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EXHIBIT 1.1
$[-]
Floating Rate Asset Backed Securities
Series [-], Class A
$[-]
Floating Rate Asset Backed Securities
Series [-], Class B
METRIS MASTER TRUST
UNDERWRITING AGREEMENT
Dated [-] [-], [-]
[Underwriter]
Ladies and Gentlemen:
Section 1. Introductory. Metris Receivables, Inc. (the
"Transferor"), a Delaware corporation, and a wholly owned subsidiary of Metris
Companies Inc. ("Metris"), proposes to sell $[-] Floating Rate Asset Backed
Securities, Series [-], Class A (the "Class A Securities") and $[-] Floating
Rate Asset Backed Securities, Series [-], Class B (the "Class B Securities" and
together with the Class A Securities, the "Offered Securities") issued by the
Metris Master Trust (the "Trust"). Each Offered Security will represent a
fractional undivided interest in the Trust. The assets of the Trust will
include, among other things, a pool of receivables (the "Receivables") arising
under certain MasterCard(R), VISA(R) or other revolving consumer credit
accounts(1) (the "Accounts") transferred and sold by Direct Merchants Credit
Card Bank, National Association ("Direct Merchants Bank" or, in its capacity as
servicer under the P&S (as hereinafter defined), the "Servicer") to Metris
pursuant to an Amended and Restated Bank Receivables Purchase Agreement dated as
of July 30, 1998 between Metris and Direct Merchants Bank (as supplemented and
amended from time to time, the "Bank Purchase Agreement"), then subsequently
sold by Metris to the Transferor pursuant to an Amended and Restated Purchase
Agreement dated as of July 30, 1998 between Metris and the Transferor (as
supplemented and amended from time to time, the "Purchase Agreement") and then
transferred by the Transferor to the Trust pursuant to an Amended and Restated
Pooling and Servicing Agreement dated as of July 30, 1998 among the Transferor,
the Servicer and U.S. Bank National Association (as successor to The Bank of New
York (Delaware) (the "Prior Trustee")), as trustee, (the "Trustee"), as
supplemented by an Agreement of Resignation, Appointment and Acceptance dated as
of December 11, 2000 among the Transferor, the Servicer, the Prior Trustee and
the Trustee, as further supplemented by Amendment No. 1 to the Amended and
Restated Pooling and Servicing Agreement, dated as of April 26, 2001 among the
Transferor, the Servicer
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(1) Visa(R) and Mastercard(R) are registered trademarks of VISA USA Incorporated
and Mastercard International Incorporated, respectively.
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and the Trustee (as amended and supplemented as of the date hereof, the "P&S").
The Offered Securities will be issued pursuant to the P&S and the Series [-]
Supplement to the P&S (the "Supplement") to be dated the Closing Date (as
defined herein), among the Transferor, the Servicer and the Trustee. The P&S and
the Supplement are collectively referred to herein as the "Pooling and Servicing
Agreement." The $[-] Series [-] Excess Collateral will also be issued pursuant
to the Pooling and Servicing Agreement and together with the Class A Securities
and Class B Securities, are referred to herein as the "Investor Securities". The
Bank Purchase Agreement, the Purchase Agreement and the Pooling and Servicing
Agreement are collectively referred to as the "Designated Agreements."
The Transferor has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-60530) pursuant to
Rule 415 under the Securities Act of 1933, as amended (the "Act"), in the form
heretofore delivered to the Representative. The Registration Statement, as
amended, has been declared effective by the Commission. If any post-effective
amendment has been filed with respect thereto, prior to the Execution Time, the
most recent such amendment has been declared effective by the Commission. The
Transferor will also file with the Commission a prospectus supplement and
prospectus relating to the Offered Securities in accordance with Rule 424(b)
under the Act ("Rule 424(b)"). The registration statement, including any
amendments thereto, the form of prospectus supplement and all documents
incorporated by reference therein, is referred to herein as the "Registration
Statement." The Registration Statement shall be in all substantive respects in
the form distributed to the Representative prior to the Execution Time or, to
the extent not completed at the Execution Time, shall contain only such specific
additional information and other changes as the Transferor has advised the
Representative, prior to the Execution Time, will be included or made therein.
For purposes of this Agreement, "Effective Date" means the date as of which such
Registration Statement, or the most recent post-effective amendment thereto, if
any, was declared effective by the Commission. Any prospectus supplement
relating to the Offered Securities (the "Prospectus Supplement"), as filed with
the Commission pursuant to and in accordance with Rule 424(b) is, together with
the base prospectus in the form filed with the Commission pursuant to Rule
424(b) together with the Prospectus Supplement, hereinafter referred to as the
"Prospectus." "Execution Time" shall mean the date and time that this Agreement
is executed and delivered by the parties hereto.
Capitalized terms used herein and not otherwise defined shall have the meanings
given them in the Pooling and Servicing Agreement.
Section 2. Representations, Warranties and Covenants of the
Transferor and Metris. Each of the Transferor and Metris, as applicable (each as
to itself only, except that the representations and warranties as to Direct
Merchants Bank are given by Metris), represents and warrants to, and agrees
with, Chase Securities Inc. and each other Underwriter named in Schedule A
hereto(collectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
Chase Securities Inc. is acting as Representative (in such capacity, Chase
Securities Inc. shall hereinafter be referred to as the "Representative"), as of
the date hereof that:
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(a) On the date hereof and on the Closing Date, the Registration
Statement does and will comply, in all material respects, with the requirements
of the Act and the 1933 Act Regulations, and does not and will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading; on
the Effective Date, the Registration Statement did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Prospectus did not and will not include any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that these representations and
warranties shall not apply to any statement or omission made in reliance upon
and in conformity with information furnished in writing to the Transferor by any
Underwriter through the Representative expressly for use in the Registration
Statement or the Prospectus.
(b) Metris is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware, and is duly qualified to
transact business and is in good standing in any state in which the conduct of
its business requires such qualification, except where the failure to so qualify
does not have a material adverse effect on the financial condition or business
of Metris, and Metris has the corporate power to own and conduct its business,
as it is currently conducted.
(c) The Transferor is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware, and is duly qualified
to transact business and is in good standing in any state in which the conduct
of its business requires such qualification, except where the failure to so
qualify does not have a material adverse effect on the financial condition or
business of the Transferor, and the Transferor has the corporate power to own
and conduct its business as it is currently conducted.
(d) Direct Merchants Bank is a national banking association formed
under the laws of the United States of America and is authorized to conduct the
business of a special purpose credit card bank, as described in the Prospectus,
and had at all relevant times and now has the power, authority and legal right
to acquire, own and service the Accounts and the Receivables.
