EXECUTION COPY
METRIS RECEIVABLES, INC.
Transferor
DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION
Servicer
and
U.S. BANK NATIONAL ASSOCIATION
Trustee
on behalf of the Series 2001-4 Securityholders
SERIES 2001-4 SUPPLEMENT
Dated as of October 25, 2001
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of July 30, 1998
METRIS MASTER TRUST
$372,928,000 Floating Rate Asset Backed
Securities, Series 2001-4, Class A
$66,298,000 Floating Rate Asset Backed
Securities, Series 2001-4, Class B
$113,260,188 Excess Collateral, Series 2001-4
EXHIBITS
Exhibit A-1 Form of Class A Investor Security
Exhibit A-2 Form of Class B Investor Security
Exhibit B Form of Monthly Securityholder's Statement
Exhibit C Form of Excess Collateral Investment Letter
SERIES 2001-4 SUPPLEMENT, dated as of October 25, 2001 (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"), under
the Amended and Restated Pooling and Servicing Agreement, dated as of July 30,
1998 (as amended, supplemented or otherwise modified from time to time, the
"Agreement"), by and among the Transferor, the Servicer and the Trustee (as
successor to The Bank of New York (Delaware)).
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 2001-4 Securities." The Series
2001-4 Securities shall be issued in two Classes, which shall be designated
generally as the Floating Rate Asset Backed Securities, Series 2001-4, Class A
(the "Class A Securities"), and the Floating Rate Asset Backed Securities,
Series 2001-4, 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 2001-4 (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 amounts 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 2001-4 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 2001-4 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 August 2003 Monthly Period or such
later date as is determined in accordance with Section 4.22 of the Agreement and
ending on the first to occur of (a) the commencement of the Early Amortization
Period and (b) the Series 2001-4 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 4.22 of the Agreement.
"Accumulation Period Reserve Account" shall have the meaning
specified in subsection 4.21(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
2001-4 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 2001-4
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 2001-4
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) of this Series Supplement.
"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 4.21(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 2001-4 Finance Charge Collections" shall
have the meaning specified in subsection 4.9(a) of the Agreement.
"Available Series 2001-4 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 2001-4 Securities pursuant to subsection 4.9(d) of the Agreement with
respect to such period, (iii) on and after the Pay Out Commencement Date, any
amount on deposit in the Pre-Funding Account, in accordance with subsection
4.14(b) of the Agreement, (iv) the sum of the aggregate amount allocated with
respect to the Series Default Amount with respect to such period and the Series
2001-4 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),
4.17(a) and (b), 4.20(b) and 4.21(b), (c) and (d) of the Agreement, (v) the
aggregate Shared Principal Collections allocated to the Series 2001-4 Securities
pursuant to Section 4.8 of the Agreement with respect to such period and (vi)
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 and a Cap Provider, as amended from time to time, and any
additional interest rate protection agreement or agreements, entered into
between the Transferor 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 September
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.
"Class A Initial Invested Amount" shall mean the aggregate
initial principal amount of the Class A Securities, which is $372,928,000.
"Class A Interest Rate" shall mean 0.35% 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 less the Class A Percentage of the Initial
Pre-Funded Amount plus the Class A Percentage of the amount of any withdrawals
from the Pre-Funding Account (i) during the Funding Period in connection with
the addition of receivables to the Trust or (ii) at the end of the Funding
Period for deposit into the Excess Funding Account, minus (b) the aggregate
amount of principal payments (excluding principal payments made from the
Pre-Funding Account) 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), 4.17(a) and (b), 4.20(b) and 4.21(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 (including principal payments made from the Pre-Funding
Account) 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
2001-4 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 2001-4 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 2001-4 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 October
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.
"Class B Floating Percentage" shall mean with respect to any
Business Day the percentage equivalent of a fraction, the numerator of which is
the Class B Invested Amount at the end of the preceding Business Day and the
denominator of which is the greater of (a) the sum of the aggregate amount of
Principal Receivables and the amount on deposit in the Excess Funding Account at
the end of the preceding Business Day and (b) the sum of the numerators with
respect to all Classes of all Series then outstanding used to calculate the
applicable allocation percentage.
"Class B Initial Invested Amount" shall mean the aggregate
initial principal amount of the Class B Securities, which is $66,298,000.
"Class B Interest Rate" shall mean 1.40% 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 less the Class B Percentage of the Initial
Pre-Funded Amount plus the Class B Percentage of the amount of any withdrawals
from the Pre-Funding Account (i) during the Funding Period in connection with
the addition of receivables to the Trust or (ii) at the end of the Funding
Period for deposit into the Excess Funding Account, minus (b) the aggregate
amount of principal payments (excluding principal payments made from the
Pre-Funding Account) 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(a), 4.20(b) and 4.21(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 (including
principal payments made from the Pre-Funding Account) 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
2001-4 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 2001-4 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 2001-4 Securityholders' Interest evidenced by the Class B Security.
"Closing Date" shall mean October 25, 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, $31,077,334; provided, however, that if the
Accumulation Period Length is determined to be less than 12 months pursuant to
Section 4.22 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" shall have the meaning specified in Section 4.23
of the Agreement.
"Distribution Date" shall mean December 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 2001-4 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 less the Excess Collateral Percentage of the
Initial Pre-Funded Amount plus the Excess Collateral Percentage of the amount of
any withdrawals from the Pre-Funding Account (i) during the Funding Period in
connection with the addition of receivables to the Trust or (ii) at the end of
the Funding Period for deposit into the Excess Funding Account, minus (b) the
aggregate amount of principal payments (excluding principal payments made from
the Pre-Funding Account) 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), 4.20(b) and 4.21(b), (c) and (d) of the Agreement,
for the purpose of reimbursing amounts deducted pursuant to the foregoing
clauses (c) and (d).
"Excess Collateral Charge-Offs" shall have the meaning
specified in subsection 4.13(a) of the Agreement.
"Excess Collateral Expected Final Payment Date" shall mean the
October 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.
"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 to calculate the applicable allocation percentage.
"Excess Collateral Holder" shall mean the entity so designated
in writing by the Transferor to the Trustee.
"Excess Collateral Holder's Interest" shall mean the portion
of the Series 2001-4 Securityholders' Interest evidenced by the Excess
Collateral.
"Excess Collateral Initial Amount" shall mean the aggregate
initial principal amount of the Excess Collateral, which is $113,260,188.
"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 the product of the Excess Collateral Notional Percentage times a rate of
2.15% 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
(including principal payments made from the Pre-Funding Account) made to the
Excess Collateral Holder prior to such Business Day.
"Excess Collateral Percentage" shall mean a fraction the
numerator of which is the Excess Collateral Initial Amount and the denominator
of which is the Initial Invested Amount.
"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 2001-4 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 2001-4 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.
"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.
"Full Invested Amount" shall mean $552,486,188.
"Funding Period" shall mean the period from and including the
Closing Date to but excluding the earliest of (x) the first day for which the
Invested Amount equals the Full Invested Amount; (y) the first day on which a
Pay Out Event is deemed to occur; and (z) the first Business Day of the January
2002 Monthly Period.
"Funding Period Reserve Account" shall have the meaning set
forth in subsection 4.15(a) of the Agreement.
"Initial Invested Amount" shall mean the sum of the Class A
Initial Invested Amount, the Class B Initial Invested Amount and the Excess
Collateral Initial Amount.
"Initial Pre-Funded Amount" shall mean $0.
"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 4.19(c),
(ii) the Principal Funding Account, deposited in the Collection Account pursuant
to subsection 4.20(b), (iii) the Accumulation Period Reserve Account, deposited
in the Collection Account pursuant to subsection 4.21(b), (iv) the Pre-Funding
Account, deposited in the Collection Account pursuant to subsection 4.14(c) and
(v) the Funding Period Reserve Account, deposited in the Collection Account
pursuant to subsection 4.15(b).
"Investment Letter" shall have the meaning specified in
subsection 11(a) of this Series Supplement.
"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 2001-4.
"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 4.18 of the Agreement.
"LIBOR Determination Date" shall mean (i) October 23, 2001
with respect to the period from the Closing Date through November 19, 2001, (ii)
November 16, 2001 with respect to the period from November 20, 2001 through
December 19, 2001, and (iii) the second Business Day prior to the commencement
of each Interest Accrual Period beginning with Interest Accrual Period
commencing on December 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
2001-4 Securities shall begin on and include the Closing Date and shall end on
and include November 30, 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 2001-4 Pay Out Event is deemed to occur pursuant to Section 8 of
this Series Supplement.
"Paying Agent" shall mean, for the Series 2001-4 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 4.19(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 2001-4 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 2001-4 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, investment earnings on amounts on
deposit in the Pre-Funding Account deposited into the Collection Account
pursuant to subsection 4.14(b) of the Agreement on the related Transfer Date,
amounts withdrawn from the Funding Period Reserve Account, if any, with respect
to such Monthly Period 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 2001-4 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 sum of the average daily Invested Amount
during the preceding Monthly Period plus the average Pre-Funded Amount during
the preceding Monthly Period; provided, however, that Excess Finance Charge
Collections applied for the benefit of the Series 2001-4 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.
"Pre-Funded Amount" shall mean (a) the Initial Pre-Funded
Amount, minus (b) the amount of any increases in the Invested Amount during the
Funding Period pursuant to Section 4.16 of the Agreement, minus (c) the amount
withdrawn from the Pre-Funding Account and deposited in the Excess Funding
Account.
"Pre-Funding Account" shall mean the account established and
maintained pursuant to subsection 4.14(a) of the Agreement.
"Principal Funding Account" shall have the meaning set forth
in subsection 4.20 of the Agreement.
"Principal Funding Account Balance" shall mean, with respect
to any date of determination during the Accumulation Period, the principal
amount, if any, on deposit in the Principal Funding Account on such date of
determination.
"Principal Funding Account Investment Proceeds" shall mean,
with respect to each Interest Accrual Period during the Accumulation Period, the
investment earnings on funds on deposit in the Principal Funding Account (net of
investment losses and expenses) for such Interest Accrual Period.
"Principal Shortfalls" shall mean on any Business Day (x) for
Series 2001-4, (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 have the meaning
specified in subsection 3A(d) of this Series Supplement.
"Rating Agencies" shall mean Standard & Poor's, Xxxxx'x and
Fitch.
"Redirected Class B Principal Collections" shall have the
meaning specified in subsection 4.17(b) of the Agreement.
"Redirected Excess Collateral Principal Collections" shall
have the meaning specified in subsection 4.17(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 2001-4.
"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 2001-4 Termination Date" shall mean the
August 2008 Distribution Date.
"Series 2001-4" shall mean the Series of the Metris Master
Trust represented by the Series 2001-4 Securities.
"Series 2001-4 Pay Out Event" shall have the meaning specified
in Section 8 of this Series Supplement.
"Series 2001-4 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 2001-4 Securities" shall mean the Class A Securities,
the Class B Securities and the Excess Collateral.
"Series 2001-4 Securityholder" shall mean the holder of record
of any Series 2001-4 Security.
"Series 2001-4 Securityholders' Interest" shall have the
meaning specified in Section 4.4 of the Agreement.
"Series 2001-4 Termination Date" shall mean the earlier to
occur of (i) the day after the Distribution Date on which the Series 2001-4
Securities are paid in full, or (ii) the Scheduled Series 2001-4 Termination
Date.
"Series Default Amount" shall mean (i) on any Business Day
other than a Default Recognition Date, an amount equal to the product of (a) the
Floating Percentage applicable on such Business Day and (b) the aggregate
Default Amount identified since the prior reporting date and (ii) on any Default
Recognition Date, an amount equal to the product of (a) the Default Recognition
Allocation Percentage applicable on such Default Recognition Date and (b) the
Default Amount with respect to such Default Recognition Date.
"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 2001-4 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 2001-4 Securities.
