EXHIBIT 99.4
LIQUIDITY RESERVE DEPOSIT AGREEMENT
WHEREAS, Direct Merchants Credit Card Bank, N.A., Scottsdale,
Arizona ("Depositor") is a national bank, chartered, supervised and examined by
the Comptroller of the Currency ("Comptroller" or "OCC") pursuant to the
National Bank Act, as amended, 12 X.X.X.xx. 1 et seq; and
WHEREAS, JPMorgan Chase Bank ("Depository Bank") is a New York state
chartered bank with its principal office located at 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000; and
WHEREAS, Depositor, Metris Companies Inc. and the OCC entered into an
Operating Agreement on March 18, 2003 ( "Operating Agreement"), pursuant to
which the Depositor has agreed to maintain with a third party insured depository
institution acceptable to the Comptroller, a Liquidity Reserve Deposit ("LRD")
in the form of a cash deposit or investment securities to be held in safekeeping
for the sole purpose of supporting Depositor's credit card receivables funding
needs, including settlement obligations with MasterCard International
Incorporated;
NOW, THEREFORE, it is agreed among the Comptroller, the Depositor, and
the Depository Bank that:
1. The Depositor will maintain Liquid Assets, in an amount and type acceptable
to the OCC, and in no event less than the amount required by the Operating
Agreement and Exhibit A to the Operating Agreement, in the Depository Bank. Said
Liquid Assets shall consist of: (i) cash deposits; (ii) investment securities
listed in 12 C.F.R. Section 1.2 to which the OCC has no prior supervisory
objection; (iii) federal funds sold; and (iv) such other assets to which the OCC
has no prior supervisory objection ("Liquid Assets"). The Depositor hereby
represents that the Liquid Assets deposited pursuant to this Agreement as of the
date hereof are free from any lien, encumbrance, charge, right of set off,
credit or preference in connection with any claim against the Depositor (each a
"Lien"). At the time of deposit, and at all times thereafter while any Liquid
Assets are held pursuant to this Agreement, the Liquid Assets shall be deposited
and/or placed in safekeeping at the Depository Bank in the name of the Depositor
pursuant to this Agreement to support the funding needs and requirements of the
Depositor.
2. Whenever Liquid Assets are deposited or placed pursuant to this Agreement,
the Depository Bank shall furnish promptly to the Depositor a receipt, and a
copy of the receipt to the Comptroller. Such receipt shall specify the following
information to the extent applicable: the complete title, interest rate, series,
serial number, face value, maturity date, and call date.
3. The Depository Bank shall segregate the LRD on its books and records
and maintain a current list of the Liquid Assets in the LRD. The Depository Bank
specifically waives all right, title, and interest, including any and all right
of set off, to and against the Liquid Assets deposited, and the account
established pursuant to this Agreement.
4. The Depository Bank shall not allow Liquid Assets comprising the LRD
to be withdrawn without the Depositor providing the Depository Bank with prior
written authorization of the Comptroller.
5. Notwithstanding the provision of paragraph 4, unless otherwise
ordered by the Comptroller, the Depository Bank shall release Liquid Assets in
the LRD to the Depositor solely to permit an exchange for other assets deposited
pursuant to this Agreement, provided that the Depositor certifies to the
Depository Bank the aggregate value, grade and marketability of the Liquid
Assets being deposited or remaining on deposit, that such Liquid Assets are free
from any Lien, and that such Liquid Assets satisfy the requirements of Article
VI, paragraph (3) of the Operating Agreement. The value, grade and marketability
of the Liquid Assets being withdrawn and deposited or placed shall be determined
as of the date of the exchange transaction and, in the case of the value of
investment securities, on the basis of the market value. The Depositor's
certificate, a copy of which shall be furnished concurrently to the Comptroller,
shall also specify:
(a) To the extent applicable, the complete title, interest rate, series,
serial number, face value, market value, maturity date and call date
of each asset being withdrawn; each asset being deposited; and each
asset remaining on deposit.
(b) The aggregate value of the assets being withdrawn, deposited, and
remaining on deposit.
(c) That, after the exchange transaction, the amount of the LRD is
sufficient to comply with the requirements set by the Comptroller.
6. The Depository Bank shall permit representatives of the Comptroller or the
Depositor to examine the LRD during regular business hours. Upon request,
the Depository Bank shall furnish the Comptroller with a current list of the
Liquid Assets maintained in the LRD pursuant to this Agreement with a
certification that, to its knowledge, the LRD and the Liquid Assets are free
from any Lien. In addition, the Comptroller may request at any time that the
Depositor certify to the Comptroller that the LRD and the Liquid Assets are free
from any Lien. The failure or inability of the Depositor to so certify shall be
deemed to be a default under this Agreement.
7. The Depositor shall be permitted to earn income on the Liquid Assets in the
LRD, and the income may be paid by the Depository Bank to the Depositor as
earned, unless the Comptroller issues a contrary order to the Depository Bank.
8. The Depository Bank agrees to give to the safeguarding, handling, and
shipment of the LRD assets the degree of care required of any professional
custodian for hire.
9. The Comptroller by written order may relieve the Depositor or Depository Bank
from compliance with any term or condition of this Agreement.
10. The Comptroller shall not be required to pay for any services under this
Agreement.
11. Unless otherwise ordered by the Comptroller, this Agreement may be
terminated by the Depositor or the Depository Bank upon at least sixty (60)
days written notice to the other parties when the following conditions are met:
(a) Another depository bank has been selected by the Depositor and
approved by the Comptroller.
(b) A Liquidity Reserve Deposit Agreement acceptable to the Comptroller
has been agreed upon by the Depositor and the new depository bank.
(c) The Depository Bank has released to the newly designated depository
bank the assets of the LRD in accordance with the Depositor's written
instructions approved by the Comptroller.
12. Upon the release of the total Liquid Assets in the LRD to the Depositor or
its successor in interest pursuant to the terms of this Agreement,
the Depository Bank shall be discharged from further obligation under this
Agreement.
13. All written communications required under this Agreement shall be mailed or
delivered to each party at the following addresses:
The Depository Bank:
JPMorgan Chase Bank
Attention: Xxxxxx Xxxxxxx
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
The Depositor:
President
Direct Merchants Credit Card Bank, N.A.
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
with copies sent by overnight mail to:
General Counsel
Metris Companies Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
The Comptroller:
Director for Special Supervision
Office of the Comptroller of the Currency
000 X Xxxxxx. X.X., Xxxx Xxxx 0-0
Xxxxxxxxxx, XX 00000
with copies sent by overnight mail to:
Assistant Deputy Comptroller for Credit Card Banks
Office of the Comptroller of the Currency
00 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Examiner-in-Charge of Direct Merchants Credit Card Bank, N.A.
Office of the Comptroller of the Currency
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
IN WITNESS WHEREOF, the undersigned, as the duly authorized
representatives of the Depositor, the Depository Bank, and the Comptroller have
caused this Agreement to be executed as of this 18th day of March, 2003.
For the Depositor:
DIRECT MERCHANTS CREDIT CARD BANK, N.A.
/s/Xxxxx X. Xxxxxxxx Xxxxx X. Xxxxxxxx, Senior Vice President,
Signature Treasurer and Cashier
For the Depository Bank:
JPMORGAN CHASE BANK
/s/Xxxx Xxxxxxxxxxxx Xxxx Xxxxxxxxxxxx, Vice President
Signature
For the Comptroller:
/s/Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx, Deputy Comptroller For
Signature Special Supervision
Typed name and title
