Exhibit 1.1
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February 22, 2001
First Consumers Credit Card Master Note Trust
$462,000,000 Class A Floating Rate Asset Backed Notes, Series 2001-A
$63,000,000 Class B Floating Rate Asset Backed Notes, Series 2001-A
UNDERWRITING AGREEMENT
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Deutsche Banc Alex. Xxxxx Inc
as Representative of the
Underwriters set forth herein (the "Representative")
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00 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
1. Introductory. First Consumers National Bank (the "Bank") proposes to
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cause First Consumers Credit Card Master Note Trust (the "Issuer") to issue
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$462,000,000 aggregate principal amount of Class A Series 2001-A Floating Rate
Asset Backed Notes (the "Class A Notes"), $63,000,000 aggregate principal amount
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of Class B Series 2001-A Floating Rate Asset Backed Notes (the "Class B Notes"),
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and $36,000,000 aggregate principal amount of Class C Series 2001-A Floating
Rate Asset Backed Notes (the "Class C Notes" and together with the Class A Notes
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and the Class B Notes, the "Notes")
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The Issuer will be a common law trust formed pursuant to a Trust Agreement,
to be dated as of March 1, 2001 (the "Trust Agreement"), between the Bank and
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Bankers Trust Company, as owner trustee (the "Owner Trustee"). The Notes will
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be issued pursuant to a Master Indenture, to be dated as of March 1, 2001 (the
"Master Indenture"), between the Issuer and The Bank of New York, as indenture
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trustee (the "Indenture Trustee"), as supplemented by the Series 2001-A
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Indenture Supplement with respect to the Notes to be dated as of March 1, 2001
(the "Indenture Supplement," and together with the Master Indenture, the
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"Indenture").
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Initially, the primary asset of the Issuer will be a certificate (the
"Collateral Certificate") representing a beneficial interest in the assets held
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in the First Consumers Master Trust ("FCMT"), issued pursuant to the Amended and
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Restated Pooling and Servicing Agreement, dated as of February 1, 1999 (as
heretofore amended, the "Amended and Restated Pooling and Servicing
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Agreement"), among the Bank and The Bank of New York (successor-in-interest to
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the corporate trust administration of Xxxxxx Trust and Savings Bank), as trustee
(the "FCMT Trustee"), and the Collateral Series Supplement, to be dated as of
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March 1, 2001, to the Amended and Restated Pooling and Servicing Agreement (the
"Collateral Supplement" and together with the Amended and Restated Pooling and
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Servicing Agreement, the "PSA"). The assets of FCMT include, among other things,
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certain amounts due (the "Receivables") on a pool of private label credit card
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accounts (the "Accounts").
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The Receivables are transferred by the Bank to FCMT pursuant to the Amended
and Restated Pooling and Servicing Agreement. The Collateral Certificate will
be transferred by the Bank to the Issuer pursuant to the Transfer and Servicing
Agreement, to be dated as of March 1, 2001 (the "Transfer and Servicing
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Agreement"), among the Bank, as Seller and Servicer, and the Issuer.
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The Bank has agreed to provide notices and perform on behalf of the Issuer
certain other administrative obligations required by the Transfer and Servicing
Agreement, the Master Indenture and each indenture supplement for each series of
Notes issued by the Issuer, pursuant to an Administration Agreement, to be dated
as of March 1, 2001 (the "Administration Agreement"), between the Bank, as
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administrator (in such capacity, the "Administrator"), and the Issuer. The
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Transfer and Servicing Agreement, the PSA, the Indenture, the Trust Agreement
and the Administration Agreement are referred to herein, collectively, as the
"Transaction Documents."
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This Underwriting Agreement is referred to herein as this "Agreement." To
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the extent not defined herein, capitalized terms used herein have the meanings
assigned in the Transaction Documents.
The Class C Notes will be sold pursuant to a Class C Note Purchase
Agreement, to be dated as of March 2001, among the Issuer, the Bank and the
initial purchaser of the Class C Notes named therein.
The Bank and Spiegel, Inc. ("Spiegel") hereby agree, severally and not
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jointly, with the underwriters for the Class A Notes listed on Schedule A hereto
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(the "Class A Underwriters") and the underwriters for the Class B Notes listed
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on Schedule A hereto (the "Class B Underwriters" and together with the Class A
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Underwriters, the "Underwriters") as follows:
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2. Representations and Warranties of the Bank and Spiegel. Each of the
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Bank and Spiegel represents and warrants to, and agrees with, the Underwriters
that:
(a) Spiegel is duly organized and validly existing in good standing as
a corporation under the laws of the State of Delaware, and has all
requisite corporate power, authority and legal right to own its property
and transact the business in which it is now engaged.
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(b) The Bank is a national banking association duly organized and
validly existing in good standing under the laws of the United States, and
has all requisite corporate power, authority and legal right to own its
property and conduct its credit card business as such properties are now
owned and such business is conducted at present, and to own the Accounts
and to execute, deliver and perform its obligations under the Transfer and
Servicing Agreement, the PSA and the Administration Agreement.
(c) The execution and delivery of each of the Transaction Documents to
which it is a party, and the incurrence of the obligations therein set
forth and the consummation of the transactions contemplated thereunder have
been duly authorized by the Bank by all necessary action on the part of the
Bank.
(d) This Agreement has been duly authorized, executed and delivered by
the Bank and Spiegel.
(e) Each of the Transaction Documents has been, or on or before the
Closing Date will be, executed and delivered by the Bank and when executed
and delivered by the other parties thereto, will constitute a valid and
binding agreement of the Bank enforceable against the Bank in accordance
with its terms, except, in each case, to the extent that (i) the
enforceability thereof may be subject to insolvency, reorganization,
moratorium, receivership or other similar laws now or hereafter in effect
relating to creditors' or other obligees' rights generally or the rights of
creditors or other obligees of institutions insured by the FDIC, (ii) 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 and (iii) certain
remedial provisions of the Indenture may be unenforceable in whole or in
part under the UCC, but the inclusion of such provisions does not render
the other provisions of the Indenture invalid and notwithstanding that such
provisions may be unenforceable in whole or in part, the Indenture Trustee,
on behalf of the Noteholders, will be able to enforce the remedies of a
secured party under the UCC.
(f) The Notes will be issued pursuant to the terms of the Indenture
and, when executed by the Owner Trustee on behalf of the Issuer and
authenticated by the Indenture Trustee in accordance with the Indenture and
delivered pursuant to this Agreement, will be validly issued and
outstanding. The Notes will be in the form contemplated by the Indenture,
and the Notes and the Indenture will conform to the descriptions thereof
contained in the Prospectus and Registration Statement, as amended or
supplemented.
(g) The Collateral Certificate will be issued pursuant to the terms of
the PSA and, when executed by the FCMT Trustee in accordance with the PSA,
will be validly issued and outstanding. The Collateral Certificate will be
in the form contemplated by the PSA, and the Collateral Certificate and the
PSA will conform to the description thereof contained in the Prospectus and
the Registration Statement, as amended or supplemented.
