EXHIBIT 10.6
CHARMING SHOPPES MASTER TRUST
$115,200,000 Floating Rate Class A Asset Backed
Certificates, Series 2004-1 $10,800,000 Floating
Rate Class M Asset Backed Certificates, Series
2004-1 $18,900,000 Floating Rate Class B Asset
Backed Certificates, Series 2004-1
CERTIFICATE PURCHASE AGREEMENT
July 21, 2004
Barclays Capital Inc.,
as a Representative of the Initial Purchasers
(the "Representative")
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
1. Introduction. Charming Shoppes Receivables Corp. ("CSRC" or the
"Seller"), a special-purpose Delaware corporation whose principal place of
business is in Delaware and which is a wholly-owned indirect subsidiary of
Charming Shoppes, Inc. ("Charming"), proposes to sell to Barclays Capital Inc.
and Bear, Xxxxxxx & Co. Inc. (the "Initial Purchasers") (a) $115,200,000 Series
2004-1 Floating Rate Class A Asset Backed Certificates (the "Class A
Certificates"), (b) $10,800,000 Series 2004-1 Floating Rate Class M Asset Backed
Certificates (the "Class M Certificates") and (c) $18,900,000 Series 2004-1
Floating Rate Class B Asset Backed Certificates (the "Class B Certificates" and,
together with the Class A Certificates and the Class M Certificates, the
"Offered Certificates") to be issued pursuant to the Second Amended and Restated
Pooling and Servicing Agreement, dated as of November 25, 1997 (as amended as of
July 22, 1999 and May 8, 2001 and as further amended from time to time, the
"Pooling Agreement") among the Seller, Spirit of America, Inc. ("SOAI"), a
Delaware corporation which is a wholly-owned indirect subsidiary of Charming, as
servicer (in such capacity, the "Servicer"), and Wachovia Bank, National
Association (formerly known as First Union National Bank), as trustee (the
"Trustee"), as supplemented by the Series 2004-1 Supplement to the Pooling
Agreement dated as of the Issuance Date (as defined below) (the "Series
Supplement", and the Pooling Agreement, as so supplemented, the "Supplemented
Pooling Agreement"). Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to such terms in the Supplemented Pooling
Agreement.
Each Offered Certificate will represent an undivided ownership interest
in the Charming Shoppes Master Trust (the "Trust"). In addition, concurrently
with the issuance of the Offered Certificates, the Trust will issue $16,200,000
Series 2004-1 Class C Asset Backed Certificates (the "Class C Certificates") and
$18,900,000 Series 2004-1 Class D Asset Backed Certificates (the "Class D
Certificates"), which will be issued in two subclasses designated as the "Class
D-1 Certificates" and the "Class D-2 Certificates". The Offered Certificates,
the Class C Certificates and the Class D Certificates are referred to herein as
the "Certificates". The Class C Certificates will be sold pursuant to the Class
C Certificate Purchase Agreement (the "Class C Purchase
Agreement") among the Trustee, the Seller, the Servicer and the purchasers named
therein (the "Class C Purchasers"). The Class D-1 Certificates will be sold
pursuant to the Class D-1 Certificate Purchase Agreement (the "Class D-1
Purchase Agreement") among the Trustee, the Seller, the Servicer and the
purchasers named therein (the "Class D-1 Purchasers"). The Class D-2
Certificates will initially be held by the Seller. The Seller will enter into a
Class D-2 Certificate Purchase Agreement (the "Class D-2 Purchase Agreement")
among the Trustee, the Seller and the Servicer. The assets of the Trust include,
among other things, receivables (the "Receivables") arising under a pool of
certain revolving credit card accounts owned by Spirit of America National Bank
("Spirit of America") which have been conveyed to the Seller by Spirit of
America pursuant to a Purchase and Sale Agreement dated as of November 25, 1997
and as amended as of September 1, 1999, November 9, 2000 and May 8, 2001 (the
"Purchase Agreement") and conveyed to the Trust pursuant to the Pooling
Agreement.
The Seller, at its own expense, has prepared an offering memorandum
dated July 16, 2004 (together with any exhibits attached thereto, the
"Preliminary Memorandum"), describing among other things, the Offered
Certificates and the Supplemented Pooling Agreement. Copies of the Preliminary
Memorandum have been delivered to you. The Seller, at its own expense, shall
also prepare a final offering memorandum (together with any exhibits attached
thereto, the "Final Memorandum"), which it will deliver to you no later than
three business days prior to the Issuance Date (as herein defined). The Seller
hereby confirms that it has authorized the Initial Purchasers to use the
Preliminary Memorandum and Final Memorandum in connection with the offering and
resale of the Offered Certificates by the Initial Purchasers. From and after the
date of any amendment or supplement to the Final Memorandum or the Preliminary
Memorandum, as applicable, the term "Final Memorandum" or "Preliminary
Memorandum" shall mean the Final Memorandum or the Preliminary Memorandum, as
applicable, as so amended or supplemented. The Pooling Agreement, the Series
Supplement and the Purchase Agreement shall be collectively referred to herein
as the "Related Documents".
The Offered Certificates may be resold solely to (i) "qualified
institutional buyers ("QIBs") in reliance upon Rule 144A ("Rule 144A") under the
Securities Act of 1933, as amended (the "Securities Act") and (ii) non-U.S.
persons outside the United States, as defined in Regulation S of the Securities
Act ("Regulation S"), in a transaction meeting the requirements of Regulation S.
2. Representations, Warranties and Covenants of CSRC, FSC and SOAI.
(a) CSRC represents and warrants to, and agrees with the
Initial Purchasers that:
(i) The Final Memorandum, as of its date and any amendment
thereof or supplement thereto, as of their respective dates, and in
each case as of the Issuance Date (as defined herein), does not and
will not, as of such dates and at such times, contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading
except that the representations and warranties in this clause (i) do
not relate to any statements or omissions made in reliance on and in
conformity with the Initial Purchaser Information (as defined in
Section 7(b)).
