1
EXHIBIT 1.1
CHARMING SHOPPES RECEIVABLES CORP.,
as Seller
SPIRIT OF AMERICA, INC.,
as Servicer
CHARMING SHOPPES MASTER TRUST ASSET BACKED CERTIFICATES
July 16, 1999
UNDERWRITING AGREEMENT
(Standard Terms)
Bear, Xxxxxxx & Co. Inc.,
as Underwriter or as a Representative
of the Underwriters named in the Terms Agreement
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Charming Shoppes Receivables Corp. ("CSRC") has duly authorized the
issuance of the Series of Asset Backed Certificates designated in the applicable
Terms Agreement (as hereinafter defined) and the sale, pursuant to this
Agreement of the Class A Asset Backed Certificates (the "Class A Certificates")
and the Class B Asset Backed Certificates (the "Class B Certificates") included
in such series (such Class A Certificates and the Class B Certificates,
collectively, the "Certificates"). The Certificates will be issued pursuant to
the Second Amended and Restated Pooling and Servicing Agreement, dated as of
November 25, 1997, as amended by the First Amendment thereto to be dated as of
July 22, 1999 (the "First Amendment"). Such Second Amended and Restated Pooling
and Servicing Agreement as so amended is among CSRC, as Seller, Spirit of
America, Inc., as Servicer, and First Union National Bank, as trustee (the
"Trustee") (the Second Amended and Restated Pooling and Servicing Agreement as
amended by the First Amendment and as amended from time to time hereafter is, in
this Agreement referred to as the "Pooling and Servicing Agreement"). The terms
of the Certificates as well as the Class C Certificates and Class D Certificates
described herein will be set forth in the Series Supplement having the date
stated in the applicable Terms Agreement, among CSRC, as Seller, Spirit of
America, Inc., as Servicer, and the Trustee (the "Supplement").
The Certificates designated in the applicable Terms Agreement may be
sold in a public offering by the Trust (as hereinafter defined) through Bear,
Xxxxxxx & Co. Inc. ("Bear
2
Xxxxxxx"), as sole underwriter, or through certain underwriters which include
Bear Xxxxxxx, one or more of which may with Bear Xxxxxxx act as representative
of such underwriters listed on Schedule I to the applicable Terms Agreement (any
underwriter through which Certificates are sold shall be referred to herein as
an "Underwriter" or, collectively, all such underwriters may be referred to as
the "Underwriters"; any representatives thereof may be referred to herein as a
"Representative," which, if the context herein does require, shall include Bear
Xxxxxxx in its capacity as sole underwriter of any Series, or the
"Representatives"). The Certificates sold to the Underwriters for which Bear
Xxxxxxx is a Representative shall be sold pursuant to a Terms Agreement by and
among CSRC, Fashion Service Corp. ("FSC"), Spirit of America, Inc. ("SOAI"), and
the Underwriters, a form of which is attached hereto as Exhibit A (a "Terms
Agreement"), which incorporates by reference this Underwriting Agreement (the
"Agreement," which may include the applicable Terms Agreement if the context so
requires). The standard provisions set forth herein shall not be construed as an
obligation of CSRC to sell any of the Certificates. The obligation of CSRC to
sell the Certificates shall be evidenced by the applicable Terms Agreement.
Credit enhancement for the Certificates will be provided by the
issuance, as part of the same series as the Certificates, of two subordinated
classes, designated as the Class C Asset Backed Certificates (the "Class C
Certificates") and the Class D Asset Backed Certificates (the "Class D
Certificates"). The Class C Certificates will be sold in a private transaction
and not pursuant to this Agreement. The Class D Certificates will be sold in a
private transaction and not pursuant to this Agreement, and all or a portion of
the Class D Certificates may be purchased by an affiliate of CSRC. The term
"applicable Terms Agreement" means the Terms Agreement dated the date hereof.
Each Certificate will represent a specified percentage of undivided interest in
the Charming Shoppes Master Trust (the "Trust"). The assets of the Trust
include, among other things, certain amounts due (the "Receivables") on a pool
of private label credit card accounts owned by Spirit of America National Bank
(the "Bank") and proceeds of credit insurance policies relating to the
Receivables. The Receivables originated by the Bank have been and will be
conveyed to and purchased by CSRC under the terms of a Purchase and Sale
Agreement dated as of November 25, 1997, as amended by the First Amendment
thereto to be dated as of July 22, 1999 (as amended by the First Amendment and
as amended from time to time hereafter, the "Purchase Agreement"). To the extent
not defined herein, capitalized terms used herein shall have the meanings
specified in the Pooling and Servicing Agreement.
Unless otherwise stated herein or in the applicable Terms Agreement, as
the context otherwise requires or if such term is otherwise defined in the
Pooling and Servicing Agreement, each capitalized term used or defined herein or
in the applicable Terms Agreement shall relate only to the Certificates
designated in the applicable Terms Agreement and no other Asset Backed
Certificates issued by the Trust.
CSRC has prepared and filed with the Securities and Exchange Commission
(the "Commission") in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-1 (having the
registration number stated in the applicable Terms Agreement), including a form
of prospectus, relating to the Certificates. The registration
2
3
statement as amended has been declared effective by the Commission. If any
post-effective amendment has been filed with respect thereto, prior to the
execution and delivery of the applicable Terms Agreement, the most recent such
amendment has been declared effective by the Commission. Such registration
statement, as amended at the time of effectiveness, including all material
incorporated by reference therein and including all information (if any) deemed
to be part of the registration statement at the time of effectiveness pursuant
to Rule 430A under the Act, is referred to in the Agreement as the "Registration
Statement," and the form of prospectus relating to the applicable Certificates,
as first filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") or (if no such filing is required) as included in the
Registration Statement, including all material incorporated by reference in such
prospectus under the Act, is referred to in this Agreement as the "Prospectus."
Upon the execution of the applicable Terms Agreement, CSRC agrees with
the Underwriters as follows:
1. Subject to the terms and conditions herein set forth and in the
applicable Terms Agreement, CSRC agrees to sell and deliver the Certificates to
the several Underwriters as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from CSRC the respective principal amount of the Class A Certificates set forth
opposite such Underwriter's name in the applicable Terms Agreement and the
respective principal amount of the Class B Certificates set forth opposite such
Underwriter's name in the applicable Terms Agreement. The Certificates are to be
purchased by the Underwriters at the purchase price or purchase prices set forth
in such Terms Agreement.
2. CSRC understands that the Underwriters intend (i) to make a public
offering of their respective portions of the Certificates as soon after the
Registration Statement and this Agreement and the applicable Terms Agreement
have become effective as in the judgment of the Representative is advisable and
(ii) initially to offer the Certificates upon the terms set forth in the
Prospectus.
3. Unless otherwise provided in the applicable Terms Agreement, payment
for Certificates shall be made to CSRC or to its order by wire transfer of same
day funds at the offices of Xxxxx, Xxxxx & Xxxxx in Chicago, Illinois at 9:00
a.m., Central time, on the Closing Date (as hereinafter defined), or at such
other time on the same or such other date, not later than the fifth Business Day
thereafter, as the Representative and CSRC may agree upon in writing. The time
and date of such payment for the applicable Series of Certificates are referred
to herein as the "Closing Date." As used herein, the term "Business Day" means
any day other than a day on which banks are permitted or required to be closed
in New York City. Unless otherwise provided in the applicable Terms Agreement,
payment for the Certificates shall be made against delivery to the
Representative for the respective accounts of the several Underwriters of the
Certificates registered in the name of Cede & Co. as nominee of The Depository
Trust Company and in such denominations as the Representative shall request in
writing not later than two full Business Days prior to the Closing Date, with
any transfer taxes payable in connection with the transfer to the Underwriters
of the Certificates duly paid by FSC. The Certificates will be made
3
4
available for inspection by the Representative at the offices of Xxxxx, Xxxxx &
Xxxxx not later than five hours before the close of business in New York City on
the Business Day prior to the Closing Date.