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(h) Neither Spiegel nor the Bank is in violation of any Requirement of
Law or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other instrument to
which it is a party or by which it is bound or to which any of its property
is subject, which violations or defaults separately or in the aggregate
would have a material adverse effect on Spiegel or the Bank.
(i) None of the issuance and sale of the Notes, the issuance of the
Collateral Certificate or the execution and delivery by Spiegel or the Bank
of this Agreement or any Transaction Document to which it is a party, nor
the incurrence by Spiegel or the Bank of the obligations herein and
therein set forth, nor the consummation of the transactions contemplated
hereunder or thereunder, nor the fulfillment of the terms hereof or thereof
does or will (i) violate any Requirement of Law presently in effect,
applicable to it or its properties or by which it or its properties are or
may be bound or affected, (ii) conflict with, or result in a breach of, or
constitute a default under, any indenture, contract, agreement, deed,
lease, mortgage or instrument to which it is a party or by which it or its
properties are bound or (iii) result in the creation or imposition of any
Lien upon any of its property or assets, except for those encumbrances
created under the Transaction Documents.
(j) All consents, approvals, authorizations, orders, filings,
registrations or qualifications of or with any court or any other
governmental agency, board, commission, authority, official or body
required in connection with the execution and delivery by Spiegel or the
Bank of this Agreement or the Transaction Documents to which it is a party
or to the consummation of the transactions contemplated hereunder and
thereunder, or to the fulfillment of the terms hereof and thereof have been
or will have been obtained on or before the Closing Date.
(k) All actions required to be taken by Spiegel and the Bank as a
condition to the offer and sale of the Class A Notes and the Class B Notes
as described herein or the consummation of any of the transactions
described in the Prospectus and the Registration Statement (each as defined
below) have been or, prior to the Closing Date, will be taken.
(l) The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended (the "TIA"), and complies as to form with the TIA
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and the rules and regulations of the Securities and Exchange Commission
(the "Commission") thereunder.
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(m) The representations and warranties made by the Bank in the
Transfer and Servicing Agreement, the PSA, the Trust Agreement and the
Administration Agreement or made in any Officer's Certificate of the Bank
delivered pursuant to any Transaction Document to which it is a party will
be true and correct at the time made and on and as of the Closing Date as
if set forth herein, except that to the extent that any such representation
or warranty expressly relates to an earlier date, such representation or
warranty is true and correct at and as of such earlier date.
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(n) The Receivables had an aggregate outstanding balance determined as
of January 1, 2001 in the amount set forth in the Prospectus.
(o) The Bank agrees it has not granted, assigned, pledged or
transferred and shall not grant, assign, pledge or transfer to any Person a
security interest in, or any other right, title or interest in, the
Receivables or the Collateral Certificate, except as provided in the PSA
and the Transfer and Servicing Agreement and agrees to take all actions
required by the PSA or the Transfer and Servicing Agreement in order to
maintain the security interests in the Receivables and the Collateral
Certificate granted pursuant to the PSA and the Transfer and Servicing
Agreement.
(p) A registration statement on Form S-3 (Nos. 333-48860 and 333-
48860-01), including a form of prospectus and such amendments thereto as
may have been filed prior to the date hereof, relating to the Class A Notes
and the Class B Notes and the offering thereof in accordance with Rule 415
under the Securities Act of 1933, as amended (the "Act"), has been filed
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with, and has been declared effective by, the Commission. If any post-
effective amendment to such registration statement has been filed with the
Commission prior to the execution and delivery of this Agreement, the most
recent such amendment has been declared effective by the Commission. For
purposes of this Agreement, "Effective Time" means the date and time as of
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which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission, and
"Effective Date" means the date of the Effective Time. Such registration
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statement, as amended at the Effective Time, is hereinafter referred to as
the "Registration Statement." The Bank proposes to file with the Commission
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pursuant to Rule 424(b) ("Rule 424(b)") under the Act a supplement (the
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"Prospectus Supplement") to the prospectus included in the Registration
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Statement (such prospectus, in the form it appears in the Registration
Statement or in the form most recently revised and filed with the
Commission pursuant to Rule 424(b), is hereinafter referred to as the "Base
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Prospectus") relating to the Class A Notes and the Class B Notes and the
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method of distribution thereof. The Base Prospectus and the Prospectus
Supplement, together with any amendment thereof or supplement thereto, are
hereinafter referred to as the "Prospectus".
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(q) On the Effective Date, the Registration Statement conformed in all
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder (the "Rules and Regulations") and the TIA and the
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rules and regulations thereunder and did not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and on
the date of this Agreement, the Registration Statement and the Prospectus
conform, and at the time of filing of the Prospectus pursuant to Rule
424(b) the Registration Statement and the Prospectus will conform, in all
respects with the requirements of the Act and the Rules and Regulations and
the TIA and the rules and regulations thereunder and neither of such
documents includes, or will include, any untrue statement of a material
fact or omits, or will
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omit, to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, except that the foregoing
does not apply to statements in or omissions from either of such documents
based upon written information furnished to the Bank by the Underwriters
specifically for use therein. Each of the Bank and Spiegel hereby
acknowledges that (i) the only information provided by the Class A
Underwriters for inclusion in the Registration Statement and the Prospectus
is set forth on the cover page of the Prospectus Supplement in the table
under the heading "Class A Notes" and on the line across from "Price to
public," in the table listing the Class A Underwriters and the Principal
Amount of Class A Notes under the heading "Underwriting" in the Prospectus
Supplement, in the table following the third paragraph under the heading
"Underwriting" in the Prospectus Supplement in the column labeled "Class A
Notes", and in the first sentence of the penultimate paragraph under the
heading "Underwriting" in the Prospectus Supplement (the "Class A
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Underwriters' Information"), and (ii) the only information provided by the
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Class B Underwriters for inclusion in the Registration Statement and the
Prospectus is set forth on the cover page of the Prospectus Supplement in
the table under the heading "Class B Notes" and on the line across from
"Price to public," in the table listing the Class B Underwriters and the
Principal Amount of Class B Notes and under the heading "Underwriting" in
the Prospectus Supplement, in the table following the third paragraph under
the heading "Underwriting" in the Prospectus Supplement in the column
labeled "Class B Notes", and in the first sentence of the penultimate
paragraph under the heading "Underwriting" in the Prospectus Supplement
(the "Class B Underwriters' Information").
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(r) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise set forth
therein, there has not been any material adverse change, or any development
involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Bank that would have a material adverse effect on the Bank or the Issuer.
3. Purchase, Sale, Payment and Delivery of the Class A Notes and Class B
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Notes.
