CHARMING SHOPPES MASTER TRUST $211,200,000 Class A Asset Backed Certificates, Series 2007-1 $19,200,000 Class M Asset Backed Certificates, Series 2007-1 $30,400,000 Class B Asset Backed Certificates, Series 2007-1 CERTIFICATE PURCHASE AGREEMENT
EXHIBIT
10.3
CHARMING
SHOPPES MASTER TRUST
$211,200,000
Class A Asset Backed Certificates, Series 2007-1
$19,200,000
Class M Asset Backed Certificates, Series 2007-1
$30,400,000
Class B Asset Backed Certificates, Series 2007-1
October
10, 2007
Barclays
Capital Inc.,
as
the Initial Purchaser
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
1. Introduction. Charming
Shoppes Receivables Corp. (“CSRC” or the “Seller”), a
special-purpose Delaware corporation whose principal place of business is in
Ohio and which is a wholly-owned indirect subsidiary of Charming Shoppes, Inc.
(“Charming”), proposes to sell to Barclays Capital Inc. (the “Initial
Purchaser”) (a) $211,200,000 Series 2007-1 Class A Asset Backed
Certificates (the “Class A Certificates”), which shall be issued in two
subclasses designated as the Class A-1 Certificates (the “Class A-1
Certificates”) in an initial aggregate outstanding amount of $153,800,000
and the Class A-2 Certificates (the “Class A-2 Certificates”) in an
initial aggregate outstanding amount of $57,400,000, (b) $19,200,000 Series
2007-1 Class M Asset Backed Certificates (the “Class M Certificates”),
which shall be issued in two subclasses designated as the Class M-1 Certificates
(the “Class M-1 Certificates”) in an initial aggregate outstanding amount
of $4,000,000 and the Class M-2 Certificates (the “Class M-2
Certificates”) in an initial aggregate outstanding amount of $15,200,000,
and (c) $30,400,000 Series 2007-1 Class B Asset Backed Certificates (the
“Class B Certificates”), which shall be issued in two subclasses
designated as the Class B-1 Certificates (the “Class B-1
Certificates”) in an initial aggregate outstanding amount of $16,900,000 and
the Class B-2 Certificates (the “Class B-2 Certificates”) in an
initial aggregate outstanding amount of $13,500,000 and, together with the
Class
A Certificates and the Class M Certificates, the “Offered
Certificates”). The Offered Certificates are to be issued
pursuant to the Second Amended and Restated Pooling and Servicing Agreement,
dated as of November 25, 1997 (as amended as of July 22, 1999, May 8, 2001,
August 5, 2004, March 18, 2005 and October 17, 2007, and as further amended
from
time to time, the “Pooling Agreement”) among the Seller, Spirit of
America, Inc. (“SOAI”), a Delaware corporation which is a wholly-owned
indirect subsidiary of Charming, as servicer (in such capacity, the
“Servicer”), and U.S. Bank National Association (as successor to Wachovia
Bank, National Association), as trustee (the “Trustee”), as supplemented
by the Series 2007-1 Supplement to the Pooling Agreement dated as of the
Issuance Date (as defined below) (the “Series Supplement”, and the
Pooling Agreement, as so supplemented, the “Supplemented Pooling
Agreement”). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Supplemented
Pooling Agreement.
Each
Offered Certificate will represent an undivided ownership interest in the
Charming Shoppes Master Trust (the “Trust”). In addition,
concurrently with the issuance of the Offered Certificates, the Trust will
issue
$28,800,000 Series 2007-1 Class C Asset Backed Certificates (the “Class C
Certificates”) and $30,400,000 Series 2007-1 Class D Asset Backed
Certificates (the “Class D Certificates”), which will be issued in two
subclasses designated as the “Class D-1 Certificates” and the “Class D-2
Certificates”. The Offered Certificates, the Class C Certificates
and the Class D Certificates are referred to herein as the
“Certificates”. The Class C Certificates will be sold pursuant
to the Class C Certificate Purchase Agreement (the “Class C Purchase
Agreement”) among the Trustee, the Seller, the Servicer and the purchasers
named therein (the “Class C Purchasers”). The Class D
Certificates will be sold pursuant to one or more Class D Certificate Purchase
Agreements (collectively, the “Class D Purchase Agreements”) among
the Trustee, the Seller, the Servicer and the purchasers named therein (the
“Class D Purchasers”). The assets of the Trust include, among
other things, receivables (the “Receivables”) arising under a pool of
certain revolving credit card accounts owned by Spirit of America National
Bank
(“Spirit of America”) which have been conveyed to the Seller by Spirit of
America pursuant to a Purchase and Sale Agreement dated as of November 25,
1997 and as amended as of September 1, 1999, November 9, 2000 and
May 8, 2001 (the “Purchase Agreement”) and conveyed to the Trust
pursuant to the Pooling Agreement.
The
Seller, at its own expense, has prepared an offering memorandum dated October
10, 2007 (together with any exhibits attached thereto, the “Preliminary
Memorandum”), describing among other things, the Offered Certificates and
the Supplemented Pooling Agreement. Copies of the Preliminary
Memorandum have been delivered to you. The Seller, at its own
expense, shall also prepare a final offering memorandum (together with any
exhibits attached thereto, the “Final Memorandum”), which it will deliver
to you no later than three business days prior to the Issuance Date (as herein
defined). The Seller hereby confirms that it has authorized the
Initial Purchaser to use the Preliminary Memorandum and Final Memorandum in
connection with the offering and resale of the Offered
Certificates by the Initial Purchaser. The Seller will advise the
Initial Purchaser promptly of (i) any proposal to amend or supplement the Final
Memorandum or the Preliminary Memorandum, (ii) any amendment or supplement
to
the Final Memorandum or the Preliminary Memorandum, and (iii) the receipt by
the
Seller of any notification with respect to the suspension of qualification
of
the Offered Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purposes. The Seller will
furnish to the Initial Purchaser copies of all amendments and supplements to
the
Final Memorandum and the Preliminary Memorandum, in each case as soon as
available and in such quantities as the Initial Purchaser reasonably
requests. From and after the date any amendment or supplement to the
Final Memorandum or the Preliminary Memorandum, as applicable, has been
furnished to the Initial Purchaser, the term “Final Memorandum” or
“Preliminary Memorandum” shall mean the Final Memorandum or the
Preliminary Memorandum, as applicable, as so amended or
supplemented. The Pooling Agreement, the Series Supplement and the
Purchase Agreement shall be collectively referred to herein as the “Related
Documents”.
The
Offered Certificates may be resold solely to (i) “qualified institutional buyers
(“QIBs”) in reliance upon Rule 144A (“Rule 144A”) under the
Securities Act of 1933, as amended (the “Securities Act”) and (ii)
non-U.S. persons outside the United States, as defined in Regulation S of the
Securities Act (“Regulation S”), in a transaction meeting the
requirements of Regulation S.
2
As
used
herein, “Applicable Time” means 2 p.m., EST, on October 10,
2007.
2. Representations,
Warranties and Covenants of CSRC, FSC and SOAI.
(a) CSRC
represents and warrants to, and agrees with the Initial Purchaser
that:
(i) The
Preliminary Memorandum and the Final Memorandum, as of their respective dates
and any amendment thereof or supplement thereto, as of their respective dates,
and in each case as of the Applicable Time and the Issuance Date (as defined
herein), do not and will not, as of such dates and at such times, 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, in light of
the
circumstances under which they were made, not misleading except that the
representations and warranties in this clause (i) do not relate to any
statements or omissions made in reliance on and in conformity with the Initial
Purchaser Information (as defined in Section 7(b)).
