrawals from the Principal Funding Account from time to time, in the
amounts and for the purposes set forth in this Series Supplement.
(b) On the Defeasance Date, the Transferor shall deposit or cause to be
deposited 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
sum of (I) the Class A Outstanding Principal Amount, (II) the Class B
Outstanding Principal Amount and (III) the Excess Collateral Outstanding
Principal Amount (determined on a net basis, after taking into account any
Excess Collateral Daily Principal payable to the Transferor on the Defeasance
Date pursuant to subsection 4.12(d) of the Agreement). 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, commencing with the September 2003 Transfer Date. On the September 2003
Transfer Date and on each Transfer Date thereafter, the Trustee, at the
Servicer's written direction, shall transfer from the Principal Funding Account
to the Accumulation Period Reserve Account the Principal Funding Account
Investment Proceeds on deposit in the Principal Funding Account. 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 2001-1 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 2001-1 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 September 2003 Transfer 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 4.17(b) of the Agreement.
(b) On the Defeasance Date, the Transferor shall deposit or cause to be
deposited in the Accumulation Period Reserve Account $6,312,290. 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, commencing with the September 2003 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.
(c) On the September 2003 Transfer Date and on each Transfer Date
thereafter, 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 Accumulation Period Reserve
Account, to the extent of funds available, the amounts required to be withdrawn
from the Accumulation Period Reserve Account pursuant to subsections 4.18(c)(i)
through 4.18(c)(iii) of the Agreement.
(i) Class A Monthly Interest. On the September 2003 Transfer Date and
on each Transfer Date thereafter, the Trustee, acting in accordance with
instructions from the Servicer shall withdraw from the Accumulation Period
Reserve Account and deposit in the Distribution Account for distribution on
the following Distribution Date to the Class A Securityholders, to the
extent of funds available, an amount equal to the Class A Monthly Interest
for the related Interest Accrual Period.
(ii) Class B Monthly Interest. On the September 2003 Transfer Date and
on each Transfer Date thereafter, the Trustee, acting in accordance with
instructions from the Servicer shall withdraw from the Accumulation Period
Reserve Account and deposit in the Distribution Account for distribution on
the following Distribution Date to the Class B Securityholders, to the
extent of funds available after giving effect to the withdrawal pursuant to
subsection 4.18(c)(i) of the Agreement, an amount equal to the Class B
Monthly Interest for the related Interest Accrual Period.
(iii) Excess Collateral Minimum Monthly Interest. On the September
2003 Transfer Date and on each Transfer Date thereafter, the Trustee,
acting in accordance with instructions from the Servicer shall withdraw
from the Accumulation Period Reserve Account and distribute to the Excess
Collateral Holder, to the extent of funds available after giving effect to
the withdrawal pursuant to subsections 4.18(c)(i) and (ii) of the
Agreement, an amount equal to the Excess Collateral Minimum Monthly
Interest for the related Interest Accrual Period.
(d) 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 the amount deposited in the Distribution Account on the
related Transfer Date allocable thereto pursuant to subsection 4.18(c)(i) and
(y) the Class B Securityholders from the Distribution Account the amount
deposited in the Distribution Account on the related Transfer Date allocable
thereto pursuant to subsection 4.18(c)(ii).
(e) The Accumulation Period Reserve Account shall be terminated following
the earlier to occur of (a) the termination of the Trust pursuant to the
Agreement and (b) the date on which each of the Class A Outstanding Principal
Amount, the Class B Outstanding Principal Amount and the Excess Collateral
Outstanding Principal Amount is paid in full. 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 paid to the Excess Collateral Holder.
SECTION 4.19. [Reserved.]