"Termination Payment Date" shall mean the earlier of the first
Distribution Date following the liquidation or sale of the Receivables as a
result of an Insolvency Event and the occurrence of the Scheduled Series 2001-4
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 October 25, 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 2001-4 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 2001-4, the portion of
the Excess Collateral represented by the Owner Certificate in the Metris Secured
Note Trust 2001-4 for so long as the Owner Certificate is retained by the
Transferor.
"Transferor Retained Finance Charge Collections" shall mean
with respect to each Business Day other than a Default Recognition Date, the
amount specified in subsection 4.9(a)(v) of the Agreement, which amount shall be
deposited in an account maintained with a Qualified Institution and shall be
invested in Cash Equivalents maturing no later than the next succeeding Default
Recognition Date.
"Weighted Average Invested Amount" shall mean with respect to
any Monthly Period the weighted average Adjusted Invested Amount based on the
Adjusted Invested Amount outstanding on each Business Day after giving effect to
all transactions on such Business Day from but excluding the Default Recognition
Date related to the preceding Monthly Period to and including the Default
Recognition Date with respect to such Monthly Period.
"Weighted Average Principal Receivables" shall mean with
respect to any Monthly Period the weighted average sum of the total amount of
Principal Receivables and the amount on deposit in the Excess Funding Account on
each Business Day after giving effect to all transactions on such Business Day
from but excluding the Default Recognition Date related to the preceding Monthly
Period to and including the Default Recognition Date with respect to such
Monthly Period.
Section 3. Reassignment Terms. The Series 2001-4 Securities shall be
subject to termination by the Transferor (so long as the Transferor is the
Servicer or an affiliate of the Servicer) at its option, in accordance with the
terms specified in subsection 12.2(a) of the Agreement, on any Distribution Date
on or after the Distribution Date on which the Invested Amount would be reduced
to an amount less than or equal to 10% of the highest Invested Amount during the
Revolving Period. The deposit required in connection with any such termination
and final distribution shall be equal to the unpaid Invested Amount plus accrued
and unpaid interest on the Series 2001-4 Securities through the day prior to the
Distribution Date on which the final distribution occurs, in each case after
giving effect to any payments on such date.
SECTION 3A. Conveyance of Interest in Interest Rate Cap; Cap Proceeds
Account.
(a) The Transferor hereby covenants and agrees that, on or prior to the
issuance of the Series 2001-4 Securities, it shall obtain and at all times prior
to and including the close of business on the October 2006 Distribution Date
maintain one or more Interest Rate Caps whose notional amounts singly or taken
as a group equal or exceed an amount equal to the product of (i) the Excess
Collateral Outstanding Principal Amount times (ii) the Excess Collateral
Notional Percentage. On each Distribution Date following the October 2006
Distribution Date, the notional amounts of the Interest Rate Caps will reduce in
an amount equal to the quotient of (i) the initial notional amount divided by
(ii) 8. The Transferor hereby assigns, sets-over, conveys, pledges and grants a
security interest and lien (free and clear of all other Liens) to the Trustee
for the benefit of the Series 2001-4 Securityholders, in and on all of the
Transferor's right, title and interest, whether now existing or hereafter
arising in and to the Cap Agreements and the Interest Rate Caps arising
thereunder, together with the Cap Proceeds Account and all other proceeds
thereof, as collateral security for the benefit of the Series 2001-4
Securityholders. The Transferor hereby further agrees to execute all such
instruments, documents and financing statements and take all such further action
requested by the Trustee to evidence and perfect the assignment of the Cap
Agreements, the Interest Rate Caps and the Cap Proceeds Account pursuant to this
Section 3A. The Transferor agrees that each Interest Rate Cap shall provide for
payments to the Trustee and that the Trust's interest in respect of such
payments shall be deposited into the Cap Proceeds Account.
(b) The Trustee, for the benefit of the Series 2001-4 Securityholders,
shall establish and maintain with a Qualified Institution, which may be the
financial institution serving as Trustee, in the name of the Trustee, on behalf
of the Securityholders, a certain segregated trust account (the "Cap Proceeds
Account"). All amounts paid pursuant to the Interest Rate Caps or any Qualified
Substitute Arrangement on any Business Day (a "Cap Settlement Date") shall be
deposited in the Cap Proceeds Account. Any amounts paid pursuant to the Interest
Rate Caps or any Qualified Substitute Arrangement on the Transfer Date in any
Monthly Period shall be treated for all purposes herein, including application
in accordance with subsection 4.9(a) of the Agreement, as if they had been
received on the last Business Day of the preceding Monthly Period. Funds in the
Cap Proceeds Account shall be invested at the direction of the Servicer, in Cash
Equivalents with maturities not later than the next succeeding Business Day. Any
earnings on such invested funds shall be deposited and held in the Cap Proceeds
Account and applied in the same manner and priority as payments pursuant to the
Interest Rate Caps.
(c) In the event that the Cap Provider defaults in its obligation to
make a payment to the Trustee under one or more Cap Agreements on any Cap
Settlement Date, the Trustee shall make a demand on such Cap Provider, or any
guarantor, if applicable, demanding payment by 12:30 p.m., New York time, on
such date. The Trustee shall give notice to the Securityholders upon the
continuing failure by any Cap Provider to perform its obligation during the two
Business Days following a demand made by the Trustee on such Cap Provider, and
shall take such action with respect to such continuing failure directed to be
taken by the Securityholders.
(d) In the event that the Cap Provider is downgraded below the rating
required by a Rating Agency, then within 30 days after receiving notice of such
decline in the creditworthiness of the Cap Provider as determined by the Rating
Agencies, either (x) the Cap Provider, with the prior written confirmation of
the Rating Agencies that such arrangement will not result in the reduction or
withdrawal of the rating of the Class A Securities, the Class B Securities or
the securities secured by the Excess Collateral, will enter into an arrangement
the purpose of which shall be to assure performance by the Cap Provider of its
obligations under the Interest Rate Cap; or (y) the Transferor shall at its
option either (i) with the prior written confirmation of the Rating Agencies
that such action will not result in a reduction or withdrawal of the rating of
the Class A Securities, the Class B Securities or the securities secured by the
Excess Collateral, cause the Cap Provider to pledge securities in the manner
provided by applicable law which shall be held by the Trustee or its agent free
and clear of the Lien of any third party, in a manner conferring on the Trustee
a perfected first Lien in such securities securing the Cap Provider's
performance of its obligations under the applicable Interest Rate Cap, or (ii)
provided that a Replacement Interest Rate Cap or Qualified Substitute
Arrangement meeting the requirements of Section 3A(e) has been obtained, direct
the Trustee (A) to provide written notice to the Cap Provider of its intention
to terminate the applicable Interest Rate Cap within such 30-day period and (B)
to terminate the applicable Interest Rate Cap within such 30-day period, to
request the payment to it of all amounts due to the Trust under the applicable
Interest Rate Cap through the termination date and to deposit any such amounts
so received, on the day of receipt, to the Cap Proceeds Account for the benefit
of the Series 2001-4 Securityholders, or (iii) establish any other arrangement
(including an arrangement or arrangements in addition to or in substitution for
any prior arrangement made in accordance with the provisions of this Section
3A(d)) satisfactory to the Rating Agencies such that the Rating Agencies will
not reduce or withdraw the rating of the Class A Securities, the Class B
Securities or the securities secured by the Excess Collateral (a "Qualified
Substitute Arrangement"); provided, however, that in the event at any time any
alternative arrangement established pursuant to clause (x) or (y)(i) or (y)(iii)
above shall cease to be satisfactory to the Rating Agencies then the provisions
of this Section 3A(d) shall again be applied and in connection therewith the
30-day period referred to above shall commence on the date the Transferor
receives notice of such cessation or termination, as the case may be.
(e) Unless an alternative arrangement pursuant to clause (x) or (y)(i)
of Section 3A(d) is being established, the Transferor shall use its best efforts
to obtain a Replacement Interest Rate Cap or Qualified Substitute Arrangement
meeting the requirements of this Section 3A(e) during the 30-day period referred
to in Section 3A(d). The Trustee shall not terminate the Interest Rate Cap
unless, prior to the expiration of the 30-day period referred to in said Section
3A(d), the Transferor delivers to the Trustee (i) a Replacement Interest Rate
Cap or Qualified Substitute Arrangement, (ii) to the extent applicable, an
Opinion of Counsel as to the due authorization, execution and delivery and
validity and enforceability of such Replacement Interest Rate Cap or Qualified
Substitute Arrangement, as the case may be, and (iii) a letter from each of the
Rating Agencies confirming that the termination of the Interest Rate Cap and its
replacement with such Replacement Interest Rate Cap or Qualified Substitute
Arrangement will not adversely affect its rating of the Class A Securities, the
Class B Securities or the securities secured by the Excess Collateral.
(f) The Servicer or the Transferor shall notify the Trustee and the
Rating Agencies within five Business Days after obtaining actual knowledge that
the senior unsecured debt rating of the Cap Provider has been withdrawn or
reduced by either of the Rating Agencies.
(g) Notwithstanding the foregoing, the Transferor may at any time
obtain a Replacement Interest Rate Cap, provided that the Transferor delivers to
the Trustee (i) an Opinion of Counsel as to the due authorization, execution and
delivery and validity and enforceability of such Replacement Interest Rate Cap
and (ii) a letter from each of the Rating Agencies confirming that the
termination of the then current Interest Rate Cap and its replacement with such
Replacement Interest Rate Cap will not adversely affect its rating of the Class
A Securities, the Class B Securities or the securities secured by the Excess
Collateral.
(h) The Trustee, on behalf of the Securityholders, upon notification
from the Transferor, shall sell all or a portion of the Interest Rate Caps
subject to the following conditions having been met:
(x) the Aggregate Interest Rate Caps Notional Amount after
giving effect to such sale shall equal or exceed an amount equal to the
product of (i) the Excess Collateral Outstanding Principal Amount times
(ii) the Excess Collateral Notional Percentage, in each case as of the
date of such sale after giving effect to all payments and allocations
made pursuant to this Agreement;
(y) such sale will not result in a downgrading or withdrawal
of the then current rating on the Class A Securities, the Class B
Securities or the securities secured by the Excess Collateral by the
Rating Agencies; and
(z) the minimum notional amount denomination of any
Interest Rate Cap to be sold is $1,000,000.
The Transferor shall have the duty of obtaining a fair market
value price for the sale of the Trust's rights under any Interest Rate Cap,
notifying the Trustee of prospective purchasers and bids, and selecting the
purchaser of such Interest Rate Cap. The Trustee upon receipt of the purchase
price in the Collection Account shall execute all documentation necessary to
effect the transfer of the Trust's rights under the Interest Rate Cap and to
release the Lien of the Trustee on the Interest Rate Cap and proceeds thereof.
Funds deposited in the Collection Account in respect of the
sale of all or a portion of an Interest Rate Cap shall be applied as Principal
Collections allocable to Series 2001-4 and shall be applied on the next
Distribution Date in accordance with subsections 4.7(a), (b) and (c) and 4.9(b)
and (c) of the Agreement.
Section 4. Delivery and Payment for the Class A Securities and the
Class B Securities. The Transferor shall execute and deliver the Class A
Securities and the Class B Securities to the Trustee for authentication in
accordance with Section 6.1 of the Agreement. The Trustee shall deliver the
Class A Securities and the Class B Securities to or upon the order of the
Transferor when authenticated in accordance with Section 6.2 of the Agreement.
Section 5. Form of Delivery of the Class A Securities and the Class B
Securities; Denominations. (a) The Class A Securities and the Class B
Securities, shall be delivered as Book-Entry Securities as provided in Sections
6.1 and 6.10 of the Agreement. The Class A Securities and the Class B Securities
shall be issued in minimum denominations of $1,000 and integral multiples
thereof.
(b) The Depositary for the Class A Securities and the Class B
Securities shall be DTC and the Class A Securities and the Class B Securities
shall be initially registered in the name of Cede & Co., its nominee, and will
initially be held by the Trustee as custodian for DTC.