(ii) As
of the
Issuance Date (as defined herein), the representations and warranties of the
Seller in the Pooling Agreement will be true and correct in all material
respects except to the extent that such representations and warranties expressly
relate to a date other than the Issuance Date (as defined herein).
(iii) The
Seller is duly organized and is validly existing as a Delaware corporation
in
good standing under the laws of the State of Delaware, with power and authority
(corporate and other) and legal right to own its properties and conduct its
business as described in the Preliminary Memorandum and the Final Memorandum,
and is duly qualified (or is exempt from such requirement) as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where
the
failure to be so qualified or in good standing would not have a material adverse
effect on the Seller and its Affiliates taken as a whole or on the transactions
contemplated by this Agreement and the Related Documents.
(iv) The
Certificates have been duly authorized for issuance and sale, and, when issued
and delivered pursuant to the Supplemented Pooling Agreement, executed by the
Seller and duly authenticated by the Trustee and paid for by the Initial
Purchaser or the respective initial purchasers of the Class C Certificates
and
Class D Certificates therein in accordance with the terms of this Agreement,
the
Class C Purchase Agreement, or the Class D Purchase Agreements, as applicable,
will be duly and validly issued and entitled to the benefits of the Supplemented
Pooling Agreement; each of this Agreement and the Related Documents to which
the
Seller is a party has been duly authorized by the Seller, and, when executed
and
delivered by CSRC and the other parties thereto, each of this Agreement and
the
Related Documents to which the Seller is a party will constitute a valid,
binding and enforceable agreement of the Seller; provided that with
respect to all such documents 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 such enforceability may be limited by
3
general
principles of equity (whether considered in a suit at law or in equity) and
subject to the unenforceability, under certain circumstances, of provisions
indemnifying a party against liability where such indemnification is contrary
to
public policy; and the Offered Certificates and the Related Documents will
conform to the descriptions thereof in the Final Memorandum in all material
respects.
(v) No
consent, approval, authorization or order of, or filing with, any court,
governmental agency or body is required to be obtained or made by the Seller
in
connection with (i) the issuance and sale of the Certificates or (ii) the
consummation of the transactions contemplated by this Agreement and the Related
Documents, except such as have been obtained or made and remain, and will
continue to remain, in full force and effect, such as may be required under
state securities laws and the filing of any financing statements required to
perfect the Trust’s and the Seller’s interest in the Receivables.
(vi) The
Seller is not in violation of its certificate of incorporation or by-laws or
in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any agreement or instrument to which it is a party
or
by which it or its properties is bound which would have a material adverse
effect on the transactions contemplated in this Agreement or in the Supplemented
Pooling Agreement and the Related Documents. This Agreement has been
duly executed and delivered by CRSC. The execution, delivery and
performance of this Agreement and the other Related Documents, and the issuance
and sale of the Certificates, the compliance with the terms and provisions
hereof and thereof and the consummation of the transactions contemplated herein
and therein will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, the certificate of incorporation
or by-laws of the Seller or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, or result in the creation
or
imposition of any Lien under, any statute, any rule, regulation or order of
any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over it or any of its properties, or any agreement or instrument
to
which it is a party or by which it is bound or to which any of its properties
is
subject, and it has full power and authority (corporate and otherwise) to enter
into this Agreement and the Related Documents to which it is a party and to
consummate the transactions contemplated hereby and thereby, including the
full
power and authority to sell the Offered Certificates as contemplated by this
Agreement.
(vii) Other
than as set forth or contemplated in the Preliminary Memorandum and the Final
Memorandum, there are no legal or governmental proceedings or investigations
pending or, to its knowledge, threatened to which any of the Seller or its
Affiliates is or may be a party or to which any property of the Seller or its
Affiliates is or may be the subject (x) which, if determined adversely to
the Seller, could individually or in the aggregate reasonably be expected to
have a material adverse effect on the general affairs, business, prospects,
management, financial position, stockholders’ equity or results of operations of
the Seller and its Affiliates, taken as a whole, or that would reasonably be
expected to materially adversely affect the interests of the holders of the
Offered Certificates, (y) asserting the invalidity of this Agreement, any of
the
Related Documents or the Offered Certificates or (z) seeking to prevent the
issuance of the
4
Offered
Certificates or of any of the transactions contemplated by this Agreement or
any
of the Related Documents.
(viii) Any
taxes, fees and other governmental charges in connection with the execution,
delivery and performance by the Seller of this Agreement, the Offered
Certificates, the Class C Certificates, the Class D Certificates or the other
Related Documents shall have been paid or will be paid by or on behalf of the
Seller at or prior to the Issuance Date (as defined herein) to the extent then
due.
(ix) No
Early
Amortization Event, and no event that would become an Early Amortization Event
after any applicable grace period has elapsed, exists with respect to any
outstanding Series of Certificates issued by the Trust and no event has occurred
that would constitute (after the issuance of the Certificates) an Early
Amortization Event or would become an Early Amortization Event after any
applicable grace period has elapsed.
(x) Except
as
set forth in or contemplated in the Preliminary Memorandum and the Final
Memorandum, there has been no material adverse change in the condition
(financial or otherwise) of the Seller since February 4, 2007.
(xi) Assuming
that (i) the Offered Certificates are offered and sold in the manner
contemplated in this Agreement and in the Preliminary Memorandum and the Final
Memorandum, (ii) the Initial Purchaser complies with the agreements and
covenants contained in this Agreement, (iii) the representations
made in this Agreement by the Initial Purchaser are true and correct and (iv)
the representations and warranties made or deemed to be made by the purchasers
of the Certificates are true and correct, the Offered Certificates are not
required to be registered under Section 5 of the Securities Act in connection
with the offer, issuance, sale and delivery thereof as contemplated by the
Preliminary Memorandum and the Final Memorandum and this Agreement and neither
the Seller nor any agent acting on its behalf (other than the Initial
Purchaser), has taken or will take any action which would subject the offer,
issuance, sale or delivery of the Offered Certificates to the provisions of
Section 5 of the Securities Act or to the registration provisions of any state
securities laws of any applicable jurisdiction.
(xii) Neither
the Seller nor any of its Affiliates has directly or through any agent (it
being
understood that the Seller makes no representation and warranty in this regard
with respect to the Initial Purchaser or any affiliates of the Initial
Purchaser) engaged in any “directed selling efforts” (as defined in Rule 902(c)
under Regulation S) with respect to the Offered Certificates. The
Seller and its affiliates and any agent acting on their behalf (it being
understood that the Seller makes no representation or warranty in this regard
with respect to the Initial Purchaser or any affiliates of the Initial
Purchaser) have complied with the “offering restrictions” (as defined in Rule
902(g) under Regulation S) with respect to Offered Certificates sold outside
the
United States. Neither the Seller, any of its Affiliates or any
person or entity acting on its behalf (it being understood that the Seller
makes
no representation or warranty in this regard with respect to the Initial
Purchaser or any affiliates of the Initial Purchaser) has entered into
any
5
contractual
arrangement with respect to the distribution of the Offered Certificates, except
for this Agreement and the Related Documents.
