B&W DRAFT
4/30/97
$616,250,000
____% Asset Backed Certificates
Series 1997-1, Class A
$106,250,000
____% Asset Backed Certificates
Series 1997-1, Class B
METRIS MASTER TRUST
UNDERWRITING AGREEMENT
Dated May __, 1997
Bear, Xxxxxxx & Co. Inc.
as Representative of the
several Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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 $616,250,000 ____% Asset-Backed
Certificates, Series 1997-1, Class A (the "Class A Certificates") and
$106,250,000 ____% Asset-Backed Certificates, Series 1997-1, Class B (the
"Class B Certificates" and together with the Class A Certificates, the
"Offered Certificates") of the Metris Master Trust (the "Trust"). Each Offered
Certificate 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 a Bank Receivables
Purchase Agreement dated as of May 26, 1995 (together with an Assignment and
Assumption Agreement dated as of September 16, 1996 among Fingerhut Companies,
Inc., as assignor, Metris, as assignee, and Direct Merchants Bank, and as
supplemented and amended from time to time, the "Bank Purchase Agreement),
then subsequently transferred by Metris to the Transferor pursuant to a
Purchase Agreement dated as of May 26, 1995 (together with an Assignment and
Assumption Agreement dated as of September 16, 1996 among Fingerhut Companies,
Inc., as assignor, Metris, as assignee, and the Transferor, and as
supplemented and amended from time to time, the "Purchase Agreement") and then
sold by the Transferor to the Trust pursuant to a Pooling and Servicing
Agreement dated as of May 26, 1995 (as supplemented and amended from time to
time, the "P&S") among the Transferor, Servicer and The Bank of New York
(Delaware), as trustee, (the "Trustee"). The Offered Certificates will be
issued pursuant to the P&S and the Series 1997-1 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". The Class C
Certificates and Class D Certificates will also be issued pursuant to the
Pooling and Servicing Agreement and, together with the Offered Certificates,
are referred to herein as the "Investor Certificates." 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.
333-23045), including the related prospectus, for the registration under the
Securities Act of 1933, as amended (the "Act"), of the Offered Certificates,
in the form heretofore delivered to the Underwriters. The registration
statement (including the prospectus constituting a part thereof and all
documents incorporated by reference therein) 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 May __, 1997 in the
form in which it is filed with the Commission (including all documents
incorporated by reference therein) 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 Certificates
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
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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, Bear, Xxxxxxx & Co. Inc.
("Bear Xxxxxxx") 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 Bear Xxxxxxx is acting as representative (in such capacity, Bear Xxxxxxx
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
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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
duly organized, validly existing and in good standing under the laws
of the United States, 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 Direct Merchants Bank, and Direct Merchants Bank has the
corporate power to own and conduct its business as it is currently
conducted.
(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.
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(viii) As of the Closing Date referred to below, the
Investor Certificates 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 in the case
of the Offered Certificates and by the purchasers thereof in the case
of the Class C Certificates, 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 Certificates, 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
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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 Certificates, 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 Certificates 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
Certificates. (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 May __, 1997, 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
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A Certificates and Class B Certificates set forth in Schedule A opposite the
name of such Underwriter. The Class A Certificates shall be purchased at a
purchase price equal to _____% of the principal amount thereof, and the Class
B Certificates 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
Certificates 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 Certificates to be so delivered will be initially represented by one
or more Offered Certificates registered in the name of Cede & Co., the nominee
of The Depository Trust Company ("DTC"). The interests of beneficial owners of
the Offered Certificates will be represented by book entries on the records of
DTC and participating members thereof.
Section 4. Public Offering of the Offered Certificates. It
is understood by the parties hereto that, after the Registration Statement
becomes effective, the Underwriters propose to offer the Offered Certificates
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 Certificates 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 Certificateholders' 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
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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 Certificates 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 Certificates 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
Certificates 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 Certificates; 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 Certificates, 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.