(e) Each of the Transferor, Metris and Direct Merchants Bank had
or has the requisite power to execute and deliver each Designated Agreement to
which it is a party and, in the case of the Transferor and Metris, this
Agreement and the Transfer and Administration Agreement, dated as of the Closing
Date (the "Transfer and Administration Agreement") between the Transferor,
Metris, as administrator, Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as Owner Trustee on
behalf of Metris Secured Note Trust [-] (in such capacity, the "Owner Trustee"),
and to perform their respective obligations thereunder and hereunder.
(f) Each of the Designated Agreements and the Transfer and
Administration Agreement, to which the Transferor, Metris or Direct Merchants
Bank, as applicable, is a party, has been duly authorized and, as of the Closing
Date, will be duly executed and delivered by the
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Transferor, Metris and Direct Merchants Bank, as applicable, and each of the
Designated Agreements, and the Transfer and Administration Agreement to which it
is a party shall, as of the Closing Date, constitute the valid, legal and
binding obligation of the Transferor, Metris and Direct Merchants Bank, as
applicable, enforceable against the Transferor, Metris and Direct Merchants
Bank, as applicable, in accordance with its terms, except (A) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect,
affecting the enforcement of creditors' rights in general, and (B) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(g) This Agreement has been duly authorized, executed and
delivered by the Transferor and Metris.
(h) As of the Closing Date referred to below, the Investor
Securities will be duly and validly authorized, and, when duly and validly
executed by the Transferor and authenticated by the Trustee and delivered to the
Transferor in accordance with the Pooling and Servicing Agreement, and following
delivery to and payment therefor by the Underwriters as provided herein, will be
validly issued and outstanding and entitled to the benefits of the Pooling and
Servicing Agreement.
(i) The execution and delivery of any Designated Agreement, of
this Agreement or the Transfer and Administration Agreement and the performance
of the transactions contemplated thereby and hereby do not (i) contravene the
Transferor's, Metris' or Direct Merchants Bank's charter or by-laws, (ii)
violate any material provision of law applicable to the Transferor, Metris or
Direct Merchants Bank or require any filing (except for filings under the UCC)
or registration under, any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to the Transferor, Metris or Direct Merchants Bank, except for
such filings or registrations as have already been made and are in full force
and effect. The execution and delivery of any Designated Agreement or of this
Agreement and the execution and delivery to the Trustee of the Investor
Securities, the performance of the transactions contemplated by this Agreement,
the Transfer and Administration Agreement or any Designated Agreement and the
fulfillment of the terms hereof or thereof will not violate any Requirement of
Law applicable to the Transferor, Metris or Direct Merchants Bank, will not
violate, result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under any
material indenture, contract, agreement, mortgage, deed of trust or other
instrument to which the Transferor, Metris or Direct Merchants Bank, is a party
or by which it is bound.
(j) There are no proceedings or investigations pending or, to the
best knowledge of the Transferor, Metris or Direct Merchants Bank, threatened
against the Transferor, Metris or Direct Merchants Bank, before any Governmental
Authority (i) asserting the invalidity of any Designated Agreement, of this
Agreement or of the Transfer and Administration Agreement, (ii) seeking to
prevent the consummation of any of the transactions contemplated thereby, (iii)
except as disclosed in the Prospectus, seeking any determination or ruling that
would materially and adversely affect the performance by the Transferor, Metris
or Direct Merchants Bank of its obligations thereunder, (iv) seeking any
determination or ruling
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that would materially and adversely affect the validity or enforceability
thereof or (v) seeking to affect adversely the tax attributes of the Trust.
(k) All approvals, authorizations, consents, orders or other
actions of any Governmental Authority required in connection with the execution
and delivery of any Designated Agreement, of this Agreement or of the Transfer
and Administration Agreement and the Investor Securities by the Transferor,
Metris or Direct Merchants Bank, the performance of the transactions
contemplated by any Designated Agreement, by this Agreement and by the Transfer
and Administration Agreement and the fulfillment of the terms hereof by the
Transferor, Metris or Direct Merchants Bank, have been obtained.
(l) Each of the Transferor, Metris and Direct Merchants Bank
possesses all material licenses, certificates, authorities or permits issued by
the appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now conducted by it and as described in the
Prospectus, except to the extent that the failure to have such licenses,
certificates, authorities or permits does not have a material adverse effect on
the Receivables, the Investor Securities or the financial condition of the
Transferor, Metris or Direct Merchants Bank, and none of the Transferor, Metris
and Direct Merchants Bank has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially and adversely affect the Receivables or the
conduct of its business, operations or financial condition.
(m) As of the Closing Date, the Transferor has conveyed to the
Trust good and marketable title to, or a perfected first priority security
interest in, the Receivables existing in Accounts designated for the Trust, free
of Liens other than any Lien permitted under the Pooling and Servicing
Agreement.
(n) The businesses of each of the Transferor, Metris and Direct
Merchants Bank conform, in all material respects, to the descriptions thereof
contained in the Prospectus.
Section 3. Purchase, Sale and Delivery of the Offered Securities.
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Transferor agrees to sell to each Underwriter, severally and not jointly, and
each Underwriter, severally and not jointly, agrees to purchase from the
Transferor, on [-] [-], [-], or on such other date as shall be mutually agreed
upon by the Transferor and the Representative (the "Closing Date"), the
principal amount, if any, of the Class A Securities set forth in Schedule A
opposite the name of the respective Underwriter and the principal amount, if any
of the Class B Securities set forth in Schedule A opposite the name of the
respective Underwriter. The Class A Securities shall be purchased at a purchase
price equal to [-]% of the principal amount thereof. The Class B Securities
shall be purchased at a purchase price equal to [-]% of the principal amount
hereof.
(b) Against payment of the purchase price in same day funds drawn
to the order of the Transferor, the Transferor will deliver the Offered
Securities to the Representative at the offices of Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx LLP, in Washington, D.C. at 10:00 a.m.
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Washington, D.C. time, on the Closing Date. Each class of the Offered Securities
to be so delivered will be initially represented by one or more Offered
Securities registered in the name of Cede & Co., the nominee of The Depository
Trust Company ("DTC"). The interests of beneficial owners of the Offered
Securities will be represented by book entries on the records of DTC and
participating members thereof.
Section 4. Public Offering of the Offered Securities. It is
understood by the parties hereto that, upon the availability of the Prospectus,
the Underwriters propose to offer the Offered Securities for sale to the public
(which may include selected dealers), as set forth in the Prospectus.
Section 5. Covenants of the Transferor. The Transferor covenants
and agrees with each Underwriter:
(a) To file the Prospectus with the Commission pursuant to and in
accordance with Rule 424(b) not later than the time specified therein. The
Transferor will advise the Underwriters promptly of any such filing pursuant to
Rule 424(b).