(xiii) None
of
the Seller, any of its Affiliates or any person or entity acting on its or
their
behalf (it being understood that the Seller makes no representation or warranty
in this regard with respect to the Initial Purchaser or any Affiliates of the
Initial Purchaser) within the six months preceding the date of this Agreement,
(A) has offered or sold any securities which are substantially similar to the
Offered Certificates the result of which would cause the offer and sale of
any
of the Offered Certificates pursuant to this Agreement to fail to be entitled
to
exemption from registration under the Securities Act or (B) has offered or
will
offer to sell the Offered Certificates in the United States by means of any
form
of general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act.
(xiv) Neither
the Seller nor the Trust is required (or after giving effect to the transactions
contemplated by the Related Documents, will be required) to be registered as
an
“investment company” as such term is defined in the Investment Company Act of
1940, as amended (the “1940 Act”).
(b) Fashion
Service Corp. (“FSC”) represents and warrants to, and agrees with the
Initial Purchaser that:
(i) As
of the
Issuance Date (as defined herein), the representations and warranties of Spirit
of America in each of the Related Documents to which it is a party will be
true
and correct except to the extent that such representations and warranties
expressly relate to a date other than the Issuance Date (as defined
herein).
(ii) FSC
is
duly organized and is validly existing as a Delaware corporation in good
standing under the laws of the State of Delaware, with power and authority
(corporate and other) and legal right to own its properties and conduct its
business as currently conducted, and is duly qualified (or is exempt from such
requirement) as a foreign corporation for the transaction of business and is
in
good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on FSC and its Affiliates
taken as a whole or on the transactions contemplated by this Agreement and
the
Related Documents.
(iii) Spirit
of
America is a national banking association duly organized, validly existing
and
in good standing under the laws of the United States of America, and has full
corporate power, authority and legal right to own its properties and conduct
its
business as described in the Preliminary Memorandum and the Final Memorandum,
and is duly qualified (or is exempt from such requirement) as a foreign
corporation for the transaction of business and is in good standing under the
laws of each jurisdiction in which it owns or leases properties, or conducts
any
business, so as to require such qualification, other than where failure to
be so
qualified or in good standing would not
6
have
a
material adverse effect on Spirit of America and its Affiliates taken as a
whole
or on the transactions contemplated by this Agreement and the Related
Documents.
(iv) This
Agreement has been duly authorized, executed and delivered by FSC, and, when
executed and delivered by the other parties hereto will constitute a valid,
binding and enforceable agreement of FSC; provided that 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 such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity) and subject to the unenforceability,
under certain circumstances, of provisions indemnifying a party against
liability where such indemnification is contrary to public policy.
(v) The
Purchase Agreement has been duly authorized, executed and delivered by Spirit
of
America and constitutes a valid, binding and enforceable agreement of Spirit
of
America; provided that 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 such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity) and subject to the unenforceability,
under certain circumstances, of provisions indemnifying a party against
liability where such indemnification is contrary to public policy.
(vi) FSC
is
not in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any agreement or instrument to which it
is a
party or by which it or its properties are bound which would have a material
adverse effect on the transactions contemplated in this Agreement or in the
Supplemented Pooling Agreement and the Related Documents. No consent,
approval, authorization or order of, or filing with, any court, governmental
agency or body is required to be obtained or made by FSC for the consummation
of
the transactions contemplated by this Agreement, or by Spirit of America for
the
consummation of the transactions contemplated by the Purchase Agreement, except
such as have been obtained or made and remain, and will continue to remain,
in
full force and effect, such as may be required under state securities laws
and
the filing of any financing statements required to perfect the Trust’s and the
Seller’s interest in the Receivables.
(vii) The
execution, delivery and performance of this Agreement by FSC, the compliance
with the terms and provisions hereof and the consummation of the transactions
contemplated herein and therein will not result in a breach or violation of
any
of the terms and provisions of, or constitute a default under, the certificate
of incorporation or by-laws of FSC or result in a breach or violation of any
of
the terms and provisions of, or constitute a default under, or result in the
creation or imposition of any Lien under, any statute, any rule, regulation
or
order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over it or any of its properties, or any agreement or
instrument to which it is a party or by which it is bound or to which any of
the
properties of it is subject, and it has full power and authority (corporate
and
7
otherwise)
to enter into this Agreement and to consummate the transactions contemplated
hereby.
(viii) Spirit
of
America is not in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any agreement or instrument to
which it is a party or by which it or its properties are bound which would
have
a material adverse effect on the transactions contemplated in the Purchase
Agreement and the Supplemented Pooling Agreement. The execution,
delivery and performance of the Purchase Agreement by Spirit of America, the
compliance with the terms and provisions thereof and the consummation of the
transactions contemplated herein and therein will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
Spirit of America’s charter or by-laws or result in a breach or violation of any
of the terms and provisions of, or constitute a default under, or result in
the
creation or imposition of any Lien under, any statute, any rule, regulation
or
order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over Spirit of America or any of its properties, or any
agreement or instrument to which Spirit of America is a party or by which it
is
bound or to which any of its properties is subject, and Spirit of America has
full power and authority (corporate and otherwise) to enter into the Purchase
Agreement and to consummate the transactions contemplated thereby.
(ix) Other
than as set forth or contemplated in the Preliminary Memorandum and the Final
Memorandum, there are no legal or governmental proceedings or investigations
pending or, to its knowledge, threatened to which Spirit of America or any
of
its Affiliates is or may be a party or to which any property of Spirit of
America and its Affiliates is or may be the subject (x) which, if
determined adversely to Spirit of America, could individually or in the
aggregate reasonably be expected to have a material adverse effect on the
general affairs, business, prospects, management, financial position,
stockholders’ equity or results of operations of Spirit of America and its
Affiliates, taken as a whole, or that would reasonably be expected to materially
adversely affect the interests of the holders of the Certificates, (y) asserting
the invalidity of this Agreement, any of the Related Documents or the Offered
Certificates or (z) seeking to prevent the issuance of the Offered Certificates
or of any of the transactions contemplated by this Agreement or any of the
Related Documents.
(x) Other
than as set forth or contemplated in the Preliminary Memorandum and the Final
Memorandum, there are no legal or governmental proceedings or investigations
pending or, to its knowledge, threatened to which FSC or any of its Affiliates
is or may be a party or to which any of property of FSC or its Affiliates is
or
may be the subject (x) which, if determined adversely to FSC, could individually
or in the aggregate reasonably be expected to have a material adverse effect
on
the general affairs, business, prospects, management, financial position,
stockholders’ equity or results of operations of FSC or FSC and its Affiliates,
taken as a whole, or that would reasonably be expected to materially adversely
affect the interests of the holders of the Certificates, (y) asserting the
invalidity of this Agreement, any of the Related Documents or the Offered
Certificates or (z) seeking to prevent the issuance of the Offered Certificates
or of any of the transactions contemplated by this Agreement or any of the
Related Documents.
8
(xi) Any
taxes, fees and other governmental charges in connection with the execution,
delivery and performance by FSC of this Agreement or the other Related Documents
shall have been paid or will be paid by or on behalf of FSC at or prior to
the
Issuance Date (as defined herein) to the extent then due.
(xii) Any
taxes, fees and other governmental charges in connection with the execution,
delivery and performance by the Servicer of the Related Documents shall have
been paid or will be paid by or on behalf of the Servicer at or prior to the
Issuance Date to the extent then due.
