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EXHIBIT 4.2
EXECUTION COPY
AMENDMENT NO. 1
TO
THE METRIS MASTER TRUST
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
THIS AMENDMENT NO. 1 TO THE METRIS MASTER TRUST AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT, dated as of April 26, 2001 (this "Amendment No.
1") is by and among METRIS RECEIVABLES, INC., as transferor (the "Transferor"),
DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION, as servicer (the
"Servicer"), and U.S. BANK NATIONAL ASSOCIATION, as trustee (the "Trustee").
WHEREAS the Transferor, the Servicer and The Bank of New York
(Delaware) (the "Prior Trustee") have executed that certain Amended and Restated
Pooling and Servicing Agreement, dated as of July 30, 1998 (as amended and
supplemented through the date hereof and as the same may be further amended,
supplemented or otherwise modified and in effect from time to time, the "Pooling
and Servicing Agreement");
WHEREAS the Transferor, the Servicer, the Prior Trustee and the Trustee
have entered into that certain Agreement of Resignation, Appointment and
Acceptance, dated as of December 11, 2000, pursuant to which the Trustee assumed
all of the rights and obligations of the Prior Trustee under the terms of the
Pooling and Servicing Agreement;
WHEREAS the Transferor, the Servicer and the Trustee wish to amend the
Pooling and Servicing Agreement as provided herein;
NOW THEREFORE, in consideration of the promises and the agreements
contained herein, the parties hereto agree to amend the provisions of the
Pooling and Servicing Agreement as follows:
SECTION 1. Amendment of Section 1.1. Section 1.1 of the Pooling and
Servicing Agreement shall be and hereby is amended by the addition of the
following definition which shall read in its entirety, as follows:
"Permitted Activities" shall mean the primary activities of the Trust,
which are:
(a) holding Receivables transferred from the Transferor and the other
assets of the Trust, including passive derivative financial instruments
that pertain to beneficial interests issued or sold to parties other than
the Transferor, its Affiliates or its agents;
(b) issuing Securities and other interests in the Trust Property;
(c) receiving Collections and making payments on such Securities and
interests in accordance with the terms of the Pooling and Servicing
Agreement and any Supplement; and
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(d) engaging in other activities that are necessary or incidental to
accomplish these limited purposes, which activities can not be contrary to
the status of the Trust as a qualified special purpose entity under
existing accounting literature.
SECTION 2. Amendment of Section 2.7. Section 2.7 of the Pooling and
Servicing Agreement shall be and hereby is amended by deleting Section 2.7(c) in
its entirety and by inserting in its place the following:
(c) In addition to the satisfaction of the conditions set forth in
subsections 2.7(a) and (b), the Transferor's right to require the
reassignment to it or its designee of all the Trust's right, title and
interest in, to and under the Receivables in Removed Accounts, shall be
subject to the following restrictions:
(i) Except for Removed Accounts described in subsection
2.7(c)(ii), the Accounts to be designated as Removed Accounts shall be
selected at random by the Transferor.
(ii) The Transferor may designate Removed Accounts as provided in
and subject to the terms and conditions contained in this Section 2.7
without being subject to the restrictions set forth in subsection
2.7(c)(i) if the Removed Accounts are designated in response to a
third-party action or decision not to act and not the unilateral action
of the Transferor.
(d) Upon satisfaction of the conditions set forth in subsections
2.7(a), (b) and (c), the Trustee shall execute and deliver the Reassignment
to the Transferor, and the Receivables from the Removed Accounts shall no
longer constitute part of the Trust.
