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EXHIBIT 5.1
[LETTERHEAD OF SIDLEY & AUSTIN]
September 29, 2000
Board of Directors
Metris Companies Inc.
10900 Wayzata Boulevard
Minnetonka, MN 55305
Re: Metris Companies Inc.
Registration Statement on Form S-3
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Ladies and Gentlemen:
We refer to the Registration Statement on Form S-3 (the "Registration
Statement") being filed by Metris Companies Inc., a Delaware corporation (the
"Company"), with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"), relating to the shelf
registration of $250,000,000 in aggregate offering price of the Company's
securities, consisting of: (i) debt securities, which may be in the form of
senior debt securities ("Senior Debt Securities") or subordinated debt
securities ("Subordinated Debt Securities," and together with the Senior Debt
Securities, "Debt Securities"); (ii) warrants to purchase Debt Securities ("Debt
Warrants"); (iii) shares of common stock, par value $.01 per share ("Common
Stock"); (iv) warrants to purchase shares of Common Stock ("Stock Warrants");
(v) shares of preferred stock, par value $.01 per share ("Preferred Stock"),
which may be represented by depositary shares ("Depositary Shares"); and (vi)
warrants to receive from the Company the cash value in U.S. dollars of the right
to purchase or to sell such foreign currency or currency units to be designated
by the Company at the time of the offering ("Currency Warrants," and together
with the Debt Warrants and the Stock Warrants, "Warrants").
The Company may issue and sell Debt Securities, Common Stock,
Preferred Stock, Depositary Shares and Warrants (collectively, the "Securities")
separately or together from time to time in one or more offerings pursuant to
the Registration Statement. The Securities will be offered in amounts, at
prices and on terms to be determined by the Company at the time of the offering
and set forth in an amendment or amendments to the Registration
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Board of Directors
Metris Companies Inc.
September 29, 2000
Page 2
Statement or in one or more supplements to the prospectus, the form of which is
contained in the Registration Statement (each, a "Prospectus Supplement").
Unless otherwise specified in the applicable Prospectus Supplement,
the Senior Debt Securities will be issued under an indenture between the Company
and U.S. Bank Trust National Association, as trustee, substantially in the form
filed as an exhibit to the Registration Statement (such indenture, as amended or
supplemented from time to time, the "Senior Indenture"). Unless otherwise
specified in the applicable Prospectus Supplement, the Subordinated Debt
Securities will be issued under an indenture between the Company and U.S. Bank
Trust National Association, as trustee, substantially in the form filed as an
exhibit to the Registration Statement (such indenture, as amended or
supplemented from time to time, the "Subordinated Indenture").
Whenever the Company elects to have shares of Preferred Stock be
represented by Depositary Shares, such shares of Preferred Stock underlying the
Depositary Shares will be deposited under a deposit agreement (each, a "Deposit
Agreement") with a bank or trust company identified therein, as preferred stock
depositary, substantially in the form filed prior to the issuance of any
Depositary Shares in an amendment to the Registration Statement or incorporated
by reference therein pursuant to a Current Report on Form 8-K of the Company.
Each series of Warrants will be issued under a warrant agreement
(each, a "Warrant Agreement") with a bank or trust company identified therein,
as warrant agent, substantially in the form filed prior to the issuance of any
Warrants in an amendment to the Registration Statement or incorporated by
reference therein pursuant to a Current Report on Form 8-K of the Company.
In rendering the opinions expressed below, we have examined and relied
upon a copy of the Registration Statement and the exhibits filed therewith. We
have also examined originals, or copies of originals certified to our
satisfaction, of such agreements, documents, certificates and statements of
government officials and other instruments, and have examined such questions of
law and have satisfied ourselves as to such matters of fact, as we have
considered relevant and necessary as a basis for such opinions. We have assumed
the authenticity of all documents submitted to us as originals, the genuineness
of all signatures, the legal capacity of all persons and the conformity with the
original documents of any copies thereof submitted to us for examination.
Based on the foregoing, and subject to the qualifications and
limitations hereinafter set forth, we are of the opinion that:
1. The Company is duly incorporated and validly existing under the
laws of the State of Delaware.