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(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
the Bank agrees to sell to the Class A Underwriters, and the Class A
Underwriters agree to purchase from the Bank, at a purchase price of 99.7%
of the principal amount thereof, $462,000,000 aggregate principal amount of
the Class A Notes, each Class A Underwriter to purchase the amounts shown
on Schedule A hereto.
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(b) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
the Bank agrees to sell to the Class B Underwriters, and the Class B
Underwriters agree to purchase from the Bank, at a purchase price of
99.575% of the principal amount thereof, $63,000,000 aggregate principal
amount of the Class B Notes, each Class B Underwriter to purchase the
amounts shown on Schedule A hereto.
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(c) The Bank will cause the Issuer to deliver the Class A Notes and
the Class B Notes to the Underwriters against payment of the purchase price
in immediately available funds, drawn to the order of the Bank, at the
office of Xxxxx, Xxxxx & Xxxxx, in Chicago, Illinois at 10:00 a.m., Chicago
time, on March 6, 2001, or at such other time not later than seven full
business days thereafter as the Representative and the Bank determine, such
time being herein referred to as the "Closing Date." Each of the Class A
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Notes and the Class B Notes so to be delivered shall be represented by one
or more definitive notes registered in the name of Cede & Co., as nominee
for The Depository Trust Company. The Class A Notes and the Class B Notes
will be available for inspection by the Underwriters at the office at which
the Notes are to be delivered no later than five hours before the close of
business in Chicago on the business day prior to the Closing Date.
4. Offering by Underwriters. It is understood that after the Effective
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Date, the Underwriters propose to offer the Class A Notes and the Class B Notes
for sale to the public (which may include selected dealers) as set forth in the
Prospectus.
5. Certain Agreements of the Bank. The Bank agrees with the Underwriters
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that:
(a) Immediately following the execution of this Agreement, the Bank
will prepare a Prospectus Supplement setting forth the amount of Class A
Notes and Class B Notes covered thereby and the terms thereof not otherwise
specified in the Base Prospectus, the price at which such Class A Notes and
Class B Notes are to be purchased by the Class A Underwriters and Class B
Underwriters, respectively, the initial public offering price, the selling
concessions and allowances, and such other information as the Bank deems
appropriate. The Bank will transmit the Prospectus, including such
Prospectus Supplement, to the Commission pursuant to Rule 424(b) by a means
reasonably calculated to result in filing with the Commission pursuant to
Rule 424(b). The Bank will not file any amendment of the Registration
Statement with respect to the Class A Notes or Class B Notes or supplement
to the Prospectus unless a copy has been furnished to the Representative
for its review a reasonable time prior to the proposed filing thereof or to
which the Representative shall reasonably object in writing. The Bank will
advise the Representative promptly of (i) the effectiveness of any
amendment or supplementation of the Registration Statement or Prospectus,
(ii) any request by the Commission for any amendment or supplementation of
the Registration Statement or the Prospectus or for any additional
information, (iii) the receipt by the Bank of any notification with respect
to the suspension of qualification of the Class A Notes or Class B Notes
for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purposes and (iv) the institution by the Commission of
any stop order proceeding in respect of the Registration Statement, and
will use its best efforts to prevent the issuance of any such stop order
and to obtain as soon as possible its lifting, if issued.
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(b) If at any time when a prospectus relating to the Class A Notes and
Class B Notes is required to be delivered under the Act, any event occurs
as a result of which the Prospectus, as then amended or supplemented, would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Bank promptly will prepare and file with the Commission an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither the Underwriters' consent to,
nor the Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(c) As soon as practicable, the Bank will cause the Issuer to make
generally available to the Class A Noteholders and Class B Noteholders an
earnings statement or statements of the Issuer covering a period of at
least 12 months beginning after the Effective Date which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 of the Commission
promulgated thereunder.
(d) The Bank will furnish to the Representative copies of the
Registration Statement (one of which will be signed and will include all
exhibits), the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as the
Representative reasonably requests.
(e) The Bank will endeavor to qualify the Class A Notes and Class B
Notes for sale under the securities or Blue Sky laws of such jurisdictions
as the Representative shall reasonably request and the determination of the
eligibility for investment of the Class A Notes and Class B Notes under the
laws of such jurisdictions as the Representative may designate and will
continue such qualifications in effect so long as required for the
distribution of the Class A Notes and Class B Notes; provided, however,
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that the Bank shall not be obligated to qualify to do business in any
jurisdiction where such qualification would subject the Bank to general or
unlimited service of process in any jurisdiction where it is not now so
subject.
(f) So long as any Class A Note or Class B Note is outstanding, the
Bank will furnish, or cause the Servicer to furnish, to the Representative
copies of each certificate and the annual statements of compliance
delivered to the Owner Trustee, the Indenture Trustee and each Rating
Agency pursuant to Section 3.5 of the Transfer and Servicing Agreement and
independent certified public accountant's servicing reports furnished to
the Indenture Trustee, the Servicer and the Rating Agencies pursuant to
Sections 3.6(a) and (b) of the Transfer and Servicing Agreement, by first
class mail as soon as practicable after such certificates, statements and
reports are furnished to the Owner Trustee, the Indenture Trustee or the
Rating Agencies, as the case may be.
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(g) So long as any Class A Note or Class B Note is outstanding, the
Bank will furnish, or cause the Servicer to furnish, to the Representative,
by first-class mail as soon as practicable (i) all documents concerning the
Class A Notes and Class B Notes distributed by the Bank or the Servicer to
the Owner Trustee, the Indenture Trustee or the Noteholders, or filed with
the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (ii) any order of the Commission under the Act or the
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Exchange Act applicable to the Issuer or to the Bank, or pursuant to a "no-
action" letter obtained from the staff of the Commission by the Bank and
affecting the Issuer or the Bank and (iii) from time to time, such other
information concerning the Issuer as the Representative may reasonably
request.
(h) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated for any reason, the Bank will
pay all expenses incident to the performance of its obligations under this
Agreement and will reimburse the Underwriters for any reasonable expenses
(including reasonable fees and disbursements of counsel to the
Underwriters) incurred by them in connection with the transactions
contemplated by this Agreement, including without limitation, all
reasonable costs and expenses (i) incident to the preparation, issuance,
execution, authentication and delivery of the Class A Notes and Class B
Notes, (ii) incident to the preparation, printing (including word
processing and duplication costs) and delivery of the Prospectus and
Preliminary Prospectus (including in each case all exhibits, amendments,
attachments and supplements thereto), (iii) in connection with the printing
(including word processing and duplication costs) and delivery of this
Agreement and the other Transaction Documents and the furnishing to the
Underwriters of copies of the Prospectus as herein provided, (iv) in
connection with the structuring and marketing of the Class A Notes and
Class B Notes, (v) incident to the qualification of the Class A Notes and
Class B Notes for sale and determination of the eligibility of the Class A
Notes and Class B Notes for investment under the laws of such jurisdictions
as the Representative designates, (vi) for any fees charged by investment
rating agencies for the rating of the Class A Notes and Class B Notes and
(vii) for any filing fee of the National Association of Securities Dealers,
Inc. relating to the Class A Notes and Class B Notes.
