EXHIBIT 1
$[ ]
Floating Rate Asset Backed Securities
Series 1999- , Class A
$[ ]
Floating Rate Asset Backed Securities
Series 1999- , Class B
METRIS MASTER TRUST
UNDERWRITING AGREEMENT
----------------------
Dated __________, 1999
[ ]
as Representative of the
several Underwriters
New York, New York 10___
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 1999- , Class A (the "Class A Securities")
and $[ ] Floating Rate Asset Backed Securities, Series 1999- , Class B (the
"Class B Securities" and together with the Class A Securities, the "Offered
Securities") of 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, VISA or other
revolving consumer credit accounts (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 (as supplemented and
amended from time to time, the "P&S") among the Transferor, the Servicer
and The Bank of New York (Delaware), as trustee, (the "Trustee"). The
Offered Securities will be issued pursuant to the P&S and the Series 1999-
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 as the "Pooling and
Servicing Agreement". Certain distributions with respect to the Offered
Securities will be enhanced by [Credit Enhancement] which, together with
the Offered 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- 76047), including the related prospectus, for the registration under
the Securities Act of 1933, as amended (the "Act"), of the Offered
Securities, in the form heretofore delivered to the Underwriters. The
registration statement (including the prospectus constituting a part
thereof, all documents incorporated by reference therein and the
information, if any, deemed to be part thereof pursuant to Rule 430(b) of
the rules and regulations of the Commission under the Act (the "1933 Act
Regulations")) in the form in which it becomes effective under the Act (the
date on which it becomes effective being the "Effective Date"), including
the exhibits thereto, is referred to herein as the "Registration
Statement", and the prospectus dated _____, 1999 in the form in which it is
filed with the Commission (including all documents incorporated by
reference therein and the information, if any, deemed to be part thereof
pursuant to Rule 430A(b) of the 1933 Act Regulations) is referred to herein
as the "Prospectus", except that if any revised prospectus shall be
provided to you by the Transferor for use in connection with the offering
of the Offered Securities which differs from the Prospectus on file at the
Commission at the time the Registration Statement becomes effective
(whether or not such revised prospectus is required to be filed by the
Transferor pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Act (the "1933 Act Regulation"), the term "Prospectus"
shall refer to such revised prospectus from and after the time it is first
provided to you for such use.
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
(the representations and warranties as to Direct Merchants Bank being given
by Xxxxxx), represents and warrants to, and agrees with, [ ] ("[ ]")
and any other Underwriters 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 [ ] is acting as
representative (in such capacity, [ ] shall hereinafter be referred to as
the "Representative"), as of the date hereof that:
(i) On the date hereof and the Effective Date, the
Registration Statement did and will comply, in all material
respects, with the requirements of the Act and the 1933 Act
Regulations, and did 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. The Prospectus, at the
Effective Date (unless the term "Prospectus" refers to a
prospectus which has been provided to you by the Transferor
which differs from the Prospectus on file at the Commission at
the time the Registration Statement becomes effective, in which
case at the time it is first provided to you for such use) and
at the Closing Date, will not include an 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.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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 to perform their
respective obligations thereunder and hereunder.
(vi) Each of the Designated Agreements to which it is a
party, has been duly authorized and, as of the Closing Date,
will be duly executed and delivered by the Transferor, Metris
and Direct Merchants Bank, as applicable, and each of the
Designated Agreements 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).
(vii) This Agreement has been duly authorized, executed
and delivered by the Transferor and Xxxxxx.
(viii) 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.
(ix) The execution and delivery of any Designated
Agreement or of this 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 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.
(x) 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 or of this
Agreement, (ii) seeking to prevent the consummation of any of
the transactions contemplated thereby, (iii) 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 that would materially and adversely
affect the validity or enforceability thereof or (v) seeking to
affect adversely the tax attributes of the Trust.
(xi) All approvals, authorizations, consents, orders or
other actions of any Governmental Authority required in
connection with the execution and delivery of any Designated
Agreement or of this Agreement and the Investor Securities, the
performance of the transactions contemplated by any Designated
Agreement and by this Agreement and the fulfillment of the
terms hereof, have been obtained.
(xii) 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 neither the Transferor, Metris nor 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.
(xiii) On the Closing Date the Trust will have good and
marketable title to, or a perfected first priority security
interest in, the Receivables, free of Liens other than any Lien
permitted under the Pooling and Servicing Agreement.