4. Upon the execution of the applicable Terms Agreement, CSRC
represents and warrants to and agrees with each Underwriter that:
(a) The Registration Statement on Form S-1 (having the registration
number stated in the applicable Terms Agreement), including the Prospectus
and such amendments thereto as may have been required on the date of the
applicable Terms Agreement, relating to the Certificates, has been filed
with the Commission, and such Registration Statement as amended has been
declared effective by the Commission. The conditions to the use of a
registration statement on Form S-1 under the Act as set forth in the General
Instructions to Form S-1 have been satisfied with respect to CSRC and the
Registration Statement.
(b) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of CSRC, threatened by the Commission, and
on the effective date of the Registration Statement, the Registration
Statement and the Prospectus conformed in all respects to the requirements
of the Act and the rules and regulations of the Commission under the Act
(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, and on
the date of the applicable Terms Agreement, the Registration Statement and
the Prospectus conform, and at the time of filing of the Prospectus pursuant
to Rule 424(b), such documents will conform in all respects to the
requirements of the Act and the Rules and Regulations, and on the Closing
Date the Registration Statement and the Prospectus will conform in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents will include on the date of the applicable Terms
Agreement and on the Closing Date 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; provided that CSRC makes no
representations or warranties with respect to the Underwriters' Information.
(c) As of the Closing Date, the representations and warranties of CSRC,
as Seller, in the Pooling and Servicing Agreement will be true and correct
in all material respects, except as they expressly relate to prior dates.
(d) CSRC is duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has full corporate power, authority
and legal right to own its properties and conduct its business as described
in the Prospectus, and is duly qualified to do business and is in good
standing (or is exempt from such requirements) under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the failure
to be so qualified or in good standing would not have a material adverse
effect on CSRC and its Affiliates, taken as a whole.
4
5
(e) The Certificates have been duly authorized, and, when issued and
delivered pursuant to the Pooling and Servicing Agreement and the
Supplement, duly authenticated by the Trustee and paid for by the
Underwriters in accordance with the terms of this Agreement and the
applicable Terms Agreement, will be duly and validly executed,
authenticated, issued and delivered and entitled to the benefits provided by
the Pooling and Servicing Agreement and the Supplement; each of the Pooling
and Servicing Agreement, the Supplement and the Purchase Agreement have been
duly authorized, executed and delivered by CSRC and constitute the valid,
binding and enforceable agreements of CSRC and this Agreement and the
applicable Terms Agreement have been duly authorized by CSRC and when
executed and delivered by CSRC, SOAI, FSC and the other parties thereto,
each of this Agreement and the applicable Terms Agreement will constitute a
valid, binding and enforceable agreement of CSRC; provided that with respect
to all such documents such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect affecting the enforcement of creditors' rights in
general and such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity) and subject to the
unenforceability, under certain circumstances, of provisions indemnifying a
party against liability where such indemnification is contrary to public
policy; and the Class C Certificates and the Class D Certificates have been
duly authorized, and, when issued and delivered pursuant to the Pooling and
Servicing Agreement and the Supplement, duly authenticated by the Trustee
and paid for by the respective purchasers thereof, will be duly and validly
executed, authenticated, issued and delivered and entitled to the benefits
provided by the Pooling and Servicing Agreement and the Supplement and will
be subordinated to the Certificates and provide credit enhancement for the
Certificates.
(f) No consent, approval, authorization or order of, or filing with,
any court or governmental agency or body is required to be obtained or made
by CSRC for the consummation of the transactions contemplated by this
Agreement, the applicable Terms Agreement, the Purchase Agreement, the
Pooling and Servicing Agreement or the Supplement or for the issuance of the
Certificates or the Class C Certificates or the Class D Certificates except
such as have been obtained and made under the Act, such as may be required
under state securities laws and the filing of any financing statements
required to perfect CSRC's and the Trust's interest in the Receivables.
(g) CSRC is not in violation of its Certificate of Incorporation or
By-Laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any agreement or instrument to
which it is a party or by which it or its properties is bound which would
have a material adverse effect on the transactions contemplated herein or in
the Pooling and Servicing Agreement and the Supplement. The execution,
delivery and performance of this Agreement, the applicable Terms Agreement,
the Pooling and Servicing Agreement, the Supplement, the Purchase Agreement,
and the issuance and sale of the Certificates, the Class C Certificates and
the Class D Certificates and compliance with the terms and provisions
thereof will not result in a breach or
5
6
violation of any of the terms and provisions of, or constitute a default
under, any statute, rule, regulation or order of any governmental agency or
body or any court having jurisdiction over CSRC or any of its properties or
any agreement or instrument to which CSRC is a party or by which CSRC is
bound or to which any of the properties of CSRC is subject, or the
Certificate of Incorporation or By-laws of CSRC.
(h) CSRC has full power and authority to authorize, issue and sell the
Certificates as contemplated by this Agreement and the applicable Terms
Agreement and to enter into this Agreement, the applicable Terms Agreement,
the Pooling and Servicing Agreement, the Supplement, the Purchase Agreement
and to issue the Class C Certificates and Class D Certificates.
(i) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending or, to the knowledge of
CSRC, threatened to which any of CSRC or its Affiliates is or may be a party
or to which any property of CSRC or its Affiliates is or may be the subject
which, if determined adversely to CSRC, could individually or in the
aggregate reasonably be expected to have a material adverse effect on the
general affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of CSRC and its Affiliates,
taken as a whole or that would reasonably be expected to materially
adversely affect the interests of the holders of the Certificates; and there
are no contracts or other documents of a character required to be filed as
an exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or described as
required;
(j) This Agreement and the applicable Terms Agreement have been duly
executed and delivered by CSRC.
(k) Except as set forth in or contemplated in the Registration
Statement and the Prospectus, there has been no material adverse change in
the condition (financial or otherwise) of CSRC or any of its subsidiaries
since May 1, 1999.
(l) Any taxes, fees and other governmental charges in connection with
the execution, delivery and performance of this Agreement, the applicable
Terms Agreement, the Pooling and Servicing Agreement, the Supplement, the
Purchase Agreement, the Certificates, the Class C Certificates and the Class
D Certificates shall have been paid or will be paid by or on behalf of CSRC
at or prior to the Closing Date to the extent then due.
5. Upon the execution of the applicable Terms Agreement, FSC represents
and warrants to and agrees with each Underwriter that:
(a) FSC is duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has full corporate power, authority
and legal right to own its properties and conduct its business as described
in the Prospectus, and is duly qualified to do business and is in good
standing (or is exempt from such requirements) under the laws
6
7
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where
the failure to be so qualified or in good standing would not have a material
adverse effect on FSC and its Affiliates, taken as a whole.