SECTION 4.20. Defeasance. On the date that the following conditions shall
have been satisfied: (i) the Transferor shall have deposited or caused to be
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 sum of (I) the Class A Outstanding Principal Amount, (II) the Class B
Outstanding Principal Amount and (III) the Excess Collateral Outstanding
Principal Amount (determined on a net basis, after taking into account any
Excess Collateral Daily Principal payable to the Transferor on the Defeasance
Date pursuant to subsection 4.12(d) of the Agreement), and (y) in the
Accumulation Period Reserve Account, an amount such that the amount on deposit
in the Accumulation Period Reserve Account following such deposit is sufficient
to pay and discharge (without relying on income or gain from reinvestment of
such amount) all remaining scheduled interest payments on all outstanding Series
2001-1 Securities on the dates scheduled for such payments in the Agreement;
(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 and (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 2001-1 Securities will no longer be entitled to the security interest
of the Trustee in the Receivables and, except those set forth in clause (i)
above, other Trust Property and the percentages applicable to the allocation to
the Series 2001-1 Securityholders of Principal Collections, Finance Charge
Collections and Receivables in Defaulted Accounts 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
2001-1 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, 4.12 and 4.18 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, 4.12 and 4.18 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;
provided, however, that, beginning with the September 2003 calendar month, the
statements referred to in this subsection 5.2(a) shall be required to set forth
only the information specified in clauses (i), (ii), (iii), (x) and (xix).
(b) Annual Securityholders' Tax Statement. On or before January 31 of each
calendar year, beginning with calendar year 2002, the Paying Agent shall
distribute to each Person who at any time during the preceding calendar year was
a Series 2001-1 Securityholder, a statement prepared by the Servicer containing
the information required to be contained in the regular report to Series 2001-1
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 2001-1 Securityholder, together with, on or before
January 31 of each year, beginning in 2002, such other customary information
(consistent with the treatment of the Series 2001-1 Securities as debt) as the
Trustee or the Servicer deems necessary or desirable to enable the Series 2001-1
Securityholders to prepare their tax returns. Such obligations of the Servicer
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 2001-1 Pay Out Events. If any one of the following events
shall occur with respect to the Series 2001-1 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 2001-1
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 2001-1 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
2001-1 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 2001-1 Securities evidencing Undivided Interests aggregating more than
50% of the Invested Amount of this Series 2001-1, and (ii) as a result of which
the interests of the Series 2001-1 Securityholders are materially and adversely
affected and continue to be materially and adversely affected for such period;
provided, however, that a Series 2001-1 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 2001-1 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 2001-1 Securityholders;
(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; or
(g) failure on the part of the Transferor to make or cause to be made a
deposit in the Accumulation Period Reserve Account in an amount sufficient to
pay and discharge (without relying on income or gain from reinvestment of such
amount) all remaining scheduled interest payments on all outstanding Series
2001-1 Securities on the dates scheduled for such payments in the Agreement
within five Business Days after the amount theretofore on deposit in the
Accumulation Period Reserve Account shall have been determined by the Transferor
to be, or shall otherwise prove to have been, insufficient to pay and discharge
(without relying on income or gain from reinvestment of such amount) all such
remaining scheduled interest payments;
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 2001-1 Securities evidencing Undivided Interests aggregating
more than 50% of the Invested Amount of this Series 2001-1, by notice then given
in writing to the Trustee, the Transferor and the Servicer may declare that a
pay out event (a "Series 2001-1 Pay Out Event") has occurred as of the date of
such notice, and in the case of any event described in subparagraphs (c), (d)
(f) or (g), a Series 2001-1 Pay Out Event shall occur without any notice or
other action on the part of the Trustee or the Series 2001-1 Securityholders
immediately upon the occurrence of such event.
SECTION 9. Series 2001-1 Termination. The right of the Series 2001-1
Securityholders to receive payments from the Trust will terminate on the first
Business Day following the Series 2001-1 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
2001-1 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.
(a) Each Class A Security and Class B Security will bear an additional
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.
(d) This Section 11 shall not apply to the transfer and pledge of the
Excess Collateral on the Closing Date by the Transferor pursuant to the Transfer
and Administration Agreement or by the Metris Secured Note Trust 2001-1 to the
Indenture Trustee (as defined in the Transfer and Administration Agreement)
pursuant to the Indenture (as defined in the Transfer and Administration
Agreement).
