XXXXXX XXXXXX CREDIT CARD MASTER TRUST
SERIES 1997-1
$400,000,000 6.25% Class A Asset Backed
Certificates, Series 1997-1
UNDERWRITING AGREEMENT
October 8, 1997
XXXXXXX XXXXXXXX INC
As Representative of the Several Underwriters
Seven World Trade Center
New York, NY 10048
Ladies and Gentlemen:
1. INTRODUCTORY. Retailers National Bank, a national banking
association ("RNB"), from time to time sells, transfers and conveys receivables
(the "Receivables") generated from time to time in a portfolio of consumer open
end credit card accounts and other rights to Xxxxxx Xxxxxx Capital Corporation,
a Minnesota corporation ("DHCC"). DHCC from time to time sells, transfers and
conveys the Receivables and other rights to Xxxxxx Xxxxxx Receivables
Corporation, a Minnesota corporation (the "Transferor"). The Transferor from
time to time transfers the Receivables to the Xxxxxx Xxxxxx Credit Card Master
Trust (the "Trust"), and the Transferor and Xxxxxx Xxxxxx Corporation, a
Minnesota corporation (the "Company"), propose to cause the Trust to issue to
the Transferor $400,000,000 principal amount of 6.25% Class A Asset Backed
Certificates, Series 1997-1 (the "Certificates"), which the Transferor proposes
to sell to the Underwriters pursuant to the terms hereof, and $122,875,817
principal amount of non interest bearing Class B Asset Backed Certificates,
Series 1997-1 (the "Class B Certificates"), which the Transferor intends to
retain. The Receivables are and will be (i) conveyed to DHCC by RNB pursuant to
the Bank Receivables Purchase Agreement, dated as of
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September 13, 1995, as amended (the "Bank Receivables Purchase Agreement")
between RNB and DHCC, (ii) conveyed to the Transferor by DHCC pursuant to the
Receivables Purchase Agreement, dated as of September 13, 1995, as amended (the
"Receivables Purchase Agreement") between DHCC and the Transferor and (iii)
transferred from the Transferor to the Trust pursuant to (a) a Pooling and
Servicing Agreement among the Transferor, RNB, as Servicer, and Norwest Bank
Minnesota, National Association, as Trustee, dated as of September 13, 1995, as
amended (the "Pooling and Servicing Agreement") and (b) the Series 1997-1
Supplement to the Pooling and Servicing Agreement, to be dated as of October 15,
1997 (the "Supplement"), among the Transferor, the Servicer and the Trustee.
Each Certificate represents a specified percentage undivided interest in the
Trust.
This Underwriting Agreement shall hereinafter be referred to as this
"Agreement." This Agreement, the Bank Receivables Purchase Agreement, the
Receivables Purchase Agreement, the Pooling and Servicing Agreement and the
Supplement shall collectively hereinafter be referred to as the "Basic
Documents." Capitalized terms used but not defined herein have the meanings
assigned thereto in the Pooling and Servicing Agreement and the Supplement. The
Transferor and the Company hereby agree with the several Underwriters named in
Schedule A hereto ("Underwriters") as follows:
2. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR AND THE COMPANY.
The Transferor and the Company hereby jointly and severally represent and
warrant to, and agree with, the several Underwriters that:
(a) A registration statement on Form S-3 (No. 33-92956) relating
to the Certificates, including a form of prospectus, has been filed with
the Securities and Exchange Commission ("Commission") and either (i) has
been declared effective under the Securities Act of 1933 ("Act") and is not
proposed to be amended or (ii) is proposed to be amended by amendment or
post-effective amendment. If such registration statement (the "initial
registration statement") has been declared effective, either (i) an
additional registration statement (the "additional registration statement")
relating to the Certificates may have been filed with the Commission
pursuant to Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has
become effective upon filing pursuant to such Rule and the Certificates all
have been duly registered under the Act pursuant to the
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initial registration statement and, if applicable, the additional
registration statement or (ii) such an additional registration statement is
proposed to be filed with the Commission pursuant to Rule 462(b) and will
become effective upon filing pursuant to such Rule and upon such filing the
Certificates will all have been duly registered under the Act pursuant to
the initial registration statement and such additional registration
statement. If the Transferor does not propose to amend the initial
registration statement or, if an additional registration statement has been
filed and the Transferor does not propose to amend it and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act
or, in the case of the additional registration statement, Rule 462(b). For
purposes of this Agreement, "Effective Time" with respect to the initial
registration statement or, if filed prior to the execution and delivery of
this Agreement, the additional registration statement means (i) if the
Transferor has advised Salomon Brothers Inc ("Salomon Brothers") as
representative of the Underwriters (the "Representative"), that it does not
propose to amend such registration statement, the date and time as of which
such registration statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of this
Agreement, was declared effective by the Commission or has become effective
upon filing pursuant to Rule 462(c), or (ii) if the Transferor has advised
the Representative that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as of which
such registration statement, as amended by such amendment or post-effective
amendment, as the case may be, is declared effective by the Commission. If
an additional registration statement has not been filed prior to the
execution and delivery of this Agreement but the Transferor has advised the
Representative that it proposes to file one, "Effective Time" with respect
to such additional registration statement means the date and
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time as of which such registration statement is filed and becomes effective
pursuant to Rule 462(b). "Effective Date" with respect to the initial
registration statement or the additional registration statement (if any)
means the date of the Effective Time thereof. The initial registration
statement, as amended at its Effective Time, including all material
incorporated by reference therein, including all information contained in
the additional registration statement (if any) and deemed to be a part of
the initial registration statement as of the Effective Time of the
additional registration statement pursuant to the General Instructions of
the Form on which it is filed and including all information (if any) deemed
to be a part of the initial registration statement as of its Effective Time
pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter
referred to as the "Initial Registration Statement." The additional
registration statement, as amended at its Effective Time, including the
contents of the initial registration statement incorporated by reference
therein and including all information (if any) deemed to be a part of the
additional registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement." The Initial Registration Statement and the Additional
Registration Statement are hereinafter referred to collectively as the
"Registration Statements" and individually as a "Registration Statement."