(b) The Bank is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of
America, and has full corporate power, authority and legal right to own its
properties and conduct its business as described in the Prospectus, and is
duly qualified to do business and is in good standing (or is exempt from
such requirements) under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Bank and its
Affiliates, taken as a whole.
(c) As of the Closing Date, the representations and warranties of the
Bank in the Purchase Agreement will be true and correct in all material
respects, except as they expressly relate to prior dates.
(d) The Purchase Agreement has been duly authorized, executed and
delivered by the Bank and constitutes the valid, binding and enforceable
agreement of the Bank, and this Agreement and the applicable Terms Agreement
have been duly authorized by FSC and, when executed and delivered by FSC,
CSRC and SOAI, each of this Agreement and the applicable Terms Agreement
will constitute a valid, binding and enforceable agreement of FSC; provided
that, with respect to each of such documents, such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general, the rights of creditors of national banking
associations and such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity) and subject to the
unenforceability, under certain circumstances, of provisions indemnifying a
party against liability where such indemnification is contrary to public
policy.
(e) No consent, approval, authorization or order of, or filing with,
any court or governmental agency or body is required to be obtained or made
by FSC for the consummation of the transactions contemplated by this
Agreement and the applicable Terms Agreement, or by the Bank for the
consummation of the transactions contemplated by the Purchase Agreement,
except such as have been obtained and made under the Act, such as may be
required under state securities laws and the filing of any financing
statements required to perfect the Seller's and the Trust's interest in the
Receivables.
(f) FSC is not in violation of its Certificate of Incorporation or
By-Laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any agreement or instrument to
which it is a party or by which it or its properties are bound which would
have a material adverse effect on the transactions contemplated herein. The
execution, delivery and performance of this Agreement and the applicable
Terms Agreement will not result in a breach or violation of any of the terms
and
7
8
provisions of, or constitute a default under, any statute, rule, regulation
or order of any governmental agency or body or any court having jurisdiction
over FSC; or any of its properties or any agreement or instrument to which
FSC is a party or by which FSC is bound or to which any of the property of
FSC is subject, or the Certificate of Incorporation or By-Laws of FSC.
(g) The Bank is not in violation of its Articles of Association or
By-Laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any agreement or instrument to
which it is a party or by which it or its properties are bound which would
have a material adverse effect on the transactions contemplated in the
Purchase Agreement, the Pooling and Servicing Agreement and the Supplement.
The execution, delivery and performance of the Purchase Agreement will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the Bank;
or any of its properties or any agreement or instrument to which the Bank is
a party or by which the Bank is bound or to which any of the property of the
Bank is subject, or the Articles of Association or By-Laws of the Bank.
(h) The Bank had at the time of execution thereof and continues to have
full power and authority to enter into the Purchase Agreement and convey the
Receivables as provided therein and carry out the other obligations of the
Bank therein, and FSC has full power and authority to enter into the
applicable Terms Agreement and to enter into this Agreement.
(i) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending or, to the knowledge of
FSC, threatened to which any of FSC or its Affiliates is or may be a party
or to which any property of FSC or its Affiliates is or may be the subject
which, if determined adversely to FSC, could individually or in the
aggregate reasonably be expected to have a material adverse effect on the
general affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of FSC and its Affiliates,
taken as a whole or that would reasonably be expected to materially
adversely affect the interests of the holders of the Certificates; and there
are no contracts or other documents of a character required to be filed as
an exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or described as
required.
(j) This Agreement and the applicable Terms Agreement have been duly
executed and delivered by FSC.
(k) Except as set forth in or contemplated in the Registration
Statement and the Prospectus, there has been no material adverse change in
the condition (financial or otherwise) of FSC or any of its subsidiaries
since May 1, 1999.
8
9
(l) Any taxes, fees and other governmental charges in connection with
the execution, delivery and performance of this Agreement and the applicable
Terms Agreement shall have been paid or will be paid by or on behalf of FSC
at or prior to the Closing Date to the extent then due.
6. Upon the execution of the applicable Terms Agreement, SOAI
represents and warrants to and agrees with each Underwriter that:
(a) As of the Closing Date, the representations and warranties of SOAI
in the Pooling and Servicing Agreement will be true and correct in all
material respects, except as they expressly relate to prior dates.
(b) SOAI is duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has full corporate power, authority
and legal right to own its properties and conduct its business as described
in the Prospectus, and is duly qualified to do business and is in good
standing (or is exempt from such requirements) under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the failure
to be so qualified or in good standing would not have a material adverse
effect on SOAI and its Affiliates, taken as a whole.
(c) The First Amendment has been duly authorized, executed and
delivered by the Servicer and was entered into in full compliance with the
terms of the Pooling and Servicing Agreement as it existed immediately prior
to such amendment.
(d) The Pooling and Servicing Agreement and the Supplement have been
duly authorized, executed and delivered by SOAI and constitute the valid,
binding and enforceable agreements of SOAI and this Agreement and the
applicable Terms Agreement have been duly authorized by SOAI and when
executed and delivered by SOAI, CSRC and FSC, this Agreement and the
applicable Terms Agreement will constitute a valid, binding and enforceable
agreement of SOAI; provided that, with respect to each of such documents,
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity) and subject to the
unenforceability, under certain circumstances, of provisions indemnifying a
party against liability where such indemnification is contrary to public
policy.
(e) No consent, approval, authorization or order of, or filing with,
any court or governmental agency or body is required to be obtained or made
by SOAI for the consummation of the transactions contemplated by this
Agreement, the applicable Terms Agreement, the Pooling and Servicing
Agreement or the Supplement except such as have been obtained and made under
the Act, such as may be required under state securities laws and the filing
of any financing statements required to perfect the Trust's interest in the
Receivables.
9
10
(f) SOAI is not in violation of its Certificate of Incorporation or
By-Laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any agreement or instrument to
which it is a party or by which it or its properties is bound which would
have a material adverse effect on the transactions contemplated herein or in
the Pooling and Servicing Agreement and the Supplement. The execution,
delivery and performance of this Agreement, the applicable Terms Agreement,
the Pooling and Servicing Agreement and the Supplement and compliance with
the terms and provisions thereof will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any
statute, rule, regulation or order of any governmental agency or body or any
court having jurisdiction over SOAI; or any of its properties or any
agreement or instrument to which SOAI is a party or by which SOAI is bound
or to which any of the properties of SOAI is subject, or the Certificate of
Incorporation or By-Laws of SOAI; and SOAI has full power and authority to
enter into this Agreement, the applicable Terms Agreement, the Pooling and
Servicing Agreement and the Supplement.
(g) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending or, to the knowledge of
SOAI, threatened to which any of SOAI or its Affiliates is or may be a party
or to which any property of SOAI or its Affiliates is or may be the subject
which, if determined adversely to SOAI, could individually or in the
aggregate reasonably be expected to have a material adverse effect on the
general affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of SOAI and its Affiliates,
taken as a whole or that would reasonably be expected to materially
adversely affect the interests of the holders of the Certificates; and there
are no contracts or other documents of a character required to be filed as
an exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or described as
required;
(h) This Agreement and the applicable Terms Agreement have been duly
authorized, executed and delivered by SOAI.
(i) Any taxes, fees and other governmental charges in connection with
the execution, delivery and performance of this Agreement, the applicable
Terms Agreement, the Pooling and Servicing Agreement and the Supplement
shall have been paid or will be paid by or on behalf of SOAI at or prior to
the Closing Date to the extent then due.