(xiii) Except
as
set forth in or contemplated in the Preliminary Memorandum and the Final
Memorandum, there has been no material adverse change in the condition
(financial or otherwise) of FSC or any of its subsidiaries since February 4,
2007.
(xiv) Except
as
set forth in or contemplated in the Preliminary Memorandum and the Final
Memorandum, there has been no material adverse change in the condition
(financial or otherwise) of the Servicer or any of its subsidiaries since
February 4, 2007.
(c) SOAI
represents and warrants to, and agrees with the Initial Purchaser,
that:
(i) As
of the
Issuance Date (as defined herein), the representations and warranties of SOAI
in
each of the Related Documents to which it is a party will be true and correct
except to the extent that such representations and warranties expressly relate
to a date other than the Issuance Date (as defined herein).
(ii) SOAI
is
duly organized and is validly existing as a Delaware corporation in good
standing under the laws of the State of Delaware, with power and authority
(corporate and other) and legal right to own its properties and conduct its
business as described in the Preliminary Memorandum and the Final Memorandum,
and is duly qualified (or is exempt from such requirement) as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, other than where
the failure to be so qualified or in good standing would not have a material
adverse effect on SOAI and its Affiliates taken as a whole or on the
transactions contemplated by this Agreement and the Related
Documents.
(iii) Each
of
this Agreement and the Related Documents to which SOAI is a party have been
duly
authorized, executed and delivered by SOAI, and, when executed and delivered
by
the other parties thereto, each of this Agreement and the Related Documents
to
which SOAI is a party will constitute a valid, binding and enforceable agreement
of SOAI; provided that with respect to all such documents 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 such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity) and subject to the
unenforceability,
9
under
certain circumstances, of provisions indemnifying a party against liability
where such indemnification is contrary to public policy.
(iv) No
consent, approval, authorization or order of, or filing with, any court,
governmental agency or body is required to be obtained or made by SOAI in
connection with the consummation of the transactions contemplated by this
Agreement and the Related Documents, except such as have been obtained or made
and remain, and will continue to remain, in full force and effect, such as
may
be required under state securities laws and the filing of any financing
statements required to perfect the Trust’s and the Seller’s interest in the
Receivables.
(v) SOAI
is
not in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any agreement or instrument to which it
is a
party or by which it or its properties is bound which would have a material
adverse effect on the transactions contemplated this Agreement or any of the
Related Documents. The execution, delivery and performance of this
Agreement and the other Related Documents, the compliance with the terms and
provisions hereof and thereof and the consummation of the transactions
contemplated herein and therein will not result in a breach or violation of
any
of the terms and provisions of, or constitute a default under, its certificate
of incorporation or by-laws or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, or result in the
creation or imposition of any Lien under, any statute, any rule, regulation
or
order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over it or any of its properties, or any agreement or
instrument to which it is a party or by which it is bound or to which any of
the
properties of it is subject, and it has full power and authority (corporate
and
otherwise) to enter into this Agreement and the Related Documents to which
it is
a party and to consummate the transactions contemplated hereby and
thereby.
(vi) Other
than as set forth or contemplated in the Preliminary Memorandum and the Final
Memorandum, there are no legal or governmental proceedings or investigations
pending or, to its knowledge, threatened to which any of SOAI or its Affiliates
is or may be a party or to which any property of SOAI or its Affiliates is
or
may be the subject (x) which, if determined adversely to SOAI, could
individually or in the aggregate reasonably be expected to have a material
adverse effect on the general affairs, business, prospects, management,
financial position, stockholders’ equity or results of operations of SOAI and
its Affiliates, taken as a whole, or that would reasonably be expected to
materially adversely affect the interests of the holders of the Certificates,
(y) asserting the invalidity of this Agreement, any of the Related Documents
or
the Offered Certificates or (z) seeking to prevent the issuance of the Offered
Certificates or of any of the transactions contemplated by this Agreement or
any
of the Related Documents.
(vii) No
Early
Amortization Event, and no event that would become an Early Amortization Event
after any applicable grace period has elapsed, exists with respect to any
outstanding Series of Certificates issued by the Trust and no event has occurred
that would constitute (after the issuance of the Certificates) an Early
Amortization Event or
10
would
become an Early Amortization Event after any applicable grace period has
elapsed.
(viii) Any
taxes, fees and other governmental charges in connection with the execution,
delivery and performance by SOAI of this Agreement or the other Related
Documents shall have been paid or will be paid by or on behalf of SOAI at or
prior to the Issuance Date (as defined herein) to the extent then
due.
(ix) Except
as
set forth in or contemplated in the Preliminary Memorandum and the Final
Memorandum, there has been no material adverse change in the condition
(financial or otherwise) of SOAI or any of its subsidiaries since February
4,
2007.
3. Payment
and Delivery of Offered Certificates; Fees. On the basis of the
representations, warranties and agreements herein contained, but subject to
the
terms and conditions herein set forth, the Seller agrees to sell to the Initial
Purchaser and the Initial Purchaser agrees to purchase $211,200,000 principal
amount of Class A Certificates consisting of Class A-1 Certificates in the
principal amount of $153,800,000 and Class A-2 Certificates in the principal
amount of $57,400,000, $19,200,000 principal amount of Class M Certificates
consisting of Class M-1 Certificates in the principal amount of $4,000,000
and
Class M-2 Certificates in the principal amount of $15,200,000, and $30,400,000
principal amount of the Class B Certificates consisting of Class B-1
Certificates in the principal amount of $16,900,000 and Class B-2 Certificates
in the principal amount of $13,500,000. The Seller hereby agrees,
that in consideration of the Initial Purchaser’s efforts in the resale of the
Offered Certificates, it shall pay the Initial Purchaser a fee equal to the
sum
of 0.375% of the aggregate original principal amount of the Class A
Certificates, 0.470% of the aggregate original principal amount of the Class
M
Certificates and 0.550% of the aggregate original principal amount of the Class
B Certificates (the “Initial Purchaser Fee”), payable in full on October
17, 2007 (or such later date as may be mutually agreed upon by the parties
hereto) (the “Issuance Date”), to be paid by the Seller by wire transfer
in immediately available funds to an account designated by the Initial
Purchaser. Each class of Offered Certificates is to be purchased at a
price equal to the principal amount thereof times the percentage specified
below
opposite such class:
|
Class
|
Percentage
|
|
Class
A-1
|
100.00000%
|
|
Class
A-2
|
99.97605%
|
|
Class
M-1
|
100.00000%
|
|
Class
M-2
|
99.95653%
|
|
Class
B-1
|
100.00000%
|
|
Class
B-2
|
99.97623%
|
.
11
The
closing and sale of the Certificates (the “Closing”) shall be held at the
offices of Xxxxx Xxxxx LLP in Chicago, Illinois, at 10:00 a.m., Chicago time,
on
the Issuance Date. Payment of the purchase price for the Offered
Certificates being sold and purchased hereunder shall be made on the Issuance
Date by wire transfer of immediately available funds to an account to be
designated by the Seller prior to the Issuance Date, against delivery to the
Initial Purchaser of the Offered Certificates registered in the name of Cede
& Co., the nominee of The Depository Trust Company
(“DTC”). The Initial Purchaser’s interests as beneficial owner
of the Offered Certificates will be represented by book entries on the records
of DTC and participating members thereof.