The form of prospectus relating to the Certificates, as first filed with
the Commission pursuant to and in accordance with Rule 424(b) ("Rule
424(b)") under the Act or (if no such filing is required) as included in a
Registration Statement, including all material incorporated by reference in
such prospectus, is hereinafter referred to as the "Prospectus." No
document has been or will be prepared or distributed in reliance on Rule
434 under the Act.
(b) If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement: (i) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act and
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the rules and regulations of the Commission (the "Rules and Regulations")
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, (ii) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed, or will conform, in all respects to the requirements of the Act
and the Rules and Regulations and did not include, or will not include, any
untrue statement of a material fact and did not omit, or will not omit, to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and (iii) on the date of this
Agreement, the Initial Registration Statement and, if the Effective Time of
the Additional Registration Statement is prior to the execution and
delivery of this Agreement, the Additional Registration Statement each
conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective Date of the
Additional Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus conforms or will conform, in all
material respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, or will include, any
untrue statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement: on the Effective Date of the Initial Registration Statement,
the Initial Registration Statement and the Prospectus will conform in all
material respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and no Additional Registration Statement has been or will
be filed. The preceding two sentences do not apply to statements in or
omissions from a Registration Statement or the Prospectus based upon
written information furnished to
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the Transferor or the Company by any Underwriter through the Representative
specifically for use therein, it being understood and agreed that the only
such information is that described as such in Section 7(b).
(c) Each of the Transferor and the Company has been duly
incorporated and is an existing corporation in good standing under the laws
of the State of Minnesota, with power and authority (corporate and other)
to own its properties and conduct its business as described in the
Prospectus; and each of the Transferor and the Company is duly qualified to
do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of
its business requires such qualification and where the failure to so
qualify might permanently impair title to property material to its
operation or its right to enforce a material contract against others or
expose it to substantial liability in such jurisdiction.
(d) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation by the Transferor or the Company of the transactions
contemplated by this Agreement in connection with the issuance and sale of
the Certificates, except such as have been obtained and made under the Act,
such as may be required under state securities laws.
(e) Neither the Transferor nor the Company is in violation of its
Articles of Incorporation or Bylaws 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 are bound which would have a material adverse effect on the
transactions contemplated in the Basic Documents. The execution, delivery
and performance of the Basic Documents and the issuance and sale of the
Certificates and compliance with the terms and provisions thereof will not
result in a material breach or violation of any of the terms and provisions
of, or constitute a default under, any stat-
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ute, any rule, regulation or order of any governmental agency or body or
any court, domestic or foreign, having jurisdiction over the Transferor or
the Company or any subsidiary of either of them or any of their properties,
or any material agreement or instrument to which the Transferor or the
Company or any such subsidiary is a party or by which the Transferor or the
Company or any such subsidiary is bound or to which any of the properties
of the Transferor or the Company or any such subsidiary is subject, or the
Articles of Incorporation or Bylaws of the Transferor or the Company or any
such subsidiary, and the Transferor has full power and authority to
authorize, issue and sell the Certificates as contemplated by this
Agreement and each of the Transferor and the Company has full power and
authority to enter into the Basic Documents to which it is a party.
(f) As of the Closing Date, the representations and warranties of
the Transferor in the Basic Documents to which it is a party will be true
and correct.
(g) This Agreement has been duly authorized, executed and
delivered by the Transferor and the Company.
(h) The Transferor has authorized the conveyance of the
Receivables to the Trust, and the Transferor has authorized the Trust to
issue and sell the Certificates.
(i) The Company has delivered to you complete and correct copies
of its Form 10-Q for the first two quarters of 1997 and its Form 10-K for
1996. Except as set forth in or contemplated in the Registration Statement
and the Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in
the condition (financial or other) of either the Transferor or the Company
or the credit card business of the Company or its Affiliates since the date
of the information provided pursuant to the preceding sentence.
(j) Any taxes, fees and other governmen-
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tal charges due and payable from or by the Transferor or the Company in
connection with the execution, delivery and performance of the Basic
Documents and the Certificates and any other agreements contemplated
therein shall have been paid or will be paid by the Transferor or the
Company, as the case may be, at or prior to the Closing Date to the extent
then due.
3. PURCHASE, SALE AND DELIVERY OF CERTIFICATES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Transferor agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Transferor, at a purchase price of 99.48553% of the principal amount
thereof, the respective principal amounts of Certificates set forth opposite the
names of the Underwriters in Schedule A hereto.
The Transferor will deliver against payment of the purchase price the
Certificates in the form of one or more permanent global securities in
definitive form (the "Global Certificates") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent global securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Prospectus. Payment for the Certificates shall
be made by the Underwriters in Federal (same day) funds by wire transfer to an
account previously designated to Salomon Brothers by the Transferor or the
Company at 10:00 a.m. (New York time), on October 15, 1997, or at such other
time not later than seven full business days thereafter as Salomon Brothers and
the Transferor determine, such time being herein referred to as the "Closing
Date," against delivery to the Trustee as custodian for DTC of the Global
Certificates representing all of the Certificates. For purposes of Rule 15c6-1
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Closing Date (if later than the otherwise applicable settlement date) shall be
the settlement date for payment of funds and delivery of the Certificates. The
Global Certificates will be made available for checking at the above offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
xx least 24 hours prior to the Closing
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Date.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Certificates for sale to the public (which may
include selected dealers) as set forth in the Prospectus.