(b) To file no amendment to the Registration Statement and to make
no amendment or any supplement to the Prospectus as amended or supplemented, or,
during such period as a Prospectus is required by law to be delivered in
connection with sales of the Offered Securities by any Underwriter or a dealer,
to file no document which, upon filing becomes incorporated by reference in the
Registration Statement other than monthly Form 8-Ks containing the
Securityholders' statement or information regarding the addition of Accounts as
contemplated in the Prospectus, without furnishing the Representative with a
copy of the proposed form thereof and providing the Representative with a
reasonable opportunity to review the same and not to file any such amendment or
supplement to which the Representative shall reasonably object; and to advise
the Representative, promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or becomes effective
or any supplement to the Prospectus as amended or supplemented or any amended
Prospectus has been filed or, if applicable, mailed for filing, of the issuance
of any stop order by the Commission, of the suspension of the qualification of
the Offered Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus as amended or supplemented or for additional
information; and, in the event of the issuance of any such stop order or of any
order preventing or suspending the use of any prospectus relating to the Offered
Securities or suspending any such qualification, promptly to use its best
efforts to obtain its withdrawal.
(c) From time to time to take such action as the Representative
may reasonably request in order to qualify the Offered Securities for offering
and sale under the securities laws of such states as the Representative may
request and to continue such qualifications in effect so long as necessary under
such laws for the distribution of such Offered Securities; provided, that in
connection therewith neither the Transferor nor Metris shall be required to
qualify as a foreign corporation or partnership, respectively, to do business,
or to file a general consent to service of process in any jurisdiction.
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(d) To furnish the Representative with copies of the Registration
Statement (including exhibits) and copies of the Prospectus as amended or
supplemented in such quantities as the Representative may from time to time
reasonably request; and if the delivery of a prospectus shall be at the time
required by law in connection with sales of any Offered Securities, either (i)
any event shall have occurred as a result of which the Prospectus would include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or (ii) for any other
reason it shall be necessary during such same period to amend or supplement the
Prospectus as amended or supplemented, to notify the Representative and to
prepare and furnish to the Representative as the Representative may from time to
time reasonably request an amendment or a supplement to the Prospectus which
will correct such statement or omission or effect such compliance.
(e) To make generally available to Securityholders an earnings
statement of the Trust complying with Rule 158 under the Act and covering a
period of at least twelve consecutive months beginning after the Effective Date
of the Registration Statement (as such date is defined in Rule 158(c) under the
Act) as soon as practicable after such period.
(f) To furnish to the Representative a copy of the Registration
Statement, each related preliminary Prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as available
and in such quantities as the Representative reasonably requests for the
purposes contemplated by the Act or the 1933 Act Regulations.
(g) To pay all expenses incident to the performance of the
obligations under this Agreement, including:
(i) the word processing, printing and filing of the
Registration Statement as originally filed and of each amendment
thereto;
(ii) the reproduction of this Agreement;
(iii) the preparation, printing, issuance and delivery of the
Offered Securities to the Underwriters;
(iv) the reasonable fees and disbursements of counsel and
accountants for the Transferor;
(v) the qualification of the Offered Securities under state
securities laws in accordance with the provisions of Section 5(c)
hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey;
(vi) the printing and delivery to the Underwriters of copies
of the Registration Statement as originally filed and of each amendment
thereto, of the preliminary prospectus and of the Prospectus and any
amendments or supplements thereto;
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(vii) the fees of Xxxxx'x Investors Service, Inc. ("Moody's"),
Standard & Poor's Ratings Services, a division of the McGraw Hill
Companies, Inc. ("S&P") and Fitch, Inc. ("Fitch") and any other Rating
Agencies rating the Offered Securities for rating the Offered
Securities;
(viii) the fees and expenses of the Trustee and its counsel;
and
(ix) miscellaneous underwriting expenses relating to the
structuring and marketing of the Offered Securities.
It is understood, however, that except as provided in this Section 5, and
Sections 7 and 8 hereof or as provided in the next succeeding sentence, each
Underwriter will pay all of its own costs and expenses, including the fees of
its counsel, transfer taxes on resale of any of the Offered Securities by it,
and any advertising expenses connected with any offers it may make. If this
Agreement is terminated by any Underwriter in accordance with the provisions of
Section 6 hereof, the Transferor and Metris, jointly and severally, shall
reimburse such Underwriter for all of its out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for such Underwriter.
(h) For a period from the date of this Agreement until the
retirement of the Offered Securities, or until such time as any Underwriter
shall cease to maintain a secondary market in the Offered Securities, whichever
occurs first, to deliver to the Underwriters the annual statements of
compliance, the Annual Servicer's Certificate and the annual independent
certified public accountants' servicing reports furnished to the Trustee
pursuant to Section 3.5 and Section 3.6, respectively, of the P&S and the
monthly Distribution Date Statement furnished to the Trustee pursuant to Section
5.2 of the Series [-] Supplement as soon as such statements and reports are
furnished to the Trustee.
(i) From and after the Closing Date, not to take any action
inconsistent with the Trust's ownership of the Receivables other than as
permitted by the Pooling and Servicing Agreement.
(j) To the extent, if any, that the rating provided with respect
to each class of the Offered Securities by the rating agency or agencies that
initially rate the Offered Securities is conditional upon the furnishing of
documents or the taking of any other actions by the Transferor, to furnish such
documents and take any such other actions.
Section 6. Conditions Precedent to the Obligations of the
Underwriters. The obligation of the Underwriters to purchase and pay for the
Offered Securities are subject to the accuracy of the representations and
warranties on the part of the Transferor and Metris, to the accuracy of the
statements of officers of the Transferor and Metris made pursuant to the
provisions hereof, to the performance by the Transferor of its obligations
hereunder and to the following additional conditions precedent:
(a) The Prospectus and any supplements thereto shall have been
filed (if required) with the Commission in accordance with the General Rules and
Regulations under the Act and Section 1 hereof, and prior to the Closing Date no
stop order suspending the
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effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Transferor or Metris, shall be contemplated by the Commissioner or by any
authority administering any state securities or blue sky law.