4. Certain
Agreements of the Seller. The Seller agrees with the Initial
Purchaser that:
(a) The
Seller shall furnish such information, execute such instruments and take such
actions, if any, as may be reasonably requested by the Initial Purchaser to
effect the resale of the Offered Certificates under the securities “blue sky”
laws of each jurisdiction in which the Offered Certificates are offered for
sale
or sold; provided that the Seller shall not be obligated to qualify to do
business in any jurisdiction in which it is not currently so qualified; and
provided, further, that the Seller shall not be required to file a
general consent to service of process in any jurisdiction.
(b) In
order
to render the Offered Certificates eligible for resale pursuant to Rule 144A,
the Seller shall make or cause to be made available to any beneficial owner
of
the Offered Certificates in connection with any sale thereof and any prospective
purchaser of such Offered Certificates from such beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act.
(c) The
Seller will not at any time offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any securities under circumstances where
such offer, sale, pledge, contract or disposition would cause the exemption
afforded by the Securities Act to cease to be applicable to the offer and sale
of the Offered Certificates hereunder.
(d) The
Seller agrees that it will not and will cause its affiliates (as defined in
Rule
501(b) of Regulation D under the Securities Act) not to solicit any offer to
buy
or make any offer or sale of or otherwise negotiate in respect of, the Offered
Certificates if, as a result of the doctrine of “integration” referred to in
Rule 502 under the Securities Act, such offer or sale would render invalid
(for
the purposes of (i) the sale of the Offered Certificates from Seller to the
Initial Purchaser, (ii) the resale of the Offered Certificates by the Initial
Purchaser to subsequent purchasers or (iii) the resale of the Offered
Certificates by such subsequent purchasers to others) the exemption from the
registration requirements of the Securities Act provided by Section 4(2) thereof
or by Rule 144A or by Regulation S thereunder or otherwise.
(e) The
Seller agrees that neither it nor any of its affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act) will directly or through any
person acting on its behalf, assuming the accuracy of the representations and
warranties of the
12
Initial
Purchaser in Section 5: (i) engage in any form of general solicitation or
general advertising in connection with the offering or sale of the Offered
Certificates in the United States (as those terms are used in Regulation D
under
the Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act or (ii) engage in any “directed
selling efforts” (as defined in Rule 902(c) under Regulation S) with respect to
the Offered Certificates. The Seller agrees that it and its affiliates (as
defined in Rule 501(b) of Regulation D under the Securities Act) and any person
acting on its behalf, assuming the accuracy of the representations and
warranties of the Initial Purchaser in Section 5, will comply with the “offering
restrictions” (as defined in Rule 902(g) under Regulation S) with respect to any
Offered Certificates sold outside the United States.
(f) Whether
or not the transactions contemplated by this Agreement are terminated for any
reason, the Seller agrees to pay promptly all costs and expenses incident to
the
performance by the Seller of its obligations hereunder, including, without
limitation, (i) the preparation, reproduction and printing (to the extent
such documents are printed) of the Preliminary Memorandum and the Final
Memorandum and all amendments or supplements thereto (including the exhibits
thereto), the Pooling Agreement, the Series Supplement, the Certificates, this
Agreement and the other Related Documents, (ii) the preparation, authentication,
issuance and delivery of the Offered Certificates, (iii) the expenses (including
reasonable fees and disbursements of counsel to the Initial Purchaser, provided,
that Seller shall not be responsible for payment of any fees and disbursements
of counsel to the Initial Purchaser in excess of $100,000), if any, of
registering or qualifying the Offered Certificates under state securities or
“blue sky” laws, (iv) the fees and expenses of the Seller’s accountants and of
reasonable fees and expenses of counsel for the Seller, (v) the reasonable
fees and disbursements of counsel for the Initial Purchaser, (vi) the furnishing
to the Initial Purchaser of such copies of the Preliminary Memorandum and the
Final Memorandum and all amendments or supplements thereto (including the
exhibits thereto) as may be requested for use in connection with the offering
and sale of the Offered Certificates, (vii) fees of each Rating Agency in
connection with their ratings of the Offered Certificates, (viii) fees of the
Trustee under the Pooling Agreement, and (ix) the Seller’s performance of and
compliance with all agreements and conditions contained herein, in the Pooling
Agreement, the Series Supplement, the Certificates and the other Related
Documents on its part to be performed or complied
with. Notwithstanding the foregoing, the Initial Purchaser shall
obtain the consent of the Seller prior to incurring any out-of-pocket expense
in
excess of $10,000.
(g) To
the
extent, if any, that the ratings provided with respect to the Offered
Certificates by either Rating Agency is conditional upon the furnishing of
documents or the taking of any other reasonable actions by the Seller, the
Seller shall, subject to availability and the reasonableness of such document
request, furnish such documents and take any such other reasonable
actions.
(h) During
the period any Offered Certificates shall remain outstanding, the Seller will
furnish or will cause to be furnished to the Initial Purchaser, copies of
all
13
reports
or other communication (financial or other) furnished to the holders of the
Offered Certificates.
5. Representations,
Warranties and Covenants of the Initial Purchaser. The Initial
Purchaser represents and warrants to, and agrees with the Seller, the Servicer
and FSC as of the date hereof, and as of the Issuance Date, that:
(a) It
understands that the Offered Certificates have not been and will not be
registered under the Securities Act in reliance upon an exemption therefrom,
or
registered or qualified under the securities or “blue sky” laws of any state in
the United States. It has advised Seller that it proposes to offer
the Offered Certificates for resale upon the terms and conditions set forth
herein and in the Final Memorandum. It will not offer, sell,
transfer, pledge, hypothecate or otherwise dispose of the Offered Certificates
except in accordance with this Agreement and the Supplemented Pooling
Agreement.
(b) It
shall
not utilize any form of general solicitation or general advertising within
the
meaning of Rule 502(c) of the Securities Act in connection with the resale
of
the Offered Certificates, including any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio, or conduct any seminar or meeting with
respect to the Offered Certificates whose attendees have been invited by general
solicitation or general advertising or other action involving a public offering
within the meaning of Section 4(2) of the Securities Act.
(c) It
is an
“accredited investor” (as defined in Regulation D under the Securities Act) and
a QIB within the meaning of Rule 144A, purchasing the Offered
Certificates. It has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an
investment in the Offered Certificates.
(d) It
will
offer or sell the Offered Certificates only to (i) persons whom it reasonably
believes to be QIBs, purchasing the Offered Certificates for their own account
or for the account of other investors who are QIBs in transactions meeting
the
requirements of Rule 144A and (ii) non-U.S. persons (as defined in
Regulation S) in offshore transactions (as defined in Regulation S) made in
compliance with Regulation S. It agrees that it will not offer, sell
or deliver any of the Offered Certificates in any jurisdiction outside the
United States (as defined in Regulation S) except under circumstances which
will
result in compliance with the applicable laws thereof, and that it will take
whatever action is required to permit its offer and resale of the Offered
Certificates in such jurisdictions.
(e) It
will
take reasonable steps to inform, and cause each of its affiliates to take
reasonable steps to inform, persons acquiring Offered Certificates from it
or
its affiliates, as the case may be, in the United States that the Offered
Certificates (i) have not been and will not be registered under the Securities
Act, (ii) are being sold to them without registration under the Securities
Act
in reliance on Rule 144A or Rule 903 or 904 of Regulation S, and (iii) may
not
be offered, sold or otherwise transferred except (A) in
14
offshore
transactions to non-U.S. Persons in accordance with Rule 903 or 904 of
Regulation S in a principal amount of not less than $100,000, or (B) to a person
whom the seller reasonably believes is a QIB that is purchasing such Offered
Certificates for its own account or for the account of a QIB to whom notice
is
given that the offer, sale or transfer is being made in reliance on Rule 144A,
in a principal amount of not less than $100,000, for the purchaser and each
such
account, in a transaction meeting the requirements of Rule 144A.