Section 6. Article IV of Agreement. Sections 4.1, 4.2 and 4.3 of the
Agreement shall read in their entirety as provided in the Agreement. Article IV
of the Agreement (except for Sections 4.1, 4.2 and 4.3 thereof) shall read in
its entirety as follows and shall be applicable only to the Series 2001-4
Securities:
ARTICLE IV
RIGHTS OF SECURITYHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.4. Rights of Securityholders. The Series 2001-4
Securities shall represent undivided interests in the Trust, including the right
to receive, to the extent necessary to make the required payments with respect
to such Series 2001-4 Securities at the times and in the amounts specified in
this Agreement, (a) the Floating Percentage and the Fixed/Floating Percentage
(as applicable from time to time) of Collections (including Finance Charge
Collections) available in the Collection Account, (b) funds allocable to the
Series 2001-4 Securities on deposit in the Excess Funding Account and (c) funds
on deposit in the Interest Funding Account, the Principal Account, the Principal
Funding Account, the Accumulation Period Reserve Account, the Distribution
Account, the Cap Proceeds Account, the Payment Reserve Account, the Funding
Period Reserve Account and the Pre-Funding Account (for such Series, the "Series
2001-4 Securityholders' Interest"). The Class B Securities and the Excess
Collateral shall be subordinated to the Class A Securities; and the Excess
Collateral shall be subordinated to the Class B Securities. The Class B
Securities will not have the right to receive payments of principal until the
Class A Invested Amount has been paid in full. The Excess Collateral will not
have the right to receive payments of principal until the Transfer Date
immediately preceding the Distribution Date on which the Class B Invested Amount
will be paid in full.
SECTION 4.5. Collections and Allocation; Payments on
Exchangeable Transferor Security.
(a) Collections and Allocations. The Servicer will apply or
will instruct the Trustee to apply all funds on deposit in the Collection
Account and the Excess Funding Account allocable to the Series 2001-4
Securities, and all funds on deposit in the Interest Funding Account, the
Principal Account, the Cap Proceeds Account, the Principal Funding Account, the
Accumulation Period Reserve Account, the Distribution Account, the Payment
Reserve Account, the Funding Period Reserve Account and the Pre-Funding Account,
as described in this Article IV. On each Business Day, (i) the amount of Finance
Charge Collections available in the Collection Account allocable to the Series
2001-4 Securities shall be determined by multiplying the aggregate amount of
such Finance Charge Collections by (x) prior to the Pay Out Commencement Date,
the Floating Percentage and (y) on and after the Pay Out Commencement Date, the
Fixed/Floating Percentage, (ii) the amount of Principal Collections available in
the Collection Account allocable to the Series 2001-4 Securities shall be
determined by multiplying the aggregate amount of such Principal Collections by
(x) during the Revolving Period, the Floating Percentage and (y) during the
Amortization Period, the Fixed/Floating Percentage, and (iii) the Receivables in
Defaulted Accounts allocable to the Series 2001-4 Securities shall be determined
by multiplying the Default Amount by the Floating Percentage.
(b) Payments to the Holder of the Exchangeable Transferor
Security. On each Business Day, the Servicer shall allocate and pay Collections
in accordance with the Daily Report with respect to such Business Day to the
Holder of the Exchangeable Transferor Security in accordance with subsection
4.3(b) of the Agreement; provided, however, that such amounts shall be applied
in accordance with Section 4.10 hereof to the extent specified therein.
Notwithstanding the foregoing and any other provisions of this
Series Supplement, amounts payable to the Transferor shall instead be deposited
in the Excess Funding Account to the extent necessary to prevent the Transferor
Interest from being less than the Minimum Transferor Interest.
SECTION 4.6. Determination of Interest for the Series 2001-4
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.
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.
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 Monthly 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 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 Excess Collateral Outstanding
Principal Amount as of the close of business on the first day of such Interest
Accrual Period.
SECTION 4.7. Determination of Principal Xxxxxxx. (a) The
amount of principal (the "Class A Principal") distributable from the
Distribution Account or available for deposit into the Principal Funding Account
with respect to the Class A Securities for each Distribution Date with respect
to the Amortization Period shall be equal to the least of (i) the Available
Series 2001-4 Principal Collections on deposit in the Principal Account with
respect to the related Transfer Date, (ii) for each Distribution Date with
respect the Accumulation Period, prior to the payment in full of the Class A
Invested Amount and on or prior to the Class A Expected Final Payment Date, the
applicable Controlled Deposit Amount for such Transfer Date and (iii) the Class
A Adjusted Invested Amount on the related Transfer Date.
(b) The amount of principal (the "Class B Principal")
distributable from the Distribution Account with respect to the Class B
Securities for each Distribution Date, beginning with (x) during the
Accumulation Period, the Distribution Date following the Distribution Date on
which the Class A Invested Amount is paid in full and (y) during the Early
Amortization Period, the Distribution Date on which the Class A Invested Amount
is paid in full, shall be equal to the lesser of (i) the Available Series 2001-4
Principal Collections remaining on deposit in the Principal Account with respect
to the related Transfer Date after application thereof to Class A Principal, if
any, and (ii) the Class B Invested Amount on such Transfer Date.
(c) The amount of principal (the "Excess Collateral Monthly
Principal") distributable from the Distribution Account with respect to the
Excess Collateral for each Transfer Date, beginning with the Transfer Date
immediately preceding the Distribution Date on which the Class B Invested Amount
will be paid in full, prior to payment in full of the Excess Collateral Amount,
shall be equal to the lesser of (i) the Available Series 2001-4 Principal
Collections remaining on deposit in the Principal Account with respect to the
related Transfer Date after application thereof to Class A Principal and Class B
Principal, if any, and (ii) the Excess Collateral Amount on such Transfer Date.
SECTION 4.8. Shared Principal Collections. Shared Principal
Collections allocated to Available Series 2001-4 Principal Collections for the
Series 2001-4 Securities and to be applied to Class A Principal, Class B
Principal and Excess Collateral Monthly Principal pursuant to subsection
4.9(c)(i)(z) of the Agreement for any Business Day with respect to the
Amortization Period shall mean an amount equal to the product of (x) Shared
Principal Collections for all Series for such Business Day and (y) a fraction,
the numerator of which is the Principal Shortfall for the Series 2001-4
Securities for such Business Day and the denominator of which is the aggregate
amount of Principal Shortfalls for all Series for such Business Day. For any
Business Day with respect to the Revolving Period, Shared Principal Collections
allocated to Available Series 2001-4 Principal Collections for the Series 2001-4
Securities shall be zero.
SECTION 4.9. Application of Funds. (a) On each Business Day,
the Servicer shall deliver to the Trustee a Daily Report in which it shall
instruct the Trustee to withdraw, and the Trustee, acting in accordance with
such instructions, shall withdraw from the Collection Account and the Cap
Proceeds Account, to the extent of the sum of (w) prior to the Pay Out
Commencement Date, the Floating Percentage of the sum of Finance Charge
Collections and the amount of Adjustment Payments made by the Transferor with
respect to Adjustment Payments required to be made but not made in a prior
Monthly Period, available in the Collection Account or, on and after the Pay Out
Commencement Date, the Fixed/Floating Percentage of the sum of Finance Charge
Collections and the amount of Adjustment Payments made by the Transferor with
respect to Adjustment Payments required to be made but not made in a prior
Monthly Period, available in the Collection Account, (x) Investment Earnings on
deposit in the Collection Account, (y) amounts on deposit in the Payment Reserve
Account, if any, if and to the extent the Transferor designates that such
amounts are to be so applied, and (z) the Cap Receipt Amount, if any, for such
Business Day (collectively, the "Available Series 2001-4 Finance Charge
Collections"), the amounts required to be withdrawn from the Collection Account
pursuant to subsections 4.9(a)(i) through 4.9(a)(xi) of the Agreement.
(i) Class A Monthly Interest. On each Business Day
during a Monthly Period, the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw first from the Cap
Proceeds Account to the extent of the Cap Receipt Amount and then from
the Collection Account and then from the Payment Reserve Account, and
deposit into the Interest Funding Account for distribution on the next
Distribution Date to the Class A Securityholders, to the extent of the
Available Series 2001-4 Finance Charge Collections for such Business
Day, an amount equal to the lesser of (x) the Available Series 2001-4
Finance Charge Collections and (y) the excess of (1) the sum of Class A
Monthly Interest for the Interest Accrual Period beginning in such
Monthly Period and Carryover Class A Interest over (2) any amounts with
respect thereto previously deposited into the Interest Funding Account
on any prior Business Day during such Monthly Period. Notwithstanding
anything to the contrary herein, the portion of Carryover Class A
Interest that constitutes Class A Additional Interest shall be payable
or distributable to Class A Securityholders only to the extent
permitted by applicable law.
(ii) Class B Monthly Interest. On each Business Day
during a Monthly Period, the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw first from the Cap
Proceeds Account to the extent of the Cap Receipt Amount and then from
the Collection Account and then from the Payment Reserve Account, and
deposit into the Interest Funding Account for distribution on the next
Distribution Date to the Class B Securityholders, to the extent of any
Available Series 2001-4 Finance Charge Collections remaining after
giving effect to the withdrawal pursuant to subsection 4.9(a)(i) of the
Agreement, an amount equal to the lesser of (x) any such remaining
Available Series 2001-4 Finance Charge Collections and (y) the excess
of (1) the sum of Class B Monthly Interest for the Interest Accrual
Period beginning in such Monthly Period and Carryover Class B Interest
over (2) any amounts with respect thereto previously deposited into the
Interest Funding Account on any prior Business Day during such Monthly
Period. Notwithstanding anything to the contrary herein, the portion of
Carryover Class B Interest that constitutes Class B Additional Interest
shall be payable or distributable to Class B Securityholders only to
the extent permitted by applicable law.
(iii) Excess Collateral Minimum Monthly Interest. On
each Business Day during a Monthly Period, the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw first
from the Cap Proceeds Account to the extent of the Cap Receipt Amount
and then from the Collection Account and then from the Payment Reserve
Account, and distribute to the Excess Collateral Holder, on such
Business Day, to the extent of any Available Series 2001-4 Finance
Charge Collections remaining after giving effect to the withdrawals
pursuant to subsections 4.9(a)(i) and (ii) of the Agreement, an amount
equal to the lesser of (x) any such remaining Available Series 2001-4
Finance Charge Collections and (y) the excess of (1) the sum of Excess
Collateral Minimum Monthly Interest for the Interest Accrual Period
beginning in such Monthly Period and Carryover Excess Collateral
Minimum Interest over (2) any amounts with respect thereto previously
distributed to the Excess Collateral Holder on any prior Business Day
during such Monthly Period.
(iv) Investor Servicing Fee. On each Business Day,
the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw first from the Cap Proceeds Account to the extent of the
Cap Receipt Amount and then from the Collection Account and then from
the Payment Reserve Account, and distribute to the Servicer, to the
extent of any Available Series 2001-4 Finance Charge Collections
remaining after giving effect to the withdrawals pursuant to subsection
4.9(a)(i) through (iii) of the Agreement, an amount equal to the lesser
of (x) any such remaining Available Series 2001-4 Finance Charge
Collections and (y) the excess of (i) the Servicing Fee for such
Monthly Period plus any unpaid Servicing Fees from prior Monthly
Periods over (ii) any amounts with respect thereto previously
distributed to the Servicer during such Monthly Period.