(b) Each of the Transferor, Metris and Direct Merchants Bank shall
have delivered to the Representative a certificate as to itself only, dated the
Closing Date, signed by its president, a senior vice president or a vice
president to the effect that the signer of such certificate has carefully
examined the Registration Statement, the Prospectus, each Designated Agreement
and this Agreement and that:
(i) (x) each representation and warranty of the Transferor and
Metris, as applicable, in this Agreement is true and correct in all
material respects to the same extent as if made on and as of the
Closing Date (except that, to the extent any such representation or
warranty expressly relates to an earlier date, such representation or
warranty was true and correct in all material respects on and as of
such earlier date) and (y) each representation and warranty of the
Transferor, Metris and Direct Merchants Bank, as applicable, in each
Designated Agreement is true and correct in all material respects to
the same extent as if made on and as of the Closing Date (except that,
to the extent any such representation or warranty expressly relates to
an earlier date, such representation or warranty was true and correct
in all material respects on and as of such earlier date)
(ii) each of the Transferor and Metris, as applicable, has
complied in all material respects with all the agreements and satisfied
all the conditions on its part to be performed or satisfied under this
Agreement on or prior to the Closing Date;
(iii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Transferor's or Metris's
knowledge, threatened by the Commission as of the Closing Date; and
(iv) nothing has come to such person's attention that would
lead such person to believe that the Prospectus contains an untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) Since the respective dates as of which information is given in
the Prospectus, there shall not have occurred any material adverse change, or
any development involving a prospective material adverse change, in or affecting
the business or assets of the Trust, the Transferor, Metris or Direct Merchants
Bank or any material adverse change in the financial position or results of
operations of the Trust, the Transferor, Metris or Direct Merchants Bank
otherwise than as set forth or contemplated in the Prospectus which in any such
case makes it impracticable or inadvisable in the Representative's good faith
judgment to proceed with the public offering or the delivery of the Offered
Securities on the terms and in the manner contemplated in the Prospectus as
amended or supplemented.
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(d) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any material adverse change in the financial
markets for asset backed securities in the United States or any outbreak of
hostilities or other calamity or crisis or (ii) the suspension of trading
generally by either the American Stock Exchange or the New York Stock Exchange,
or the establishment of minimum or maximum prices or ranges of prices by either
of such exchanges or by order of the Commission or any other governmental
authority, or any banking moratorium declared by federal or New York
authorities, the effect of which with respect to clause (i) or (ii) is such as
to make it, in the good faith judgment of the Representative, impracticable to
market the Offered Securities or to enforce contracts for the sale of the
Offered Securities.
(e) The Representative shall have received:
(i) The favorable opinion of the General Counsel of Metris,
dated the Closing Date and addressed to the Underwriters and
satisfactory in form and substance to the Representative and counsel to
the Representative, to the effect that:
(A) Metris is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware.
(B) The Transferor is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware and is duly qualified to transact business and is in
good standing in each state in which the conduct of its business
requires such qualification except where the failure to so qualify
does not have a material adverse effect on the financial condition
or business of the Transferor.
(C) Direct Merchants Bank is a national banking
association formed under the laws of the United States of America
and is authorized to conduct the business of a special purpose
credit card bank, as described in the Prospectus, and had at all
relevant times and now has the power, authority and legal right to
acquire, own and service the Accounts and the Receivables.
(D) Each Designated Agreement and the Transfer and
Administration Agreement to which Metris, Direct Merchants Bank or
the Transferor is a party and this Agreement has been duly and
validly authorized, executed and delivered by each of Metris,
Direct Merchants Bank and the Transferor, as applicable.
(E) The sale of the Investor Securities and the direction
by the Transferor to the Trustee to execute, authenticate and
deliver the Investor Securities have been duly authorized by the
Transferor. The Investor Securities have been duly and validly
authorized and executed by the Transferor.
(F) The execution and delivery of any Designated Agreement
or of this Agreement and the execution and delivery to the Trustee
of the Investor Securities, the performance of the transactions
contemplated by this Agreement or any Designated Agreement and the
fulfillment of the terms thereof will not (i)
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conflict with, result in a breach of or a violation of any of the
terms of, or constitute a default under, the certificate of
incorporation or bylaws of Metris, (ii) violate any Applicable
Laws (assuming compliance with all applicable state securities and
Blue Sky laws, as to which such counsel expresses no opinion),
(iii) require any Governmental Approval (except for filings under
the UCC, compliance with all applicable state securities and Blue
Sky laws, as to which such counsel expresses no opinion, and such
filings or registrations as have already been made and are in full
force and effect) or (iv) violate, result in any breach of any of
the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under any
currently existing material indenture, contract, agreement,
mortgage, deed of trust or other instrument which has been
attached as an exhibit to the report on Form 10-K filed by Metris.
For purposes of this paragraph (vi), "Applicable Laws" means those
laws, rules and regulations of the State of Minnesota and the
United States of America which, in such counsel's experience, are
normally applicable to the ordinary business operations of Metris
or the Transferor and transactions of the type contemplated by the
Designated Agreements. For the purposes of this paragraph (vi),
the term "Governmental Approval" means any consent, approval,
license, authorization or validation of, or filing, recording or
registration with, any Governmental Authority pursuant to
Applicable Laws, and the term "Governmental Authority" means any
Minnesota or federal executive, legislative, judicial,
administrative or regulatory body.
(G) There are no legal or governmental proceedings pending
or, to such counsel's knowledge, threatened that are required to
be disclosed in the Registration Statement, other than those
disclosed therein. There are no proceedings or investigations
pending or, to the best of such counsel's knowledge, threatened
against Metris, Direct Merchants Bank or the Transferor, before
any Governmental Authority (i) asserting the invalidity of any
Designated Agreement or of this Agreement, (ii) seeking to prevent
the consummation of any of the transactions contemplated hereby,
(iii) except as disclosed in the Prospectus, seeking any
determination or ruling that would materially and adversely affect
the performance by Metris, Direct Merchants Bank or the Transferor
of its obligations thereunder, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability thereof or (v) seeking to affect adversely the tax
attributes of the Trust or the Investor Securities.
(H) No consent, approval, authorization or order of, or
registration, filing (except for filings under the UCC) or
declaration with, any court or governmental agency or body is
required in connection with (i) the execution, delivery and
performance by Metris or the Transferor of any Designated
Agreement or of this Agreement or (ii) the offer, sale or delivery
of the Investor Securities, except such as shall have been
obtained or made, as the case may be, or will be obtained or made,
as the case may be, prior to the Closing Date and except such as
may be required under state securities or Blue Sky laws.
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(I) Metris has full corporate power and authority to sell
and assign the Receivables to the Transferor pursuant to the terms
of the Purchase Agreement and has duly authorized such sale and
assignment by all necessary corporate action. The Transferor has
full corporate power and authority to transfer the Receivables to
the Trust pursuant to the terms of the Pooling and Servicing
Agreement and has duly authorized such transfer by all necessary
corporate action.
(J) Direct Merchants Bank has the power and authority to
execute and deliver the Bank Purchase Agreement and the Pooling
and Servicing Agreement and to consummate the transactions
contemplated therein.
(K) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required for the consummation by Direct Merchants Bank of the
transactions contemplated in the Bank Purchase Agreement or the
Pooling and Servicing Agreement, except for such consents,
approvals, orders or filings as may be required under federal or
state securities laws and except for such filings as may be
required to perfect interests in the Receivables pursuant to the
Bank Purchase Agreement.