(g) None
of
it, its affiliates or any person acting on its behalf has engaged or will engage
in any directed selling efforts (as defined in Regulation S under the Securities
Act) with respect to the Offered Certificates, and it, its affiliates and any
person acting on its behalf have complied and will comply with the offering
restriction requirements of Regulation S. It agrees that, at or
before confirmation of a sale of Offered Certificates (other than a sale of
Offered Certificates pursuant to Rule 144A) it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration who purchases the Offered Certificates from or through it during
the distribution compliance period as defined in Rule 902 of Regulation S,
a
confirmation or notice to substantially the following effect:
“The
Offered Certificates covered hereby have not been registered under the United
States Securities Act of 1933 (the “Securities Act”) and may not be offered or
sold within the United States or to or for the account or benefit of U.S.
persons (as defined in Regulation S), except in accordance with Rule 144A under
the Securities Act.”
(h) It
represents and warrants that:
(i) it
has
only communicated or caused to be communicated and will only communicate or
cause to be communicated an invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial Services and Markets
Xxx 0000 (“FSMA”)) in connection with the issue or sale of any Offered
Certificates in circumstances in which Section 21(1) of the FSMA does not apply
to the Seller; and
(ii) it
has
complied and will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to any Offered Certificates in, from or
otherwise involving the United Kingdom, other than where the failure to so
comply would not have a material adverse effect on the Seller and its Affiliates
taken as a whole or on the transactions contemplated by this Agreement and
the
Related Documents; and
(iii) if
it
sells Offered Certificates in any other non-U.S. jurisdiction, it has complied
with and will comply with all applicable laws of such jurisdiction with
respect
15
to
anything done by it in relation to the Offered Certificates in, from or
otherwise involving such jurisdiction, other than where the failure to so comply
would not have a material adverse effect on the Seller and its Affiliates taken
as a whole or on the transactions contemplated by this Agreement and the Related
Documents.
(i) It
represents and warrants that (i) it is duly authorized and empowered to execute,
deliver and perform this Agreement; (ii) the person signing this Agreement
on
its behalf has been duly authorized to do so; (iii) the execution, delivery
and
performance of this Agreement does not and will not conflict with, violate
or
constitute a default under any applicable law or regulation, its articles of
organization or other organizational document or by-laws and (iv) this Agreement
constitutes a legal, valid and binding obligation of the Initial Purchaser;
provided that 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 such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity) and subject to the unenforceability,
under certain circumstances, of provisions indemnifying a party against
liability where such indemnification is contrary to public policy.
(j) If
an
electronic copy of the Preliminary Memorandum or the Final Memorandum is
delivered by the Initial Purchaser for any purpose, such copy shall be the
same
electronic file containing the Preliminary Memorandum or the Final Memorandum
(as applicable) in the identical form transmitted electronically to the Initial
Purchaser by or on behalf of the Seller specifically for use by the
Initial Purchaser pursuant to this Section; for example, if the Final Memorandum
is delivered to the Initial Purchaser by or on behalf of the Seller
in a single electronic file in .pdf format, then the Initial Purchaser will
deliver the electronic copy of the Final Memorandum in the same single
electronic file in .pdf format.
(k) The
Initial Purchaser represents and agrees that it will deliver the Preliminary
Memorandum to each investor to whom Offered Certificates are sold by the Initial
Purchaser, prior to the Applicable Time or, if later, the time at which a
contract of sale with such investor becomes effective unless, at such time,
the
Final Memorandum has been made available by the Seller to the Initial
Purchaser. In such event, the Initial Purchaser shall deliver the
Final Memorandum to such investor to which it sells an Offered Certificate
prior
to the effective time of such sale.
The
Initial Purchaser acknowledges that the Seller and others will rely upon the
truth and accuracy of the foregoing acknowledgments, representations and
agreements.
6. Conditions
of the Obligations of the Initial Purchaser. The Initial
Purchaser’s obligations hereunder will be subject to the accuracy of the
representations and warranties herein made on the part of the Seller, FSC and
the Servicer, to the accuracy of the statements of the officers of each of
the
Seller, FSC and the Servicer made pursuant to the provisions hereof, to the
performance by the Seller, FSC and the Servicer of their respective obligations
hereunder and to the following additional conditions precedent:
16
(a) The
Initial Purchaser shall have received fully executed copies of this Agreement,
the Supplemented Pooling Agreement and the other Related Documents duly executed
and delivered by the parties thereto.
(b) Subsequent
to the execution and delivery of this Agreement and prior to the Issuance Date,
there shall not have occurred and be continuing (i) any change, or any
development involving a prospective change, in or affecting particularly the
business or properties of the Seller, FSC, the Servicer or Spirit of America
which, in the reasonable judgment of the Initial Purchaser after consultation
with the Seller and the Servicer, materially impairs the investment quality
of
the Offered Certificates; (ii) any reduction in or withdrawal of the rating
of
the Certificates issued by the Trust or any other debt securities of the Seller,
the Servicer or any Affiliate thereof by any “nationally recognized statistical
rating organization” (as defined for purposes of Rule 436(g) under the
Securities Act), or any public announcement that any such organization has
under
surveillance or review its rating of the Certificates issued by the Trust or
any
other debt securities of the Seller, the Servicer or any Affiliate thereof
(other than an announcement with positive implications of a possible upgrading,
and no implication of a possible reduction in or withdrawal of such rating);
(iii) any suspension or limitation of trading in securities generally on the
New
York Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Seller or the
Servicer or any Affiliate of the Seller or the Servicer on any exchange or
in
any over-the-counter market; (iv) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities; (v) any material disruption in commercial banking securities
settlement or clearance services; if, in the reasonable judgment of the Initial
Purchaser, the effect of any such disruption makes it impractical or inadvisable
to proceed with completion of the resale of the Offered Certificates; or
(vi) any outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the reasonable judgment
of the Initial Purchaser, the effect of any such outbreak, escalation,
declaration, calamity, emergency or change makes it impractical or inadvisable
to proceed with completion of the resale of the Offered
Certificates.
(c) The
Initial Purchaser shall have received an opinion of Xxxxx X. Xxxxx, Esq.,
Executive Vice President and General Counsel to Charming, dated the Issuance
Date and addressed to the Initial Purchaser, satisfactory in form and substance
to the Initial Purchaser and its counsel as to certain corporate
matters.
(d) The
Initial Purchaser shall have received an opinion of local tax counsel for the
Seller and the Servicer, dated the Issuance Date, regarding certain Ohio tax
matters in form and substance reasonably satisfactory to the Initial Purchaser
and its counsel.
(e) The
Initial Purchaser shall have received an opinion of Xxxxx Xxxxx LLP, dated
the
Issuance Date and addressed to the Initial Purchaser, satisfactory in form
and
substance to the Initial Purchaser and its counsel as to enforceability and
certain securities law matters. Such counsel shall also deliver a
negative assurance letter, dated
17
the
Issuance Date and addressed to the Initial Purchaser, in form and substance
satisfactory to the Initial Purchaser.