(i) To the extent, if any, that any of the ratings provided with
respect to the Class A Notes or Class B Notes by any Rating Agency are
conditional upon the furnishing of documents or the taking of any other
actions by the Bank, the Bank shall furnish such documents and take any
such other actions as are reasonably necessary to satisfy such condition.
6. Conditions of the Obligations of the Underwriters. The obligation of
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the Class A Underwriters and Class B Underwriters to purchase and pay for the
Class A Notes and Class B Notes, respectively, will be subject to the accuracy
of the representations and warranties by Spiegel and the Bank herein, to the
accuracy of the statements of officers of Spiegel and the Bank made
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pursuant to the provisions hereof, to the performance by Spiegel and the Bank of
their respective obligations hereunder and to the following additional
conditions precedent:
(a) On or prior to the date of this Agreement, the Representative
shall have received a letter, dated the date of this Agreement, of KPMG,
confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder,
substantially in the form heretofore agreed to and otherwise in form and in
substance satisfactory to the Representative and its counsel.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement; and, prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Bank or the Representative, shall be contemplated by the
Commission.
(c) Subsequent to the execution and delivery of this Agreement none of
the following shall have occurred: (i) any change, or any development
involving a prospective change, in or affecting particularly the business
or properties of Spiegel or the Bank which, in the judgment of the
Underwriters, make it impractical or inadvisable to proceed with the public
offering or delivery of the Class A Notes and Class B Notes on the terms
and in the manner contemplated in the Prospectus, (ii) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market shall have been suspended or
minimum prices shall have been established on either of such exchanges or
such market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction; (iii) a banking
moratorium shall have been declared by Federal or state authorities; (iv)
the United States shall have become engaged in hostilities, there shall
have been an escalation of hostilities involving the United States or there
shall have been a declaration of a national emergency or war by the United
States; (v) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets of the United States
shall be such) as to make it, in the judgment of the Underwriters,
impractical or inadvisable to proceed with the public offering or delivery
of the Class A Notes and Class B Notes on the terms and in the manner
contemplated in the Prospectus or (vi) any material adverse change in the
financial markets for asset-backed securities in the United States if, in
the judgment of the Underwriters, the effect of which is to make it
impractical or inadvisable to proceed with the public offering or delivery
of the Class A Notes and Class B Notes on the terms and in the manner
contemplated in the Prospectus.
(d) The Representative shall have received an opinion, dated the
Closing Date, of Xxxxx, Xxxxx and Xxxxx, special counsel for Spiegel and
the Bank, satisfactory in form and substance to the Representative and its
counsel to the effect that:
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(i) Spiegel is a corporation in good standing, duly organized
and validly existing under the laws of the State of Delaware; the Bank is a
national banking association in good standing, duly organized and validly
existing under the laws of the United States of America; and each of
Spiegel and the Bank (each collectively referred to in this subsection (d)
as a "Spiegel Entity") is authorized by its certificate of incorporation or
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articles of association, as the case may be, to transact the business in
which it is engaged and the Bank is not required to qualify or register as
a foreign corporation, in any state in order to conduct its business as
presently conducted, except where the failure to so qualify or register
would not have a material adverse effect upon the Noteholders;
(ii) Each Spiegel Entity has full corporate power and authority
to enter into and perform its obligations under each Transaction Document
and this Agreement to which it is a party;
(iii) The Bank has the corporate power and authority and legal
right to acquire, own, transfer and service the Receivables;
(iv) Each of the Transaction Documents and this Agreement has
been duly authorized, executed and delivered by each Spiegel Entity that is
a party thereto;
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for (a) the execution and delivery
by any Spiegel Entity of any Transaction Document or this Agreement to
which such Spiegel Entity is a party or the performance by such Spiegel
Entity of its obligations thereunder, or (b) the issuance and sale of the
Notes;
(vi) Neither the execution and delivery of the Transaction
Documents and this Agreement by any Spiegel Entity that is party thereto
nor the performance by such Spiegel Entity of the transactions therein
contemplated nor the fulfillment of the terms thereof does or will result
in any violation of any statute or regulation or any order or decree of any
court or governmental authority binding upon such Spiegel Entity or its
property, or conflict with, or result in a breach or violation of any term
or provision, or result in a default under any of the terms and provisions,
of such Spiegel Entity's certificate of incorporation or articles of
association, as the case may be, or by-laws or any material indenture, loan
agreement or other material agreement known to such counsel to which such
Spiegel Entity is a party or by which such Spiegel Entity is bound;
(vii) There is no legal or governmental proceeding pending to
which any Spiegel Entity is a party or to which any Spiegel Entity is
subject which, individually or in the aggregate (a) would have a material
adverse effect on the ability of such Spiegel Entity to perform its
obligations under the Transaction Documents or this
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Agreement, (b) assert the invalidity of any Transaction Document, this
Agreement, the Seller Interest or the Collateral Certificate, (c) seek to
prevent the issuance, sale or delivery of the Notes or any of the
transactions contemplated by the Transaction Documents or this Agreement or
(d) seek to adversely affect the federal income tax consequences of the
Notes; and
(viii) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or threatened under the Act.
(ix) Each of the Transaction Documents to which the Bank is a
party constitutes the legal, valid and binding agreement of the Bank under
the laws of Illinois, enforceable against each such Person in accordance
with its terms, subject to (w) limitations imposed by bankruptcy,
insolvency, reorganization, liquidation, arrangement, fraudulent
conveyance, moratorium, receivership, conservatorship, readjustment of
debts, creditors' rights or other laws relating to or affecting the rights
of creditors generally or the rights of creditors of national banking
associations; (x) rights to indemnification and contribution which may be
limited by applicable law and equitable principles or otherwise
unenforceable as against public policy; (y) the unenforceability under
certain circumstances of provisions imposing penalties, forfeiture, late
payment charges, or an increase in interest rate upon delinquency in
payment or the occurrence of any event of default; and (z) general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, and the possible
unavailability of specific performance or injunctive relief, regardless of
whether such enforceability is considered in a proceeding in equity or at
law.
(x) This Agreement constitutes the legal, valid and binding
obligation of Spiegel and the Bank under the laws of the State of Illinois,
enforceable against Spiegel and the Bank in accordance with its terms,
subject to (w) limitations imposed by bankruptcy, insolvency,
reorganization, liquidation, arrangement, fraudulent conveyance,
moratorium, receivership, conservatorship, readjustment of debts,
creditors' rights or other laws relating to or affecting the rights of
creditors generally or the rights of creditors of national banking
associations; (x) rights to indemnification and contribution which may be
limited by applicable law and equitable principles or otherwise
unenforceable as against public policy; (y) the unenforceability under
certain circumstances of provisions imposing penalties, forfeiture, late
payment charges, or an increase in interest rate upon delinquency in
payment or the occurrence of any event of default; and (z) general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, and the possible
unavailability of specific performance or
-12-
injunctive relief, regardless of whether such enforceability is considered
in a proceeding in equity or at law.