(L) Neither the execution, delivery and performance by
Direct Merchants Bank of its obligations under the Bank Purchase
Agreement or the Pooling and Servicing Agreement, the transfer of
the Receivables to Metris, the issuance and sale of the Investor
Securities, nor the consummation of any other of the transactions
contemplated in the Bank Purchase Agreement or the Pooling and
Servicing Agreement will conflict with, result in a breach of or
violation of any of the terms of, or constitute a default under,
the Articles of Association or bylaws of Direct Merchants Bank,
each as amended, or any Applicable Laws or the terms of any
material indenture or other material agreement or instrument known
to such counsel to which Direct Merchants Bank is a party or by
which it or its properties are bound. For purposes of this
paragraph (1), "Applicable Laws" means those laws, rules and
regulations of the United States of America which, in such
counsel's experience, are normally applicable to the ordinary
business operations of Direct Merchants Bank and transactions of
the type contemplated by the Designated Agreements.
(M) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge, threatened
before any court, administrative agency or other tribunal (1)
asserting the invalidity of the Bank Purchase Agreement or the
Pooling and Servicing Agreement or (2) seeking to prevent the
issuance of the Investor Securities or the consummation of any of
the transactions contemplated by the Bank Purchase Agreement or
the Pooling and Servicing Agreement or the Investor Securities,
which might materially and adversely affect the performance by
Direct Merchants Bank of its obligations under, or the validity or
enforceability of, the Bank Purchase Agreement or the Pooling and
Servicing Agreement or the Investor Securities.
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(N) Metris is duly qualified to transact business and is
in good standing in each state in which the conduct of its
business requires such qualification except where the failure to
so qualify does not have a material adverse effect on the
financial condition or business of Metris.
(O) Each of Metris, Direct Merchants Bank and the
Transferor possesses all material licenses, certificates,
authorities or permits issued by the appropriate state or federal
regulatory agencies or bodies necessary to conduct the business
now conducted by it and as described in the Prospectus, except to
the extent that the failure to have such licenses, certificates,
authorities or permits does not have a material adverse effect on
the Receivables or the Investor Securities or the financial
condition of Metris, Direct Merchants Bank or the Transferor, and
none of Metris, Direct Merchants Bank and the Transferor has
received any notice of proceedings relating to the revocation or
modification of any such license, certificate, authority or permit
which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and
adversely affect the conduct of its business, operations or
financial condition.
(ii) The favorable opinion of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx
LLP, special counsel for the Transferor and Metris, dated the Closing
Date and addressed to the Underwriters and satisfactory in form and
substance to the Representative and counsel to the Representative, to the
effect that:
(A) The Pooling and Servicing Agreement is not required to
be qualified under the Trust Indenture Act of 1939, as amended;
neither Metris, the Transferor nor the Trust is required to be
registered under the Investment Company Act of 1940, as amended;
(B) The Investor Securities, the Designated Agreements and
this Agreement conform in all material respects to the
descriptions thereof contained in the Registration Statement and
the Prospectus;
(C) Neither the execution, delivery or performance by any
of Metris, the Transferor and Direct Merchants Bank (the
"Companies") of any of the Designated Agreements, the Transfer and
Administration Agreement or this Agreement (collectively, the
"Transaction Documents") to which it is a party nor the compliance
by any of the Companies with the terms and provisions thereof will
contravene any provision of any Applicable Laws. For purposes of
this paragraph (C) and paragraph (D) below, "Applicable Laws"
means those laws, rules and regulations of the United States of
America, and with respect to this Agreement, the laws, rules and
regulations of the State of New York which, in such counsel's
experience, are normally applicable to transactions of the type
contemplated by any of the Transaction Documents, without such
counsel having made any special investigation as to the
applicability of any specific law, rule or regulation, and which
are not the subject of a specific opinion given by such counsel
referring expressly to a particular law or laws;
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(D) No Governmental Approval, which has not been obtained
or taken and is not in full force and effect, is required to
authorize or is required in connection with the execution,
delivery or performance of any of the Purchase Agreement, the
Pooling and Servicing Agreement or the Transfer and Administration
Agreement, except for (1) filings of Uniform Commercial Code
financing statements with respect to the transfer of the
Receivables from Direct Merchants Bank to Metris pursuant to the
Bank Purchase Agreement, from Metris to the Transferor pursuant to
the Purchase Agreement and with respect to the transfer of the
Receivables from the Transferor to the Trust pursuant to the
Pooling and Servicing Agreement and (2) such Governmental
Approvals as may be required under the securities or blue sky laws
of any jurisdiction. For the purposes of this paragraph (D), the
term "Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing, recording or
registration with, any Governmental Authority pursuant to
Applicable Laws. For the purposes of this paragraph (D), the term
"Governmental Authority" means any New York or federal
legislative, judicial, administrative or regulatory body; and
(E) The statements in the final Prospectus Supplement
under the headings "Risk Factors -- Insolvency or Bankruptcy of
Metris Receivables, Inc., Direct Merchants Bank or Metris
Companies Inc. Could Result in Accelerated, Delayed or Reduced
Payments to Securityholders," and "ERISA Considerations" and the
statements in the base Prospectus under the headings "Certain
Legal Aspects of the Receivables," "Income Tax Matters" and "ERISA
Considerations" to the extent that they constitute matters of law
or legal conclusions with respect thereto, have been reviewed by
us and are correct in all material respects;
(F) Each of the Registration Statement, as of its
effective date and the Prospectus, as of its date, complied as to
form in all material respects with the requirements of the Act and
the General Rules and Regulations under the Act, except that in
each case such counsel need not express any opinion as to the
financial and statistical data included therein or excluded
therefrom or the exhibits to the Registration Statement and,
except as and, to the extent set forth in paragraphs (B), (E) and
(G) such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus; and
(G) The information in the Prospectus Supplement under the
heading "Description of the Offered Securities" and in the base
Prospectus under the heading "Description of the Securities,"
insofar as it constitutes a summary of certain provisions of the
Offered Securities and the Pooling and Servicing Agreement,
summarizes fairly such provisions.
Such counsel's opinions may be subject to the following
assumptions and qualifications:
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(A) enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of
equity (regardless of whether enforcement is sought in equity or
at law);
(B) certain of the remedial provisions, including waivers,
contained in any agreement, may be unenforceable in whole or in
part, but the inclusion of such provisions does not affect the
validity of any such agreement taken as a whole, and each of the
agreements, together with applicable law, contains adequate
provisions for the practical realization of the benefits of the
security created by such agreements;
(C) no opinion is given as to the enforceability of any
rights to contribution or indemnification provided for in the
Transaction Documents which are violative of the public policy
underlying any law, rule or regulation (including any Federal or
state securities law, rule or regulation);
(D) each of the agreements constitutes the valid and
binding obligation of each party to such agreement (other than
Metris, the Transferor and Direct Merchants Bank to the extent
such opinion is given in Section 5(b)(i) above) enforceable
against such other party in accordance with its terms;
(E) no opinion is given as to the effect on the opinions
expressed of (i) the compliance or non-compliance of any of the
Underwriters or any party (other than Metris, the Transferor and
Direct Merchants Bank) to the Transaction Documents with any
state, federal or other laws or regulations applicable to it or
(ii) the legal or regulatory status or the nature of the business
of any Underwriters;
(F) no opinion is given as to the applicability or effect
of any fraudulent transfer or similar law on the transaction
documents or any transactions contemplated thereby;
(G) no opinion is given as to the applicability or effect
of any preference or similar law on the transaction documents or
any transaction contemplated thereby;
(H) no opinion is given with respect to the enforceability
of provisions of the Pooling and Servicing Agreement to the extent
such provisions provide for interest on interest; and
(I) each outstanding interest in the Trust issued prior to
the issuance of the Offered Securities (other than the Retained
Interest) represents indebtedness or an interest in a partnership
(other than a publicly traded partnership treated as a
corporation) for federal income tax purposes.