(v) Series Default Amount. On each Business Day,
first if such day is the Default Recognition Date for the related
Monthly Period, the Transferor will apply (as described below) an
amount equal to the amount paid to the Transferor pursuant to
subsection 3.02(a)(vii) of the Transfer and Administration Agreement on
each Business Day in the current Monthly Period other than a Default
Recognition Date to be treated as "Transferor Retained Finance Charge
Collections" and second the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw first from the Cap
Proceeds Account to the extent of the Cap Receipt Amount and then from
the Collection Account and then from the Payment Reserve Account, to
the extent of any Available Series 2001-4 Finance Charge Collections
remaining after giving effect to the withdrawals pursuant to
subsections 4.9(a)(i) through (iv) of the Agreement, in an amount equal
to the lesser of (x) any such remaining Available Series 2001-4 Finance
Charge Collections and, if such day is the related Default Recognition
Date for such Monthly Period, an amount equal to the aggregate
Transferor Retained Finance Charge Collections for each prior day
during the related Monthly Period and (y) the sum of (1) the aggregate
Series Default Amount for such Business Day plus (2) the unpaid Series
Default Amount for each previous Business Day during such Monthly
Period, such amount to be (A) treated as Shared Principal Collections
during the Revolving Period, and (B) treated as Available Series 2001-4
Principal Collections during the Amortization Period.
(vi) Adjustment Payment Shortfalls. On each Business
Day, the Trustee, acting in accordance with instructions from the
Servicer, shall withdraw first from the Cap Proceeds Account to the
extent of the Cap Receipt Amount and then from the Collection Account
and then from the Payment Reserve Account, to the extent of any
Available Series 2001-4 Finance Charge Collections remaining after
giving effect to the withdrawals pursuant to subsections 4.9(a)(i)
through (v) of the Agreement, an amount equal to the lesser of (x) any
such remaining Available Series 2001-4 Finance Charge Collections and
(y) an amount equal to the Series 2001-4 Percentage of any Adjustment
Payment which the Transferor is required but fails to make pursuant to
subsection 3.8(a) of the Agreement, such amount, (i) during the
Revolving Period, to be treated as Shared Principal Collections, and
(ii) during the Amortization Period, to be treated as Available Series
2001-4 Principal Collections.
(vii) Reimbursement of Class A Charge-Offs. On each
Business Day, the Trustee, acting in accordance with instructions from
the Servicer, shall withdraw first from the Cap Proceeds Account to the
extent of the Cap Receipt Amount and then from the Collection Account
and then from the Payment Reserve Account, to the extent of any
Available Series 2001-4 Finance Charge Collections remaining after
giving effect to the withdrawals pursuant to subsections 4.9(a)(i)
through (vi) of the Agreement, an amount equal to the lesser of (x) any
such remaining Available Series 2001-4 Finance Charge Collections and
(y) the unreimbursed Class A Charge-Offs, if any, will be applied to
reimburse Class A Charge-Offs, such amount during the Revolving Period,
to be treated as Shared Principal Collections, and during the
Amortization Period, to be treated as Available Series 2001-4 Principal
Collections.
(viii) Reimbursement of Class B Charge-Offs. On each
Business Day, the Trustee, acting in accordance with instructions from
the Servicer, shall withdraw first from the Cap Proceeds Account to the
extent of the Cap Receipt Amount and then from the Collection Account
and then from the Payment Reserve Account, to the extent of any
Available Series 2001-4 Finance Charge Collections remaining after
giving effect to the withdrawals pursuant to subsections 4.9(a)(i)
through (vii) of the Agreement, an amount equal to the lesser of (x)
any such remaining Available Series 2001-4 Finance Charge Collections
and (y) the unreimbursed amount by which the Class B Invested Amount
has been reduced on prior Business Days pursuant to clauses (c) and (d)
of the definition of Class B Invested Amount, if any, such amount, (i)
during the Revolving Period, to be treated as Shared Principal
Collections, and (ii) during the Amortization Period, to be treated as
Available Series 2001-4 Principal Collections.
(ix) Reimbursement of Excess Collateral Charge-Offs.
On each Business Day, the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw first from the Cap
Proceeds Account to the extent of the Cap Receipt Amount and then from
the Collection Account and then from the Payment Reserve Account, to
the extent of any Available Series 2001-4 Finance Charge Collections
remaining after giving effect to the withdrawals pursuant to
subsections 4.9(a)(i) through (viii) of the Agreement, an amount equal
to the lesser of (x) any such remaining Available Series 2001-4 Finance
Charge Collections and (y) the unreimbursed amount by which the Excess
Collateral Amount has been reduced on prior Business Days pursuant to
clauses (c) and (d) of the definition of Excess Collateral Amount, if
any, such amount, (i) during the Revolving Period, to be treated as
Shared Principal Collections, and (ii) during the Amortization Period,
to be treated as Available Series 2001-4 Principal Collections.
(x) Accumulation Period Reserve Account. On each
Business Day on and after the Reserve Account Funding Date, but prior
to the date on which the Accumulation Period Reserve Account terminates
pursuant to subsection 4.21(d) of the Agreement, the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw first
from the Cap Proceeds Account to the extent of the Cap Receipt Amount
and then from the Collection Account and then from the Payment Reserve
Account, and distribute to the Servicer, to the extent of any Available
Series 2001-4 Finance Charge Collections remaining after giving effect
to the withdrawals pursuant to subsections 4.9(a)(i) through (ix) of
the Agreement, an amount equal to the lesser of (x) any such remaining
Available Series 2001-4 Finance Charge Collections and (y) the excess,
if any, of the Required Reserve Account Amount over the Available
Reserve Account Amount and the Servicer shall deposit such amount, if
any, in the Accumulation Period Reserve Account.
(xi) Payments to Excess Collateral Holder. Any
amounts remaining in the Cap Proceeds Account, Collection Account and
the Payment Reserve Account, to the extent of any Available Series
2001-4 Finance Charge Collections remaining after giving effect to the
withdrawals pursuant to subsections 4.9(a)(i) through (x) of the
Agreement, shall be distributed to the Excess Collateral Holder.
On each Business Day during a Monthly Period, any amount distributed to the
Trustee pursuant to subsection 3.02(a)(v) of the Transfer and Administration
Agreement to be deposited in the Payment Reserve Account shall be deposited in
the Payment Reserve Account.
On each Business Day during a Monthly Period, any amount distributed to the
Trustee pursuant to subsection 3.02(a)(vi) of the Transfer and Administration
Agreement shall be treated as Excess Finance Charge Collections, and the
Servicer shall direct the Trustee in writing on each Business Day to first make
such amounts available to pay Securityholders of other Series to the extent of
shortfalls, if any, in amounts payable to such Securityholders from Finance
Charge Collections allocated to such other Series, then to pay any unpaid
commercially reasonable costs and expenses of a Successor Servicer, if any.
Notwithstanding the foregoing, if on any Default Recognition Date the sum of the
amount of Available Series 2001-4 Finance Charge Collections (including, all
amounts on deposit in the Payment Reserve Account remaining after application
pursuant to subsection 4.9(a)(iv)) and Transferor Retained Finance Charge
Collections is less than the Series Default Amount for such Default Recognition
Date, the Servicer shall apply (i) amounts deposited in the Accumulation Period
Reserve Account pursuant to subsection 4.9(a)(x) of the Agreement during the
then current Monthly Period and (ii) any amount distributed to the Trustee
pursuant to subsection 3.02(a) of the Transfer and Administration Agreement for
application in accordance with the instructions of the Servicer in respect of
such shortfall, in accordance with subsection 4.9(a)(v) of the Agreement to the
extent of such shortfall.
(b) For each Business Day with respect to the Revolving
Period, the funds on deposit in the Collection Account to the extent of the
product of (i) the Floating Percentage and (ii) Principal Collections with
respect to such Business Day (less the amount of Redirected Principal
Collections on such Business Day) will be treated as Shared Principal
Collections and applied, pursuant to the written direction of the Servicer in
the Daily Report for such Business Day, as provided in Section 4.3(d) of the
Agreement.
(c) For each Business Day on and after the Amortization Period
Commencement Date, the amount of funds on deposit in the Collection Account, the
Excess Funding Account or the Pre-Funding Account and other accounts as
described below will be distributed, pursuant to the written direction of the
Servicer in the Daily Report for such Business Day in the following priority:
(i) an amount (not in excess of the Adjusted Invested
Amount) equal to the sum of (v) the product of the Fixed/Floating
Percentage and Principal Collections in the Collection Account at the
end of the preceding Business Day (less the amount thereof applied as
Redirected Principal Collections on such Business Day), (w) any amount
on deposit in the Excess Funding Account allocated to the Series 2001-4
Securities on such Business Day pursuant to subsection 4.9(d) of the
Agreement, (x) amounts to be paid pursuant to subsections 4.9(a)(v),
(vi), (vii), (viii) and (ix) of the Agreement from Available Series
2001-4 Finance Charge Collections and from amounts available pursuant
to subsections 4.10(a) and (b), 4.17, 4.20(b) and 4.21(b), (c) and (d)
of the Agreement on such Business Day, (y) on and after the Pay Out
Commencement Date, any amount on deposit in the Pre-Funding Account on
such Business Day (less investment earnings thereon) and (z) the amount
of Shared Principal Collections allocated to the Series 2001-4
Securities in accordance with Section 4.8 of the Agreement on such
Business Day, will be deposited into the Principal Account; provided,
however, that with respect to any Monthly Period during the
Accumulation Period, the aggregate amount required to be deposited in
the Principal Account pursuant to this subsection 4.9(c)(i) shall not
exceed the sum of the Controlled Deposit Amount.
(ii) an amount equal to the excess, if any, of (A)
the sum of the amounts described in clauses (i)(v) and (x) above over
(B) the sum of the Class A Principal, the Class B Principal and the
Excess Collateral Monthly Principal will be treated as Shared Principal
Collections and applied as provided in subsection 4.3(d) of the
Agreement.
(d) On the first Business Day of the Amortization Period funds
on deposit in the Excess Funding Account will be deposited in the Principal
Account to the extent of the lesser of (x) the Invested Amount and (y) the
product of (i) the amount on deposit in the Excess Funding Account at the
beginning of the Amortization Period and (ii) a fraction, the numerator of which
is equal to the Invested Amount and the denominator of which is equal to the sum
of the invested amounts of all Series in amortization periods on such day.
SECTION 4.10. Coverage of Required Amount for the Series
2001-4 Securities.
(a) To the extent that any amounts are on deposit in the
Excess Funding Account on any Business Day, the Servicer shall apply, in the
manner specified for application of Available Series 2001-4 Finance Charge
Collections in subsections 4.9(a)(i) through (xi) of the Agreement, Transferor
Finance Charge Collections in an amount equal to the excess of (x) the product
of (a) the Base Rate, (b) the amounts on deposit in the Excess Funding Account
and (c) the number of days elapsed since the previous Business Day divided by
the actual number of days in such year over (y) the aggregate amount of all
earnings since the previous Business Day available from the Cash Equivalents in
which funds on deposit in the Excess Funding Account are invested (the "Negative
Carry Amount").
(b) To the extent that on any Business Day payments are being
made pursuant to any of subsections 4.9(a)(i) through (x) of the Agreement,
respectively, and the full amount to be paid pursuant to any such subsection
receiving payments on such Business Day is not paid in full on such Business
Day, the Servicer shall apply, in the manner specified for application of
Available Series 2001-4 Finance Charge Collections in subsections 4.9(a)(i)
through (x) of the Agreement, all or a portion of the Excess Finance Charge
Collections from other Series with respect to such Business Day allocable to the
Series 2001-4 Securities in an amount equal to the excess of the full amount to
be allocated or paid pursuant to the applicable subsection over the amount
applied with respect thereto from Available Series 2001-4 Finance Charge
Collections and Transferor Finance Charge Collections on such Business Day (the
"Required Amount").
Excess Finance Charge Collections allocated to the Series
2001-4 Securities for any Business Day shall mean an amount equal to the product
of (x) Excess Finance Charge Collections available from all other Series for
such Business Day and (y) a fraction, the numerator of which is the Required
Amount for such Business Day and the denominator of which is the aggregate
amount of shortfalls in required amounts or other amounts to be paid from
Finance Charge Collections for all Series for such Business Day.