7. Upon the execution of the applicable Terms Agreement, CSRC covenants
and agrees with the several Underwriters that:
(a) CSRC will file the final Prospectus with the Commission within the
time periods specified by Rule 424(b) and Rule 430A under the Act.
(b) CSRC will deliver, at the expense of CSRC, to the Representative,
two signed copies of the Registration Statement and each amendment thereto,
in each case including
10
11
exhibits, and to each other Underwriter a conformed copy of the Registration
Statement and each amendment thereto, in each case without exhibits, and,
during the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all amendments and
supplements thereto) as the Representative may reasonably request.
(c) Before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the
Registration Statement becomes effective, CSRC will furnish to the
Representative a copy of the proposed amendment or supplement for review and
will not file any such proposed amendment or supplement to which the
Representative reasonably objects.
(d) CSRC will advise the Representative promptly, and will confirm such
advice in writing, (i) when the Registration Statement shall become
effective, (ii) when any amendment to the Registration Statement shall
become effective, (iii) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the
Prospectus or for any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threatening of any proceeding
for that purpose, and (v) of the receipt by CSRC of any notification with
respect to any suspension of the qualification of the Certificates for offer
and sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and to use its best efforts to prevent the
issuance of any such stop order or notification and, if issued, to obtain as
soon as possible the withdrawal thereof.
(e) CSRC will if (i) during such period of time after the first date of
the public offering of the Certificates as in the opinion of counsel for the
Underwriters a Prospectus relating to the Certificates is required by law to
be delivered in connection with sales by an Underwriter or dealer, (ii) any
event shall occur as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or (iii) it is necessary to amend or supplement the
Prospectus to comply with the law, forthwith prepare and furnish, at the
expense of CSRC, to the Underwriters and to the dealers (whose names and
addresses the Representative will furnish to CSRC) to which Certificates may
have been sold by the Representative on behalf of the Underwriters and to
any other dealers upon request, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with the law.
(f) CSRC will endeavor to qualify the Certificates for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the
Representative shall reasonably request and will continue such qualification
in effect so long as reasonably required for distribution of the
Certificates and to pay all fees and expenses (including fees and
disbursements of counsel to the Underwriters) reasonably incurred in
connection with such
11
12
qualification and in connection with the determination of the eligibility of
the Certificates for investment under the laws of such jurisdictions as the
Representative may designate; provided, however, that CSRC shall not be
obligated to qualify to do business in any jurisdiction in which it is not
currently so qualified; and provided further that CSRC shall not be required
to file a general consent to service of process in any jurisdiction.
(g) On or before December 31 of the year following the year in which
the Closing Date occurs, CSRC will cause the Trust to make generally
available to Certificateholders and to the Representative as soon as
practicable an earnings statement covering a period of at least twelve
months beginning with the first fiscal quarter of the Trust occurring after
the effective date of the Registration Statement, which shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 of the Commission
promulgated thereunder.
(h) So long as any of the Certificates are outstanding, CSRC will
furnish to the Representative copies of all reports or other communications
(financial or other) furnished to holders of the Certificates and copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange.
(i) For a period from the date of this Agreement until the retirement
of the Certificates CSRC will furnish to the Representative copies of each
certificate and the annual statements of compliance delivered to the Trustee
pursuant to Article III of the Pooling and Servicing Agreement 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 first-class mail as soon as practicable after such statements
and reports are furnished to the Trustee.
(j) During the period beginning on the date hereof and continuing to
and including the Business Day following the Closing Date, CSRC will not
offer, sell, contract to sell or otherwise dispose of any debt securities of
or guaranteed by CSRC which are substantially similar to the Certificates
without the prior written consent of the Representative.
(k) CSRC will cause the Certificates to be registered in a timely
manner pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
8. Upon the execution of the applicable Terms Agreement, FSC, CSRC and
SOAI each severally covenant and agree with the several Underwriters that to the
extent, if any, that the rating provided with respect to the Certificates by the
rating agency or rating agencies rating the Certificates (the "Rating Agency")
is conditional upon the furnishing of documents or the taking of any other
action by CSRC, FSC, the Bank or SOAI agreed upon on or prior to the Closing
Date, CSRC, FSC, the Bank and SOAI each shall use its best efforts to furnish
such documents and take any such other action.
9. CSRC will pay all costs and expenses incident to the performance of
its obligations under this Agreement and the related Terms Agreement, including
without limiting the generality of the foregoing, all costs and expenses (i)
incident to the preparation, issuance,
12
13
execution, authentication and delivery of the Certificates, (ii) incident to the
preparation, printing and filing under the Act of the Registration Statement,
the Prospectus and any preliminary prospectus (including in each case all
exhibits, amendments and supplements thereto), (iii) incurred in connection with
the registration or qualification and determination of eligibility for
investment of the Certificates under the laws of such jurisdictions as the
Underwriters may designate (including fees of counsel for the Underwriters and
their disbursements), (iv) related to any filing with the National Association
of Securities Dealers, Inc., (v) in connection with the printing (including word
processing and duplication costs) and delivery of this Agreement, the applicable
Terms Agreement, the Pooling and Servicing Agreement and any Blue Sky Memorandum
and the furnishing to Underwriters and dealers of copies of the Registration
Statement and the Prospectus as herein provided, (vi) the fees and disbursements
of CSRC's counsel and accountants, and (vii) payable to each Rating Agency in
connection with the rating of the Certificates.
10. The several obligations of the Underwriters hereunder are subject
to the performance by each of CSRC, FSC and SOAI of its obligations hereunder
and under the applicable Terms Agreement and to the following additional
conditions:
(a) On or prior to the date of this Agreement, the Representative shall
have received a letter, dated the date of the applicable Terms Agreement, of
Ernst & Young LLP (or such other independent accountants as shall be named
in the applicable Terms Agreement) confirming that they are independent
public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and substantially in the form
heretofore agreed and otherwise in form and in substance satisfactory to the
Representative and its counsel.
(b) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the Rules and Regulations and in accordance with Section 7(a) of this
Agreement; and, as of the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or, to the knowledge of
CSRC, threatened by the Commission, and all requests for additional
information from the Commission with respect to the Registration Statement
shall have been complied with to the satisfaction of the Representative.
(c) The representations and warranties of each of CSRC, FSC and SOAI
contained herein are true and correct on and as of the Closing Date as if
made on and as of the Closing Date, and each of CSRC, FSC and SOAI shall
have complied with all agreements and all conditions on its part to be
performed or satisfied hereunder and under the applicable Terms Agreement at
or prior to the Closing Date.
(d) The Representative shall have received an opinion of Xxxxx X.