Such counsel also shall state that they have participated in conferences with
representatives of Metris and the Transferor and their accountants, the
Underwriters and counsel to the
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Underwriters concerning the Registration Statement and the Prospectus and have
considered the matters required to be stated therein and the matters stated
therein, although they are not independently verifying the accuracy,
completeness of fairness of such statements, except as and to the extent set
forth in paragraphs (B), (E) and (G) above, and based upon and subject to the
foregoing, nothing has come to such counsel's attention to cause such counsel to
believe that the Registration Statement, at the time it became effective,
contained an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or the Prospectus, as of the Closing Date, contains any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading (it being
understood that such counsel has not been requested to and does not make any
comment in this paragraph with respect to the financial statements, supporting
schedules and other financial or statistical information contained in the
Prospectus).
(iii) The favorable opinion of Xxxxxxxx, Xxxxxx & Finger P.A.,
special Delaware counsel for the Transferor, dated the Closing Date and
addressed to the Underwriters and satisfactory in form and substance to
the Representative and counsel to the Representative, to the effect that:
(A) Each of the Purchase Agreement, the Transfer and
Administration Agreement and the Pooling and Servicing Agreement
(including, with respect to the Pooling and Servicing Agreement,
the allocation provisions thereof) to which any of the Companies
is a party, constitutes a valid and binding obligation of each of
them, as applicable, enforceable against each of Metris, the
Transferor and Direct Merchants Bank, as applicable, in accordance
with their respective terms under the laws of the State of
Delaware;
(B) Neither the execution, delivery or performance by any
of the Companies of any of the Purchase Agreement, the Transfer
and Administration Agreement, this Agreement or the Pooling and
Servicing Agreement (collectively, the "Transaction Documents") to
which it is a party nor the compliance by any of the companies
with the terms and provisions thereof will contravene any
provision of any Applicable Laws. For purposes of this paragraph
(b) and paragraph (c) below, "Applicable Laws" means those laws,
rules and regulations of the State of Delaware which, in such
counsel's experience, are normally applicable to transactions of
the type contemplated by the Purchase Agreement, the Transfer and
Administration Agreement, this Agreement and the Pooling and
Servicing Agreement, without such counsel having made any special
investigation as to the applicability of any specific law, rule or
regulation, and which are not the subject of a specific opinion
given by such counsel referring expressly to a particular law or
laws;
(C) No Governmental Approval, which has not been obtained
or taken and is not in full force and effect, is required to
authorize or is required in connection with the execution,
delivery or performance of any of the Purchase Agreement, the
Pooling and Servicing Agreement or the Transfer and
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Administration Agreement, except for (i) filings of Uniform
Commercial Code financing statements with respect to the transfer
of the Receivables from Direct Merchants Bank to Metris pursuant
to the Bank Purchase Agreement, from Metris to the Transferor
pursuant to the Purchase Agreement and with respect to the
transfer of the Receivables from the Transferor to the Trust
pursuant to the Pooling and Servicing Agreement and (ii) such
Governmental Approvals as may be required under the securities or
blue sky laws of any jurisdiction. For the purposes of this
paragraph (C), the term "Governmental Approval" means any consent,
approval, license, authorization or validation of, or filing,
recording or registration with, any Governmental Authority
pursuant to Applicable Laws. For the purposes of this paragraph
(C), the term "Governmental Authority" means any Delaware
legislative, judicial, administrative or regulatory body; and
(D) The Offered Securities, when duly and validly executed
by the Transferor and authenticated by the Trustee and delivered
to the Transferor in accordance with the Pooling and Servicing
Agreement, and delivered to and paid for by the Underwriters, will
be duly and validly issued and outstanding and entitled to the
benefits of the Pooling and Servicing Agreement.
(f) The Representative shall have received an opinion or opinions
of Xxxxxx & Xxxxxxx LLP with respect to Minnesota law, Xxxxxxxxx Traurig with
respect to Arizona law, Xxxxxxxx, Xxxxxx & Finger, P.A. with respect to Delaware
law and Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP with respect to federal law, dated
the Closing Date, in form and substance satisfactory to the Representative and
to counsel to the Underwriters, with respect to certain matters relating to the
transfers of the Receivables to Metris (including the enforceability under
Minnesota law of the Bank Purchase Agreement), the Transferor and the Trust and
the perfection of Metris', the Transferor's and the Trust's interest in the
receivables and certain other matters relating to insolvency considerations and
with respect to other related matters in a form previously approved by you and
your counsel.
(g) The Representative shall have received from each of Xxxxxx &
Whitney LLP in respect of Minnesota, Xxxxxxxxx Xxxxxxx in respect of Arizona and
Florida, Xxxxxxxx, Xxxxxx & Finger, P.A. in respect of Delaware, and Xxxxx &
Xxxxxxx L.L.P. in respect of Maryland an opinion, dated the Closing Date and
satisfactory in form and substance to the Representative and to counsel to the
Underwriters, to the effect that the Offered Securities will be characterized
for such state's income and franchise tax purposes as indebtedness secured by
the Receivables and Securityholders not otherwise subject to taxation in such
state will not be subject to tax in respect of the Offered Securities.
(h) The Representative shall have received from Xxxxxx, Xxxxxxxxxx
& Xxxxxxxxx LLP, special counsel to the Transferor and Metris, opinions, dated
the Closing Date, addressed to the Underwriters and satisfactory in form and
substance to the Representative and to counsel to the Underwriters, relating to
certain insolvency and bankruptcy matters.
(i) The Representative shall have received from Xxxxxx & Whitney
LLP, counsel for the Trustee, opinions, dated the Closing Date and addressed to
the Underwriters, the
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Transferor and Metris and satisfactory in form and substance to the
Representative and to counsel to the Underwriters.