SECTION 4.11. Payment of Interest on Class A Securities and
Class B Securities. On each Transfer Date, the Trustee, acting in accordance
with instructions from the Servicer set forth in the Daily Report for such day,
shall withdraw the amount on deposit in the Interest Funding Account with
respect to the preceding Monthly Period allocable to the Class A Securities and
the Class B Securities and deposit such amount in the Distribution Account. On
each Distribution Date, the Paying Agent shall pay in accordance with Section
5.1 of the Agreement to (x) the Class A Securityholders from the Distribution
Account such amount deposited into the Distribution Account on the related
Transfer Date allocable thereto pursuant to subsection 4.9(a)(i) of the
Agreement and (y) the Class B Securityholders from the Distribution Account the
amount deposited into the Distribution Account on the related Transfer Date
allocable thereto pursuant to subsections 4.9(a)(ii) of the Agreement.
SECTION 4.12. Payment of Security Principal. (a) On the
Transfer Date preceding each Distribution Date with respect to the Amortization
Period, the Trustee, acting in accordance with instructions from the Servicer
set forth in the Daily Report for such day, shall withdraw from the Principal
Account and deposit into the Distribution Account with respect to the Early
Amortization Period, or the Principal Funding Account with respect to the
Accumulation Period, to the extent of funds available, an amount equal to the
Class A Principal for such Distribution Date. On each Distribution Date with
respect to the Early Amortization Period until the Class A Invested Amount is
paid in full, or on the Class A Expected Final Payment Date with respect to the
Accumulation Period following any deposit to the Distribution Account pursuant
to subsection 4.12(e) of the Agreement, the Paying Agent shall pay in accordance
with Section 5.1 of the Agreement to the Class A Securityholders from the
Distribution Account such amounts deposited with respect to Class A Principal
into the Distribution Account on the related Transfer Date.
(b) (i) During the Accumulation Period, on each Transfer Date
after the Distribution Date on which the Class A Invested Amount is paid in full
and (ii) during the Early Amortization Period on each Transfer Date commencing
with the Transfer Date immediately preceding the Distribution Date on which the
Class A Invested Amount will be paid in full, the Trustee, acting in accordance
with instructions from the Servicer set forth in the Daily Report for such day,
shall withdraw from the Principal Account and deposit in the Distribution
Account, to the extent of funds available, an amount equal to the Class B
Principal for the related Distribution Date. On and after the Class A Invested
Amount has been paid in full, and on each Distribution Date thereafter until the
Class B Invested Amount is paid in full, the Paying Agent shall pay in
accordance with Section 5.1 of the Agreement to the Class B Securityholder from
the Distribution Account such amounts deposited with respect to Class B
Principal into the Distribution Account on the related Transfer Date.
(c) On the Transfer Date immediately preceding the
Distribution Date on which the Class B Invested Amount will be paid in full and
on each Transfer Date thereafter, the Trustee, acting in accordance with
instructions from the Servicer set forth in the Daily Report for such day, shall
withdraw from the Principal Account and deposit in the Distribution Account, to
the extent of funds available, an amount equal to the Excess Collateral Monthly
Principal for such Transfer Date. On and after the Transfer Date immediately
preceding the Distribution Date on which the Class B Invested Amount will be
paid in full, and on each Distribution Date thereafter until the Excess
Collateral Amount is paid in full, the Paying Agent shall pay in accordance with
Section 5.1 of the Agreement to the Excess Collateral Holder from the
Distribution Account such amounts deposited with respect to Excess Collateral
Monthly Principal into the Distribution Account on such Transfer Date.
(d) Any amounts remaining in the Principal Account and
allocable to the Series 2001-4 Securities, after the Excess Collateral Amount
has been paid in full, will be treated as Shared Principal Collections and
applied in accordance with Section 4.3(d) of the Agreement.
(e) On the earlier to occur of (i) the first Transfer Date
with respect to the Early Amortization Period and (ii) the Transfer Date
immediately preceding the Class A Expected Final Payment Date, the Trustee,
acting in accordance with instructions from the Servicer, shall withdraw from
the Principal Funding Account and deposit in the Distribution Account the amount
on deposit in the Principal Funding Account for distribution to the Class A
Securityholders up to an amount equal to the Class A Invested Amount.
SECTION 4.13. Series Charge-Offs. (a) If, on any Determination
Date, the aggregate Series Default Amount and the Series 2001-4 Percentage of
unpaid Adjustment Payments, if any, for each Business Day in the preceding
Monthly Period exceeded the Available Series 2001-4 Finance Charge Collections
applied to the payment thereof pursuant to subsections 4.9(a)(v) and (vi) of the
Agreement, the amount of Transferor Finance Charge Collections and Excess
Finance Charge Collections allocated thereto pursuant to Section 4.10 of the
Agreement, the amount of Redirected Principal Collections applied with respect
thereto pursuant to Section 4.17 of the Agreement, the amount of Principal
Funding Account Investment Proceeds applied with respect thereto pursuant to
subsection 4.20(b), the amount of Pre-Funding Account investment proceeds
applied with respect thereto pursuant to subsection 4.14(c), amounts withdrawn
from the Funding Period Reserve Account pursuant to subsection 4.15(b) and
amounts withdrawn from the Accumulation Period Reserve Account pursuant to
subsection 4.21(b), (c) and (d) and applied with respect to the Series Default
Amount and the Series 2001-4 Percentage of unpaid Adjustment Payments with
respect to such Monthly Period, the Excess Collateral Amount will be reduced by
the amount by which the remaining aggregate Series Default Amount and Series
2001-4 Percentage of unpaid Adjustment Payments exceed the amount applied with
respect thereto during such preceding Monthly Period (an "Excess Collateral
Charge-Off").
(b) In the event that any such reduction of the Excess
Collateral Amount would cause the Excess Collateral Amount to be a negative
number, the Excess Collateral Amount will be reduced to zero, and the Class B
Invested Amount will be reduced by the amount by which the Excess Collateral
Amount would have been reduced below zero, but not more than the remaining
aggregate Series 2001-4 Default Amount and Series 2001-4 Percentage of unpaid
Adjustment Payments for such Monthly Period (a "Class B Charge-Off").
(c) In the event that any such reduction of the Class B
Invested Amount would cause the Class B Invested Amount to be a negative number,
the Class B Invested Amount will be reduced to zero, and the Class A Invested
Amount will be reduced by the amount by which the Class B Invested Amount would
have been reduced below zero, but not more than the remaining aggregate Series
2001-4 Default Amount and Series 2001-4 Percentage of unpaid Adjustment Payments
for such Monthly Period (a "Class A Charge-Off").
SECTION 4.14. Pre-Funding Account. (a) Establishment of the
Pre-Funding Account. The Transferor hereby directs the Servicer, for the benefit
of the Series 2001-4 Securityholders, to establish and maintain or cause to be
established and maintained in the name of the Trustee, on behalf of the Series
2001-4 Securityholders, with a Qualified Institution (which initially shall be
U.S. Bank National Association) a segregated trust account (the "Pre-Funding
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Series 2001-4 Securityholders. The
Transferor does hereby transfer, assign, set over and otherwise convey to the
Trust for the benefit of the Series 2001-4 Securityholders, without recourse,
all of its right, title and interest in, to and under the Pre-Funding Account,
any Cash Equivalent on deposit therein and any proceeds of the foregoing,
including the investment earnings. The Pre-Funding Account shall be under the
sole dominion and control of the Trustee for the benefit of the Series 2001-4
Securityholders. If, at any time, the institution holding the Pre-Funding
Account ceases to be a Qualified Institution, the Transferor shall direct the
Servicer to establish within 10 Business Days a new Pre-Funding Account meeting
the conditions specified above with a Qualified Institution, transfer any cash
and/or any investments to such new Pre-Funding Account and from the date such
new Pre-Funding Account is established, it shall be the "Pre-Funding Account."
In addition, after five days notice to the Trustee, the Transferor may direct
the Servicer to establish a new Pre-Funding Account meeting the conditions
specified above with a different Qualified Institution, transfer any cash and/or
investments to such new Pre-Funding Account and from the date such new
Pre-Funding Account is established, it shall be, for the Series 2001-4
Securities, the "Pre-Funding Account." Pursuant to the authority granted to the
Servicer in subsection 3.1(b) of the Agreement, the Servicer shall have the
power, revocable by the Trustee, to make withdrawals and payments or to instruct
the Trustee to make withdrawals and payments from the Pre-Funding Account for
the purposes of carrying out the Servicer's or Trustee's duties hereunder.
(b) Administration of Pre-Funding Account. The Transferor
shall on the Closing Date deposit in the Pre-Funding Account the Initial
Pre-Funded Amount. On the Business Day preceding each Transfer Date, the
Servicer shall withdraw from the Pre-Funding Account and deposit in the
Collection Account all interest and other investment income on the Pre-Funded
Amount. Interest (including reinvested interest) and other investment income on
funds on deposit in the Pre-Funded Account shall not be considered part of the
Pre-Funded Amount for purposes of this Agreement. Funds on deposit in the
Pre-Funding Account shall be withdrawn by the Servicer and paid to the
Transferor to the extent of any increases in the Invested Amount pursuant to
Section 4.16 of the Agreement. If the Pay Out Commencement Date occurs during
the Funding Period, the remaining Pre-Funded Amount will be applied in
accordance with subsection 4.9(c) of the Agreement to make principal payments
with respect to the Series 2001-4 Securities. The Servicer shall withdraw the
remaining Pre-Funded Amount, if any, on deposit in the Pre-Funding Account on
the first Business Day of the January 2002 Monthly Period and deposit such
amount into the Excess Funding Account.
(c) Investment of Funds in Pre-Funding Account. Funds on
deposit in the Pre-Funding Account shall be invested in Cash Equivalents by the
Trustee (or, at the direction of the Trustee, by the Servicer on behalf of the
Trustee) at the direction of the Servicer. Funds on deposit in the Pre-Funding
Account on any Distribution Date, after giving effect to any withdrawals from
the Pre-Funding Account, shall be invested in Cash Equivalents that will mature
so that such funds will be available for withdrawal on or prior to the following
Transfer Date. The proceeds of any such investments shall be invested in Cash
Equivalents that will mature so that such funds will be available for withdrawal
on or prior to the following Transfer Date and, on such Transfer Date, such
proceeds shall be deposited in the Collection Account and treated as Investment
Earnings for application as Available Series 2001-4 Finance Charge Collections
available to be applied pursuant to subsection 4.9(a) on the last Business Day
of the preceding Monthly Period.
SECTION 4.15. Funding Period Reserve Account. (a)
Establishment of the Funding Period Reserve Account. The Transferor hereby
directs the Servicer, for the benefit of the Series 2001-4 Securityholders, to
establish and maintain or cause to be established and maintained in the name of
the Trustee, on behalf of the Series 2001-4 Securityholders, with a Qualified
Institution (which initially shall be U.S. Bank National Association) a
segregated trust account (the "Funding Period Reserve Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Series 2001-4 Securityholders. The Transferor does hereby
transfer, assign, set over and otherwise convey to the Trust for the benefit of
the Series 2001-4 Securityholders, without recourse, all of its right, title and
interest in, to and under the Funding Period Reserve Account, any Cash
Equivalent on deposit therein and any proceeds of the foregoing, including the
investment earnings. The Funding Period Reserve Account shall be under the sole
dominion and control of the Trustee for the benefit of the Series 2001-4
Securityholders. If, at any time, the institution holding the Funding Period
Reserve Account ceases to be a Qualified Institution, the Transferor shall
direct the Servicer to establish within 10 Business Days a new Funding Period
Reserve Account meeting the conditions specified above with a Qualified
Institution, transfer any cash and/or any investments to such new Funding Period
Reserve Account and from the date such new Funding Period Reserve Account is
established, it shall be the "Funding Period Reserve Account." In addition,
after five days notice to the Trustee, the Transferor may direct the Servicer to
establish a new Funding Period Reserve Account meeting the conditions specified
above with a different Qualified Institution, transfer any cash and/or
investments to such new Funding Period Reserve Account and from the date such
new Funding Period Reserve Account is established, it shall be, for the Series
2001-4 Securities, the "Funding Period Reserve Account." Pursuant to the
authority granted to the Servicer in subsection 3.1(b) of the Agreement, the
Servicer shall have the power, revocable by the Trustee, to make withdrawals and
payments or to instruct the Trustee to make withdrawals and payments from the
Funding Period Reserve Account for the purposes of carrying out the Servicer's
or Trustee's duties hereunder.