5. CERTAIN AGREEMENTS OF THE TRANSFEROR AND THE COMPANY. The
Transferor and the Company jointly and severally covenant and agree with the
several Underwriters that:
(a) If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement, the Transferor
will file the Prospectus with the Commission pursuant to Rule 424(b)(1) (or
if applicable, and if insisted to by the Underwriters pursuant to Rule
424(b)(4)) not later than the Commission's close of business on the second
business day following the earlier of (A) the date of determination of the
offering price or (B) the date the Prospectus is first used after
effectiveness in connection with a public offering or sale.
The Transferor will advise the Representative promptly of any such filing
pursuant to Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and an
additional registration statement is necessary to register a portion of the
Certificates under the Act but the Effective Time thereof has not occurred
as of such execution and delivery, the Transferor will file the additional
registration statement or, if filed, will file a post-effective amendment
thereto with the Commission pursuant to and in accordance with Rule 462(b)
on or prior to 10:00 P.M., New York time, on the date of this Agreement or,
if earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later date
as shall have been consented to by Salomon Brothers.
(b) The Transferor or the Company will advise the Representative
promptly of any proposal to amend or supplement the initial or any
additional
9
registration statement as filed or the related prospectus, or the Initial
Registration Statement, the Additional Registration Statement (if any) or
the Prospectus, and will not effect such amendment or supplementation
without the Representative's consent; and the Transferor or the Company
will also advise the Representative promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceeding in respect of a
Registration Statement and each of the Transferor and the Company 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.
(c) If, at any time when a prospectus relating to the
Certificates is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of which
the Prospectus as then amended or supplemented would include any 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 Transferor will promptly
notify the Representative of such event and will promptly prepare and file
with the Commission (subject to the Representative's prior review pursuant
to paragraph (b) of this Section 5), at its own expense, an amendment or
supplement which will correct such statement or omission, or an amendment
which will effect such compliance. Neither the Representative's 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.
(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Transferor will cause the Trust to make
generally available to the Certificateholders an earnings statement of the
Trust covering a period of at least 12 months beginning after the Effective
Date of the
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Initial Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the Trust's fourth
fiscal quarter following the fiscal quarter that includes such Effective
Date, except that, if such fourth fiscal quarter is the last quarter of the
Trust's fiscal year, "Availability Date" means the 90th day after the end
of such fourth fiscal quarter.
(e) The Transferor or the Company will furnish to the Representative
copies of each Registration Statement (two of which will be signed and will
include all exhibits), each related preliminary prospectus, and, so long as
delivery of a prospectus relating to the Certificates is required to be
delivered under the Act in connection with sales by any Underwriter or
dealer, the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as the
Representative requests. The Prospectus shall be so furnished on or prior
to 10:00 A.M., New York time, on the business day following the later of
the execution and delivery of this Agreement or the Effective Time of the
Initial Registration Statement. All other such documents shall be so
furnished as soon as available. The Transferor or the Company will pay the
expenses of printing and distributing to the Underwriters all such
documents.
(f) The Transferor will cooperate in the qualification of the
Certificates for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Representative
designates and in the continuation of such qualifications in effect so long
as required for the distribution of the Certificates.
(g) For a period from the date of this Agreement until the
retirement of the Certificates (i) RNB, as Servicer, will furnish to the
Representative and, upon request, to each of the other Underwriters, copies
of each certificate and the annual statements of compliance delivered to
the Trustee pursuant to Article III of the Pooling and
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Servicing Agreement and Section 5.2 of the Supplement and the annual
independent certified public accountant's servicing reports furnished to
the Trustee pursuant to Article III of the Pooling and Servicing Agreement,
by either first-class mail or electronic transfer as soon as practicable
after such statements and reports are furnished to the Trustee, and (ii)
any other periodic certificates or reports as may be delivered to the
Trustee or the Certificateholders under the Pooling and Servicing Agreement
or the Supplement.
(h) So long as any of the Certificates is outstanding, the
Transferor will furnish to the Representative by either first-class mail or
electronic transfer as soon as practicable, copies of all documents (A)
distributed, or caused to be distributed, by the Transferor to
Certificateholders, (B) filed, or caused to be filed, by the Transferor
with the Commission pursuant to the Exchange Act, any order of the
Commission thereunder or pursuant to a "no-action" letter from the staff of
the Commission and (C) from time to time, such other information in the
possession of the Transferor concerning the Trust as the Representative may
reasonably request. The Transferor will register the Certificates under
the Exchange Act within 120 days after the end of the fiscal year of the
Trust during which the offering of the Certificates to the public occurred.
(i) The Transferor will pay all expenses incident to the
performance of its obligations under this Agreement and will reimburse the
Underwriters (if and to the extent incurred by them) for any filing fees
and other expenses (including fees and disbursements of their counsel)
incurred by them in connection with qualification of the Certificates for
sale and determination of their eligibility for investment under the laws
of such jurisdictions as the Representative designates and the printing
of memoranda relating thereto, for any fees charged by investment rating
agencies for the rating of the Certificates, for any travel expenses of the
Transferor's officers and employees and any other expenses of the
Transferor in connection with attending or hosting meetings with
prospective pur-
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chasers of the Certificates and for expenses incurred in distributing
preliminary prospectuses and the Prospectus (including any amendments and
supplements thereto).
(j) To the extent, if any, that the ratings provided with respect
to the Certificates by the Rating Agencies is conditional upon the
furnishing of documents or the taking of any other action by the Transferor
or the Company agreed upon on or prior to the Closing Date, the Transferor
or the Company shall furnish such documents and take any such other action.
