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