(xi) When the Class A Notes and Class B Notes have been duly
executed and delivered by the Issuer, authenticated by the Indenture
Trustee in accordance with the terms of the Indenture and delivered to and
paid for by the Underwriters in accordance with this Agreement, they will
be validly issued and outstanding, will constitute legal, valid and binding
obligations of the Issuer, enforceable against the Issuer in accordance
with their terms and will be entitled to the benefits of the Indenture,
subject to (w) limitations imposed by bankruptcy, insolvency,
reorganization, liquidation, arrangement, fraudulent conveyance,
moratorium, receivership, conservatorship, readjustment of debts,
creditors' rights or other laws relating to or affecting the rights of
creditors generally or the rights of creditors of national banking
associations; (x) rights to indemnification and contribution which may be
limited by applicable law and equitable principles or otherwise
unenforceable as against public policy; (y) the unenforceability under
certain circumstances of provisions imposing penalties, forfeiture, late
payment charges, or an increase in interest rate upon delinquency in
payment or the occurrence of any event of default; and (z) general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, and the possible
unavailability of specific performance or injunctive relief, regardless of
whether such enforceability is considered in a proceeding in equity or at
law.
(xii) The statements in the Base Prospectus under the headings
"Risk Factors--If a conservator or receiver were appointed for us, delays
or reductions in payment of your notes could occur," "Material Legal
Aspects of the Receivables," "ERISA Considerations" and "Federal Income Tax
Consequences" and the statements in the Prospectus Supplement under the
headings "Structural Summary--Tax Status" and "--ERISA Considerations" to
the extent that they constitute matters of law or legal conclusions with
respect thereto, have been reviewed by us and are correct in all material
respects.
(xiii) This Agreement, the Transaction Documents and the Notes
conform in all material respects to the descriptions thereof contained in
the Prospectus.
(xiv) The Indenture has been duly qualified under the TIA and
complies as to form with the TIA and the rules and regulations of the
Commission thereunder. The Issuer is not now, and immediately following the
issuance of the Notes pursuant to the Indenture will not be, required to be
registered under the Investment Company Act of 1940, as amended.
(xv) Subject to the discussion in the Base Prospectus under the
heading "Federal Income Tax Consequences", the Class A Notes and Class B
Notes will
-13-
properly be characterized as indebtedness and the issuance of the Notes
will not cause the Issuer to be deemed an association (or publicly traded
partnership) taxable as a corporation, for U.S. federal income tax
purposes.
(xvi) The Indenture constitutes the legal, valid and binding
obligation of the Issuer under the laws of the State of Illinois, subject
to (w) limitations imposed by bankruptcy, insolvency, reorganization,
liquidation, arrangement, fraudulent conveyance, moratorium, receivership,
conservatorship, readjustment of debts, creditors' rights or other laws
relating to or affecting the rights of creditors generally or the rights of
creditors of national banking associations; (x) rights to indemnification
and contribution which may be limited by applicable law and equitable
principles or otherwise unenforceable as against public policy; (y) the
unenforceability under certain circumstances of provisions imposing
penalties, forfeiture, late payment charges, or an increase in interest
rate upon delinquency in payment or the occurrence of any event of default;
and (z) general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing, and
the possible unavailability of specific performance or injunctive relief,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
(xvii) Each of the Registration Statement, as of its effective
date, and the Prospectus, as of its date, complied as to form in all
material respects with the requirements of the Act and the Rules and
Regulations under the Act, except that in each case such counsel need not
express any opinion as to the financial and statistical data included
therein or excluded therefrom or the exhibits to the Registration Statement
and, except as and, to the extent set forth in paragraphs (xii) and (xiii),
such counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus.
(xviii) If the FDIC is appointed as conservator or receiver for the
Bank and if a court were to determine that the Indenture Trustee has a
security interest in the Receivables and the proceeds thereof, the court
would hold that the security interest of the Indenture Trustee would be
enforceable against the Bank with respect to the Receivables and such
proceeds.
(xix) When the Indenture Trustee has taken possession of the
Collateral Certificate issued by FCMT, the Transaction Documents have been
executed and delivered and FCMT has received payment for the Collateral
Certificate, the Indenture Trustee will become the registered holder of the
Collateral Certificate, subject to no Liens of record.
Such counsel also shall state that they have participated in conferences
with representatives of Spiegel and the Bank and their accountants, the
Underwriters and counsel
-14-
to the Underwriters concerning the Registration Statement and the
Prospectus and have considered the matters to be stated therein and the
matters stated therein, although they are not independently verifying the
accuracy, completeness or fairness of such statements (except as stated in
paragraph (xii) above) and based upon and subject to the foregoing, nothing
has come to such counsel's attention to cause such counsel to believe that
the Registration Statement (excluding any exhibits filed therewith), at the
time it became effective, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus, as of the date hereof, contains any untrue statement of a
material fact or omits to state any 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 (it being
understood that such counsel has not been requested to, and does not, make
any comment in such opinion with respect to the financial statements,
supporting schedules and other financial or statistical information
contained in the Registration Statement or the Prospectus).
(e) The Representative shall have received from Xxxxx, Xxxxx & Xxxxx,
special counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to such matters relating to this transaction as
the Representative may require, and the Bank shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(f) The Representative shall have received an opinion, dated the
Closing Date, satisfactory in form and substance to the Representative and
its counsel of (i) Ball Xxxxx LLP, special Oregon counsel for the Bank,
with respect to certain matters relating to the transfer of the Receivables
from the Bank to FCMT under the PSA and (ii) Farleigh, Wada & Xxxx, special
Oregon counsel for the Bank, with respect to the perfection of the security
interest in favor of FCMT in the Receivables and the proceeds thereof.