(j) The Representative shall have received an officer's
certificate dated the Closing Date of the chairman of the board, the president,
an executive vice president or the treasurer of the Trustee in which such
officer shall state that, to the best of his/her knowledge after reasonable
investigation, the representations and warranties of the Trustee contained in
the Pooling and Servicing Agreement are true and correct in all material
respects, and that the Trustee has complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or satisfied
under the Pooling and Servicing Agreement at or prior to the Closing Date.
(k) The Representative shall have received copies of rating
letters confirming that the Class A Securities have been rated in the highest
rating category by S&P, Xxxxx'x and Fitch and such ratings shall not have been
reduced or withdrawn as of the Closing Date;
(l) The Representative shall have received copies of rating
letters confirming that the Class B Securities have been rated at least [-] by
S&P, at least [-] by Xxxxx'x and at least [-] by Fitch and such ratings shall
not have been reduced or withdrawn by the Closing Date;
(m) Counsel to the Transferor and Metris shall have furnished to
the Representative any opinions supplied to the rating agencies relating to
certain matters with respect to the Offered Securities;
(n) The Representative shall have received copies of letters,
dated the date of the Prospectus and addressed to the Underwriters, from KPMG
Peat Marwick LLP certified public accountants, substantially in the form
heretofore approved by the Representative and counsel to the Underwriters. On
the Closing Date, the Representative shall have received from KPMG Peat Marwick
LLP such letter (which may be in a bring-down format) dated the Closing Date.
(o) The Representative shall have received (i) a copy of the
financing statements on Form UCC-1 filed with the Secretary of State of the
State of Arizona with respect to the transfer of the Receivables by Direct
Merchants Bank to Metris pursuant to the Bank Purchase Agreement, identifying
the Receivables as collateral and naming Direct Merchants Bank as debtor and
Metris as secured party, (ii) a copy of the financing statements on Form UCC-1
filed with the Secretary of State of the State of Minnesota with respect to the
transfer of the Receivables by Metris to the Transferor pursuant to the Purchase
Agreement, identifying the Receivables as collateral and naming Metris as debtor
and the Transferor as the secured party and (iii) a copy of the financing
statements on Form UCC-1 filed with the Secretary of State of the State of
Minnesota with respect to the transfer of the Receivables by the Transferor to
the Trust pursuant to the Pooling and Servicing Agreement, identifying the
Receivables as collateral and naming the Transferor as the debtor and the Trust
as the secured party.
(p) The Representative shall have received an opinion addressed to
the Underwriters from [-], counsel to the Underwriters, dated the Closing Date,
with respect to the validity of the Investor Securities and other related
matters and the Transferor shall have
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furnished to such counsel such documents as they may reasonably request for the
purpose of enabling them to render such opinions.
(q) Xxxxxxxx, Xxxxxx & Finger, P.A., in its capacity as special
Delaware counsel for Metris Secured Note Trust [-] (the "Owner Trust") in
connection with the Transfer and Administration Agreement and the Indenture
dated as of the Closing Date, between the Owner Trust and U.S. Bank National
Association, as indenture trustee, (the "Indenture") shall have furnished to the
Underwriters its written opinion, addressed to the Underwriters and dated the
Closing Date, in form and substance satisfactory to the Underwriters and their
counsel, substantially to the effect that:
(i) The Owner Trust is a business trust duly created, validly
existing and in good standing under the laws of the State of Delaware
and has the power and authority to execute, deliver and perform its
obligations under the Transfer and Administration Agreement and the
Indenture;
(ii) The execution and delivery by the Owner Trust of the
Transfer and Administration Agreement, the Indenture and the secured
notes issued by the Owner Trust pursuant to the Indenture (the "Notes")
have been duly authorized, and the Transfer and Administration
Agreement constitutes the legal, valid and binding agreement of the
Owner Trust, enforceable against the Owner Trust in accordance with
their respective terms, except (x) as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights of creditors generally (as such laws would
apply in the event of the insolvency, receivership, conservatorship or
reorganization of, or other similar occurrence with respect to, the
Owner Trustee) and (y) that the enforceability of the Transfer and
Administration Agreement against the Owner Trust may be subject to the
application of general principles of equity (regardless of whether
considered or applied in a proceeding in equity or at law);
(iii) The execution and delivery by the Owner Trust of the
Transfer and Administration Agreement, the Indenture and the Notes and
the performance by the Owner Trust of its obligations under the
Transfer and Administration Agreement, the Indenture and the Notes do
not conflict with or result in a violation of (x) any law or regulation
of the State of Delaware applicable to the Owner Trust, or (y) the
Trust Agreement; and
(iv) The execution and delivery by the Owner Trust of the
Transfer and Administration Agreement, the Indenture and the Notes and
the performance by the Owner Trustee of its obligations under the
Transfer and Administration Agreement, the Indenture and the Notes do
not require any approval, authorization or other action by, or filing
with, any governmental authority of the State of Delaware having
jurisdiction over the Owner Trust, except such as have been obtained,
taken or made.
(r) Xxxxxxxx, Xxxxxx & Finger P.A., in its capacity as counsel
for the Owner Trustee in connection with the Trust Agreement, relating to the
establishment of the Metris Secured Note Trust [-], between the Bank and the
Owner Trustee, shall have furnished to the Representative its written opinion,
addressed to the Underwriters and dated the Closing Date, in
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form and substance satisfactory to the Underwriters and their counsel,
substantially to the effect that:
(i) The Owner Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has the corporate power and authority to execute, deliver
and perform its obligations under the Trust Agreement;
(ii) The Trust Agreement has been duly authorized, executed
and delivered by the Owner Trustee, and the Trust Agreement constitutes
a legal, valid and binding agreement of the Owner Trustee, enforceable
against the Owner Trustee in accordance with its terms, except (x) as
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights of creditors
generally (as such laws would apply in the event of the insolvency,
receivership, conservatorship or reorganization of, or other similar
occurrence with respect to, the Owner Trustee), (y) that the
enforceability of the Trust Agreement against the Owner Trustee may be
subject to the application of general principles of equity (regardless
of whether considered or applied in a proceeding in equity or at law),
and (z) that certain remedial provisions of the Trust Agreement may be
unenforceable, in whole or in part against the Owner Trustee, but the
inclusion of such provisions does not affect the validity of the Trust
Agreement, taken as a whole, and the Trust Agreement, together with
applicable law, contains adequate provisions for the practical
realization of the benefits of the security provided thereby. Such
counsel expresses no opinion as to the enforceability of any rights to
contribution or indemnification that are violative of public policy
underlying any law, rule or regulation;
(iii) The execution and delivery by the Owner Trustee of the
Trust Agreement, and the performance by the Owner Trustee of its
obligations under the Trust Agreement, do not conflict with or result
in a violation of (x) any law or regulation of the United States of
America or the State of Delaware governing the banking or trust
activities of the Owner Trustee, or (y) the organizational documents of
the Owner Trustee; and
(iv) The execution and delivery by the Owner Trustee of the
Trust Agreement and the performance by the Owner Trustee of its
obligations under the Trust Agreement do not require any approval,
authorization or other action by, or filing with, any governmental
authority of the United States of America or the State of Delaware
having jurisdiction over the banking or trust activities of the Owner
Trustee, except such as have been obtained, taken or made.