(e) The Excess Collateral shall be delivered in uncertificated form.
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
2001-1 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. The
undersigned hereby declare that it is their intention that this Series
Supplement shall be regarded as made under the laws of the State of Delaware and
that the laws of said State shall be applied in interpreting its provisions in
all cases where legal interpretation shall be required. Each of the parties
hereto agrees (a) that this Series Supplement involves at least $100,000.00, and
(b) that this Series Supplement has been entered into by the parties hereto in
express reliance upon 6 Del. C. ss. 2708. Each of the parties hereto hereby
irrevocably and unconditionally agrees (a) to be subject to the jurisdiction of
the courts of the State of Delaware and of the federal courts sitting in the
State of Delaware, and (b) (1) to the extent such party is not otherwise subject
to service of process in the State of Delaware, to appoint and maintain an agent
in the State of Delaware as such party's agent for acceptance of legal process,
and (2) that, to the fullest extent permitted by applicable law, service of
process may also be made on such party by prepaid certified mail with a proof of
mailing receipt validated by the United States Postal Service constituting
evidence of valid service, and that service made pursuant to (b) (1) or (2)
above shall, to the fullest extent permitted by applicable law, have the same
legal force and effect as if served upon such party personally within the State
of Delaware. For purposes of implementing the parties' agreement to appoint and
maintain an agent for service of process in the State of Delaware, each such
party that has not as of the date hereof already duly appointed such an agent
does hereby appoint RL&F Service Corp., One Xxxxxx Square, Tenth Floor,
Wilmington, New Castle County, Delaware 19801, as such agent.
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 2001-1
Securityholder, by acquiring an interest in a Series 2001-1 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 2001-1 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 2001-1 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 2001-1 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.
SECTION 20. Additional Representations and Warranties of the Transferor.
The Transferor hereby makes the following representations and warranties. Such
representations and warranties shall survive until the termination of this
Series Supplement. Such representations and warranties speak as of the date that
the Collateral (as defined below) is transferred to the Trustee but shall not be
waived by any of the parties to this Series Supplement unless each Rating Agency
shall have notified the Transferor, the Servicer and the Trustee in writing that
such waiver will not result in a reduction or withdrawal of the rating of any
outstanding Series or Class to which it is a Rating Agency.
(i) The Agreement creates a valid and continuing security interest (as
defined in the Delaware UCC) in favor of the Trustee in (i) the
Distribution Account and all monies on deposit therein (collectively, the
"Deposit Account Collateral") and (ii) the Series Accounts (other than the
Distribution Account) and all monies and investments deposited therein or
credited thereto (the "Series Account Collateral"), each as described in
Section 2.1 of the Agreement and maintained for the benefit of the Series
2001-1 Securityholders, which security interest is prior to all other
Liens, except for Permitted Liens, and is enforceable as such as against
creditors of and purchasers from the Transferor.
(ii) (A) The Distribution Account constitutes a "deposit account"
within the meaning of the applicable UCC.
(B) At the time of each transfer and assignment of Deposit
Account Collateral to the Trustee pursuant to the Agreement, the
Transferor owned and had good and marketable title to such Deposit
Account Collateral free and clear of any Lien, claim or encumbrance of
any Person, except for Permitted Liens.
(C) The Transferor has taken all steps necessary to cause the
Trustee to become the account holder of the Distribution Account.
(D) Other than the transfer and the security interest granted to
the Trustee pursuant to the Agreement, the Transferor has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed
the Deposit Account Collateral. The Transferor is not aware of any
judgment or tax lien filings against the Transferor.
(E) The Deposit Account Collateral is not in the name of any
person other than the Trustee. The Transferor has not consented to the
bank maintaining the Deposit Account Collateral complying with
instruction of any person other than the Trustee.
(iii) (A) The Series Accounts (other than the Distribution Account)
constitute "securities accounts" within the meaning of the applicable UCC
and the Trustee's rights and property interest with respect to the monies
and investments deposited therein or credited thereto constitute "security
entitlements" within the meaning of the applicable UCC.