Xxxxx, Esq., Executive Vice President and General Counsel of Charming
Shoppes, Inc. (or such other counsel as may be named in the applicable Terms
Agreement), dated the Closing Date, in
13
14
form and substance reasonably satisfactory to the Representative and its
counsel, to the effect that:
(i) CSRC is duly organized, validly existing and in good standing
under the laws of the State of Delaware; SOAI is duly organized,
validly existing and in good standing under the laws of the State of
Delaware; FSC is duly organized, validly existing and in good standing
under the laws of the State of Delaware; the Bank is a national banking
association duly organized, validly existing and in good standing under
the laws of the United States of America; neither CSRC, SOAI, FSC nor
the Bank is required to qualify, nor to register as a foreign
corporation, in any state in order to conduct its business, except
those states where it has so qualified or registered or where the
failure to so qualify or register would not have a material adverse
effect upon the Certificateholders; each of CSRC, SOAI, FSC and the
Bank has full power and authority to own its assets and to transact its
business as described in the Prospectus; and the Bank had at all
relevant times, and now has, the power, authority and legal right to
acquire and own the Accounts and sell and convey the Receivables; CSRC
had all relevant times and now has the power, authority and legal right
to purchase, own and sell the Receivables;
(ii) CSRC has and at all relevant times had the power and
authority to execute and deliver this Agreement, the applicable Terms
Agreement, the Purchase Agreement, the Pooling and Servicing Agreement
and the Supplement and to consummate the transactions contemplated
herein and therein; SOAI has the power and authority to execute and
deliver this Agreement, the applicable Terms Agreement, the Pooling and
Servicing Agreement and the Supplement and to consummate the
transactions contemplated herein and therein; FSC has the power and
authority to execute and deliver this Agreement and the applicable
Terms Agreement; and the Bank has the power and authority to execute
and deliver the First Amendment and the Purchase Agreement and to
consummate the transactions contemplated herein and therein;
(iii) Neither the execution, delivery and performance by CSRC of
its obligations under this Agreement, the applicable Terms Agreement,
the Purchase Agreement, the Supplement or the Pooling and Servicing
Agreement, the purchase of the Receivables or the transfer of the
Receivables to the Trust, the issuance and sale of the Certificates,
the issuance and sale of the Class C Certificates and the Class D
Certificates nor the consummation of any other of the transactions
contemplated herein, in the applicable Terms Agreement, the Purchase
Agreement, the Supplement or the Pooling and Servicing Agreement will
conflict with, result in a breach of or violation of any material term
of, or constitute a default under, the certificate of incorporation or
by-laws of CSRC, each as amended, or any order of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over CSRC or the material terms of any material indenture or other
material agreement or instrument known to such counsel to which CSRC is
a
14
15
party or by which it or its properties are bound (except as set forth
in such opinion or the Prospectus);
(iv) Neither the execution, delivery and performance by SOAI of
its obligations under this Agreement, the applicable Terms Agreement,
the Supplement, the Pooling and Servicing Agreement nor the
consummation of any other of the transactions contemplated herein, in
the applicable Terms Agreement, the Supplement, the Pooling and
Servicing Agreement, will conflict with, result in a breach of or
violation of any material term of, or constitute a default under, the
certificate of incorporation or by-laws of SOAI, each as amended, or
any order of any court, regulatory body, administrative agency or
governmental body having jurisdiction over SOAI or the material terms
of any material indenture or other material agreement or instrument
known to such counsel to which SOAI is a party or by which it or its
properties are bound (except as set forth in such opinion or the
Prospectus);
(v) Neither the execution, delivery and performance by FSC of its
obligations under this Agreement and the applicable Terms Agreement nor
the consummation of any other of the transactions contemplated herein
or in the applicable Terms Agreement, will conflict with, result in a
breach or violation of any material term of, or constitute a default
under, the Certificate of Incorporation or By-Laws of FSC, each as
amended, or any order of any court, regulatory body, administrative
agency or governmental body having jurisdiction over FSC or the
material terms of any material indenture or other material agreement or
instrument known to such counsel to which FSC is a party or by which it
or its properties are bound (except as set forth in such opinion or the
Prospectus);
(vi) Neither the execution, delivery and performance by the Bank
of its obligations under the Purchase Agreement or the First Amendment
nor the consummation of any other of the transactions contemplated in
the Supplement or the First Amendment, will conflict with, result in a
breach of or violation of any material term of, or constitute a default
under, the Articles of Association or By-Laws of the Bank, each as
amended, or any order of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Bank or the
material terms of any material indenture or other material agreement or
instrument known to such counsel to which the Bank is a party or by
which it or its properties are bound (except as set forth in such
opinion or the Prospectus);
(vii) Except as otherwise disclosed in the Prospectus or the
Registration Statement, there are no actions, proceedings or
investigations pending or, to the best of such counsel's knowledge,
threatened before any court, administrative agency or other tribunal
(A) asserting the invalidity of this Agreement, the applicable Terms
Agreement, the Purchase Agreement, the Supplement, the Pooling and
Servicing Agreement or the Certificates or the Class C Certificates or
the Class D Certificates, (B) seeking to prevent the issuance of the
Certificates or
15
16
the consummation of any of the transactions contemplated by this
Agreement, the applicable Terms Agreement, the Purchase Agreement, the
Supplement or the Pooling and Servicing Agreement or the Certificates,
which might materially and adversely affect the performance by any of
CSRC, SOAI, FSC or the Bank of its obligations under, or the validity
or enforceability of, this Agreement, the applicable Terms Agreement,
the Purchase Agreement, the Supplement, the Pooling and Servicing
Agreement or the Certificates, or (C) seeking adversely to affect the
federal income tax attributes of the Certificates as described in the
Prospectus under the headings "Summary -- Tax Status" and "U.S. Federal
Income Tax Consequences"; and
(viii) Each of the applicable Terms Agreement, incorporating by
reference this Agreement, the Pooling and Servicing Agreement, the
First Amendment, the Supplement, the Certificates and the Purchase
Agreement has been duly authorized, executed and delivered by CSRC;
each of the applicable Terms Agreement, incorporating by reference this
Agreement, the Pooling and Servicing Agreement, the First Amendment and
the Supplement has been duly authorized, executed and delivered by
SOAI; the applicable Terms Agreement, incorporating by reference this
Agreement, has been delivered authorized, executed and delivered by
FSC; and the First Amendment and the Purchase Agreement have been duly
authorized, executed and delivered by the Bank.