(xiv) 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 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 [ ], 1999, 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 and Class B
Securities set forth in Schedule A opposite the name of such Underwriter.
The Class A Securities shall be purchased at a purchase price equal to [ .
%] of the principal amount thereof, and the Class B Securities shall be
purchased at a price equal to [ . %] of the principal amount thereof.
(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 Underwriters at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, at 10:00 a.m. New York City
time, on the Closing Date. 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, after the Registration Statement
becomes effective, 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) If required, 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 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 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.
(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 (which will be signed and will include all
exhibits) , 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 such Underwriter
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 prospectuses, and of
the Prospectus and any amendments or supplements thereto;
(vii) the reproduction and delivery to the Underwriters
of copies of the Blue Sky Survey;
(viii) the fees of Xxxxx'x Investors Service, Inc.
("Xxxxx'x") and Standard & Poor's Ratings Services, a division
of the McGraw Hill Companies, Inc. ("S&P") and any other Rating
Agencies rating the Offered Securities for rating the Offered
Securities; and
(ix) the fees and expenses of the Trustee and its
counsel.
It is understood, however, that except as provided in this Section, 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 the Representative in
accordance with the provisions of Section 6 hereof, the Transferor and
Metris, jointly and severally, shall reimburse the Representative for all
of its out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Representative.
(h) For a period from the date of this Agreement until
the retirement of the Offered Securities, or until such time as each
Underwriter shall cease to maintain a secondary market in the Offered
Securities, whichever occurs first, to deliver to the Representative
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 pursuant to Section 5.2 of the Series
1999- 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 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
Underwriter. 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 Xxxxxx 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 Registration Statement shall have become
effective not later than 4:00 p.m., New York time, on the second
Business Day following the date of this Agreement or such later date
as shall have been consented to by the Representative; and prior to
the Closing Date no stop order suspending the 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 Commission. If the
Transferor has elected to rely upon Rule 430A of the 1933 Act
Regulations, the price of the Offered Securities and any
price-related information previously omitted from the effective
Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of
the 1933 Act Regulations within the prescribed time period, and prior
to the Closing Date the Company shall have provided evidence
satisfactory to the Representative of such timely filing, or a
post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the
requirements of Rule 430A of the 1933 Act Regulations.
(b) Each of the Transferor and Xxxxxx shall have
delivered to the Representative a certificate, 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) (A) the representations and warranties of the
Transferor and Metris, as applicable, in this Agreement are
true and correct in all material respects at and as of the
Closing Date with the same effect as if made on the Closing
Date and (B) the representations and warranties of the
Transferor, Metris and Direct Merchants Bank, as applicable, in
each Designated Agreement are true and correct in all material
respects at and as of the Closing Date with the same effect as
if made on and as of the Closing Date except that to the extent
that any such representation or warranty in this clause (B)
expressly relates to an earlier date, such representation or
warranty is true and correct in all material respects at and as
of such earlier date;
(ii) the Transferor or 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 at 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 initiated 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, or Direct Merchants Bank or any material adverse
change in the financial position or results of operations of the
Trust, the Transferor, 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.
(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:
(1) The favorable opinion of Xxxx X. Xxxxxxxx, general counsel
of Xxxxxx, dated the Closing Date and addressed to the Underwriters
and satisfactory in form and substance to the Representative and to
counsel to the Representative, to the effect that:
(i) Metris is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware.
(ii) 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.
(iii) 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;
(iv) Each Designated 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.
(v) 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.
(vi) The execution and delivery of any Designated
Agreement or of the Underwriting 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) violate any Applicable Laws (assuming
compliance with all applicable state securities and Blue Sky
laws, as to which such counsel expresses no opinion), (ii)
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 (iii) 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 Xxxxxx. 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.
(vii) 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 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) seeking any determination or ruling
that would materially and adversely affect the performance by
Metris 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.
(viii) 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.
(ix) 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.
(x) 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;
(xi) 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;
(xii) 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
by-laws of the 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 (xii), "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; and
(xiii) 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 (x) asserting the invalidity of the Bank
Purchase Agreement or the Pooling and Servicing Agreement or
(y) 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.
(xiv) 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.
(xv) Each of Metris 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 or the Transferor, and neither Metris nor
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.
