Capital Assurance and Liquidity Maintenance Agreement (2003)Full Document 

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              CAPITAL ASSURANCE AND LIQUIDITY MAINTENANCE AGREEMENT

     This Capital Assurance and Liquidity Maintenance Agreement ("Agreement") is
entered into,  and is effective as of, the 18th day of March,  2003, by and
between Direct  Merchants  Credit Card Bank, N. A. ("Bank") and Metris Companies
Inc. ("Parent" or "Metris"), a Delaware corporation.

                                    RECITALS

A. The Bank is a national bank chartered by the Office of the Comptroller of the
Currency ("OCC") and is authorized to conduct business as a national bank; and

B. The Parent as the sole stockholder of Metris Direct, Inc. ("MDI"), which in
turn is the sole stockholder of the Bank, is the indirect parent company of the
Bank; and

C. In consideration of the mutual covenants and promises set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
expressly acknowledged by both parties, the Bank and the Parent hereby enter
into this Agreement setting forth the Parent's requirement to provide to the
Bank, either directly or through MDI, any necessary capital and/or liquidity
support, all in order to ensure that the Bank continues to operate in a safe and
sound manner without need of recourse to external sources; and

D. For purposes of the OCC's regulations under 12 C.F.R. Part 6, this Agreement
shall not be deemed to have been issued by the OCC, and shall not prevent the
Bank from being deemed "well capitalized" so long as the Bank achieves and
maintains the required minimum capital ratios detailed in Section 6.4(b)(1) of
such Part; and

E. In consideration of the mutual covenants and conditions contained herein, the
parties to this Agreement hereby agree as follows:

                                    ARTICLES

1.  CAPITAL ASSURANCES

A. Initial and ongoing Capital Requirements. In accordance with conditions
imposed in writing in connection with the conditional approval by the OCC for
the Bank to pay a dividend to its Parent and the terms of the Operating
Agreement entered into by and between the Bank, Metris, and the OCC on March 18,
2003, (the "Operating Agreement"), the Bank is required to maintain, at
a minimum, capital in the aggregate amount of: (i) the Liquidity Reserve Deposit
described in Article VI of the Operating Agreement; (ii) the result of the 200%
risk-weight applied to on-book subprime credit card receivables; and (iii) the
minimum capital required pursuant to 12 C.F.R. Part 3, Appendix A, for
well-capitalized institutions for all remaining assets owned by the Bank
(collectively, "the Required Capital").

B. Bank's Obligation to First Seek Parent's Assistance. The Bank agrees that if
it becomes necessary for it to secure capital infusions so as to remain in
compliance with its Required Capital, or a higher minimum capital ratio as set
forth in subparagraph D, the Bank will promptly notify and first make demand on
the Parent or MDI for such capital.

C. Capital Infusions from the Parent. Parent hereby agrees to make or cause MDI
to make such capital infusions or take such other actions, to which the OCC has
no supervisory objection, as may be necessary from time to time to ensure the
Bank achieves and remains in compliance with the Required Capital. If at any
time the Bank's capital level falls below the Required Capital, then the Parent
agrees that no later than ten (10) business days after receiving notification
regarding this capital deficiency from the Bank, MDI or the OCC, the Parent will
and subject to the exceptions and limitations set out on the attached Schedule A
(incorporated herein by reference), the Parent, acting directly or by causing
MDI to take such action, will either (i) contribute sufficient additional
capital to return the Bank's capital ratios to the required level; or (ii) take
such other action, to which the OCC has no supervisory objection, sufficient to
return the Bank's capital ratios to the required level. Any capital contribution
pursuant to subsection (i) in the preceding sentence will be in the form of
cash, or if appropriate, other qualified assets, and the capital contribution
will be credited to the Bank's surplus capital account.

D. Higher Minimum Capital Ratios. Subject to Schedule A, should the OCC
subsequently deem it necessary for the Bank to maintain capital above the
Required Capital, pursuant to its regulatory authority, or that the Bank achieve
and thereafter maintain higher minimum capital ratios than those detailed in 12

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