(b) Administration of Funding Period Reserve Account. The
Transferor shall on the Closing Date deposit in the Funding Period Reserve
Account an amount which is equal to the product of (a) 0.95%, (b) the Pre-Funded
Amount on the Closing Date and (c) a fraction the numerator of which is the
actual number of days from and including the Closing Date through but excluding
the first day of the January 2002 Monthly Period and the denominator of which is
360. Funds on deposit in the Funding Period Reserve Account (after giving effect
to any withdrawals from the Funding Period Reserve Account) shall be invested by
the Trustee at the direction of the Servicer in Cash Equivalents maturing no
later than the following Transfer Date. The interest and other investment income
(net of investment expenses and losses) earned on such investments will be
deposited in the Collection Account and treated as Investment Earnings for
application as Available Series 2001-4 Finance Charge Collections available to
be applied pursuant to subsection 4.9(a) on the last Business Day of the
preceding Monthly Period.
(c) On or before each Transfer Date with respect to the
Funding Period, the Trustee at the direction of the Servicer shall withdraw from
the Funding Period Reserve Account, an amount equal to the lesser of (a) the
amount on deposit in the Funding Period Reserve Account and (b) the excess, if
any, of (i) the product of (x) 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, (y) the weighted average of the Class A Interest Rate, the Class B
Interest Rate and the Excess Collateral Minimum Rate, in each case as in effect
for the related Interest Accrual 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 the preceding Monthly Period) and (z) the
sum of the Pre-Funded Amount at the close of business on each day during the
preceding Monthly Period divided by the actual number of days in such Monthly
Period over (ii) the investment income (net of investment losses and expenses)
earned on amounts in the Pre-Funding Account since the Closing Date (in the case
of the first Transfer Date) or the preceding Transfer Date (in the case of each
subsequent Transfer Date), and the amount of such withdrawal shall be applied as
if such amount were Available Series 2001-4 Finance Charge Collections available
to be applied pursuant to subsection 4.9(a) on the last Business Day of the
preceding Monthly Period.
(d) The Funding Period Reserve Account shall be terminated
following the earlier to occur of (a) the completion of the Funding Period and
(b) the termination of the Trust pursuant to the Agreement. Upon the termination
of the Funding Period Reserve Account, all amounts on deposit therein (after
giving effect to any withdrawal from the Funding Period Reserve Account on such
date as described above) shall be applied as if they were Available Series
2001-4 Finance Charge Collections available to be applied pursuant to subsection
4.9(a) on the last Business Day of the preceding Monthly Period.
SECTION 4.16. Increases in Invested Amount. The Transferor may
at any time during the Funding Period determine to increase the Invested Amount
up to the Full Invested Amount to the extent there are sufficient Principal
Receivables in the Trust to permit such increase in the Invested Amount without
causing a Pay Out Event to occur with respect to any outstanding Series. Upon
determining to increase the Invested Amount pursuant to this Section 4.16, the
Transferor shall deliver to the Servicer, the Trustee and each Rating Agency an
Officers' Certificate specifying the amount of the increase in the Invested
Amount the Transferor has determined to make and certifying that no Pay Out
Event with respect to any outstanding Series will occur as a result of or in
connection with such increase in the Invested Amount. Upon receipt of such
Officer's Certificate by the Trustee, the Class A Invested Amount, the Class B
Invested Amount and the Excess Collateral Amount shall be increased by the
amount specified in such Officers' Certificate, whereupon the Trustee shall
instruct the Servicer to withdraw from the Pre-Funding Account and pay to the
Transferor an amount equal to the sum of the amount of such increase in the
Class A Invested Amount, the Class B Invested Amount and the Excess Collateral
Amount.
Upon the withdrawal of the remaining Pre-Funded Amount, if
any, on deposit in the Pre-Funding Account on the first Business Day of the
January 2002 Monthly Period and the deposit of such amount in the Excess Funding
Account, the Class A Invested Amount shall be increased by an amount equal to
the Class A Percentage of such amount, the Class B Invested Amount shall be
increased by an amount equal to the Class B Percentage of such amount and the
Excess Collateral Amount shall be increased by an amount equal to the Excess
Collateral Percentage of such amount.
SECTION 4.17. Redirected Principal Collections for the
Series 2001-4 Securities.
(a) On each Business Day, the Servicer will determine an
amount equal to the least of (i) the Excess Collateral Amount, (ii) the product
of (x)(I) during the Revolving Period, the Excess Collateral Floating Percentage
or (II) during an Amortization Period, the Excess Collateral Fixed/Floating
Percentage and (y) the amount of Principal Collections for such Business Day and
(iii) an amount equal to the sum of (a) the Class A Required Amount for such
Business Day and (b) the Class B Required Amount for such Business Day (such
amount called "Redirected Excess Collateral Principal Collections") and shall
apply Principal Collections in an amount equal to such amount first to the
components of the Class A Required Amount and then to the components of the
Class B Required Amount in the same priority as amounts are applied to such
components from Available Series 2001-4 Finance Charge Collections pursuant to
subsection 4.9(a) of the Agreement.
(b) On each Business Day, the Servicer will determine an
amount equal to the least of (i) the Class B Invested Amount, (ii) the product
of (x)(I) during the Revolving Period, the Class B Floating Percentage or (II)
during an Amortization Period, the Class B Fixed/Floating Percentage and (y) the
amount of Principal Collections with respect to such Business Day and (iii) an
amount equal to the excess, if any, of the Class A Required Amount for such
Business Day over the amount of Redirected Excess Collateral Principal
Collections applied with respect thereto for such Business Day (such amount
called "Redirected Class B Principal Collections") and shall apply Principal
Collections in an amount equal to such amount to the components of the Class A
Required Amount as amounts are applied to such components from Available Series
2001-4 Finance Charge Collections pursuant to subsection 4.9(a) of the
Agreement.
SECTION 4.18. 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 4.19. Payment Reserve Account. (a) The Servicer shall
establish and maintain or cause to be established and maintained with a
Qualified Institution, which may be the Trustee, in the name of the Trustee, on
behalf of the Securityholders, the "Payment Reserve Account," which shall be a
segregated trust account with the corporate trust department of such Qualified
Institution, bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Securityholders. The Trustee shall
possess all right, title and interest in all funds on deposit from time to time
in the Payment Reserve Account and in all proceeds thereof. The Payment Reserve
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Securityholders. If, at any time, the institution holding the
Payment Reserve Account ceases to be a Qualified Institution, the Trustee shall
within 10 Business Days establish a new Payment Reserve Account meeting the
conditions specified above with a Qualified Institution, and shall transfer any
cash or any investments to such new Payment Reserve Account. From the date such
new Payment Reserve Account is established, it shall be the "Payment Reserve
Account."
(b) The Transferor, at its discretion, may on any Business Day
withdraw all or a part of any amounts then on deposit in the Payment Reserve
Account and apply such funds as Available Series 2001-4 Finance Charge
Collections in accordance with subsection 4.9(a) of the Agreement.
(c) Funds on deposit in the Payment Reserve Account shall be
invested in Cash Equivalents by the Trustee (or, at the direction of the
Trustee, by the Servicer on behalf of the Trustee) at the direction of the
Servicer. Funds on deposit in the Payment Reserve Account on any Business Day,
after giving effect to any withdrawals from the Payment Reserve Account, shall
be invested in Cash Equivalents that will mature so that such funds will be
available for withdrawal on or prior to the following Business Day. The proceeds
of any such investments shall be invested in Cash Equivalents that will mature
so that such funds will be available for withdrawal on or prior to the following
Business Day. On each Business Day following a deposit of funds to the Payment
Reserve Account, the aggregate proceeds of any such investment shall be
deposited in the Collection Account and treated as Investment Earnings for
application as Available Series 2001-4 Finance Charge Collections.
SECTION 4.20. 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 2001-4 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 2001-4 Securityholders. If, at any time,
the institution holding the Principal Funding Account ceases to be a Qualified
Institution, the Trustee shall within 10 Business Days establish a new Principal
Funding Account meeting the conditions specified above with a Qualified
Institution, and shall transfer any cash or any investments to such new
Principal Funding Account. From the date such new Principal Funding Account is
established, it shall be the "Principal Funding Account." The Trustee, at the
written direction of the Servicer, shall (i) make withdrawals from the Principal
Funding Account from time to time, in the amounts and for the purposes set forth
in this Series Supplement, and (ii) on each Transfer Date (from and after the
commencement of the Accumulation Period) prior to termination of the Principal
Funding Account make a deposit into the Principal Funding Account in the amount
specified in, and otherwise in accordance with, subsection 4.12(a) of the
Agreement.
(b) Funds on deposit in the Principal Funding Account shall be
invested by the Trustee at the direction of the Servicer in Cash Equivalents
maturing no later than the following Transfer Date. On the Transfer Date
occurring in the month following the commencement of the Accumulation Period and
on each Transfer Date thereafter with respect to the Accumulation Period, the
Trustee, at the Servicer's written direction, shall transfer from the Principal
Funding Account to the Collection Account the Principal Funding Account
Investment Proceeds on deposit in the Principal Funding Account, but not in
excess of the Covered Amount, and shall apply such amount as if such amounts
were Available Series 2001-4 Finance Charge Collections available to be applied
pursuant to subsection 4.9(a) on the last Business Day of the preceding Monthly
Period. Principal Funding Account Investment Proceeds (including reinvested
interest) shall not be considered part of the amounts on deposit in the
Principal Funding Account for purposes of this Series Supplement.
SECTION 4.21. 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 2001-4 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 2001-4 Securityholders. If, at any time, the institution
holding the Accumulation Period Reserve Account ceases to be a Qualified
Institution, the Trustee shall within 10 Business Days establish a new
Accumulation Period Reserve Account meeting the conditions specified above with
a Qualified Institution, and shall transfer any cash or any investments to such
new Accumulation Period Reserve Account. From the date such new Accumulation
Period Reserve Account is established, it shall be the "Accumulation Period
Reserve Account." The Trustee, at the written direction of the Servicer, shall
(i) make withdrawals from the Accumulation Period Reserve Account from time to
time, in the amounts and for the purposes set forth in this Series Supplement,
and (ii) on each Transfer Date (from and after the Reserve Account Funding Date)
prior to termination of the Accumulation Period Reserve Account make a deposit
into the Accumulation Period Reserve Account in the amount specified in, and
otherwise in accordance with, subsection 4.9(a)(x) of the Agreement.
(b) Funds on deposit in the Accumulation Period Reserve
Account shall be invested by the Trustee at the direction of the Servicer in
Cash Equivalents maturing no later than the following Transfer Date. The
interest and other investment income (net of investment expenses and losses)
earned on such investments will be retained in the Accumulation Period Reserve
Account (to the extent the amount on deposit therein is less than the Required
Reserve Account Amount) or deposited in the Collection Account and treated as
Investment Earnings for application as Available Series 2001-4 Finance Charge
Collections available to be applied pursuant to subsection 4.9(a) on the last
Business Day of the preceding Monthly Period.
(c) On or before each Transfer Date with respect to the
Accumulation Period and on the first Transfer Date with respect to the Early
Amortization Period, the Trustee at the direction of the Servicer shall withdraw
from the Accumulation Period Reserve Account, up to the Available Reserve
Account Amount, an amount equal to the excess of the Covered Amount for the
related Interest Accrual Period over the Principal Funding Account Investment
Proceeds with respect to such Transfer Date, and the amount of such withdrawal
shall be applied as if such amount were Available Series 2001-4 Finance Charge
Collections available to be applied pursuant to subsection 4.9(a) on the last
Business Day of the preceding Monthly Period.