(2) The favorable opinion of Xxxxxxx, Arps, Slate, Xxxxxxx &
Xxxx LLP, special counsel for the Transferor and Xxxxxx, 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:
(i) Each of the Purchase Agreement and the Pooling and
Servicing Agreement (including, with respect to the Pooling and
Servicing Agreement, the allocation provisions thereof) to
which any of Metris, the Transferor, the Bank and the Servicer
(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;
(ii) Neither the execution, delivery or performance by
any of the Companies of any of the Purchase Agreement or the
Pooling and Servicing Agreement 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 (ii) and
paragraph (iii) below, "Applicable Laws" means those laws,
rules and regulations of the States of New York and Delaware
and the United States of America which, in such counsel's
experience, are normally applicable to transactions of the type
contemplated by the Purchase 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;
(iii) 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 this
Agreement, except for (a) 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 (b) such
Governmental Approvals as may be required under the securities
or blue sky laws of any jurisdiction. For the purposes of this
paragraph (iii), 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.
(iv) The Investor Securities, the Purchase Agreement, the
Pooling and Servicing Agreement and this Agreement conform in
all material respects to the descriptions thereof contained in
the Registration Statement and the Prospectus;
(v) 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;
(vi) The statements in the Prospectus under the headings
["Risk Factors -- [Transfer of the Receivables]," "--
Insolvency or Bankruptcy of Metris Receivables, Inc. Could
Result in Accelerated, Delayed or Reduced Payments to
Securityholders,"] "Certain Legal Aspects of the Receivables,"
and "Tax Matters", and "Employee Benefit Plan Considerations"
to the extent that they constitute matters of law or legal
conclusions with respect thereto, have been reviewed by such
counsel and are correct in all material respects;
(vii) Each of the Registration Statement, as of its
effective date and the Prospectus, as of its date, appeared on
its face to be appropriately responsive in all material
respects to 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 (iv), (vi) and (viii) such
counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus;
(viii) The information in the 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;
(ix) 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, will be
validly issued and outstanding and entitled to the benefits of
the Pooling and Servicing Agreement;
(x) The execution and delivery of any of the Purchase
Agreement, the Pooling and Servicing Agreement or this
Agreement and the performance by the Transferor of the
transactions contemplated thereby will not constitute a
violation of, or default under, any agreements or instruments
identified to such counsel in writing by the Transferor as
being material to the Transferor.
Such counsel's opinions may be subject to the following
assumptions and qualifications:
(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) rights to indemnity and contribution contained in any
agreements may be limited by applicable laws or the policies
underlying such laws; and
(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) enforceable
against such other party in accordance with its terms.
Such counsel shall have been advised by the Commission that the
Registration Statement was declared effective and, to the best of such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose
has been instituted or threatened by the Commission.
Such counsel also shall state that they have participated in
conferences with officers and representatives of Metris and the Transferor,
counsel for Metris and the Transferor, representatives of the independent
accountants of Metris and the Transferor, and representatives of the
Underwriters, at which the contents of the Registration Statement, the
Prospectus and related matters were discussed and, although they are not
passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus and have made no independent check or
verification thereof except as and to the extent set forth in paragraphs
(iv) , (vi) and (viii) above, on the basis of the foregoing, no facts have
come to such counsel's attention that have led 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 its date, contained an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that in each case such
counsel need express no belief with respect to financial and statistical
data included therein or excluded therefrom or the exhibits to the
Registration Statement.
Such counsel shall also deliver to the Underwriters their
opinion, 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 for federal income tax purposes (i) the
Offered Securities would be treated as debt for federal income tax purposes
and (ii) any entity constituted by the Trust will not be an association
taxable as a corporation or publicly traded partnership treated as a
corporation;
(f) The Representative shall have received an opinion or
opinions of Xxxxxx & Xxxxxxx with respect to Minnesota law, X'Xxxxxx,
Xxxxxxxx, Xxxxxxxx, Xxxxxxxxxxxxx & Xxxxxxxx with respect to Arizona
law and Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP with respect to
federal and Delaware law, dated the Closing Date, in form and
substance satisfactory to the Representatives and their counsel, with
respect to certain matters relating to the transfers of the
Receivables to Metris, 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 & Xxxxxxx in respect of Minnesota, X'Xxxxxx, Xxxxxxxx,
Xxxxxxxx, Xxxxxxxxxxxxx & Xxxxxxxx in respect of Arizona, Xxxxxxx,
Xxxxx, Xxxxx & Xxxxxxxxxxx in respect of Oklahoma and Xxxxxxx, Arps,
Slate, Xxxxxxx & Xxxx LLP in respect of Delaware, 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 Skadden,
Arps, Slate, Xxxxxxx & Xxxx 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 Xxxxxxxx,
Xxxxxx & Finger, Delaware counsel for the Trustee, and Xxxxx, Xxxxxx
& Xxxxxx, New York counsel for the Trustee, as appropriate, opinions,
dated the Closing Date and addressed to the Underwriters, the
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 and Xxxxx'x and the Class B
Securities have been rated at least "A" by S&P and "A2" by Xxxxx'x,
and such ratings shall not have been reduced or withdrawn;
(l) 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.