(g) The Representative shall have received a certificate from the
Bank, dated the Closing Date, of a Treasurer, Vice President or more senior
officer of the Bank in which such officer, to the best of his/her knowledge
after reasonable investigation, shall state that (u) the representations
and warranties of the Bank in this Agreement are true and correct on and as
of the Closing Date, (v) the Bank has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, (w) the representations and warranties of
the Bank contained in this Agreement and the Transaction Documents to which
it is a party are true and correct as of the dates specified herein and
therein, (x) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are threatened by the Commission, (y) nothing has come to
such officers' attention that would lead such officers to believe that the
Registration Statement or the Prospectus, and any amendment or supplement
thereto, as of its date and as of the Closing Date, contained an untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made,
-15-
not misleading, and (z) subsequent to the date of the Prospectus, there has
been no material adverse change in the financial position or results of
operation of the Bank's credit card business except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(h) The Representative shall have received an opinion of Winston &
Xxxxxx, counsel to the Owner Trustee, dated the Closing Date, satisfactory
in form and substance to the Representative and its counsel, to the effect
that:
(i) The Owner Trustee is duly incorporated and validly
existing as a banking corporation in good standing under the laws of
the State of New York;
(ii) The Owner Trustee has the power and authority to execute,
deliver and perform the Trust Agreement and to consummate the
transactions contemplated thereby;
(iii) The Trust Agreement has been duly authorized, executed and
delivered by the Owner Trustee and constitutes a legal, valid and
binding obligation of the Owner Trustee, enforceable against the Owner
Trustee in accordance with its terms;
(iv) Each of the Indenture, the Trust Agreement and the
Transfer and Servicing Agreement (collectively referred to in this
subsection (i) as the "Trust Documents") has been duly executed and
---------------
delivered by the Owner Trustee, as Owner Trustee on behalf of the
Issuer;
(v) Neither the execution, delivery or performance by the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, of the Trust Documents, nor the consummation of the
transactions by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, contemplated thereby, requires the
consent or approval of, the withholding of objection on the part of,
the giving of notice to, the filing, registration or qualification
with, or the taking of any other action in respect of, any
governmental authority or agency of the States of New York and
Illinois or the United States of America governing the banking or
trust powers of the Owner Trustee;
(vi) Neither the execution, delivery and performance by the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, of the Trust Documents, nor the consummation of the
transactions by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, contemplated thereby, is in
violation of the charter or bylaws of the Owner Trustee or of any law,
governmental rule or regulation of the State of Illinois, the State of
New York or of the United States of America governing the banking or
trust powers of the Owner
-16-
Trustee or, to such counsel's knowledge, without independent
investigation, any indenture, mortgage, bank credit agreement, note or
bond purchase agreement, long-term lease, license or other agreement
or instrument to which it is a party or by which it is bound or, to
such counsel's knowledge, without independent investigation, of any
judgment or order applicable to the Owner Trustee;
(vii) No consent, approval or other authorization of, or
registration, declaration or filing with, any court or governmental
agency or commission of the State of Illinois or the State of New York
is required by or with respect to the Owner Trustee, in its individual
capacity or as Owner Trustee, as the case may be, for the valid
execution and delivery of the Trust Documents, or for the validity or
enforceability thereof; and
(viii) To such counsel's knowledge, without independent
investigation, there are no pending or threatened actions, suits or
proceedings affecting the Owner Trustee before any court or other
governmental authority which, if adversely determined, would
materially and adversely affect the ability of the Owner Trustee to
carry out the transactions contemplated by the Trust Agreement.
(ix) The Representative shall have received an opinion of Xxxxx, Xxxxx
and Xxxxx, special Illinois counsel to the Issuer, dated the Closing Date,
satisfactory in form and substance to the Representative and its counsel,
to the effect that:
(i) The Issuer is validly existing as a common law trust under
the laws of the State of Illinois;
(ii) The Issuer, through the Owner Trustee, (A) has the trust
power and authority pursuant to the Trust Agreement to (x) execute,
deliver and perform its obligations under the Trust Agreement, the
Administration Agreement, the Indenture and the Transfer and Servicing
Agreement (collectively referred to in this subsection (j) as the
"Trust Documents"), (y) to execute, deliver and issue the Notes, and
----------------
(z) to issue the Seller Interest, and (B) has duly authorized,
executed and delivered the Trust Documents and the Notes;
(iii) Each of the Trust Documents to which the Issuer is a party
constitutes the legal, valid and binding agreement of the Issuer,
acting through the Owner Trustee, under the laws of Illinois,
enforceable against the Issuer, through the Owner Trustee, in
accordance with its terms, subject to (w) limitations imposed by
bankruptcy, insolvency, reorganization, liquidation, arrangement,
fraudulent conveyance, moratorium, receivership, conservatorship,
readjustment of debts, creditors' rights or other laws relating to or
affecting the rights of creditors generally or the rights of creditors
of national banking associations; (x) rights to indemnification and
contribution which may be limited by applicable law and
-17-
equitable principles or otherwise unenforceable as against public
policy; (y) the unenforceability under certain circumstances of
provisions imposing penalties, forfeiture, late payment charges, or an
increase in interest rate upon delinquency in payment or the
occurrence of any event of default; and (z) general principles of
equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, and the possible
unavailability of specific performance or injunctive relief,
regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(iv) When issued in accordance with the Trust Agreement, the
Seller Interest will be validly issued and entitled to the benefits of
the Trust Agreement;
(v) Neither the execution, delivery and performance by the
Issuer of the Trust Documents or the Notes, nor the consummation by
the Issuer of any of the transactions by the Issuer contemplated
thereby, requires the consent or approval of, the withholding of
objection on the part of, the giving of notice to, the filing,
registration or qualification with, or the taking of any other action
in respect of, any governmental authority or agency of the State of
Illinois other than the filing of any financing statements with the
Illinois Secretary of State in connection with the Indenture;
(vi) Neither the execution, delivery and performance by the
Issuer of the Trust Documents, nor the consummation by the Issuer of
the transactions contemplated thereby, is in violation of the Trust
Agreement or of any law, rule or regulation of the State of Illinois
applicable to the Issuer; and
(vii) With respect to the Issuer and the Collateral Certificate:
(a) there is no document, stamp, exercise or other similar tax imposed
by the State of Illinois upon the perfection of a security interest in
the Collateral Certificate, in the transfer of the Collateral
Certificate to the Issuer, or upon the issuance of the Notes; (b)
there is no personal property tax imposed by the State of Illinois
upon or measured by the corpus of the Issuer; and (c) the
characterization of the Issuer for federal income tax purposes will be
determinative of the characterization of the Issuer for Illinois
income tax purposes and assuming that the Issuer has only one owner,
the Issuer will not be subject to Illinois income tax or personal
property replacement tax and Noteholders who are not otherwise subject
to Illinois income tax will not be subject to tax by reason of their
ownership of the Notes and the receipt of income therefrom.