SECTION 3. Amendment of Section 9.2. Section 9.2(a)(ii) of the Pooling
and Servicing Agreement is hereby amended by deleting Section 9.2(a)(ii) in its
entirety and inserting in its place the following:
If an Insolvency Event or a Trigger Event shall have occurred this
Agreement and the Trust shall be deemed to have terminated, subject to the
liquidation, winding-up and dissolution procedures described below;
provided, however, that within 15 days of the date of written notice to the
Trustee, the Trustee shall (i) publish a notice in an Authorized Newspaper
that an Insolvency Event or a Trigger Event has occurred, that the Trust
has terminated, and that the Trustee intends to sell, dispose of or
otherwise liquidate the Receivables pursuant to this Agreement (a
"Disposition"), and (ii) send written notice to the Investor
Securityholders describing the provisions of this Section 9.2 and
requesting each Investor Securityholder to advise the Trustee in writing
that it elects one of the following options: (A) the Investor
Securityholder wishes the Trustee to instruct the Servicer not to
effectuate a Disposition, or (B) the Investor Securityholder refuses to
advise the Trustee as to the specific action the Trustee shall instruct the
Servicer to take, or (C) the Investor Securityholder wishes the Servicer to
effect a Disposition. If after 90 days from the day notice pursuant to
clause (i) above is first published (the "Publication Date"), the Trustee
shall not have received the written instruction described in clause (A)
above from Holders of Investor Securities representing Undivided Interests
aggregating in excess of 50% of the related Invested Amount of each Series
(or, in the case of a Series having more than one Class, each Class of
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such Series) and the holders of any Supplemental Securities or any other
interest in the Exchangeable Transferor Security other than the Transferor
as provided in Section 6.3(b) for each Series, a "Holders' Majority"), the
Trustee shall instruct the Servicer to effectuate a Disposition, and the
Servicer shall proceed to consummate a Disposition. If, however, with
respect to the portion of the Receivables allocable to any outstanding
Series, a Holders' Majority instruct the Trustee not to effectuate a
Disposition of the portion of the Receivables allocable to such Series, the
Trust shall be reconstituted and continue with respect to such Series
pursuant to the terms of this Agreement and the applicable Supplement (as
amended in connection with such reconstitution). The portion of the
Receivables allocable to any Series shall be equal to the sum of (1) the
product of (A) the Transferor Percentage, (B) the aggregate outstanding
Principal Receivables and (C) a fraction the numerator of which is the
related Investor Percentage of Finance Charge Collections and the
denominator of which is the sum of all Investor Percentages with respect to
Finance Charge Collections for all Series outstanding and (2) the Invested
Amount of such Series. The Transferor or any of its Affiliates shall be
permitted to bid for the Receivables. In addition, the Transferor or any of
its Affiliates shall have the right to match any bid by a third person and
be granted the right to purchase the Receivables at such matched bid price.
The Trustee shall use its best efforts to effectuate a Disposition by the
use of competitive bids and on terms equivalent to the best purchase offer
as determined by the Trustee. The Trustee may obtain a prior determination
from any such bankruptcy trustee, receiver or liquidator that the terms and
manner of any proposed Disposition are commercially reasonable. The
provisions of Sections 9.1 and 9.2 shall not be deemed to be mutually
exclusive.
SECTION 4. Amendment of Section 10.2. Section 10.2(a) of the Pooling
and Servicing Agreement shall be and hereby is amended by deleting the fifth
sentence thereof in its entirety, and inserted in its place shall be the
following:
If the Trustee is unable to obtain any bids from any potential successor
servicer and the Servicer delivers an Officer's Certificate to the effect
that it cannot in good faith cure the Servicer Default which gave rise to a
Termination Notice, and if the Trustee is legally unable to act as
Successor Servicer, then the Trustee, except in the case of a Servicer
Default set forth in subsection 10.1(d), shall offer the Transferor the
right to accept reassignment of all of the Receivables for an amount equal
to the Aggregate Invested Amount on the date of such purchase plus all
interest accrued but unpaid on all of the outstanding Investor Securities
at the applicable Security Rate through the date of such purchase;
provided, however, that no such purchase by the Transferor shall occur
unless the Transferor shall deliver an Opinion of Counsel reasonably
acceptable to the Trustee that such purchase would not constitute a
fraudulent conveyance of the Transferor.
SECTION 5. Amendment of Section 12.1. Section 12.1(c) of the Pooling
and Servicing Agreement shall be and hereby is amended by deleting the fifth
sentence thereof in its entirety.