(B) All of the Cash Equivalents have been and will have been
credited to one of the Series Accounts (other than the Distribution
Account). The securities intermediary has agreed to treat all assets
credited to the Series Accounts (other than the Distribution Account)
as "financial assets" within the meaning of the applicable UCC.
(C) At the time of each transfer and assignment of Series Account
Collateral to the Trustee pursuant to the Agreement, the Transferor
owned and had good and marketable title to such Series Account
Collateral free and clear of any Lien, claim or encumbrance of any
Person, except for Permitted Liens.
(D) The Transferor has received all consents and approvals
required by the terms of the Series Account Collateral to the transfer
to the Trustee of its interest and rights in the Series Account
Collateral under the Agreement.
(E) The Transferor has taken all steps necessary to cause the
Trustee to become the registered entitlement holder of any Series
Account Collateral consisting of security entitlements.
(F) Other than the transfer and the security interest granted to
the Trustee pursuant to the Agreement, the Transferor has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed
the Series Account Collateral. The Transferor has not authorized the
filing of and is not aware of any financing statements against the
Transferor that include a description of collateral covering the
Series Account Collateral other than any financing statement relating
to the security interest granted to the Trustee under the Agreement or
that has been terminated. The Transferor is not aware of any judgment
or tax lien filings against the Transferor.
(G) The Series Accounts are not in the name of any person other
than the Trustee. Each Series Account is maintained by the securities
intermediary. The Transferor has not consented to the securities
intermediary of any Series Account complying with entitlement orders
of any person other than the Trustee.
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Amended and Restated Series 2001-1 Supplement to be duly executed by
their respective officers as of the day and year first above written.
METRIS RECEIVABLES, INC.
Transferor
By:/s/Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and Treasurer
DIRECT MERCHANTS CREDIT CARD BANK,
NATIONAL ASSOCIATION
Servicer
By:/s/Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President, Treasurer and Cashier
U.S. BANK NATIONAL ASSOCIATION
Trustee
By:
Name:
Title:
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 2001-1, 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, supplement or other modification thereto) by
and between the Transferor, Direct Merchants Credit Card Bank, National
Association, as Servicer (the "Servicer"), and U.S. Bank National Association
(as successor to The Bank of New York (Delaware)), as Trustee (the "Trustee"),
and the Series 2001-1 Supplement, dated as of February 13, 2001 (the "Series
2001-1 Supplement"), among the Transferor, the Servicer and the Trustee. The
Pooling and Servicing Agreement, as supplemented by the Series 2001-1
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 2001-1, 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 2001-1, 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 March
20, 2001 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 in effect
with respect to the related Interest Accrual Period, (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.
Interest payments on the Class A Securities on each
Distribution Date will be funded from Available Series 2001-1 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 2001-1 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 December 2007 Distribution Date (or if such day is not a Business Day,
the next succeeding Business Day) (the "Scheduled Series 2001-1 Termination
Date"). After the earlier to occur of (i) the Scheduled Series 2001-1
Termination Date and (ii) the day after the Distribution Date on which the
Series 2001-1 Securities are paid in full (the "Series 2001-1 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 2001-1
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.
This Security shall be construed in accordance with and
governed by the laws of the State of Delaware, without reference to its conflict
of law provisions.
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.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
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 2001-1, 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, supplement or other modification thereto) by
and between the Transferor, Direct Merchants Credit Card Bank, National
Association, as Servicer (the "Servicer"), and U.S. Bank National Association
(as successor to The Bank of New York (Delaware)), as Trustee (the "Trustee"),
and the Series 2001-1 Supplement, dated as of February 13, 2001 (the "Series
2001-1 Supplement"), among the Transferor, the Servicer and the Trustee. The
Pooling and Servicing Agreement, as supplemented by the Series 2001-1
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 2001-1, 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 2001-1, 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.
Interest on the Class B Securities will be payable on March
20, 2001 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 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.