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(e) To make generally available to Certificateholders 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 Certificates to the Under-
writers;
(iv) the reasonable fees and disbursements of
counsel and accountants for the Transferor;
(v) the qualification of the Offered Certificates
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 Under-
writers of copies of the Blue Sky Survey;
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(viii) the fees of Xxxxx'x Investors Service,
Inc. and Standard & Poor's Ratings Services for rating
the Offered Certificates; 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 Certificates 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 Certificates, or until such time as each
Underwriter shall cease to maintain a secondary market in the Offered
Certificates, 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
1997-1 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 Certificates by the rating agency or agencies
that initially rate the Offered Certificates 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 Certificates 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
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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 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 Certificates and any pricerelated 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) 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;
(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
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the Transferor's or Xxxxxx'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 Certificates 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 Certificates or
to enforce contracts for the sale of the Offered Certificates.
(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:
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(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 transact the business of banking, including to own
its assets and to transact its business 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 Certificates and the direction
by the Transferor to the Trustee to execute, authenticate and deliver
the Investor Certificates have been duly authorized by the
Transferor. The Investor Certificates 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 Certificates, 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 Requirement of Law applicable to Metris or the Transferor
(assuming compliance with all applicable state securities and Blue
Sky laws, as to which such counsel expresses no opinion), (ii)
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 Metris or the Transferor, except for such filings or
registrations as have already been made and are in full force and
effect or (iii)
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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.
(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
Certificates.
(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 Certificates, 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
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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
fillings as may be required under federal or state securities laws
and except for such fillings 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
Certificates, 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 rule, order, statute or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
Direct Merchants Bank 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; 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 Certificates or the consummation of any of
the transactions contemplated by the Bank Purchase Agreement or the
Pooling and Servicing Agreement or the Investor Certificates, 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 Certificates.
(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
15
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
Certificates 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 Designated Agreements (including, with
respect to the 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, except to the extent
enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, receivership or other similar laws now or
hereafter in effect relating to creditors' rights generally and, in
the case of (for creditors of national banking associations, with
respect to the Bank) (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity), and (c) the qualification that certain remedial provisions
of the Designated Agreements 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 each of such
agreements, together with applicable law, contains adequate
provisions for the practical realization of the benefits of the
security created by such Designated Agreements;
16
(ii) Neither the execution, delivery or performance by any
of the Companies of any of the Designated Agreements 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
State of New York, the United States of America and the Delaware
General Corporation Law which, in our experience, are normally
applicable to transactions of the type contemplated by the Designated
Agreements.
(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 Designated Agreements and this
Agreement, except for (a) filings of Uniform Commercial Code
financing statements with respect to the transfer of the Receivables
from Metris to the Transferor pursuant to the Bank Purchase Agreement
and with respect to the transfer of the Receivables from the
Transferor to the Trust pursuant to the Purchase 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, and the term "Governmental Authority" means any
New York, Delaware or federal executive, legislative, judicial,
administrative or regulatory body.
(iv) The Investor Certificates, the Designated Agreements
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 or 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 Risk
Considerations", "Certain Legal Aspects of the Receivables" and
"Certain Federal Income Tax Consequences", and "Employee Benefit Plan
Considerations" to the extent that they constitute matters of law or
legal
17
conclusions with respect thereto, have been reviewed by us
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 Offered Certificates", insofar as it constitutes
a summary of certain provisions of the Offered Certificates 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, and delivered to
and paid for by the Underwriters in accordance with this Agreement in
the case of the Offered Certificates delivered to and paid for and by
the purchasers in the case of the Class C Certificates and delivered
by the Transferor in exchange for a portion of the Transferror's
Certificate in the case of the Class D Certificates, the Investor
Certificates will be validly issued and outstanding and entitled to
the benefits of the Pooling and Servicing Agreement;
(x) The execution and delivery of any Designated Agreement
or this Agreement and the execution and delivery to the Trustee of
the Investor Certificates, the performance of the transactions
contemplated thereby and the fulfillment of the terms thereof 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 currently existing indenture, contract,
agreement, mortgage, deed of trust or other instrument to which the
Transferor is bound and which has been specifically identified to
such counsel in writing by the Transferor as being material to the
Transferor.