SECTION 6. Amendment of Section 12.2. Section 12.2(a) of the Pooling
and Servicing Agreement shall be and hereby is amended by inserting after the
word "Transferor" where first used the following:
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(so long as the Transferor is the Servicer or an Affiliate of the
Servicer)
SECTION 7. Amendment of Section 13.1. (a) Section 13.1(a) of the
Pooling and Servicing Agreement shall be and hereby is amended by adding at the
end of the first sentence of the first paragraph thereof the following, which
shall read in its entirety as follows:
provided further, that such action shall not effect a significant change in
the Permitted Activities of the Trust;
(b) Section 13.1(a) of the Pooling and Servicing Agreement shall be and
hereby is further amended by adding after the first proviso in the first
sentence of the second paragraph thereof the following, which shall read in its
entirety as follows:
provided further, that such action shall not effect a significant change in
the Permitted Activities of the Trust;
(c) Section 13.1(b) of the Pooling and Servicing Agreement shall be and
hereby is amended by inserting after the word "Trustee" where first used the
following:
(A) in the case of a significant change in the Permitted Activities of the
Trust which is not materially adverse to Holders of Investor Securities,
with the consent of Holders of Investor Securities evidencing Undivided
Interests aggregating not less than 50% of the Investor Interest of each
outstanding Series affected by such change, and (B) in all other cases
SECTION 8. Effectiveness. The amendments provided for by this Amendment
No. 1 shall become effective upon the occurrence of the following:
(a) Ten business days prior written notice of this Amendment No. 1 to
each Rating Agency by the Servicer, and written confirmation from each Rating
Agency to the effect that the terms of this Amendment No. 1 will not result in a
reduction or withdrawal of the rating of any outstanding Series or any class of
any Series to which it is a Rating Agency.
(b) An Officer's Certificate from the Servicer delivered to the Trustee
to the effect that the terms of this Amendment No.1 will not materially and
adversely affect the interests of the Securityholders.
(c) An Opinion of Counsel addressed to the Trustee to the effect that
the terms of this Amendment No. 1 will not cause the Trust to be characterized
for Federal income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the Federal income taxation of any
outstanding Series of Investor Securities or any Security Owner.
(d) Counterparts of this Amendment No. 1, duly executed by the parties
hereto.
SECTION 9. Pooling and Servicing Agreement in Full Force and Effect as
Amended. Except as specifically amended or waived hereby, all of the terms and
conditions of the Pooling and Servicing Agreement shall remain in full force and
effect. All references to the Pooling and Servicing Agreement in any other
document or instrument shall be deemed to mean such Pooling and Servicing
Agreement as amended by this Amendment No. 1. This Amendment No. 1 shall not
constitute a novation of the Pooling and Servicing Agreement, but shall
constitute an
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amendment thereof. The parties hereto agree to be bound by the terms and
obligations of the Pooling and Servicing Agreement, as amended by this Amendment
No. 1, as though the terms and obligations of the Pooling and Servicing
Agreement were set forth herein.
SECTION 10. Counterparts. This Amendment No. 1 may be executed in any
number of counterparts and by separate parties hereto on separate counterparts,
each of which when executed shall be deemed an original, but all such
counterparts taken together shall constitute one and the same instrument.
SECTION 11. Governing Law. THIS AMENDMENT NO. 1 SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 12. Defined Terms and Section References. Capitalized terms
used herein and not otherwise defined shall have the meanings assigned to such
terms in the Pooling and Servicing Agreement. All Section or subsection
references herein shall mean Sections or subsections of the Pooling and
Servicing Agreement, except as otherwise provided herein.
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IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Amendment No. 1 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
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Name: Xxxxx X. Than
Title: Senior Vice President and
Treasurer
DIRECT MERCHANTS CREDIT CARD
BANK, NATIONAL ASSOCIATION,
SERVICER
By: /s/ XXXXX X. THAN
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Name: Xxxxx X. Than
Title: Treasurer and Cashier
U.S. BANK NATIONAL ASSOCIATION,
TRUSTEE
By: /s/ XXX X. XXXXXX
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Name: Xxx X. Xxxxxx
Title: Vice President