(k) The Transferor or the Company shall not, until after the
Closing Date, offer, sell or contract to sell, directly or indirectly, or
file with the Commission a registration statement under the Act relating
to, securities substantially similar to the Certificates.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligation
of the several Underwriters to purchase and pay for the Certificates on the
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Transferor and the Company herein, to the accuracy
of the statements of officers of the Transferor and the Company made pursuant to
the provisions hereof, to the performance by each of the Transferor and the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) The Representative shall have received a letter, dated the
date of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if the
Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing of
the amendment or post-effective amendment to the registration statement to
be filed shortly prior to such Effective Time), of Xxxxx & Young LLP, in
form and substance satisfactory to the Underwriters and counsel for the
Underwriters, confirming that they are independent public accountants
within the meaning of the Act and
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the applicable published Rules and Regulations thereunder and stating in
effect that (i) they have performed certain specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
RNB) set forth in the Registration Statements and the Prospectus (and any
supplements thereto), agrees with the accounting records of RNB, excluding
any questions of legal interpretation, and (ii) they have performed certain
specified procedures with respect to the accounts.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time, (ii) if the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement but the Effective Time of the
Additional Registration Statement is subsequent to such execution and
delivery, "Registration Statements" shall mean the Initial Registration
Statement and the additional registration statement as proposed to be filed
or as proposed to be amended by the post-effective amendment to be filed
shortly prior to its Effective Time, and (iii) "Prospectus" shall mean the
prospectus included in the Registration Statements. All financial
statements included in material incorporated by reference into the
Prospectus shall be deemed included in the Registration Statements for
purposes of this subsection.
(b) If the Effective Time of the Initial Registration Statement
is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York
time, on the date of this Agreement or such later date as shall have been
consented to by the Representative. If the Effective Time of the
Additional Registration Statement (if any) is not prior to the execution
and delivery of this Agreement, such Effective Time shall have occurred not
later
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than 10:00 P.M., New York time, on the date of this Agreement or, if
earlier, the time the Prospectus is printed and distributed to any
Underwriter, or shall have occurred at such later date as shall have been
consented to by Salomon Brothers. If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Transferor, the Company or the Representative, shall be
contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of any of the Transferor,
DHCC, the Company or RNB or its credit card business which, in the judgment
of a majority in interest of the Underwriters including the Representative,
is material and adverse and makes it impractical or inadvisable to proceed
with completion of the public offering or the sale of and payment for the
Certificates; (ii) any downgrading in the rating of any debt securities of
the Company by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or review
its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating) if in the judgment
of a majority in interest of the Underwriters including the Representative,
the effect of any such downgrading or public announcement makes it
impractical or inadvisable to proceed with the completion of the public
offering or the sale of and payment for the Certificates; (iii) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for
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trading on such exchange, or any suspension of trading of any securities of
the Transferor or the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters including the
Representative, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Certificates.
(d) You shall have received from Xxxxx X. Xxxx, General Counsel
for the Transferor, the Company, DHCC and RNB, such opinion or opinions
dated the Closing Date and satisfactory in form and substance to you and
your counsel, substantially to the effect that:
(i) Each of the Transferor, the Company and DHCC has been
duly incorporated and is validly existing and in good standing under the
laws of the State of Minnesota with full corporate power, authority and
legal right to own its properties and conduct its business as such
properties are currently owned and such business is currently conducted, to
execute, deliver and perform its obligations under each of the Basic
Documents to which it is a party and, solely with respect to the
Transferor, to execute and deliver to the Trustee the Certificates pursuant
to the Pooling and Servicing Agreement;
(ii) RNB is a national banking corporation duly organized,
validly existing and in good standing under the laws of the United States,
and has full corporate power, authority and legal right to execute, deliver
and perform its obligations under the Basic Documents to which it is a
party and, in all material respects, to own its properties and conduct its
business as such properties are presently owned and as such business is
presently conducted;
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(iii) Each of the Transferor, the Company, DHCC and RNB is
duly qualified to do business and is in good standing as a foreign
corporation (or is exempt from such requirements), and has obtained all
necessary licenses and approvals in each jurisdiction in which failure to
so qualify or to obtain such licenses and approvals would render any Credit
Card Agreement relating to an Account owned by the Credit Card Originator
or any Receivable transferred to the Trust by the Transferor unenforceable
by the Credit Card Originator, the Transferor, the Servicer or the Trustee
and would have a material adverse effect on the interests of the
Certificateholders under the Pooling and Servicing Agreement or under any
Supplement;
(iv) The Certificates have been duly authorized, executed
and delivered by the Transferor and, when duly authenticated by the Trustee
in accordance with the terms of the Pooling and Servicing Agreement and
delivered to and paid for by the Underwriters in accordance with the terms
of this Agreement, will be validly issued and outstanding and entitled to
the benefits provided by the Pooling and Servicing Agreement;
(v) Each of the Basic Documents to which the applicable
entity is a party has been duly authorized, executed and delivered by the
Transferor, the Company, DHCC and/or the Servicer, as the case may be, and
constitutes the legal, valid and binding agreement of the Transferor, the
Company, DHCC and/or the Servicer, as the case may be, enforceable against
the Transferor, the Company, DHCC and/or the Servicer, as the case may be,
in accordance with its terms, except (x) to the extent that the
enforceability thereof may be limited by (A) bankruptcy, insolvency,
moratorium, receivership, conservatorship, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting the
rights and remedies of creditors generally and the rights of creditors as