(m) On or prior to the date of this Agreement, the
Representative shall have received a copy of a letter, dated the
Closing Date and addressed to the Underwriters, from KPMG Peat
Marwick LLP certified public accountants, substantially in the form
heretofore approved by the Underwriters 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.
(n) 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.
(o) The Representative shall have received an opinion
addressed to the Underwriters from Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx,
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 furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to render
such opinions.
The Transferor will furnish the Representative with such
conformed copies of such certificates, letters and documents as the
Representative 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 Seller 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.
Section 7. Indemnification and Contribution. (a) Each of Metris
and the Transferor shall, jointly and severally, indemnify and hold
harmless each Underwriter and each person who controls any Underwriter
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 Xxxxxx; 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 any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) and provided, further, that the foregoing indemnity is subject to
the condition that, insofar as it relates to any untrue statement or
omission, or any alleged untrue statement or omission, made in the
preliminary prospectus (as amended or supplemented) but eliminated,
corrected or remedied in the Prospectus (as amended or supplemented), it
shall not inure to the benefit of any Underwriter (or to the benefit of any
person who controls such Underwriter) if a copy of the Prospectus (as
amended or supplemented) was not delivered by such Underwriter to the
person asserting any loss, claim, damage, or liability arising out of or
based upon such untrue statement or omission, or such alleged untrue
statement or omission, at or prior to the time required by the Securities
Act.
(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 any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information furnished to the Transferor by such Underwriter through
the Representative expressly for use in the Registration Statement
(or any amendment thereto) or such preliminary prospectus 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 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 Security
purchased by it hereunder. No person guilty of fraudulent misrepresentation
(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 24 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
24-hour period, then:
(a) if the principal amount of Defaulted Securities does
not exceed 10% of the principal amount of Offered Securities, each of
the non-defaulting Underwriters 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, or
(b) if the principal amount of Defaulted Securities
exceeds 10% of the principal amount 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, Xxxxxx 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 Act
1986 (Investment Advertisements) (Exemptions) Order 1996 or who is a
person to whom the document may otherwise lawfully be issued or
passed on.
(b) It has complied and will comply with all applicable
provisions of the Financial Services Act 1986 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 Act 1986, 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 Act
1986 or in Regulation 1.04 of the Financial Services (Promotion of
Unregulated Schemes) Regulations 1991.
Section 12. Notices. All communications hereunder will
be in writing and:
(i) if sent to the Underwriters, will be mailed,
delivered or sent by facsimile transmission and confirmed to
the Representative at:
[ ]
(ii) if sent to the Transferor, will be mailed, delivered
or sent by facsimile transmission, and confirmed to it at:
Metris Receivables, Inc.
000 Xxxxx Xxxxxxx 000
Xx. Xxxxx Xxxx, XX 00000
Attention: Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(iii) if sent to Metris, will be mailed, delivered or
sent by facsimile transmission, and confirmed to it at:
Metris Companies Inc.
000 Xxxxx Xxxxxxx 000
Xx. Xxxxx Xxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000;
or to such other address as the Transferor, Metris or the
Underwriter 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 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.
* * *
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: Xxxx X. Xxxxxx
Title: Senior Vice President and
Treasurer
METRIS COMPANIES INC.
By: _________________________
Name: Xxxx X. Xxxxxx
Title: Senior Vice President and
Treasurer
Accepted in New York, New York,
as of the date hereof:
[ ]
By: _____________________
Name:
Title:
For itself and as Representative
of the other Underwriters named in
Schedule A hereto.
Schedule A
Principal Amount of Principal Amount of
Name of Underwriter Class A Securities Class B Securities
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