The Transferor will furnish the Representative with such conformed copies of
such certificates, letters and documents as the Underwriters may reasonably
request.
If any condition specified in this Section shall not have been fulfilled when
and as required to be fulfilled, this Agreement may be terminated by the
Representative by notice to the Transferor at any time at or prior to Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 5 hereof.
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Section 7. Indemnification and Contribution.
(a) Each of Metris and the Transferor shall, jointly and
severally, indemnify and hold harmless the Underwriters and each person who
controls the Underwriters within the meaning of Section 15 of the Act as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), or the
omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein
not misleading, or arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus
(or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected with the
written consent of the Transferor and Metris; and
(iii) against any and all expense whatsoever (including,
subject to Section 7(c) hereof, the fees and disbursements of
counsel chosen by the Representative) reasonably incurred in
investigating, preparing or defending against any litigation, or
any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Transferor by
any Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto).
(b) Each Underwriter severally agrees to indemnify and hold
harmless Metris, the Transferor, each of their respective directors and
officers, each of the Transferor's officers who signed the Registration
Statement, and each person, if any, who controls the Transferor and Metris,
respectively, within the meaning of Section 15 of the Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Transferor by any Underwriter through the
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Representative expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party under subsection (a) or (b) above unless the indemnifying party has been
materially prejudiced by such failure to notify. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. The indemnifying person
shall not be responsible for the settlement of any proceeding made without its
prior consent.
Section 8. Contribution. If the indemnification provided for in
Section 7 is unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (b) of Section 7, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in subsection (a) or
(b) of Section 7 (i) in such proportion as is appropriate to reflect the
relative benefits received by the Transferor and Metris on the one hand and the
Underwriters on the other from the offering of the Offered Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Transferor
and Metris on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Transferor and Metris on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Transferor bear to the total underwriting discounts and commissions received by
the Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Transferor or by the Underwriters through the
Representative and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this Section
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim which is the subject of this Section. Notwithstanding the provisions of
this Section, no Underwriter shall be required to contribute any amount in
excess of the underwriting discount or commission applicable to the Offered
Securities purchased by it hereunder. No person guilty of fraudulent
misrepresentation
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(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Section 9. Survival of Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of each of the Transferor, Metris or its officers and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation or statement as to the results
thereof, made by or on behalf of any Underwriter, the Transferor, Metris or any
of their respective representatives, officers or directors of any controlling
person, and will survive delivery of and payment for the Offered Securities.
Section 10. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail on the Closing Date to purchase the Offered
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representative shall have the right, within 36
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 36-hour period, then:
(a) (if the principal amount of Defaulted Securities does not
exceed 10% of the principal amount of the applicable class of Offered
Securities, each of the non-defaulting Underwriters of such class of Offered
Securities shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters of such class of Offered Securities, or
(b) if the principal amount of Defaulted Securities exceeds 10% of
the principal amount of the applicable class of Offered Securities, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representative or the Transferor shall
have the right to postpone the Closing Date for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
Section 11. Representations and Warranties of the Underwriters.
Each Underwriter represents and warrants to, and agrees with, Metris and the
Transferor that:
(a) It has only issued or passed on and will only issue or pass on
in the United Kingdom any document received by it in connection with the issue
of the Offered Securities to a person who is of a kind described in Article
11(3) of the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) Order 1996 or who is a person to whom the document may otherwise
lawfully be issued or passed on.
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(b) It has complied and will comply with all applicable provisions
of the Financial Services Xxx 0000 of Great Britain with respect to anything
done by it in relation to the Offered Securities in, from or otherwise involving
the United Kingdom.
(c) If it is an authorized person under the Financial Services Xxx
0000, it has only promoted and will only promote (as that term is defined in
Regulation 1.02 of the Financial Services (Promotion of Unregulated Schemes)
Regulations 1991) to any person in the United Kingdom the scheme described
herein if that person is of a kind described either in Section 76(2) of the
Financial Services Xxx 0000 or in Regulation 1.04 of the Financial Services
(Promotion of Unregulated Schemes) Regulations 1991.
(d) Each Underwriter represents that if it furnished an electronic
copy of the preliminary Prospectus prepared in connection with the offer and
sale of the Offered Securities to any person, such Underwriter has taken
reasonable steps to furnish a printed copy of such preliminary Prospectus to all
persons to whom it previously furnished an electronic copy.
Section 12. Notices. All communications hereunder will be in
writing and:
(a) if sent to the Underwriters, will be mailed, delivered or sent
by facsimile transmission and confirmed to the Representative at:
[Underwriter]
(b) if sent to the Transferor, will be mailed, delivered or sent
by facsimile transmission, and confirmed to it at:
Metris Receivables, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(c) if sent to Metris, will be mailed, delivered or sent by
facsimile transmission, and confirmed to it at:
Metris Companies Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000;
or to such other address as the Transferor, Metris or the Representative may
designate in writing to the other parties hereto.
Section 13. Successors. This Agreement will inure to the benefit
of and be binding upon the Underwriters, Metris and the Transferor and their
respective successors and the
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officers and directors and controlling persons referred to in Section 7 hereof,
and no other person will have any right or obligations hereunder.
Section 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 15. Severability of Provisions. Any covenant, provision,
agreement or term of this Agreement that is prohibited or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
Section 16. Entire Agreement. This Agreement constitutes the
entire agreement and understanding of the parties hereto with respect to the
matters and transactions contemplated hereby and supersedes all prior agreements
and understandings whatsoever relating to such matters and transactions.
Section 17. Amendment. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
Section 18. Headings. The headings in this Agreement are for the
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
Section 19. Counterparts. This Agreement may be executed by each
of the parties hereto in any number of counterparts, and by each of the parties
hereto on separate counterparts, each of which counterparts, when so executed
and delivered, shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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* * *
If the foregoing is in accordance with your understanding, please sign and
return to us a counterpart hereof, whereupon this letter and your acceptance
hereof shall constitute a binding agreement between the Underwriters, the
Transferor and Metris.
Very truly yours,
METRIS RECEIVABLES, INC.
By:
------------------------------------------
Name:
Title:
METRIS COMPANIES INC.
By:
------------------------------------------
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
[Underwriter]
By
------------------------------------------
Name:
Title:
As Representative of the Underwriters as set forth herein.
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SCHEDULE A
Aggregate
Principal Amount of
Name of Underwriter Class A Securities
----------------------
Total $
Aggregate
Principal Amount of
Name of Underwriter Class B Securities
----------------------
Total $