(j) The Representative shall have received an opinion of Xxxxxx &
Xxxxxx LLP, counsel to the Indenture Trustee dated the Closing Date,
satisfactory in form and substance to the Representative and its counsel,
to the effect that:
-18-
(i) The Indenture Trustee is a banking corporation organized
and validly existing and in good standing under the laws of the State
of New York and is authorized and qualified to accept the trusts
imposed by the Indenture and to act as Indenture Trustee under the
Indenture;
(ii) The acknowledgment by the Indenture Trustee of the
Transfer and Servicing Agreement has been duly authorized, executed
and delivered by the Indenture Trustee. The Indenture Trustee has duly
authorized, executed and delivered the Indenture. Assuming the due
authorization, execution and delivery thereof by the other parties
thereto, the Indenture is the legal, valid and binding obligation of
the Indenture Trustee, enforceable against the Indenture Trustee in
accordance with its terms, subject to bankruptcy and insolvency laws
and general principles of equity;
(iii) The Indenture Trustee has duly executed and authenticated
the Notes;
(iv) The Indenture Trustee is duly authorized and empowered to
exercise trust powers under applicable law;
(v) None of (x) the execution and authentication of the Notes,
(y) the acknowledgment of the Transfer and Servicing Agreement or (z)
the execution, delivery and performance of the Indenture by the
Indenture Trustee conflicts with or will result in a violation of (A)
any law or regulation of the United States of America or the States of
New York and Illinois governing the banking or trust powers of the
Indenture Trustee or (B) the Organization Certificate or Bylaws of the
Indenture Trustee.
(vi) No approval, authorization or other action by, or filing
with, any governmental authority of the United States of America or
the State of New York having jurisdiction over the banking or trust
powers of the Indenture Trustee is required in connection with the
execution and delivery by the Indenture Trustee of the Indenture or
the performance by the Indenture Trustee of the terms of the Indenture
or the acknowledgment of the Transfer and Servicing Agreement.
(k) The Representative shall have received reliance letters addressed
to the Representative, dated as of the Closing Date, allowing the
Representative to rely on each opinion of counsel delivered to a Rating
Agency, the Indenture Trustee or the Bank in connection with the issuance
of the Notes.
(l) The Representative shall have received evidence satisfactory to
the Representative that the Class A Notes shall be rated Aaa by Xxxxx'x
Investors Service, Inc., AAA by Standard & Poor's Ratings Services and AAA
by Fitch, Inc.; and that the Class B
-19-
Notes shall be rated no lower than A2 by Xxxxx'x Investors Service, Inc., A
by Standard & Poor's Ratings Services and A by Fitch, Inc.
The Bank will furnish the Representative with such conformed copies of such
opinions, certificates, letters and documents as the Representative reasonably
request.
7. Indemnification and Contribution. (a) Spiegel and the Bank, jointly
--------------------------------
and severally, will indemnify and hold harmless the Underwriters against any
losses, claims, damages or liabilities, joint or several, to which the
Underwriters may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Underwriters for any legal or other expenses reasonably incurred
by the Underwriters in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
---------
however, that Spiegel and the Bank will not be liable in any such case to the
-------
extent that any such loss, claim, damage 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
Class A Underwriters' Information or the Class B Underwriters' Information;
provided further, that Spiegel and the Bank will not be liable to any
Underwriter under the indemnity agreement in this subsection (a) with respect to
any preliminary prospectus to the extent that any loss, claim, damage or
liability of such Underwriter results from the fact that such Underwriter sold
Notes to a Person as to whom it is established that there was not sent or given,
at or prior to written confirmation of such sale, a copy of the Prospectus
(excluding documents incorporated by reference) or of the Prospectus as then
amended or supplemented (excluding documents incorporated by reference) in any
case where such delivery is required by the Act if Spiegel or the Bank notified
the Representative in writing in accordance with Section 5(a) hereof and
previously furnished copies of the Prospectus (excluding documents incorporated
by reference) in the quantity requested in accordance with Section 5(d) hereof
to such Underwriter and the loss, claim, damage or liability of such Underwriter
results from an untrue statement or omission of a material fact contained in the
preliminary prospectus and corrected in the Prospectus or the Prospectus as then
amended or supplemented.
(b) The Underwriters agree, severally and not jointly, to indemnify
and hold harmless Spiegel and the Bank against any losses, claims, damages
or liabilities to which Spiegel or the Bank may become subject, under the
Act or otherwise and will reimburse any legal or other expenses reasonably
incurred by Spiegel or the Bank in connection with investigating or
defending any such loss, claim, damage, liability or action as such
expenses are incurred, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment
or supplement thereto, or arise out of or are based upon the omission or
the alleged omission
-20-
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that, with respect to each of the Class A
Underwriters and the Class B Underwriters, such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon
and in conformity with the Class A Underwriters' Information or the Class B
Underwriters' Information, respectively, and will reimburse any legal or
other expenses reasonably incurred by Spiegel and the Bank in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under this section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; provided, however, that the failure to notify an
-------- -------
indemnifying party shall not relieve it from any liability which it may
have under this Section 7 except to the extent it has been materially
prejudiced by such failure; and provided further, however, that the failure
-------- ------- -------
to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this
Section 7. In case any such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding 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 claims that are the subject
matter of such proceeding 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.
(e) If the indemnification provided for in this section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a)
or (b) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above
(i) in such proportion as is appropriate to reflect the relative benefits
received by Spiegel and the Bank on the one hand and the Underwriters on
the other from the offering of the Notes, 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
-21-
referred to in clause (i) above but also the relative fault of Spiegel and
the Bank on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by Spiegel and the Bank on
the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) of the Class A Notes and Class B Notes received by the
Bank bear to the total underwriting discounts and commissions received by
the Underwriters with respect to the Class A Notes and Class B Notes. 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 Spiegel and the Bank or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission with respect to the
Notes. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any other 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 Underwriters
shall not be required to contribute any amount in excess of the amount by
which the total underwriting discount as set forth on the cover page of the
Prospectus Supplement exceeds the amount of damages which the Underwriters
have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission with respect to the Notes.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(f) The obligations of Spiegel and the Bank under this Section shall
be in addition to any liability which Spiegel or the Bank may otherwise
have and shall extend, upon the same terms and conditions, to each Person,
if any, who controls the Underwriters within the meaning of the Act; and
the obligations of the Underwriters under this section shall be in addition
to any liability which the Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of Spiegel or
the Bank, to each officer of the Bank who has signed the Registration
Statement and to each Person, if any, who controls Spiegel or the Bank
within the meaning of the Act.
8. Survival of Certain Representations and Obligations. The respective
---------------------------------------------------
indemnities, agreements, representations, warranties and other statements of
Spiegel and the Bank or their officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation, or statement as to the results thereof, made by or on
behalf of the Underwriters, Spiegel, the Bank or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Class A Notes and Class B Notes. If
this Agreement is terminated or if for any reason other than default by the
Underwriters the purchase of the Notes by the Underwriters is not consummated,
the Bank and Spiegel shall remain responsible for the expenses to be paid by
them pursuant to Section 5 and the respective
-22-
obligations of Spiegel, the Bank and the Underwriters pursuant to Section 7
shall remain in effect. If for any reason the purchase of the Class A Notes and
Class B Notes by the Class A Underwriters and the Class B Underwriters,
respectively, is not consummated other than solely because of the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 6(c), the Bank and
Spiegel will reimburse the Underwriters for all out-of-pocket expenses
reasonably incurred by them in connection with the offering of the Class A Notes
and Class B Notes.