Interest payments on the Class B Securities on each
Distribution Date will be funded from Available Series 2001-1 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 2001-1 Securities and deposited on each
business day during such Monthly Period in the Interest Funding Account.
"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 December 2007 Distribution Date (or if such day is not a Business Day,
the next succeeding Business Day) (the "Scheduled Series 2001-1 Termination
Date"). After the earlier to occur of (i) the Scheduled Series 2001-1
Termination Date or (ii) the day after the Distribution Date on which the Series
2001-1 Securities are paid in full (the "Series 2001-1 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.
This Security shall be construed in accordance with and
governed by the laws of the State of Delaware, without reference to its conflict
of law provisions.
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.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:
Name:
Title:
EXHIBIT B
Metris Receivables, Inc. Monthly
Metris Master Trust Report
Section Securityholders' Statement Month-Year
5.2 Series 2001-1 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 2001-1 Excess Collateral
Ladies and Gentlemen:
This letter (the "Investment Letter") is delivered by the
undersigned (the "Purchaser") pursuant to Section 11 of the Series 2001-1
Supplement dated as of February 13, 2001 (the "Series Supplement") to the
Amended and Restated Pooling and Servicing Agreement dated as of July 30, 1998
(as amended, supplemented or otherwise modified, the "Agreement"), each among
U.S. Bank National Association (as successor to 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
Page
SECTION 1. DESIGNATION........................................................2
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........................................17
SECTION 5. FORM OF DELIVERY OF THE CLASS A SECURITIES
AND THE CLASS B SECURITIES; DENOMINATIONS.........................17
SECTION 6. ARTICLE IV OF AGREEMENT...........................................18
SECTION 4.4. Rights of Securityholders...................................18
SECTION 4.5. Collections and Allocation; Payments on
Exchangeable Transferor Security............................18
SECTION 4.6. Determination of Interest for the
Series 2001-1 Securities....................................18
SECTION 4.7. Determination of Principal Amounts..........................20
SECTION 4.8. Shared Principal Collections................................20
SECTION 4.9. Application of Funds........................................20
SECTION 4.10. Coverage of Required Amount for the
Series 2001-1 Securities....................................21
SECTION 4.11. Payment of Interest on Class A Securities
and Class B Securities......................................21
SECTION 4.12. Payment of Security Principal...............................21
SECTION 4.13. Series Charge-Offs..........................................22
SECTION 4.14. Redirected Principal Collections for the
Series 2001-1 Securities....................................22
SECTION 4.15. Determination Of Libor......................................22
SECTION 4.16. Payment Reserve Account.....................................22
SECTION 4.17. Principal Funding Account...................................23
SECTION 4.18. Accumulation Period Reserve Account.........................23
SECTION 4.19. Postponement of Accumulation Period.........................25
SECTION 4.20. Defeasance..................................................25
SECTION 7. ARTICLE V OF THE AGREEMENT........................................25
SECTION 5.1. Distributions...............................................26
SECTION 5.2. Securityholders' Statement..................................26
SECTION 8. SERIES 2001-1 PAY OUT EVENTS......................................29
SECTION 9. SERIES 2001-1 TERMINATION.........................................30
SECTION 10. LEGENDS; TRANSFER AND EXCHANGE;
RESTRICTIONS ON TRANSFER OF CLASS A
SECURITIES AND CLASS B SECURITIES.................................30
SECTION 11. TRANSFERS OF THE EXCESS COLLATERAL................................31
SECTION 12. RATIFICATION OF AGREEMENT.........................................32
SECTION 13. [RESERVED]........................................................32
SECTION 14. COUNTERPARTS......................................................32
SECTION 15. GOVERNING LAW.....................................................32
SECTION 16. INSTRUCTIONS IN WRITING...........................................33
SECTION 17. AMENDMENT FOR FASIT PURPOSES......................................33
SECTION 18. PAIRED SERIES.....................................................33
SECTION 19. THIRD PARTY BENEFICIARIES.........................................34
SECTION 20. TAX TREATMENT.....................................................34
An extra section break has been inserted above this paragraph. Do not
delete this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.