the same may be applied in the event of bankruptcy, insolvency,
receivership, reorganization, moratorium or other similar event in respect
of the Transferor, the Company, DHCC and/or the Servicer, (B) general
principles of equity (regardless of whether considered and applied in a
pro-
17
ceeding in equity or in law) and (C) with respect to the Pooling and
Servicing Agreement and the Supplement, the qualification that certain of
the remedial provisions of the Pooling and Servicing Agreement and the
Supplement may be unenforceable in whole or in part, but the inclusion of
such provisions does not affect the validity of the Pooling and Servicing
Agreement or the Supplement taken as a whole, and the Pooling and Servicing
Agreement and the Supplement, together with applicable law, contain
adequate provisions for the practical realization of the benefits of the
security created thereby; and (y) such counsel expresses no opinion as to
the enforceability of any rights to contribution or indemnification which
are violative of public policy underlying any law, rule or regulation;
(vi) No consent, approval, authorization or order of any
governmental agency or body is required for (A) the execution, delivery and
performance by the Transferor, the Company, DHCC or the Servicer of its
obligations under any of the Basic Documents or the Certificates to which
it is a party, or (B) the issuance or sale of the Certificates, except such
as have been obtained under the Act and as may be required under state
securities or blue sky laws in connection with the purchase and
distribution of the Certificates by the Underwriters;
(vii) None of the execution and delivery of the Basic
Documents or the Certificates by the Transferor, the Company, DHCC and/or
the Servicer, as the case may be, or the performance by the Transferor, the
Company, DHCC and/or the Servicer, as the case may be, of the transactions
therein contemplated or 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 the Transferor, the
Company, DHCC or the Servicer or the property of the Transferor, the
Company, DHCC or the Servicer, or conflict with, or result in a breach or
violation of any term or provision of, or result in a default under any of
the terms and provisions of, the charter or by-laws of the Transferor, the
Company, DHCC or the Servicer, or any material indenture,
18
loan agreement or other material agreement to which the Transferor, the
Company, or the Servicer is a party or by which any of them is bound;
(viii) There are no proceedings or investigations pending
or, to the best knowledge of such counsel, threatened against the
Transferor, the Company, DHCC or RNB, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality
(i) asserting the invalidity of any of the Basic Documents or the
Certificates, (ii) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by any of the
Basic Documents or the Certificates, (iii) seeking any determination or
ruling that, in the reasonable judgment of such counsel, would materially
and adversely affect the performance by the Transferor of its obligations
under any of the Basic Documents, (iv) seeking any determination or ruling
that would materially and adversely affect the validity or enforceability
of any of the Basic Documents or the Certificates or (v) seeking to affect
adversely the income tax attributes of the Trust under the Federal or
applicable state income or franchise tax systems;
(e) You shall have received from Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, special counsel to the Transferor, such opinion or opinions dated the
Closing Date and satisfactory in form and substance to you and your counsel,
substantially to the effect that the Certificates will be treated as
indebtedness for Federal income tax purposes and that the Trust will not be
classified as an association taxable as a corporation.
(f) You shall have received from Davenport, Xxxxx, Xxxxxxx &
Xxxxx, special South Dakota tax counsel to RNB, such opinion or opinions dated
the Closing Date and satisfactory in form and substance to you and your counsel,
substantially to the effect that, to the extent that the Certificates will be
characterized as debt for Federal income tax purposes, the Certificates will be
characterized as debt for South Dakota income tax purposes, and to the effect
that, to the extent that the Trust will not be subject to tax at the entity
level for Federal income tax purposes, the Trust will not be subject to tax at
the entity level for South Dakota income
19
tax purposes.
(g) You shall have received from Faegre & Xxxxxx, special
Minnesota tax counsel to the Transferor, such opinion or opinions dated the
Closing Date and satisfactory in form and substance to you and your counsel,
substantially to the effect that when the Certificates are beneficially owned by
a person that is not a member of the Transferor's consolidated group, the
certificates will be characterized as debt for Minnesota income tax purposes and
to the effect that the Trust will not be subject to tax at the entity level.
(h) You shall have received from Xxxxxxx, Arps, Slate, Xxxxxxx &
Xxxx LLP, special counsel to the Transferor, such opinion or opinions dated the
Closing Date and satisfactory in form and substance to you and your counsel,
substantially to the effect that:
(i) Each of the Pooling and Servicing Agreement and the
Supplement constitutes the valid and binding obligation of the Transferor,
RNB and the Trustee, enforceable against the Transferor, RNB and the
Trustee in accordance with its terms, except (x) to the extent that the
enforceability thereof may be limited by (a) bankruptcy, insolvency,
receivership, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and the rights
of creditors as the same may be applied in the event of the bankruptcy,
insolvency, receivership, reorganization, moratorium or other similar event
in respect of the Transferor, RNB or the Trustee, (b) general principles of
equity (regardless of whether enforceability is considered in a proceeding
at law or in equity) and (c) the qualification that certain of the remedial
provisions of the Pooling and Servicing Agreement may be unenforceable in
whole or in part, but the inclusion of such provisions does not affect the
validity of the Pooling and Servicing Agreement taken as a whole, and the
Pooling and Servicing Agreement, together with applicable law, contain
adequate provisions for the practical realization of the benefits of the
security created thereby and (y) such counsel expresses no opinion as to
the enforceability of any rights to contribution or indemnification which
are violative of public
20
policy underlying any law, rule or regulation;
(ii) The Bank Receivables Purchase Agreement constitutes the
valid and binding obligation of RNB and DHCC, enforceable against RNB and
DHCC in accordance with its terms, except (x) to the extent that the
enforceability thereof may be limited by (a) bankruptcy, insolvency,
receivership, conservatorship, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and
the rights of creditors as the same may be applied in the event of the
bankruptcy, insolvency, receivership, conservatorship, reorganization,
moratorium or other similar event in respect of RNB or DHCC and (b) general
principles of equity (regardless of whether enforceability is considered in
a proceeding at law or in equity) and (y) such counsel expresses no opinion
as to the enforceability of any rights to contribution or indemnification
which are violative of public policy underlying any law, rule or
regulation;
(iii) The Receivables Purchase Agreement constitutes the
valid and binding obligation of DHCC and the Transferor, enforceable
against DHCC and the Transferor in accordance with its terms, except (x) to