(e) The Representative shall have received an opinion of Xxxxx, Xxxxx &
Xxxxx (or such other counsel as may be named in the applicable Terms
Agreement), special counsel for CSRC, SOAI, FSC and the Bank dated the
Closing Date, in form and substance reasonably satisfactory to the
Representative and its counsel, to the effect that:
(i) The Certificates, when duly executed and authenticated in
accordance with the terms of the Pooling and Servicing Agreement and
the Supplement and delivered and paid for pursuant to this Agreement
and the applicable Terms Agreement, will be duly issued and outstanding
and will be entitled to the benefits afforded by the Pooling and
Servicing Agreement and the Supplement;
(ii) No consent, approval, authorization or other action by, or
notice to or filing with, any Federal or New York State governmental
authority or regulatory body is required for the consummation of the
transactions contemplated herein, in the applicable Terms Agreement,
the Pooling and Servicing Agreement, the Security Agreement, the
Supplement or the Purchase Agreement;
(iii) The applicable Terms Agreement, incorporating by reference
this Agreement, the Purchase Agreement, the Pooling and Servicing
Agreement, the First Amendment and the Supplement each constitutes the
legal, valid and binding agreement of CSRC, enforceable against CSRC in
accordance with its terms, the applicable Terms Agreement,
incorporating by reference this Agreement, the
16
17
Pooling and Servicing Agreement, the First Amendment and the Supplement
each constitutes the legal, valid and binding agreement of SOAI,
enforceable against SOAI in accordance with its terms; the applicable
Terms Agreement, incorporating by reference this Agreement, constitutes
the legal, valid and binding agreement of FSC; and the First Amendment,
the Security Agreement and the Purchase Agreement each constitutes the
legal, valid and binding agreement of the Bank enforceable against the
Bank in accordance with its terms; provided that, as to enforcement,
such opinions are subject to (A) the effect of bankruptcy, insolvency,
reorganization, moratorium, conservatorship, receivership, or other
similar laws (including any such laws relating to the insolvency of
banks) now or hereafter in effect relating to or affecting the rights
and remedies of creditors (B) the effect of general principles of
equity (including without limitation concepts of materiality,
reasonableness, good faith and fair dealing) regardless of whether
enforceability is considered in a proceeding in equity or at law and
the discretion of the court before which any proceeding therefor may be
brought and (C) the unenforceability under certain circumstances of
provisions indemnifying a party against liability or requiring
contribution from a party for liability where such indemnification or
contribution is contrary to public policy;
(iv) The Registration Statement has become effective under the
Act and the Prospectus has been filed with the Commission pursuant to
Rule 424(b) promulgated under the Act; to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued or threatened and no proceedings
for that purpose have been instituted or are pending; and the
Registration Statement and the Prospectus (other than the financial and
statistical information contained therein as to which such counsel
express no belief) as of their respective effective date or date of
issuance complied as to form in all material respects with the
requirements of the Act and the rules and regulations promulgated
thereunder;
(v) The Pooling and Servicing Agreement, the Supplement, the
Purchase Agreement, and the Certificates, the Class C Certificates and
the Class D Certificates conform in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus;
(vi) The Pooling and Servicing Agreement and the Supplement will
not be required to be qualified under the Trust Indenture Act of 1939,
as amended, and the Trust is not now, and immediately following the
sale of the Certificates pursuant hereto will not be, an "investment
company" required to be registered under the Investment Company Act of
1940, as amended;
(vii) The statements contained in the Prospectus under the
headings "Structural Summary--Federal Tax Status of Offered
Certificates and the Trust" (to the extent relating to Federal income
tax consequences), "U.S. Federal Income Tax Consequences" and "Legal
Aspects of the Receivables," to the extent they
17
18
constitute matters of law or legal conclusions with respect thereto,
are correct in all material respects;
(viii) The statements in the Prospectus under the headings
"Structural Summary--ERISA Considerations for Investors" and "ERISA
Considerations," to the extent they constitute matters of law or legal
conclusions with respect thereto, accurately describe the material
consequences to the holders of the Class A and Class B Certificates
under ERISA;
(ix) The execution, delivery and performance by CSRC of its
obligations under this Agreement, the applicable Terms Agreement, the
Supplement, the Pooling and Servicing Agreement or the Purchase
Agreement, will not conflict with, result in a breach of or violation
of any Federal or New York rule, statute or regulation.
(x) The execution, delivery and performance by SOAI of its
obligations under this Agreement, the applicable Terms Agreement, the
Supplement or the Pooling and Servicing Agreement will not conflict
with, result in a breach of or violation of any Federal or New York
rule, statute or regulation;
(xi) The execution, delivery and performance by FSC of its
obligations under this Agreement and the applicable Terms Agreement
will not conflict with, result in a breach or violation of any Federal
or New York rule, statute or regulation; and
(xii) The execution, delivery and performance by the Bank of its
obligations under the Purchase Agreement will not conflict with, result
in a breach of or violation of any Federal or New York rule, statute or
regulation.
Such counsel also shall make the following statement in a
separate letter: such counsel has not independently checked or verified
the accuracy, completeness or fairness of the statements contained in
the Registration Statement and the Prospectus and such counsel is not
passing upon, and does not assume responsibility for, the accuracy,
completeness or fairness of any such statement. Such counsel has,
however, participated in the preparation of the Registration Statement
and Prospectus. During the course of such preparation, such counsel has
examined various documents, including (i) this Agreement, (ii) the
Pooling and Servicing Agreement, (iii) the Supplement, (iv) the
Purchase Agreement, (v) the Security Agreement, (vi) the Certificates,
(vii) the Registration Statement and (viii) the Prospectus, and various
corporate records of Spirit of America National Bank, SOAI and CSRC and
participated in meetings and telephonic conferences with certain
officers and employees of Spirit of America National Bank, SOAI and
CSRC, representatives of the Representative and of its counsel, during
which the contents of the Registration Statement and the Prospectus and
certain related matters were discussed. Based upon such counsel's
participation in such
18
19
conferences and its document review, no facts have come to such
counsel's attention that have caused it to believe that (a) the
Registration Statement at its effective date 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 or (b) the
Prospectus at the date it bears and as of the Closing Date 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; provided,
however, such counsel expresses no opinion, conclusion or belief with
respect to any financial statements, schedules or other financial or
statistical data contained or incorporated by reference in either the
Registration Statement or Prospectus. Except as set forth above, such
counsel expresses no conclusion, opinion or belief as to any statements
or information set forth in the Registration Statement and Prospectus.
(f) The Representative shall have received an opinion or opinions of
Xxxxx, Xxxxx & Xxxxx (or such other counsel as may be named in the
applicable Terms Agreement), special counsel for the Bank and CSRC, dated
the Closing Date, in form and substance reasonably satisfactory to the
Representative and its counsel, with respect to certain matters relating to
the transfer of the Receivables to CSRC and to the Trust, with respect to
the perfection of the Trust's interest in the Receivables, with respect to
the claims of any Receivable Purchaser against the Receivables not being
superior to the claims of the Trustee against the Receivables on behalf of
the Investor Certificateholders, with respect to the nonconsolidation of FSC
with CSRC or of Charming Shoppes, Inc. with CSRC in a bankruptcy case, with
respect to the applicability of certain provisions of the National Bank Act
and the Federal Deposit Insurance Act, as amended by the Financial
Institutions, Reform, Recovery and Enforcement Act of 1989 with respect to
the effect of receivership of the Bank on such interest in the Receivables,
and with respect to other related matters in a form previously approved by
the Representative and its counsel.
(g) The Representative shall have received from Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx LLP (or such other counsel as may be named in the applicable Terms
Agreement), special counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, in form and substance satisfactory to the
Representative, with respect to the organization of each of CSRC, SOAI, FSC
and the Bank, the validity of the Certificates, the Registration Statement,
the Prospectus and other related matters as the Representative may require,
and each of CSRC and FSC shall have furnished to such counsel such documents
as they may request for the purpose of enabling them to pass upon such
matters.
(h) The Representative shall have received a certificate or
certificates, dated the Closing Date, of a Vice President or more senior
officer of each of CSRC, SOAI and FSC in which such officer, to the best of
his or her knowledge after reasonable investigation, shall state that (A)
the representations and warranties of each of CSRC, SOAI and FSC in this
Agreement are true and correct in all material respects on and as of the
Closing Date,
19
20
(B) each of CSRC, SOAI and FSC has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
and under the applicable Terms Agreement at or prior to the Closing Date,
(C) the representations and warranties of CSRC, SOAI and the Bank,
respectively in the Supplement, in the Pooling and Servicing Agreement and
in the Purchase Agreement are true and correct as of the dates specified in
the Supplement, in the Pooling and Servicing Agreement and in the Purchase
Agreement, and are true on the Closing Date except to the extent such
representations and warranties relate to an earlier date, (D) the
Registration Statement has become effective, 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 and (E) subsequent to the date of the Prospectus, there has been
no material adverse change in the condition (financial or otherwise) of
CSRC, SOAI or FSC or any of their respective Affiliates except as set forth
in or contemplated in the Registration Statement and the Prospectus or as
described in such certificate;
(i) The Representative shall have received an opinion of Squire,
Xxxxxxx & Xxxxxxx LLP, special counsel for the Bank and CSRC, dated the
Closing Date, in form and substance reasonably satisfactory to the
Representative and its counsel, with respect to the characterization of the
Certificates under Ohio tax law; and, with respect to the perfection of the
Trust's interest in the Receivables and with respect to other related
matters in a form previously approved by the Representative and its counsel.