2. (a) Each series of Senior Debt Securities will be legally issued
and binding obligations of the Company when (i) the Registration Statement, as
finally amended (including any necessary post-effective amendments), shall have
become effective under the
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Board of Directors
Metris Companies Inc.
September 29, 2000
Page 3
Securities Act and the Senior Indenture (including any necessary supplemental
indentures) shall have been duly qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and duly authorized, executed and
delivered by the Company and duly executed and delivered by the Trustee; (ii) a
Prospectus Supplement with respect to such series of Senior Debt Securities
shall have been filed with the SEC in compliance with the Securities Act and the
rules and regulations thereunder; (iii) the Company's Board of Directors or a
duly authorized committee thereof (the "Company Board") shall have duly adopted
final resolutions authorizing the issuance and sale of such series of Senior
Debt Securities as contemplated by the Registration Statement and the Senior
Indenture; (iv) such series of Senior Debt Securities shall have been duly
executed by the Company and authenticated by the Trustee as provided in the
Senior Indenture and shall have been delivered to the purchasers thereof against
payment of the agreed consideration therefor; and (v) any consents required
pursuant to the Company's credit facilities shall have been obtained.
(b) Each series of Subordinated Debt Securities will be legally
issued and binding obligations of the Company when (i) the Registration
Statement, as finally amended (including any necessary post-effective
amendments), shall have become effective under the Securities Act and the
Subordinated Indenture (including any necessary supplemental indentures) shall
have been duly qualified under the Trust Indenture Act and duly authorized,
executed and delivered by the Company and duly executed and delivered by the
Trustee; (ii) a Prospectus Supplement with respect to such series of
Subordinated Debt Securities shall have been filed with the SEC in compliance
with the Securities Act and the rules and regulations thereunder; (iii) the
Company Board shall have duly adopted final resolutions authorizing the issuance
and sale of such series of Subordinated Debt Securities as contemplated by the
Registration Statement and the Subordinated Indenture; (iv) such series of
Subordinated Debt Securities shall have been duly executed by the Company and
authenticated by the Trustee as provided in the Subordinated Indenture and shall
have been delivered to the purchasers thereof against payment of the agreed
consideration therefor; and (v) any consents required pursuant to the Company's
credit facilities shall have been obtained.
3. Each issue of Warrants will be legally issued and binding
obligations of the Company when (i) the Registration Statement, as finally
amended (including any necessary post-effective amendments), shall have become
effective under the Securities Act; (ii) a Prospectus Supplement with respect to
such issue of Warrants shall have been filed with the SEC in compliance with the
Securities Act and the rules and regulations thereunder; (iii) the Warrant
Agreement relating to such issue of Warrants shall have been duly authorized,
executed and delivered by the Company and duly executed and delivered by the
warrant agent; (iv) the Company Board shall have duly adopted final resolutions
authorizing the issuance and sale of such issue of Warrants as contemplated by
the Registration Statement and such Warrant Agreement; (v) such issue of
Warrants shall have been duly executed by the Company and countersigned by the
warrant agent in accordance with the Warrant Agreement and shall have been
delivered to the purchasers thereof against payment of the agreed consideration
therefor; and (vi) any consents required pursuant to the Company's credit
facilities shall have been obtained.
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Board of Directors
Metris Companies Inc.
September 29, 2000
Page 4
4. The shares of Common Stock covered by the Registration Statement
will be legally issued, fully paid and nonassessable when (i) the Registration
Statement, as finally amended (including any necessary post-effective
amendments), shall have become effective under the Securities Act; (ii) a
Prospectus Supplement with respect to the sale of such shares of Common Stock
shall have been filed with the SEC in compliance with the Securities Act and the
rules and regulations thereunder; (iii) the Company Board shall have adopted
final resolutions authorizing the issuance and sale of such shares of Common
Stock; and (iv) certificates representing such shares of Common Stock shall have
been duly executed, countersigned and registered and duly delivered to the
purchasers thereof against payment of the agreed consideration therefor.