the extent that the enforceability thereof may be limited by (a)
bankruptcy, insolvency, receivership, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and the rights of creditors as the same may be applied in the
event of the bankruptcy, insolvency, receivership, reorganization,
moratorium or other similar event in respect of DHCC and the Transferor and
(b) general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) and (y) such counsel
expresses no opinion as to the enforceability of any rights to contribution
or indemnification which are violative of public policy underlying any law,
rule or regulation;
(iv) The Certificates, when executed and authenticated in
accordance with the terms of the Pooling and Servicing Agreement and the
Supplement and delivered to and paid for by the Underwriters pursuant to
this Agreement, will be duly and
21
validly issued and outstanding and will be entitled to the benefits of the
Pooling and Servicing Agreement and the Supplement;
(v) This Agreement has been duly authorized, executed and
delivered by the Transferor and the Company;
(vi) Neither the execution, delivery or performance by each
of the Transferor, the Company, DHCC or RNB of the Basic Documents to which
it is a party, nor the compliance by each of the Transferor, the Company,
DHCC or RNB, as the case may be, with the terms and provisions thereof or
hereof, will contravene any provision of any applicable law;
(vii) Based on such counsel's review of applicable laws, no
governmental approval, which has not been obtained or taken and is not in
full force and effect, is required to authorize or is required in
connection with the execution, delivery or performance by each of the
Transferor, the Company, DHCC or RNB, of the Basic Documents to which it is
a party;
(viii) The Certificates and the Basic Documents conform in
all material respects to the descriptions thereof contained in the
Prospectus;
(ix) The Pooling and Servicing Agreement is not required to
be qualified under the Trust Indenture Act of 1939, as amended, and the
Trust is not required to be registered under the Investment Company Act of
1940, as amended (the "1940 Act");
(x) The statements in the Prospectus under the heading
"Certain Legal Aspects of the Receivables," to the extent that they
constitute matters of law or legal conclusions with respect thereto, have
been reviewed by such counsel and are correct in all material respects;
(xi) The Initial Registration Statement has become
effective under the Act, the Additional Registration Statement (if any) was
filed and became effective under the Act, and the Prospectus Supplement has
been filed with the Commission pursu-
22
ant to Rule 424(b) thereunder, no stop order suspending the effectiveness
of a Registration Statement has been issued and no proceeding for that
purpose has been instituted or threatened; and
(xii) Each of the Registration Statements, as of their
effective dates, and the Prospectus, as of its date, appeared on its face
to be appropriately responsive in all material respects to the requirements
of the Act and the General Rules and Regulations under the Act, except that
in each case such counsel expresses no opinion as to the financial data
included therein or excluded therefrom or the exhibits to a Registration
Statement, and such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in a
Registration Statement and the Prospectus.
Such opinion shall also state that such counsel has participated
in conferences with officers and representatives of the Transferor, the Company,
DHCC and RNB, counsel for the Transferor, the Company, DHCC and RNB,
representatives of the independent accountants of the Transferor, the Company,
DHCC and RNB, and the Underwriters at which the contents of the Prospectus and
related matters were discussed and, although such counsel need not pass upon,
and need not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Prospectus and shall have made no
independent check or verification thereof, except for those made under the
caption "Certain Legal Aspects of the Receivables" to the extent set forth in
paragraph (x) above, on the basis of the foregoing, no facts shall have come to
such counsel's attention that shall have led such counsel to believe that the
Prospectus, as of its date or the date of its opinion, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except that such counsel need not express an
opinion or belief with respect to the financial statements, schedules and other
financial information included in such Prospectus or excluded therefrom.
(i) You shall have received from Daven-
23
port, Xxxxx, Xxxxxxx & Xxxxx special South Dakota counsel to RNB, such opinion
or opinions dated the Closing Date and satisfactory in form and substance to you
and your counsel, substantially to the effect that:
(i) The security interest created by the Bank Receivables
Purchase Agreement in the Receivables has been perfected under Article 9 of the
Uniform Commercial Code of South Dakota by the proper filing of UCC-1 financing
statements with the appropriate filing offices in South Dakota, and such
security interest is of first priority under Article 9 of the South Dakota
Uniform Commercial Code; and
(ii) The UCC-1 financing statements are in appropriate form
for filing and no other filings or other actions, with respect to DHCC's
interest in the Receivables, are necessary to perfect the interest of DHCC in
the Receivables, and the proceeds thereof, conveyed to DHCC, except that
appropriate continuation statements must be filed in accordance with the
applicable state's requirements.
(j) You shall have received from Faegre & Xxxxxx, special
Minnesota counsel to the Transferor and DHCC, such opinion or opinions dated the
Closing Date and satisfactory in form and substance to you and your counsel,
substantially to the effect that:
(i) Each of the security interest created by the
Receivables Purchase Agreement and the security interest created by the Pooling
and Servicing Agreement in the Receivables has been perfected under Article 9 of
the Uniform Commercial Code of Minnesota by the proper filing of UCC-1 financing
statements with the appropriate filing offices in Minnesota, and each such
security interest is of first priority under Article 9 of the Minnesota Uniform
Commercial Code; and
(ii) The UCC-1 financing statements are in appropriate form
for filing and (a) no other filings or other actions, with respect to the
Transferor's interest in the Receivables, are necessary to perfect the interest
of the Transferor in the Receivables, and the proceeds thereof, conveyed to the
Transferor thereunder and (b) no other filings or other actions, with respect to
the Trustee's interest in the
24
Receivables, are necessary to perfect the interest of the Trustee in the
Receivables, and proceeds thereof, against third parties, except, in each case,
that appropriate continuation statements must be filed in accordance with the
applicable state's requirements.
(k) You shall have received from Skadden, Arps, Slate, Xxxxxxx &
Xxxx, special counsel to RNB, DHCC and the Transferor, such opinion or opinions
dated the Closing Date and satisfactory in form and substance to you and your
counsel, substantially to the effect that the Bank Receivables Purchase
Agreement creates in favor of DHCC a security interest under Article 9 of the
Delaware Uniform Commercial Code ("Delaware UCC") in the rights of RNB in the
Receivables, the Receivables Purchase Agreement creates in favor of the
Transferor a security interest under Article 9 of the Delaware UCC in the rights
of DHCC in the Receivables and the Pooling and Servicing Agreement creates in
favor of the Trustee a security interest under Article 9 of the Delaware UCC in
the rights of the Transferor in the Receivables.