The Representative shall also have received an opinion of Xxxxxxxx, Xxxxxx &
Finger, P.A., special counsel for CSRC, dated the Closing Date, with respect
to the perfection of the Trust's interest in the Receivables in a form
previously approved by the Representative and its counsel.
(j) The Representative shall have received an opinion of Xxxxxx
Xxxxxxxx LLP (or such other counsel as may be named in the applicable Terms
Agreement), counsel to the Trustee, dated the Closing Date, in form and
substance reasonably satisfactory to the Representative and its counsel, to
the effect that:
(i) The Trustee is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States of America, has full power and authority to transact the
business of banking and has the power and authority to enter into and
to perform all actions required of it under the Pooling and Servicing
Agreement and the Supplement;
(ii) Each of the Pooling and Servicing Agreement and the
Supplement has been duly authorized, executed and delivered by the
Trustee and constitutes a legal, valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its terms,
except as such enforceability may be limited by (A) bankruptcy,
insolvency, liquidation, reorganization, moratorium,
20
21
conservatorship, receivership or other similar laws now or hereafter in
effect relating to the enforcement of creditors' rights in general, as
such laws would apply in the event of a bankruptcy, insolvency,
liquidation, reorganization, moratorium, conservatorship, receivership
or similar occurrence affecting the Trustee, and (B) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) as well as concepts of reasonableness,
good faith and fair dealing;
(iii) The Certificates have been duly authenticated and delivered
by the Trustee;
(iv) The execution and delivery of the Pooling and Servicing
Agreement and the Supplement by the Trustee and the performance by the
Trustee of their respective terms do not conflict with or result in a
violation of (A) any law or regulation of the United States of America
or the State of Pennsylvania governing the banking or trust powers of
the Trustee, or (B) the Certificate of Incorporation or By-laws of the
Trustee; and
(v) No approval, authorization or other action by, or filing
with, any governmental authority of the United States of America or the
State of Pennsylvania having jurisdiction over the banking or trust
powers of the Trustee is required in connection with the execution and
delivery by the Trustee of the Pooling and Servicing Agreement and the
Supplement or the performance by the Trustee thereunder.
(k) The Representative shall have received a letter, dated the Closing
Date, of Ernst & Young LLP which meets the requirements of subsection (a) of
this Section 10.
(l) The Representative shall have received evidence satisfactory to it
that the Certificates shall be rated in accordance with the applicable Terms
Agreement by each Rating Agency.
CSRC will furnish the Representative, or cause the Representative to be
furnished with, such conformed copies of such opinions, certificates, letters
and documents as the Representative reasonably requests.
11. (a) Each of CSRC, SOAI and FSC agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and expenses (including, without limitation, the
reasonable legal fees and other reasonable expenses incurred in connection
with any suit, action or proceeding or any claim asserted) caused by any
untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if
CSRC shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses are caused by any untrue statement
or omission or
21
22
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Underwriter furnished to CSRC in writing by
such Underwriter through the Representative expressly for use in the
Prospectus. Each of CSRC, SOAI and FSC hereby acknowledge that the only
information relating to any Underwriter furnished to CSRC for use in the
Prospectus is the following (the "Underwriters' Information"): the
information on the cover page in the chart under the headings Class A
Certificates and Class B Certificates, the "Price to public for
certificate"; the first sentence under the caption "Risk Factors--It may not
be possible to find an investor to purchase your certificates"; and, under
the caption "Underwriting," the information in the table, the second and
third paragraphs following the table and the last paragraph under such
"Underwriting" caption. The Underwriters agree, however, that the foregoing
indemnity with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) from whom the person asserting any such losses, claims,
damages, liabilities or expenses purchased Certificates if such untrue
statement or omission or alleged untrue statement or omission made in such
preliminary prospectus is eliminated or remedied in the Prospectus (as
amended or supplemented if CSRC shall have furnished any amendments or
supplements thereto) and, if required by law, a copy of the Prospectus (as
so amended or supplemented) shall not have been furnished to such person at
or prior to the written confirmation of the sale of such Certificates to
such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless each of CSRC, SOAI and FSC, its directors, its officers
who sign the Registration Statement and each person who controls CSRC, SOAI
or FSC within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act, to the same extent as the indemnity from each of CSRC,
SOAI and FSC to each Underwriter in paragraph (a) of this Section 11, but
only with reference to the Underwriters' Information.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnity may be sought pursuant to
either paragraph (a) or (b) of this Section 11, such person (the
"Indemnified Person") shall promptly notify the person against whom such
indemnity may be sought (the "Indemnifying Person") in writing, and the
Indemnifying Person, upon request of the Indemnified Person, shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may designate in
such proceeding and shall pay the reasonable fees and reasonable expenses of
such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying
Person has failed within a reasonable time to retain counsel reasonably
satisfactory to the Indemnified Person or (iii) the named parties in any
such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is
22
23
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses
shall be reimbursed as they are incurred. Any such separate firm for the
Underwriters and such control persons of Underwriters shall be designated in
writing by the Representative and any such separate firm for CSRC, SOAI and
FSC, its directors, its officers who sign the Registration Statement and
such control persons of CSRC, SOAI and FSC or authorized representatives
shall be designated in writing by CSRC, SOAI and FSC. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be
a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. No Indemnifying Person shall, without
the prior written consent of the Indemnified Person, effect any settlement
of any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on
claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraphs (a) and (b) of
this Section 11 is unavailable to an Indemnified Person in respect of all
losses, claims, damages, liabilities or expenses referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by CSRC, SOAI and FSC on the one hand
and the Underwriters on the other hand 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 CSRC, SOAI and FSC on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relative equitable considerations. The relative benefits received by CSRC,
SOAI and FSC on the one hand and the Underwriters on the other shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of such Certificates (before deducting expenses) received by CSRC
and the total underwriting discounts and the commissions received by the
Underwriters bear to the aggregate public offering price of the
Certificates. The relative fault of CSRC, SOAI and FSC on the one hand and
the Underwriters on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by CSRC, SOAI or FSC or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
23
24
(e) CSRC, SOAI and FSC and the Underwriters agree that it would not be
just and equitable if contribution pursuant to paragraph (d) of this Section
11 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
such paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages, liabilities and expenses referred to
in paragraph (d) of this Section 11 shall be deemed to include, subject to
the limitations set forth above, any reasonable legal or other reasonable
expenses incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 11, in no event shall an Underwriter be required
to contribute any amount in excess of the amount by which the underwriting
discount on the Certificates purchased by such Underwriter exceeds the
amount of any damages that 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 11 are several in proportion to the respective principal amount
of the Certificates set forth opposite their names in Schedule I to the
Terms Agreement and not joint.