18
(xi) With respect to such counsel's opinion set forth in
paragraph (iii) above, such counsel shall consider only such
consents, approvals, authorizations, orders and filings which, in
such counsel's experience, are customarily required for transactions
of the type contemplated by the Designated Agreements.
(xii) 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 (vii) 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
or contains an untrue statement of a material fact or omitted or
omits 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
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 Underwriter's
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 Certificates will not constitute an
ownership interest in the Receivables but will properly be
characterized as debt and (ii) any entity constituted by the Trust
will not be an
19
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, Xxx Xxxx,
Xxxxxx, Cornwall & XxXxxxxx with respect to Utah law and Xxxxxxx,
Arps, Slate, Xxxxxxx & Xxxx LLP with respect to federal and New York
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 consideration 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, Xxx Xxxx, Xxxxxx, Cornwall
& XxXxxxxx in respect of Utah, Xxxxxxx, Allen, Xxxxx & Dornblasser in
respect of Oklahoma and Skadden, Arps, Slate, Xxxxxxx & Xxxx 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
Certificates will be characterized for such state's income and
franchise tax purposes as indebtedness secured by the Receivables and
Certificateholders not otherwise subject to taxation in such state
will not be subject to tax in respect of the Offered Certificates.
(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, in substantially
the form of Exhibit A hereto.
(j) The Representative shall have received an
officer's certificate dated the Closing Date of the chairman
20
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 Certificates have been rated in
the highest rating category by Standard & Poor's Ratings Services, a
Division of The McGraw Hill Companies, Inc. ("S&P") and Xxxxx'x
Investors Service, Inc. ("Moody's") and the Class B Certificates have
been rated at least "A" by S&P and A2 by Moody's, and such ratings
shall not have been reduced or withdrawn;
(l) The Trustee shall have furnished to the Representative a
certificate of the Trustee, signed by one or more duly authorized
officers of the Trustee, dated the Closing Date, as to the due
acceptance of the Pooling and Servicing Agreement by the Trustee and
the due execution and delivery of the Offered Certificates by the
Trustee thereunder and such other matters as the Representative shall
reasonably request.
(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
Certificates.
(n) 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 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 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 statement on Form UCC-1 filed with the Secretary of State
of the State of Utah 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
21
Bank as debtor and Xxxxxx 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 of Xxxxx & Wood LLP, counsel to the
Underwriters, dated the Closing Date, with respect to the validity of
the Investor Certificates 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
22
make the statements therein, in the light of the circum-
stances 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 you) 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
23
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
24
other from the offering of the Offered Certificates 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 Certificate 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 Certificates.
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 Certificates which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representative shall have the
right,
25
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 Certificates, 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 Certificates, 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 Certificates 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
Certificates in, from or otherwise involving the United Kingdom.
26
(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:
Bear Xxxxxxx & Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Securitization
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) if sent to the Transferor, will be mailed,
delivered or sent by facsimile transmission, and confirmed
to it at:
Metris
Receivables, Inc.
0000 Xxxxx Xxxx
Xxxxxxxxxx, 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.
27
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.
* * *
28
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:
BEAR, XXXXXXX & CO. INC.
By: ____________________________
Name: __________________________
Title: _________________________
For itself and as Representative
of the other Underwriters named in
Schedule A hereto.
29
SCHEDULE A
Principal Amount of Principal Amount of
Name of Underwriter Class A Certificates Class B Certificates
Bear, Xxxxxxx & Co. Inc.
NationsBanc Capital Markets, Inc.
Chase Securities, Inc.