(l) You shall have received from Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, special counsel to the Transferor, such opinion or opinions dated the
Closing Date and satisfactory in form and substance to you and your counsel,
substantially to the effect that:
(i) In a properly presented and argued case in a
proceeding under Title 11 of the United States Code, 11 U.S.C. Sections 101,
ET SEQ. (the "Bankruptcy Code"), if the matter were properly briefed and
presented to a court, the court would hold that (1) the transfer of the
Receivables by DHCC to the Transferor in the manner set forth in the
Receivables Purchase Agreement would constitute the sale of the Receivables
from DHCC to the Transferor, and (2) in the event that DHCC were to become a
debtor under the Bankruptcy Code, the transfer of Receivables under the
Receivables Purchase Agreement would not, after full consideration of all
relevant factors, be properly characterized as a pledge of the Receivables to
secure a borrowing by DHCC from the Transferor, and accordingly, the
Receivables and the proceeds thereof would not be part of the estate of DHCC
under Section 541 of the Bankruptcy Code in such event, and consequently
Section 362 of the Bankruptcy Code would not be applicable to the Receivables
and the proceeds there-
25
of; and
(ii) If DHCC should become a debtor in a case under the
Bankruptcy Code, and the Transferor would not otherwise properly be a debtor in
a case under the Bankruptcy Code, and if the matter were properly briefed and
presented to a court exercising bankruptcy jurisdiction, it would not be a
proper exercise by the court of its equitable discretion to disregard the
separate corporate existence of the Transferor so as to order substantive
consolidation under the Bankruptcy Code of the assets and liabilities of the
Transferor with the bankruptcy estate of DHCC.
(m) You shall have received from Xxxxxxx Xxxxxx, Assistant Vice
President and Senior Counsel for Norwest Corporation, parent of the Trustee,
such opinion or opinions dated the Closing Date and satisfactory in form and
substance to you and your counsel, substantially to the effect that:
(i) The Trustee is a national banking association duly
organized, validly existing and in good standing under the Federal laws of
the United States of America;
(ii) The Trustee has all requisite power and authority as a
national banking association to execute and deliver, and to perform its
obligations under the Pooling and Servicing Agreement and the Supplement
and to consummate the transactions contemplated by the Pooling and
Servicing Agreement and the Supplement;
(iii)The Trustee's performance of its obligations under the
Pooling and Servicing Agreement and the execution, delivery and performance
of the Trustee's obligations pursuant to the Supplement by the Trustee does
not conflict with or result in a violation of the Articles of Association
or By-Laws of the Trustee;
(iv) The Pooling and Servicing Agreement and the Supplement
have been duly authorized, executed and delivered by the Trustee; and
26
(v) The Certificates have been duly authenticated by the
Trustee pursuant to the Pooling and Servicing Agreement.
(n) You shall have received a certificate, dated the Closing Date and
satisfactory in form and substance to you and your counsel, of the Chairman,
President or any Vice President and a principal financial or accounting officer
of each of the Transferor, DHCC, RNB and the Company, as applicable, in which
such officers, to the best of their knowledge after reasonable investigation,
shall state that the representations and warranties of the Transferor and the
Company, as the case may be, in this Agreement are true and correct, that each
of the Transferor and the Company 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, that the representations and warranties of each of the
Transferor, DHCC, RNB and the Company, as applicable, in the Basic Documents are
true and correct as of the dates specified therein, that no stop order
suspending the effectiveness of a Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated by the
Commission, that, subsequent to the date of the Prospectus, there has been no
material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
properties or results of operations of the Transferor, DHCC, RNB or the Company,
as the case may be, or its respective credit card business except as set forth
in or contemplated by the Prospectus or as described in such certificate and
that nothing has come to the attention of the Transferor, DHCC, RNB or the
Company that would lead the Transferor, DHCC, RNB or the Company to believe that
a Registration Statement contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(o) You shall have received evidence satisfactory to you and your
counsel that the Certificates shall be rated "AAA" by Standard & Poor's Ratings
Group and "Aaa" by Xxxxx'x Investors Service, Inc.
27
(p) You shall have received a letter, dated such Closing Date and
satisfactory in form and substance to you and your counsel, which meets the
requirements of subsection (a) of this Section, except that the specified date
referred to in such subsection will be a date not more than five days prior to
such Closing Date for the purposes of this subsection (p).
(q) You shall also receive from each counsel rendering an opinion not
otherwise addressed to you a letter dated the Closing Date and satisfactory in
form and substance to you and your counsel, stating that you may rely on the
opinions of such counsel as delivered to Xxxxx'x Investors Service, Inc. and
Standard & Poor's Ratings Group in connection with the rating of the
Certificates.
(r) On the Closing Date, $122,875,817 aggregate principal amount of
the Class B Certificates shall have been issued to the Transferor.
(s) All proceedings in connection with the transactions contemplated
by this Agreement and the other Basic Documents and all documents incident
hereto and thereto shall be reasonably satisfactory in form and substance to you
and your counsel, and you and your counsel shall have received such information,
certificates and documents as you and your Counsel may reasonably request.
The Transferor will furnish you with such conformed copies of
such opinions, certificates, letters and documents as you reasonably request.