(d) The Accumulation Period Reserve Account shall be
terminated following the earliest to occur of (a) the termination of the Trust
pursuant to the Agreement, (b) the date on which the Class A Invested Amount is
paid in full, (c) if the Accumulation Period has not commenced, the occurrence
of a Pay Out Event with respect to the Series 2001-4 Securities and (d) if the
Accumulation Period has commenced, the earlier of the first Transfer Date with
respect to the Early Amortization Period and the Class A Expected Final Payment
Date. Upon the termination of the Accumulation Period Reserve Account, all
amounts on deposit therein (after giving effect to any withdrawal from the
Accumulation Period Reserve Account on such date as described above) shall be
applied as if they were Available Series 2001-4 Finance Charge Collections
available to be applied pursuant to subsection 4.9(a) on the last Business Day
of the preceding Monthly Period.
SECTION 4.22. Postponement of Accumulation Period. The
Accumulation Period is scheduled to commence at the close of business on the
last day of the August 2003 Monthly Period; provided, however, that, if the
Accumulation Period Length (determined as described below) is less than 12
months, the date on which the Accumulation Period actually commences may, at the
option of the Transferor, upon written notice to the Trustee, be delayed to the
first Business Day of the month that is the number of months prior to the
Expected Final Payment Date at least equal to the Accumulation Period Length
and, as a result, the number of Monthly Periods in the Accumulation Period will
at least equal the Accumulation Period Length. On each Determination Date
beginning on the May 2003 Determination Date and ending when the Accumulation
Period begins, the Servicer will determine the "Accumulation Period Length"
which will equal the number of months such that the sum of the Accumulation
Period Factors for each Monthly Period during such period will be equal to or
greater than the Required Accumulation Factor Number; provided, however, that
the Accumulation Period Length will not be less than one month.
SECTION 4.23. Defeasance. On the date that the following
conditions shall have been satisfied: (i) the Transferor shall have deposited
(x) in the Principal Funding Account, an amount such that the amount on deposit
in the Principal Funding Account following such deposit is equal to the Class A
Outstanding Principal Amount, (y) in the Principal Account, an amount equal to
the sum of the Class B Outstanding Principal Balance and Excess Collateral
Outstanding Principal Balance and (z) in the Accumulation Period Reserve
Account, an amount equal to or greater than the accrued and unpaid interest on
the Investor Securities through the day preceding the date on which the
Defeasance occurs; (ii) the Transferor shall have delivered to the Trustee (a)
an Opinion of Counsel to the effect that such deposit will not result in the
Trust being required to register as an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, (b) an Opinion of Counsel to
the effect that following such deposit none of the Trust, the Accumulation
Period Reserve Account or the Principal Funding Account will be deemed to be an
association (or publicly traded partnership) taxable as a corporation, (c) a
certificate of an officer of the Transferor stating that the Transferor
reasonably believes that such deposit will not cause a Pay Out Event or any
event that, with the giving of notice or the lapse of time, or both, would
constitute a Pay Out Event, to occur; and (iii) a Ratings Event will not occur,
the Series 2001-4 Securities will no longer be entitled to the security interest
of the Trust in the Receivables and, except those set forth in clause (i) above,
other Trust assets (a "Defeasance") and the percentages applicable to the
allocation to the Series 2001-4 Securityholders of Principal Collections,
Finance Charge Collections and Defaulted Receivables will be reduced to zero.
Section 7. Article V of the Agreement. Article V of the
Agreement shall read in its entirety as follows and shall be applicable only to
the Series 2001-4 Securities:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
SECURITYHOLDERS
SECTION 5.1. Distributions. (a) On each Distribution Date, the
Paying Agent shall distribute (in accordance with the Settlement Statement
delivered by the Servicer to the Trustee and the Paying Agent pursuant to
subsection 3.4(c)) to each Class A Securityholder of record on the preceding
Record Date (other than as provided in subsection 2.4(e) or in Section 12.3
respecting a final distribution) such Securityholder's pro rata share (based on
the aggregate Undivided Interests represented by each Class A Security held by
such Securityholder) of amounts on deposit in the Distribution Account as are
payable to each Class A Securityholder pursuant to Sections 4.11 and 4.12 of the
Agreement by check mailed to each Class A Securityholder at such
Securityholder's address as it appears on the Security Register or, in the case
of Class A Securityholders holding Class A Securities evidencing not less than
80% of the Class A Invested Amount, by wire transfer, at the expense of such
Class A Securityholder, to an account or accounts designated by such Class A
Securityholder by written notice given to the Paying Agent not less than five
days prior to the related Distribution Date; provided, however, that the final
payment in retirement of the Class A Securities will be made only upon
presentation and surrender of the Class A Securities at the office or offices
specified in the notice of such final distribution delivered by the Trustee
pursuant to Section 12.3 of the Agreement.
(b) On each Distribution Date, the Paying Agent shall
distribute (in accordance with the Settlement Statement delivered by the
Servicer to the Trustee and the Paying Agent pursuant to subsection 3.4(c) of
the Agreement) to each Class B Securityholder of record other than the
Transferor on the preceding Record Date (other than as provided in subsection
2.4(e) of the Agreement or in Section 12.3 of the Agreement respecting a final
distribution) such Securityholder's pro rata share (based on the aggregate
Undivided Interests represented by Class B Securities held by such
Securityholder) of amounts on deposit in the Distribution Account as are payable
to each Class B Securityholder pursuant to Sections 4.11 and 4.12 of the
Agreement by check mailed to each Class B Securityholder at such
Securityholder's address as it appears on the Security Register or, in the case
of Class B Securityholders holding Class B Securities evidencing Undivided
Interest aggregating not less than 80% of the Invested Amount, by wire transfer,
at the expense of such Class B Securityholder, to an account or accounts
designated by such Class B Securityholder by written notice given to the Paying
Agent not less than five days prior to the related Distribution Date; provided,
however, that the final payment in retirement of the Class B Securities will be
made only upon presentation and surrender of the Class B Securities at the
office or offices specified in the notice of such final distribution delivered
by the Trustee pursuant to Section 12.3 of the Agreement.
SECTION 5.2. Securityholders' Statement. (a) On the twentieth
day of each calendar month (or if such day is not a Business Day the next
succeeding Business Day), the Paying Agent shall forward to each Securityholder
and the Rating Agencies a statement substantially in the form of Exhibit B
prepared by the Servicer and delivered to the Trustee and the Paying Agent on
the preceding Determination Date setting forth the following information (which,
in the case of (i), (ii) and (iii) below, shall be stated on the basis of an
original principal amount of $1,000 per Security and, in the case of (ix) and
(x), shall be stated on an aggregate basis and on the basis of an original
principal amount of $1,000 per Security):
(i) the total amount distributed;
(ii) the amount of such distribution allocable to
Class A Principal, Class B Principal and Excess Collateral Monthly
Principal;
(iii) the amount of such distribution allocable to
Class A Monthly Interest and Carryover Class A Monthly Interest, Class
B Monthly Interest and Carryover Class B Monthly Interest and Excess
Collateral Minimum Monthly Interest and Carryover Excess Collateral
Minimum Interest;
(iv) the amount of Principal Collections received in
the Collection Account during the preceding Monthly Period and
allocated in respect of the Class A Securities, the Class B Securities
and the Excess Collateral, respectively;
(v) the amount of Finance Charge Collections
processed during the preceding Monthly Period and allocated in respect
of the Class A Securities, the Class B Securities and the Excess
Collateral, respectively, and the amount of Principal Funding Account
Investment Proceeds and investment earnings on amounts on deposit in
the Accumulation Period Reserve Account and the Pre-Funding 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 and the Pre-Funding Account as of the last day of the
Monthly Period immediately preceding the Distribution Date;
(xiii) the number of new Accounts the Receivables
in which have been added to the Trust during the related Monthly
Period;
(xiv) the Portfolio Yield for the related Monthly
Period;
(xv) the Base Rate for the related Monthly
Period;
(xvi) the Principal Funding Account Balance on the
related Transfer Date;
(xvii) the Accumulation Shortfall;
(xviii) the scheduled date for the commencement of
the Accumulation Period and the Accumulation Period Length;
(xix) the amount of Principal Funding Account
Investment Proceeds deposited in the Collection Account on the related
Transfer Date, the Required Reserve Account Amount and the Available
Reserve Account Amount as of the related Transfer Date, and the Covered
Amount for the related Interest Accrual Period; and
(xx) the Aggregate Interest Rate Caps Notional Amount
and the amount deposited in the Cap Proceeds Account during the related
Monthly Period.
(b) Annual Securityholders' Tax Statement. On or before
January 31 of each calendar year, beginning with calendar year 2002, the Paying
Agent shall distribute to each Person who at any time during the preceding
calendar year was a Series 2001-4 Securityholder, a statement prepared by the
Servicer containing the information required to be contained in the regular
report to Series 2001-4 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 2001-4 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 2001-4
Securities as debt) as the Trustee or the Servicer deems necessary or desirable
to enable the Series 2001-4 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 2001-4 Pay Out Events. If any one of the
following events shall occur with respect to the Series 2001-4 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 2001-4 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 2001-4 Securities
evidencing Undivided Interests aggregating more than 50 percent of the Invested
Amount and continues to affect materially and adversely the interests of the
Series 2001-4 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 2001-4 Securities evidencing Undivided Interests aggregating more than
50% of the Invested Amount of this Series 2001-4, and (ii) as a result of which
the interests of the Series 2001-4 Securityholders are materially and adversely
affected and continue to be materially and adversely affected for such period;
provided, however, that a Series 2001-4 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) (A) the sum of the amount on deposit in the
Pre-Funding Account plus the Series 2001-4 Percentage of the sum of the total
amount of Principal Receivables plus amounts on deposit in the Excess Funding
Account shall be less than (B) the sum of the Class A Outstanding Principal
Amount, the Class B Outstanding Principal Amount 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 Pre-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 2001-4 Securityholders; or
(f) failure of any Cap Provider to make any payment under
an Interest Rate Cap within 30 days of the date such payment was due;
then, in the case of any event described in subparagraph (a), (b) or (e), after
the applicable grace period, if any, set forth in such subparagraphs, the
Holders of Series 2001-4 Securities evidencing Undivided Interests aggregating
more than 50% of the Invested Amount of this Series 2001-4, by notice then given
in writing to the Trustee, the Transferor and the Servicer may declare that a
pay out event (a "Series 2001-4 Pay Out Event") has occurred as of the date of
such notice, and in the case of any event described in subparagraphs (c), (d) or
(f), a Series 2001-4 Pay Out Event shall occur without any notice or other
action on the part of the Trustee or the Series 2001-4 Securityholders
immediately upon the occurrence of such event.
Section 9. Series 2001-4 Termination. The right of the Series 2001-4
Securityholders to receive payments from the Trust will terminate on the first
Business Day following the Series 2001-4 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
2001-4 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 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.
(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 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 2001-4
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
2001-4 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 GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 16. Instructions in Writing. All instructions or other
communications given by the Servicer or any other person to the Trustee pursuant
to this Series Supplement shall be in writing, and, with respect to the
Servicer, may be included in a Daily Report or Settlement Statement.