(f) The
Initial Purchaser shall have received an opinion of Xxxxx Xxxxx LLP, dated
the
Issuance Date and addressed to the Initial Purchaser, to the effect that the
transfer of Receivables from the Seller to the Trust creates a perfected
security interest in such Receivables in favor of the Trustee, in form and
substance satisfactory to the Initial Purchaser and its counsel.
(g) The
Initial Purchaser shall have received an opinion of Squire, Xxxxxxx &
Xxxxxxx LLP, dated the Issuance Date and addressed to the Initial Purchaser,
to
the effect that the transfer of Receivables from Spirit of America to the Seller
creates a perfected security interest in such Receivables in favor of the
Seller, in form and substance satisfactory to the Initial Purchaser and its
counsel.
(h) The
Initial Purchaser shall have received an opinion of Xxxxx Xxxxx LLP, dated
the
Issuance Date and addressed to the Initial Purchaser, with respect to (a) the
nonconsolidation of FSC with the Seller and (b) certain FDIC matters relating
to
the transfer of the Receivables from Spirit of America to the Seller, in each
case in form and substance satisfactory to the Initial Purchaser and its
counsel.
(i) The
Initial Purchaser shall have received copies of UCC-1 financing statements
filed
in the offices of the Secretary of State of the State of Ohio and the Recorder
of Deeds of the District of Columbia, in the case of Spirit of America, and
the
Secretary of State of the State of Delaware, in the case of the Seller,
reflecting the interests of the Seller and the Trust in the
Receivables.
(j) The
Initial Purchaser shall have received an opinion of Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx LLP, special counsel for the Initial Purchaser, subject to customary
qualifications, assumptions, limitations and exceptions, dated the Issuance
Date, in form and substance reasonably satisfactory to the Initial Purchaser,
with respect to the enforceability of the Supplemental Pooling Agreement and
the
Offered Certificates, the Trust Indenture Act of 1939, and securities law
matters with respect to the Offered Certificates.
(k) The
Initial Purchaser shall have received an opinion from Xxxxxxx & Xxxxxx LLP,
counsel for the Trustee, dated the Issuance Date and addressed to the Initial
Purchaser, with respect to general corporate matters, enforceability of the
Related Documents to which the Trustee is a party, due authentication and
delivery of the Offered Certificates and such other matters as the Initial
Purchaser shall request, in form and substance satisfactory to the Initial
Purchaser and its counsel.
(l) The
Initial Purchaser shall have received a certificate or certificates, dated
the
Issuance Date, of a vice president or more senior officer of each of the Seller,
FSC and the Servicer in which such officer, to the best of his or her knowledge
after reasonable investigation, shall state that (A) the representations and
warranties of the Seller, FSC and the Servicer, as applicable, contained in
this
Agreement are true and
18
correct
in all material respects on and as of the Issuance Date, (B) the Seller, FSC
and
the Servicer, as applicable, has complied with all agreements and satisfied
all
conditions on its part to be performed or satisfied hereunder at or prior to
the
Issuance Date, (C) the representations and warranties of the Seller, FSC or
the
Servicer, as applicable, in the Related Documents to which it is a party are
true in all material respects on the Issuance Date, except to the extent such
representations and warranties relate to an earlier date, and (D) subsequent
to
the date as of which information is given in the Final Memorandum, and except
as
set forth or contemplated in the Final Memorandum or such certificate, there
has
been no material adverse change in the condition (financial or otherwise) of
the
Seller, FSC or the Servicer, as applicable, or any of their respective
subsidiaries.
(m) The
Initial Purchaser shall have received a letter of Ernst & Young addressed to
the Seller and the Initial Purchaser regarding the Receivables, substantially
in
the form heretofore agreed to and otherwise in form and in substance
satisfactory to the Initial Purchaser and its counsel.
(n) The
Initial Purchaser shall have received letters from each of the Rating Agencies
stating that (i) the Class A Certificates have received a rating of “AAA” and
“Aaa” by Standard & Poor’s and Moody's, respectively, (ii) the Class M
Certificates have received a rating of “AA” and “Aa2” by Standard & Poor’s
and Moody’s respectively, (iii) the Class B Certificates have received a rating
of “A” and “A2” by Standard and Poor’s and Moody’s, respectively, (iv) the Class
C Certificates have received a rating of “Baa2” by Moody’s, and (v) the rating
of any certificates of any other Series issued by the Trust will not be
withdrawn or reduced as a result of the issuance of the
Certificates.
(o) The
Initial Purchaser shall have received from the Servicer a Servicer Report dated
as of the Issuance Date, calculated after giving effect to all transactions
contemplated on the Issuance Date.
(p) The
Seller and the Servicer will furnish the Initial Purchaser with such number
of
conformed copies of such opinions, certificates, letters and documents as it
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 Initial
Purchaser by notice to the Seller at any time at or prior to the Issuance Date,
and such termination shall be without liability of any party to any other party
except as provided in Section 8.
7. Indemnification
and Contribution.
(a) CSRC,
SOAI and FSC, jointly and severally, agrees to indemnify and hold harmless
the
Initial Purchaser, and each person, if any, who controls the Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), from
and against any and all losses, claims, damages, liabilities and expenses
(including, without limitation, the reasonable legal fees and other reasonable
expenses incurred in connection with any suit,
19
action
or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of any material fact contained in the Final Memorandum or
the
Preliminary Memorandum or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading, except insofar as any such loss, claim, damage, expense
or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with the Initial Purchaser Information (as
defined in subsection (b) below); provided, further, that none of
CSRC, SOAI or FSC will be liable under the indemnity agreement in this
subsection (a) with respect to the Preliminary Memorandum to the extent that
any
loss, claim, damage or liability of the Initial Purchaser (or any Person
controlling the Initial Purchaser within the meaning of the Securities Act)
results from the fact that the Initial Purchaser sold Offered Certificates
to a
person as to whom it is established that there was not sent or given, at or
prior to consummation of such sale, a copy of the Final Memorandum (including
any amendment or supplement but excluding documents incorporated by reference)
if the Seller or the Servicer previously furnished copies of the Final
Memorandum (including any amendment or supplement but excluding documents
incorporated by reference) to the Initial Purchaser and the loss, claim, damage
or liability of the Initial Purchaser (or any Person controlling the Initial
Purchaser within the meaning of the Securities Act) results from an untrue
statement or omission of a material fact contained in the Preliminary Memorandum
that is corrected in the Final Memorandum or any amendment or supplement to
the
Final Memorandum.
(b) The
Initial Purchaser agrees to indemnify and hold harmless each of CSRC, SOAI
and
FSC and each person, if any, who controls the CSRC, SOAI or FSC within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and expenses
(including, without limitation, the reasonable legal fees and other reasonable
expenses incurred in connection with any suit, action or proceeding or any
claim
asserted) caused by any untrue statement or alleged untrue statement of any
material fact contained in the Final Memorandum or the Preliminary Memorandum
or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance on or in
conformity with the Initial Purchaser Information. The “Initial
Purchaser Information” includes the name of the Initial Purchaser as it
appears on the front page of the Preliminary Memorandum and the Final Memorandum
and the information in the Preliminary Memorandum and the Final Memorandum
in
the third paragraph under the heading “Plan of
Distribution”.