Salomon Brothers may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Transferor and the
Company, will jointly and severally indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter 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 a Registration Statement, the Prospectus, or
28
any amendment or supplement thereto, or any related preliminary prospectus, 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 each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that neither the
Transferor nor the Company will 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 written
information furnished to the Transferor or the Company by any Underwriter
through the Representative specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in subsection (b) below; and PROVIDED FURTHER,
HOWEVER, that neither the Transferor nor the Company will 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 preliminary prospectus that was eliminated or
remedied in the Prospectus, if a copy of the Prospectus was not sent or given
with or prior to the written confirmation of the sale of any Certificate to the
person asserting the loss, claim, damage or liability, if required by the Act.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Transferor and the Company against any losses, claims, damages or
liabilities to which the Transferor or the Company 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 any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omission
or the alleged omission to state therein in 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
29
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Transferor or the Company by such Underwriter
through the Representative specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Transferor or the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the following information in the Prospectus furnished on behalf of each
Underwriter: the last paragraph at the bottom of the cover page concerning the
terms of the offering by the Underwriters, the legend concerning overallotments
and stabilizing on the inside front cover page and the concession and
reallowance figures appearing in the paragraph under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. 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 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 action in respect of which any
30
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.
(d) 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 the Transferor and
the Company on the one hand and the Underwriters on the other from the offering
of the Certificates or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Transferor and/or the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Transferor and the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Transferor and the Company
bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Transferor or the Company on the one hand or by the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim
31
which is the subject of this subsection (d). Notwithstanding the provisions of
this subsection (d), no Underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the Certificates
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. 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. The
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Transferor and the Company under this
Section shall be in addition to any liability which the Transferor and the
Company may otherwise have and shall extend, upon the same terms and conditions,
to each person, if any, who controls any Underwriter within the meaning of the
Act; and the obligations of the Underwriters under this Section shall be in
addition to any liability which the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each director of the
Transferor and the Company, to each officer of the Transferor and the Company
who has signed a Registration Statement and to each person, if any, who controls
the Transferor or the Company within the meaning of the Act.
8. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters
default in their obligations to purchase Certificates hereunder on the Closing
Date and the aggregate principal amount of Certificates that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total principal amount of Certificates that the Underwriters are obligated
to purchase on such Closing Date, the Representative may make arrangements
satisfactory to the Transferor for the purchase of such Certificates by other
persons, including any of the Underwriters, but if no such arrangements are made
by such Closing Date, the nondefaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Certificates that such defaulting Underwriters
32
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate principal amount of the Certificates
with respect to which such default or defaults occur exceeds 10% of the total
principal amount of the Certificates that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to the
Representative and the Transferor for the purchase of such Certificates by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Transferor or the Company, except as provided in Section 9. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The
respective indemnities, agreements, representations, warranties and other
statements of the Transferor and the Company and of their respective officers
and of the several Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the Transferor, the Company or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and payment
for the Certificates. If this Agreement is terminated pursuant to Section 8 or
if for any reason the purchase of the Certificates by the Underwriters is not
consummated, the Transferor and the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Transferor and the Company and the Underwriters pursuant to
Section 7 shall remain in effect, and if any Certificates have been purchased
hereunder the representations and warranties in Section 2 and all obligations
under Section 5 shall also remain in effect. If the purchase of the
Certificates by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(c),
the Transferor and the Company, jointly and severally, will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by
33
them in connection with the offering of the Certificates.
10. NOTICES. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representative at Salomon Brothers, Seven World Trade Center, New York,
NY 10048, Attention Xxxx Xxxx (facsimile no. 212-783-2274); if sent to the
Transferor, will be mailed, delivered or telegraphed and confirmed to it at
Xxxxxx Xxxxxx Receivables Corporation, 00 Xxxxx Xxxxxx Xxxxxx, 00xx xxxxx, Xxxxx
0000, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention of Treasurer, (facsimile no. (612)
370-6412); and if sent to the Company, will be mailed, delivered or telegraphed
and confirmed to it at Xxxxxx Xxxxxx Corporation, 000 Xxxxxxxx Xxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention of Treasurer (facsimile no. (612)
370-5508); PROVIDED; HOWEVER, that any notice to an Underwriter pursuant to
Section 7 will be mailed, delivered or telegraphed and confirmed to such
Underwriter.
11. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. REPRESENTATIONS OF UNDERWRITERS. The Representative will act for
the several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representative will be binding upon all the
Underwriters. Each of the Underwriters represents and warrants to, and agrees
with, the Transferor that (w) 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 Certificates to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 or who is a person to whom the document may otherwise
lawfully be issued or passed on, (x) it has complied and shall comply with all
applicable provisions of the Financial Services Act 1986 and other applicable
laws and regulations with respect to anything done by it in relation to the
Certificates in, from or otherwise involving the United Kingdom and (y) if that
Underwriter is an authorized person under the Financial Services Act 1986, it
has only promoted and
34
shall only promote (as that term is defined in Regulation 1.02 of the Financial
Services (Promotion of Unregulated Schemes) Regulations 1991) to any person in
the United Kingdom the scheme described in the Prospectus if that person is of a
kind described either in Section 76(2) of the Financial Services Act 1986 or in
Regulation 1.04 of the Financial Services (Promotion of Unregulated Schemes)
Regulations 1991.
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 NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Transferor and the Company hereby submit to the nonexclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
35
If the foregoing is in accordance with the Representative's
understanding of our agreement, kindly sign and return to the Transferor and the
Company one of the counterparts hereof, whereupon it will become a binding
agreement between the Transferor, the Company and the several Underwriters in
accordance with its terms.
Very truly yours,
XXXXXX XXXXXX RECEIVABLES
CORPORATION
By
---------------------------------------
Name:
Title:
XXXXXX XXXXXX CORPORATION
By
---------------------------------------
Name:
Title:
Acting on behalf of itself
and as the Representative of
the several Underwriters.
SALOMON BROTHERS INC
By
----------------------------
Name:
Title:
36
SCHEDULE A
Underwriter Principal
----------- Amount of
Certificates
------------
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . $133,400,000
Xxxxxxx, Xxxxx & Co . . . . . . . . . . . . . . . . . . 133,300,000
X.X. Xxxxxx Securities Inc. . . . . . . . . . . . . . . 133,300,000
------------
Total . . . . . . . . . . . . . . . . . . . . $400,000,000
------------
A-1