The indemnity and contribution agreements contained in this Section 11
are in addition to any liability which the Indemnifying Persons may otherwise
have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 11
and the representations and warranties of each of CSRC, SOAI and FSC set forth
in this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or by or on behalf of each of CSRC, SOAI and the Bank,
its officers or directors or any other person controlling each of CSRC, SOAI and
the Bank and (iii) acceptance of and payment for any of the Certificates.
12. Notwithstanding anything herein contained, this Agreement and the
applicable Terms Agreement may be terminated in the absolute discretion of the
Representative, by notice given to CSRC, if after the execution and delivery of
this Agreement and the applicable Terms Agreement and prior to the Closing Date
(i) there has occurred any material adverse change or any development involving
a prospective material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, stockholders' equity or
results of operation of CSRC, SOAI or FSC or Charming Shoppes, Inc., and their
respective subsidiaries, taken as a whole, the effect of which in the reasonable
judgment of the Representative after consultation with CSRC, SOAI, FSC and
Charming Shoppes, Inc. materially impairs the investment quality of the
Certificates; (ii) there has occurred any downgrading or placement on "credit
watch" for possible downgrade in the rating accorded any securities of or
guaranteed by CSRC, SOAI or FSC or Charming Shoppes, Inc., by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Act; (iii) trading generally shall have
been suspended or materially limited on or by, as the case
24
25
may be, the New York Stock Exchange; (iv) trading of any securities of or
guaranteed by CSRC or FSC or Charming Shoppes, Inc. shall have been suspended on
any exchange or in any over-the-counter market; (v) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities; or (vi) there shall have occurred any
outbreak or escalation of hostilities in which the United States is involved,
any declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the reasonable judgment of the
Representative, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impracticable or inadvisable to proceed with
completion of the sale and payment for the Certificates.
13. If any Underwriter defaults in its obligations to purchase
Certificates hereunder and the aggregate principal amount of the Certificates
that such defaulting Underwriter agreed but failed to purchase does not exceed
15% of the total principal amount of such Certificates, the Representative may
make arrangements satisfactory to CSRC for the purchase of such Certificates by
other persons, including the non-defaulting Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriters shall
be obligated, in proportion to their commitments hereunder, to purchase the
Certificates that such defaulting Underwriter agreed but failed to purchase. If
any Underwriter so defaults 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 such Certificates and arrangements satisfactory to
the Representative and CSRC 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 nondefaulting Underwriter or
CSRC, except as provided in Section 9. In any such case, either the
Representative or CSRC shall have the right to postpone the Closing Date, but in
no event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and in the Prospectus or in any other documents
may be effected. Any action taken under this paragraph shall not relieve a
defaulting Underwriter from liability for its default.
14. If for any reason other than as set forth in Section 13 the
purchase of the Certificates by the Underwriters is not consummated, CSRC shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 9 and the respective obligations of CSRC and the Underwriters pursuant
to Section 11 shall remain in effect. If the purchase of the Certificates by the
Underwriters is not consummated for any reason other than solely because of the
occurrence of any event specified in clauses (iii), (iv), (v) or (vi) of Xxxxxxx
00, XXXX will reimburse the Underwriters for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) reasonably incurred by
it in connection with the offering of the Certificates.
15. Any action by the Underwriters hereunder may be taken by Bear
Xxxxxxx on behalf of the Underwriters, and any such action taken by Bear Xxxxxxx
shall be binding upon the Underwriters. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be given to the Representative, c/o Bear, Xxxxxxx & Co. Inc.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Facsimile No.: 212-272-7294),
Attention: Asset Backed Securities Group. Notices to CSRC shall be given to it,
x/x
00
00
Xxxxxxxx Xxxxxxx, Xxx., 000 Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxx 00000, Attention:
General Counsel.
16. This Agreement shall become effective upon execution and delivery
of the applicable Terms Agreement.
17. This Agreement shall inure to the benefit of and be binding upon
CSRC, SOAI, FSC, the Underwriters, any controlling persons referred to herein
and their respective successors and assigns. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person, firm
or corporation any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. No purchaser of
Certificates from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
18. THIS AGREEMENT MAY BE SIGNED IN COUNTERPARTS, EACH OF WHICH SHALL
BE AN ORIGINAL AND ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME
INSTRUMENT. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
26
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon it will
become a binding agreement among CSRC, SOAI, FSC and the several Underwriters in
accordance with its terms.
Very truly yours,
CHARMING SHOPPES RECEIVABLES CORP.
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
SPIRIT OF AMERICA, INC.
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
FASHION SERVICE CORP.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
BEAR, XXXXXXX & CO. INC.,
as Representative of the Underwriters
named in Schedule I to the Terms Agreement
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
28
EXHIBIT A
[FORM OF TERMS AGREEMENT]
CHARMING SHOPPES MASTER TRUST
Series ______ [___%] [Floating Rate]
Asset Backed Certificates
TERMS AGREEMENT
Dated: ___________ , 19__
To: Charming Shoppes Receivables Corp.
Spirit of America, Inc.
Fashion Service Corp.
Re: Underwriting Agreement dated _____________ , 19__.
Underwriters: The Underwriters named on Schedule I attached hereto are the
"Underwriters" for the purpose of this Agreement and for the
purposes of the above referenced Underwriting Agreement as such
Underwriting Agreement is incorporated herein and made a part
hereof.
Terms of Certificates:
Initial Investor Interest Interest Rate or Formula Price to Public (1)
------------------------- ------------------------ -------------------
(1) Plus accrued interest at the applicable rate from ____________ , 199_.
Certificate Rating [s]: ["______" by Xxxxx'x Investors Service, Inc.] ["______"
by Standard & Poor's Corporation] [other]
Distribution Dates: ________________.
Closing Date: ___________
29
Credit Enhancement Provider:
Trustee:
Pooling and Servicing Agreement:
Supplement:
Purchase Price:
The purchase price payable by the Underwriters for the Certificates
covered by this Agreement will be the following percentage of the principal
amounts to be issued:
Per Certificate _________%
Registration Statement:
Underwriting Commissions, Concessions and Discounts:
The Underwriters' discounts and commissions, the concessions that the
Underwriters may allow to certain dealers, and the discounts that such dealers
may reallow to certain other dealers, each expressed as a percentage of the
principal amount of the Certificates, shall be as follows:
Underwriting
Discounts and Selling
Concessions Concessions Reallowance
----------- ----------- -----------
% % %
Location of Closing:
Payment for the Certificates:
Opinion Modifications:
30
The Underwriters agree, severally and not jointly, subject to the terms
and provisions of the above referenced Underwriting Agreement which is
incorporated herein in its entirety and made a part hereof, to purchase the
respective principal amounts of the above referenced Series of Certificates set
forth opposite their names on Schedule I hereto.
BEAR, XXXXXXX & CO. INC.
as Representative of the Underwriters
named in Schedule I hereto
By: _______________________________________
Name:
Title:
Accepted:
CHARMING SHOPPES RECEIVABLES CORP.
By: _______________________________________
Name:
Title:
SPIRIT OF AMERICA, INC.
By: _______________________________________
Name:
Title:
FASHION SERVICE CORP.
By: _______________________________________
Name:
Title:
S-1
31
SCHEDULE I
UNDERWRITERS
$_______________ Principal Amount of Series __________ [____%]
[Floating Rate] Asset Backed Certificates.
Principal Amount
----------------
[Name of Underwriter] $
------------------
------------------