(c) Promptly
after receipt by an indemnified party under this Section 7 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 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
20
any
indemnified party otherwise than under subsection (a) or (b) above except and
to
the extent of any prejudice to such indemnifying party arising from such failure
to provide such notice. 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 elect by written notice to the indemnified party, 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 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation unless (i) the named parties in any such proceeding
include both the indemnified party and the indemnifying party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interest between them, (ii) the indemnifying party shall
not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action and assumption of the defense thereof, or (iii)
the
indemnifying party has authorized in writing the employment of counsel for
the
indemnified party; it is understood that the indemnifying party shall not,
in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all indemnified parties. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes
an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action and does not include a statement
as
to, or an admission of, fault, culpability or failure to act by or on behalf
of
any indemnified party. No indemnifying party shall be liable under
this section for any settlement of any claim or action effected without its
prior written consent, which shall not be unreasonably withheld.
(d) If
the
indemnification provided for in this Section 7 is unavailable or insufficient
to
hold harmless an indemnified party under subsection (a) or (b) above, then
in
order to provide for just and equitable contribution, each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as
a
result of the losses, claims, damages, expenses or liabilities referred to
in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the CSRC, SOAI and FSC on the one hand and
the
Initial Purchaser on the 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
CSR, SOAI and FSC on the one hand and the Initial Purchaser 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 CSRC, SOAI and FSC
on the one hand and the Initial Purchaser on the other shall be
21
deemed
to
be in the same proportion as the total net proceeds from the sale of the Offered
Certificates (before deducting expenses) received by CSRC bear to the Initial
Purchaser Fee. 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 CSRC, SOAI or FSC, on the one hand, or
information supplied by the Initial Purchaser, on the other hand, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission with respect to the Offered
Certificates and any other equitable consideration appropriate under the
circumstances. The amount paid by an indemnified party as a result of
the losses, claims, damages, expenses or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection
(d). Notwithstanding the provisions of this subsection (d), the
Initial Purchaser shall not be required to contribute any amount in excess
of
the amount by which the Initial Purchaser Fee exceeds the amount of damages
which the Initial Purchaser has otherwise been required to pay by reason of
such
untrue or alleged untrue statement or omission or alleged omission with respect
to the Offered Certificates. 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.
(e) The
obligations of CSRC, SOAI and FSC under this section shall be in addition to
any
liability which CSRC, SOAI and FSC may otherwise have and shall extend, upon
the
same terms and conditions, to the directors and officers of the Initial
Purchaser and each Person, if any, who controls the Initial Purchaser within
the
meaning of the Securities Act; and the obligations of the Initial Purchaser
under this section shall be in addition to any liability which the Initial
Purchaser may otherwise have and shall extend, upon the same terms and
conditions and to each Person, if any, who controls CSRC, SOAI or FSC within
the
meaning of the Securities Act.
8. Survival
of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
CSRC, SOAI or FSC or their respective officers and of the Initial
Purchaser or its officers 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 the Initial Purchaser, the
Seller, FSC or the Servicer or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and payment
for the Offered Certificates. If this Agreement is terminated, in
whole or in part, or for any reason other than solely because of the occurrence
of an event specified in clauses (iii), (iv) or (v) of Section 6(b), and the
purchase of the Offered Certificates is not consummated, the Seller shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4(f) and the obligations of the Seller, FSC and the Servicer
pursuant to Section 7 shall remain in effect.
9. Notices. All
communications hereunder will be in writing and effective only upon receipt,
and, if sent to the Initial Purchaser, will be mailed, delivered or telecopied
and confirmed to the Initial Purchaser, at the following address:
22
Barclays
Capital Inc.
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxxxx
Xxxxxx
Facsimile: (000)
000-0000
if
sent
to CSRC, FSC or SOAI, will be mailed, delivered or telecopied and confirmed
to
the CSRC, FSC or SOAI, at the following address:
0000
Xxxxx Xxxxx
Xxxxxxx,
Xxxx 00000
Attention: President
Facsimile: (000)
000-0000
with
a
copy to:
General
Counsel
Charming
Shoppes, Inc.
000
Xxxxx
Xxxx
Xxxxxxxx,
XX 00000
Facsimile: (000)
000-0000
10. Other
Services. Nothing in this Agreement is intended to obligate or
commit the Initial Purchaser or any of its affiliates to provide any services
other than as set forth herein.
11. Successors. This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns and the officers and directors
and
controlling persons referred to in Section 7 hereof, and no other person
will have any right or obligation hereunder.
12. APPLICABLE
LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF
LAWS PROVISIONS THEREOF.
13. Benefit
of Agreement. This Agreement shall inure to the benefit of and be
binding upon Seller, the Servicer, FSC, the Initial Purchaser, any controlling
persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended
or shall be construed to give any other person, firm or corporation any legal
or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Offered Certificates from
the Initial Purchaser shall be deemed to be a successor by reason merely of
such
purchase.
Each
of the Seller, FSC and SOAI
acknowledges and agrees that (i) the purchase and sale of the Offered
Certificates pursuant to this Agreement, including the determination of the
offering price of the Offered Certificates and any related discounts and
commissions, is an arm’s-length commercial transaction between the Seller, FSC
and SOAI, on the one hand, and the Initial Purchaser, on the other hand, and
the
Seller, FSC and SOAI are capable of evaluating and understanding, and understand
and accept the terms, risks and conditions of the transactions
23
contemplated
by this Agreement; (ii) in connection with the transaction contemplated hereby
and the process leading to such transaction, the Initial Purchaser is and has
been acting solely as a principal and is not the agent or fiduciary of the
Seller, FSC, SOAI or their respective Affiliates, stockholders, creditors or
employees or any other party; (iii) the Initial Purchaser has not assumed and
will not assume an advisory or fiduciary responsibility in favor of the Seller,
FSC or SOAI with respect to the transaction contemplated hereby or the process
leading thereto (irrespective of whether the Initial Purchaser has advised
or is
currently advising the Seller, FSC or SOAI on other matters) or any other
obligations to the Seller, FSC or SOAI, except the obligations expressly set
forth in this Agreement; (iv) the Initial Purchaser and its Affiliates may
be
engaged in a broad range of transactions that involve interests that differ
from
those of the Seller, FSC and SOAI, and that the Initial Purchaser has no
obligation to disclose to the Seller, FSC or SOAI any of such interests by
virtue of any relationship hereunder; and (v) the Initial Purchaser has not
provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Seller, FSC and SOAI have consulted their
own legal, accounting, regulatory and tax advisors to the extent they deemed
appropriate.
24
If
the
foregoing is in accordance with your understanding of our agreement, kindly
sign
and return to us the enclosed duplicate hereof, whereupon it will become a
binding agreement among the Seller, FSC, SOAI and the Initial Purchaser in
accordance with its terms.
|
Very
truly yours,
|
|
CHARMING
SHOPPES RECEIVABLES CORP.
|
|
By:_____________________________________
|
|
Name:
|
|
Title:
|
|
SPIRIT
OF AMERICA, INC.
|
|
By:_____________________________________
|
|
Name:
|
|
Title:
|
|
FASHION
SERVICE CORP.
|
|
By:_____________________________________
|
|
Name:
|
|
Title:
|
|
The
foregoing Certificate Purchase Agreement
|
|
is
hereby confirmed and accepted as
|
|
of
the date first above written:
|
|
BARCLAYS
CAPITAL INC.,
|
|
as
the Initial Purchaser
|
|
By________________________________
|
|
Name:
|
|
Title:
|
25