9. Computational Materials and ABS Term Sheets. (a) Each Underwriter
-------------------------------------------
agrees to provide to the Bank, not less than two Business Days prior to the date
on which the Bank is required to file the Prospectus Supplement pursuant to Rule
424(b), any information used by it (in such written or electronic format as
required by the Bank) with respect to the offering of the Class A Notes and
Class B Notes that constitutes "Computational Materials," as defined in the
-----------------------
Commission's No-Action Letter, dated May 20, 1994, addressed to Xxxxxx, Xxxxxxx
Acceptance Corporation I, Xxxxxx, Peabody & Co. Incorporated and Xxxxxx
Structured Asset Corporation (as made generally applicable to registrants,
issuers and underwriters by the Commission's response to the request of the
Public Securities Association dated May 27, 1994 (the "Xxxxxx/PSA Letter")),
-----------------
that is not contained in the Prospectus (without taking into account information
incorporated therein by reference).
(b) Each Underwriter agrees to provide to the Bank, not less than two
Business Days prior to the date on which the Bank is required to file the
Prospectus Supplement pursuant to Rule 424(b), any information used by it
(in such written or electronic format as required by the Bank) with respect
to the offering of the Class A Notes and Class B Notes that constitutes
"ABS Term Sheets," as defined in the Commission's No-Action Letter, dated
----------------
February 17, 1995, addressed to the Public Securities Association, that is
not contained in the Prospectus (without taking into account information
incorporated therein by reference).
(c) Each Underwriter severally agrees, assuming all information
provided by the Bank is accurate and complete in all material respects, to
indemnify and hold harmless the Bank, each of the officers and directors of
the Bank and each Person who controls the Bank within the meaning of
Section 15 of the Act against any and all losses, claims, damages or
liabilities, joint or several, to which they may become subject under the
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement of a material fact contained in the Computational Materials or
ABS Term Sheets, if any, provided by such Underwriter, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
loss, claim, damage, liability or action as such expenses are incurred.
The obligations of each Underwriter under this Section 9(c) shall be in
addition to any liability that such Underwriter may otherwise have.
-23-
(3) The Bank shall file with the Commission any Computational
Materials or ABS Term Sheets, if any, provided by the Underwriters no later
than the date on which such Computational Materials or ABS Term Sheets are
required to be filed pursuant to the applicable No-Action Letters.
The procedures set forth in Sections 7(c) and 7(d) shall be equally
applicable to this Section 9(c). Notwithstanding anything in this Section 9,
each Underwriter represents and warrants that it has not used any Computational
Materials or ABS Term Sheets in connection with the offering of the Class A
Notes or Class B Notes.
10. Obligation of the Underwriters. Each Underwriter represents and
------------------------------
agrees that it has not and will not, directly or indirectly, offer, sell or
deliver any of the Class A Notes or Class B Notes or distribute the Prospectus
or any other offering materials relating to the Class A Notes or Class B Notes
in or from any jurisdiction except under circumstances that will, to the best of
its knowledge and belief, result in compliance with any applicable laws and
regulations thereof in effect on the date hereof and that, to the best of its
knowledge and belief, will not impose any material obligations under laws and
regulations of the subject jurisdictions that relate to the issuance of
securities, as in effect on the date of this Agreement, on the Bank, Spiegel or
the Issuer except as set forth herein.
11. Default by an Underwriter. If any one or more Class A Underwriters
-------------------------
shall fail to purchase and pay for any of the Class A Notes agreed to be
purchased by such Class A Underwriter or Class A Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Class A Underwriters shall
be obligated severally to take up and pay for (in the respective proportions
which the amount of Class A Notes set forth opposite their names in Schedule A
hereto bear to the aggregate amount of Class A Notes set forth opposite the
names of all the remaining Underwriters) the Class A Notes which the defaulting
Class A Underwriter or Class A Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of Class A Notes
-------- -------
which the defaulting Class A Underwriter or Class A Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Class A Notes set
forth in Schedule A hereto, the remaining Class A Underwriters shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Class A Notes, and if such nondefaulting Class A Underwriters do not
purchase all the Class A Notes, this Agreement will terminate without liability
to any nondefaulting Class A Underwriter, Spiegel or the Bank. In the event of
a default by any Class A Underwriter as set forth in this Section 11, the
Closing Date shall be postponed for such period, not exceeding seven days, as
the Representative shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Class A Underwriter for its liability, if any, to Spiegel and the
Bank and any nondefaulting Class A Underwriter for damages occasioned by its
default hereunder.
-24-
12. Notices. All communications hereunder will be in writing and, if sent
-------
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to:
Deutsche Banc Alex. Xxxxx Inc
00 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, XX 00000
Attn.: ABS Syndicate Desk, 3/rd/ Floor
13. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
--------------
ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
15. Financial Services Act. Each Underwriter represents and warrants to,
----------------------
and agrees with, Spiegel and the Bank that (w) it has complied and shall comply
with all applicable provisions of the Financial Services Xxx 0000 and the Public
Offers of Securities Regulations 1995 (the "Regulations") with respect to
-----------
anything done by it in relation to the Notes in, from or otherwise involving the
United Kingdom; (x) it has only issued or passed on and shall only issue or pass
on in the United Kingdom any document received by it in connection with the
issue of the Notes to a Person who is of a kind described in Article 11(3) of
the Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order
1996 or who is a Person to whom the document may otherwise lawfully be issued or
passed on; (y) it has not offered or sold and, during the period of six months
from the date hereof, will not offer or sell any Note to Persons in the United
Kingdom except to Persons whose ordinary activities involve them in acquiring,
holding, managing, or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Regulations.
-25-
If you are in agreement with the foregoing, please sign two counterparts
hereof and return one to the Bank whereupon this letter and your acceptance
shall become a binding agreement among Spiegel, the Bank and the Underwriters.
Very truly yours,
SPIEGEL, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Treasurer
FIRST CONSUMERS NATIONAL BANK
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Treasurer
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof
DEUTSCHE BANC ALEX. XXXXX INC
as Representative of the
Underwriters set forth herein
By: /s/ Xxxxxxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: Director
By: /s/ Xxxx Xxxxxxxx
-----------------
Name: Xxxx Xxxxxxxx
Title: Vice President
-26-
SCHEDULE A
Class A Notes
-------------
Underwriters Principal Amount of
------------ Class A Notes
-------------
Deutsche Banc Alex. Xxxxx Inc $115,500,000
------------
Banc of America Securities LLC $115,500,000
------------
Commerzbank Capital Markets Corp. $115,500,000
------------
Chase Securities Inc. $115,500,000
------------
Total $462,000,000
============
Class B Notes
-------------
Underwriters Principal Amount of
------------ Class B Notes
-------------
Deutsche Banc Alex. Xxxxx Inc $63,000,000
-----------
Total $63,000,000
===========