Section 17. Amendment for FASIT Purposes. Each Series 2001-4
Securityholder, by acquiring an interest in a Series 2001-4 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 2001-4 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 2001-4 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 2001-4 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. Tax Treatment. In addition to the tax treatment described
in Section 3.7 of the Agreement and notwithstanding Section 11.11 of the
Agreement, each of the Transferor, the Servicer, and the Holder of the
Exchangeable Transferor Security agree, covenant and warrant that at all times
(i) it will treat and take no action inconsistent with the treatment of the
Transferor (or its sole member or owner, if the Transferor is treated as a
disregarded entity for relevant tax purposes) as the direct beneficial owner of
the Receivables and the other assets of the Trust for purposes of federal,
state, local and foreign income and franchise taxes and any other tax imposed on
or measured by income, and (ii) it will cause any Affiliate with whom each such
Person joins in the filing of any tax return, or with whom it is liable for any
tax, to so treat, and not to fail to so treat, the Transferor (or its sole
member or owner, as applicable) for such purposes. Each Holder of the
Exchangeable Transferor Security, by acceptance of its Security, agrees to be
bound by the provisions of this Section 20.
Section 21. Investments. The Trustee shall hold each Cash Equivalent
that constitutes investment property through a securities intermediary, which
securities intermediary shall agree with the Trustee that (i) such investment
property at all times shall be credited to a securities account of the Trustee,
(ii) all property credited to such securities account shall be treated as a
financial asset, (iii) such securities intermediary shall treat the Trustee as
entitled to exercise the rights that comprise each financial asset credited to
such securities account, (iv) such securities intermediary shall comply with
entitlement orders originated by the Trustee without the further consent of any
other person or entity, (v) such securities intermediary shall not agree with
any person or entity other than the Trustee to comply with entitlement orders
originated by any person or entity other than the Trustee, (vi) such securities
account and all property credited thereto shall not be subject to any lien,
security interest, right of set-off, or encumbrance in favor of such securities
intermediary or anyone claiming through such securities intermediary (other than
the Trustee), and (vii) such agreement between such securities intermediary and
the Trustee shall be governed by the laws of the State of New York. The Trustee
shall maintain possession of each other Cash Equivalent in the State of
Minnesota, separate and apart from all other property held by the Trustee.
Notwithstanding any other provision of this Series Supplement, the Trustee shall
not hold any Cash Equivalent through an agent except as expressly permitted by
this Section 21. Each term used in this Section 21 and defined in the New York
Uniform Commercial Code shall have the meaning set forth in the New York Uniform
Commercial Code.
Section 22. 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
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.
(a) The Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in favor of the Trustee in the
Receivables described in Section 2.1 of the Agreement (the "Collateral"), which
security interest is prior to all other Liens, and is enforceable as such as
against creditors of and purchasers from the Transferor.
(b) The Collateral constitutes "accounts" within the
meaning of the applicable UCC.
(c) At the time of each transfer and assignment of Collateral
to the Trustee pursuant to the Agreement, the Transferor owned and had good and
marketable title to such Collateral free and clear of any Lien, claim or
encumbrance of any Person.
(d) The Transferor caused, within ten days of the initial
execution of the Agreement, the filing of all appropriate financing statements
in the proper filing office in the appropriate jurisdictions under applicable
law in order to perfect the security interest in the Collateral granted to the
Trustee pursuant to the Agreement.
(e) 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
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
the Collateral other than any financing statement relating to the security
interest granted to the Trustee pursuant to the Agreement or that has been
terminated. The Transferor is not aware of any judgment or tax lien filings
against the Transferor.
(f) The Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Cap Agreement, the Interest
Rate Caps and the Cap Proceeds Account described in Section 3A of this Series
Supplement (collectively, the "Interest Rate Cap Agreement") in favor of the
Trustee, which security interest is prior to all other Liens, and is enforceable
as such as against creditors of and purchasers from the Transferor.
(g) The Interest Rate Cap Agreement constitutes either an
"account," a "general intangible," or an "instrument," each within the meaning
of the applicable UCC.
(h) At the time of the transfer and assignment of the Interest
Rate Cap Agreement to the Trustee pursuant to the Agreement, the Transferor
owned and had good and marketable title to the Interest Rate Cap Agreement free
and clear of any Lien, claim or encumbrance of any Person.
(i) The Transferor has caused, within ten days of the
execution of this Series Supplement, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the security interest in the Interest Rate
Cap Agreement granted to the Trustee pursuant to the Agreement.
(j) Other than 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 Interest Rate Cap
Agreement. 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 Interest Rate Cap Agreement other than any financing
statement relating to the security interest granted to the Trustee pursuant to
the Agreement or any financing statement that has been terminated. The
Transferor is not aware of any judgment or tax lien filings against the
Transferor.
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Series 2001-4 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. THAN
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Treasurer
DIRECT MERCHANTS CREDIT CARD BANK,
NATIONAL ASSOCIATION
Servicer
By: /s/ XXXXX X. THAN
Name: Xxxxx X. Xxxx
Title: Treasurer and Cashier
U.S. BANK NATIONAL ASSOCIATION
Trustee
By: /s/ XXX X. XXXXXX
Name: Xxx X. Xxxxxx
Title: Vice President
Exhibit A-1
FORM OF CLASS A INVESTOR SECURITY
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO. HAS AN INTEREST HEREIN.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF
METRIS RECEIVABLES, INC. AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I)
AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS
SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN
SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") THAT IS SUBJECT TO SECTION 4975 OF THE CODE, (III) A
GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO
THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE,
(IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS (AS DEFINED
IN 29 C.F.R. SECTION 2510.3-101 OR OTHERWISE UNDER ERISA) BY REASON OF
A PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING PLAN ASSETS
OF ANY SUCH PLAN (INCLUDING WITHOUT LIMITATION, FOR PURPOSES OF CLAUSE
(IV) AND THIS CLAUSE (V), AS APPLICABLE, AN INSURANCE COMPANY GENERAL
ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED).
No. $
CUSIP NO. [___________]
METRIS MASTER TRUST
FLOATING RATE ASSET BACKED
SECURITY, SERIES 2001-4, 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 2001-4 Supplement, dated as of October 25, 2001 (the "Series
2001-4 Supplement"), among the Transferor, the Servicer and the Trustee. The
Pooling and Servicing Agreement, as supplemented by the Series 2001-4
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 2001-4, 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 2001-4, 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 December
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 2001-4 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 2001-4 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 less the Class A Percentage of the Initial
Pre-Funded Amount plus the Class A Percentage of the amount of any withdrawals
from the Pre-Funding Account (i) during the Funding Period in connection with
the addition of receivables to the Trust or (ii) at the end of the Funding
Period for deposit into the Excess Funding Account, minus (b) the aggregate
amount of principal payments (excluding principal payments made from the
Pre-Funding Account) 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), 4.17(a) and (b), 4.20(b) and 4.21(b), (c) and (d) of the
Agreement, for the purpose of reimbursing amounts deducted pursuant to the
foregoing clause (c).
Subject to the Agreement, payments of principal are limited to
the unpaid Class A Invested Amount of the Class A Securities, which may be less
than the unpaid balance of the Class A Securities pursuant to the terms of the
Agreement. All principal on the Class A Securities is due and payable no later
than the August 2008 Distribution Date (or if such day is not a Business Day,
the next succeeding Business Day) (the "Scheduled Series 2001-4 Termination
Date"). After the earlier to occur of (i) the Scheduled Series 2001-4
Termination Date and (ii) the day after the Distribution Date on which the
Series 2001-4 Securities are paid in full (the "Series 2001-4 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 2001-4
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. [_________]
METRIS MASTER TRUST
FLOATING RATE ASSET BACKED
SECURITY, SERIES 2001-4, 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 2001-4 Supplement, dated as of October 25, 2001 (the "Series
2001-4 Supplement"), among the Transferor, the Servicer and the Trustee. The
Pooling and Servicing Agreement, as supplemented by the Series 2001-4
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 2001-4, 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 2001-4, 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 December
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 2001-4 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 2001-4 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 less the Class B Percentage of the Initial
Pre-Funded Amount plus the Class B Percentage of the amount of any withdrawals
from the Pre-Funding Account (i) during the Funding Period in connection with
the addition of receivables to the Trust or (ii) at the end of the Funding
Period for deposit into the Excess Funding Account, minus (b) the aggregate
amount of principal payments (excluding principal payments made from the
Pre-Funding Account) 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(a), 4.20(b) and 4.21(b), (c) and
(d) of the Agreement, for the purpose of reimbursing amounts deducted pursuant
to the foregoing clauses (c) and (d).
Subject to the Agreement, payments of principal are limited to
the unpaid Class B Invested Amount of the Class B Securities, which may be less
than the unpaid balance of the Class B Securities pursuant to the terms of the
Agreement. All principal on the Class B Securities is due and payable no later
than the August 2008 Distribution Date (or if such day is not a Business Day,
the next succeeding Business Day) (the "Scheduled Series 2001-4 Termination
Date"). After the earlier to occur of (i) the Scheduled Series 2001-4
Termination Date or (ii) the day after the Distribution Date on which the Series
2001-4 Securities are paid in full (the "Series 2001-4 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
Monthly Report
Section Metris Receivables, Inc. Metris Master Trust Month-Year
5.2 Securityholders' Statement Series 2001-3 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
(xxi) Pre-Funded Amount
Net investment earnings for Pre-Funding
Account
(xxii) Deposit to Funding Period Reserve Account
Net investment earnings for Funding Period
Reserve Account
EXHIBIT C
FORM OF INVESTMENT LETTER
[Date]
Re Metris Master Trust;
Purchases of Series 2001-4 Excess Collateral
Ladies and Gentlemen:
This letter (the "Investment Letter") is delivered by the
undersigned (the "Purchaser") pursuant to Section 11 of the Series 2001-4
Supplement dated as of October 25, 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 1
SECTION 2. Definitions 1
SECTION 3. Reassignment Terms 16
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 19
SECTION 5. Form of Delivery of the Class A Securities and the
Class B Securities; Denominations 19
SECTION 6. Article IV of Agreement 19
ARTICLE IV
RIGHTS OF SECURITYHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
SECTION 4.4. Rights of Securityholders 20
SECTION 4.5. Collections and Allocation; Payments on Exchangeable
Transferor Security 20
SECTION 4.6. Determination of Interest for the Series 2001-4 Securities 21
SECTION 4.7. Determination of Principal Amounts 22
SECTION 4.8. Shared Principal Collections 22
SECTION 4.9. Application of Funds 22
SECTION 4.10. Coverage of Required Amount for the Series 2001-4 Securities 27
SECTION 4.11. Payment of Interest on Class A Securities and
Class B Securities 28
SECTION 4.12. Payment of Security Principal 28
SECTION 4.13. Series Charge-Offs 29
SECTION 4.14. Pre-Funding Account 30
SECTION 4.15. Funding Period Reserve Account 31
SECTION 4.16. Increases in Invested Amount 32
SECTION 4.17. Redirected Principal Collections for the Series
2001-4 Securities 33
SECTION 4.18. Determination of LIBOR 33
SECTION 4.19. Payment Reserve Account 33
SECTION 4.20. Principal Funding Account 34
SECTION 4.21. Accumulation Period Reserve Account 35
SECTION 4.22. Postponement of Accumulation Period 36
SECTION 4.23. Defeasance 36
SECTION 7. Article V of the Agreement 36
ARTICLE V
DISTRIBUTIONS AND REPORTS
TO INVESTOR SECURITYHOLDERS
SECTION 5.1. Distributions 37
SECTION 5.2. Securityholders' Statement 37
SECTION 8. Series 2001-4 Pay Out Events 39
SECTION 9. Series 2001-4 Termination 40
SECTION 10. Legends; Transfer and Exchange; Restrictions on Transfer of
Class A Securities and Class B Securities 40
SECTION 11. Transfers of the Excess Collateral 41
SECTION 12. Ratification of Agreement 42
SECTION 13. [Reserved] 42
SECTION 14. Counterparts 42
SECTION 15. Governing Law 43
SECTION 16. Instructions in Writing 43
SECTION 17. Amendment for FASIT Purposes 43
SECTION 18. Paired Series 43
SECTION 19. Third Party Beneficiaries 43
SECTION 20. Tax Treatment 43
SECTION 21. Investments 44
SECTION 22. Additional Representations and Warranties of the Transferor 44