5. Each series of Preferred Stock covered by the Registration
Statement will be legally issued, fully paid and nonassessable, when (i) the
Registration Statement, as finally amended (including any necessary post-
effective amendments), shall have become effective under the Securities Act;
(ii) a Prospectus Supplement with respect to the sale of such series of
Preferred Stock shall have been filed with the SEC in compliance with the
Securities Act and the rules and regulations thereunder; (iii) the Company Board
shall have duly adopted resolutions establishing the terms and conditions of
such series of Preferred Stock and authorizing the issuance and sale thereof;
(iv) the certificate of designation with respect to such series of Preferred
Stock shall have been filed with, and accepted for record by, the Secretary of
State of the State of Delaware; and (v) certificates representing such series of
Preferred Stock shall have been duly executed, countersigned and registered and
duly delivered to the purchasers thereof against payment of the agreed
consideration therefor.
6. The Depositary Shares covered by the Registration Statement will
be legally issued and valid and binding obligations of the Company when (i) the
Registration Statement, as finally amended (including any necessary post-
effective amendments), shall have become effective under the Securities Act;
(ii) a Prospectus Supplement with respect to the Depositary Shares and the
series of Preferred Stock underlying such Depositary Shares shall have been
filed with the SEC in compliance with the Securities Act and the rules and
regulations thereunder; (iii) the Deposit Agreement relating to such Depositary
Shares shall have been duly authorized, executed and delivered by the Company
and duly executed and delivered by the preferred stock depositary; (iv) the
Company Board shall have duly adopted resolutions establishing the terms and
conditions of the series of Preferred Stock underlying the Depositary Shares;
(v) the certificate of designation with respect to the series of Preferred Stock
underlying the Depositary Shares shall have been filed with, and accepted for
record by, the Secretary of State of the State of Delaware; and (vi) the
depositary receipts evidencing Depositary Shares shall have been duly executed
and delivered by the preferred stock depositary in the manner set forth in the
Deposit Agreement.
The opinions set forth above are subject to the qualifications that
(a) enforcement of the Company's obligations under the Senior Indenture, the
Subordinated Indenture, the Debt Securities, any Warrant Agreement, the
Warrants, any Deposit Agreement and the Depositary Shares may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium,
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Board of Directors
Metris Companies Inc.
September 29, 2000
Page 5
fraudulent transfer or other similar laws affecting the enforcement of
creditors' rights generally and (ii) the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law), and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
For the purposes of this opinion letter, we have assumed that, at the
time of the issuance, sale and delivery of each series of Senior Debt
Securities, each series of Subordinated Debt Securities, each issue of Warrants,
each issue of Common Stock, each series of Preferred Stock or each issue of
Depositary Shares, as the case may be: (i) the authorization thereof by the
Company will not have been modified or rescinded, and there will not have
occurred any change in law affecting the validity, legally binding character or
enforceability thereof; (ii) in the case of the issue of Senior Debt Securities
or Subordinated Debt Securities, the form of Senior Indenture or Subordinated
Indenture, as applicable, will not have been modified or amended; (iii) in the
case of the issue of Warrants, the terms and conditions of such Warrants and the
related Warrant Agreement will be as expressly contemplated by the Registration
Statement; (iv) in the case of the issue of Depositary Shares, the terms and
conditions of the Depositary Shares and underlying series of Preferred Stock and
the related Depositary Agreement will be as expressly contemplated by the
Registration Statement; and (v) the Certificate of Incorporation of the Company,
as currently in effect, will not have been modified or amended and will be in
full force and effect.
We do not find it necessary for the purposes of this opinion letter to
cover, and accordingly we express no opinion as to, the application of the
securities or "Blue Sky" laws of the various states or the District of Columbia
to the sale of the Securities to be registered pursuant to the Registration
Statement. Without limiting the generality of the foregoing, we express no
opinion in connection with the matters contemplated by the Registration
Statement, and no opinion may be implied or inferred, except as expressly set
forth herein.
This opinion letter is limited to the laws of the State of New York,
the Delaware General Corporation Law and the Securities Act. For the purposes
of this opinion, we have assumed that the Senior Indenture, the Subordinated
Indenture, each Warrant Agreement and each Deposit Agreement will be governed by
the laws of the State of New York.
We hereby consent to the filing of this opinion letter as Exhibit 5.1
to the Registration Statement and to all references to our Firm included in or
made a part of the Registration Statement. In giving such consent, we do not
thereby admit that we are within the category of persons for whom consent is
required by Section 7 of the Securities Act or the related rules promulgated by
the SEC thereunder.
Very truly yours,
/s/ Sidley & Austin