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(ii) As of the Issuance Date (as defined herein), the
representations and warranties of the Seller in the Pooling Agreement
will be true and correct in all material respects except to the extent
that such representations and warranties expressly relate to a date
other than the Issuance Date (as defined herein).
(iii) The Seller is duly organized and is validly existing as
a Delaware corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) and legal
right to own its properties and conduct its business as described in
the Preliminary Memorandum and the Final Memorandum, and is duly
qualified (or is exempt from such requirement) as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not have
a material adverse effect on the Seller and its Affiliates taken as a
whole or on the transactions contemplated by this Agreement and the
Related Documents.
(iv) The Certificates have been duly authorized for issuance
and sale, and, when issued and delivered pursuant to the Supplemented
Pooling Agreement, executed by the Seller and duly authenticated by the
Trustee and paid for by the Initial Purchasers or the respective
initial purchasers of the Class C Certificates and Class D Certificates
therein in accordance with the terms of this Agreement, the Class C
Purchase Agreement, the Class D-1 Purchase Agreement or the Class D-2
Purchase Agreement, as applicable, will be duly and validly issued and
entitled to the benefits of the Supplemented Pooling Agreement; each of
this Agreement and the Related Documents to which the Seller is a party
has been duly authorized by the Seller, and, when executed and
delivered by CSRC and the other parties thereto, each of this Agreement
and the Related Documents to which the Seller is a party will
constitute a valid, binding and enforceable agreement of the Seller;
provided that with respect to all such documents such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting
the enforcement of creditors' rights in general and such enforceability
may be limited by general principles of equity (whether considered in a
suit at law or in equity) and subject to the unenforceability, under
certain circumstances, of provisions indemnifying a party against
liability where such indemnification is contrary to public policy; and
the Offered Certificates and the Related Documents will conform to the
descriptions thereof in the Final Memorandum in all material respects.
(v) No consent, approval, authorization or order of, or filing
with, any court, governmental agency or body is required to be obtained
or made by the Seller in connection with (i) the issuance and sale of
the Certificates or (ii) the consummation of the transactions
contemplated by this Agreement and the Related Documents, except such
as have been obtained or made and remain, and will continue to remain,
in full force and effect, such as may be required under state
securities laws and the filing of any financing statements required to
perfect the Trust's and the Seller's interest in the Receivables.
(vi) The Seller is not in violation of its certificate of
incorporation or by-laws or in default in the performance or observance
of any obligation, agreement, covenant or
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condition contained in any agreement or instrument to which it is a
party or by which it or its properties is bound which would have a
material adverse effect on the transactions contemplated in this
Agreement or in the Supplemented Pooling Agreement and the Related
Documents. This Agreement has been duly executed and delivered by CRSC.
The execution, delivery and performance of this Agreement and the other
Related Documents, and the issuance and sale of the Certificates, the
compliance with the terms and provisions hereof and thereof and the
consummation of the transactions contemplated herein and therein will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, the certificate of incorporation or
by-laws of the Seller or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, or result in
the creation or imposition of any Lien under, any statute, any rule,
regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over it or any of its
properties, or any agreement or instrument to which it is a party or by
which it is bound or to which any of its properties is subject, and it
has full power and authority (corporate and otherwise) to enter into
this Agreement and the Related Documents to which it is a party and to
consummate the transactions contemplated hereby and thereby, including
the full power and authority to sell the Offered Certificates as
contemplated by this Agreement.
(vii) Other than as set forth or contemplated in the Final
Memorandum, there are no legal or governmental proceedings or
investigations pending or, to its knowledge, threatened to which any of
the Seller or its Affiliates is or may be a party or to which any
property of the Seller or its Affiliates is or may be the subject (x)
which, if determined adversely to the Seller, could individually or in
the aggregate reasonably be expected to have a material adverse effect
on the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Seller
and its Affiliates, taken as a whole, or that would reasonably be
expected to materially adversely affect the interests of the holders of
the Offered Certificates, (y) asserting the invalidity of this
Agreement, any of the Related Documents or the Offered Certificates or
(z) seeking to prevent the issuance of the Offered Certificates or of
any of the transactions contemplated by this Agreement or any of the
Related Documents.
(viii) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance by the Seller
of this Agreement, the Offered Certificates, the Class C Certificates,
the Class D Certificates or the other Related Documents shall have been
paid or will be paid by or on behalf of the Seller at or prior to the
Issuance Date (as defined herein) to the extent then due.
(ix) No Early Amortization Event, and no event that would
become an Early Amortization Event after any applicable grace period
has elapsed, exists with respect to any outstanding Series of
Certificates issued by the Trust and no event has occurred that would
constitute (after the issuance of the Certificates) an Early
Amortization Event or would become an Early Amortization Event after
any applicable grace period has elapsed.
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(x) Except as set forth in or contemplated in the Final
Memorandum, there has been no material adverse change in the condition
(financial or otherwise) of the Seller since May 1, 2004.
(xi) Assuming that (i) the Offered Certificates are offered
and sold in the manner contemplated in this Agreement and in the Final
Memorandum, (ii) the Initial Purchasers comply with the agreements and
covenants contained in this Agreement, (iii) the representations made
in this Agreement by the Initial Purchasers are true and correct and
(iv) the representations and warranties made or deemed to be made by
the purchasers of the Certificates are true and correct, the Offered
Certificates are not required to be registered under Section 5 of the
Securities Act in connection with the offer, issuance, sale and
delivery thereof as contemplated by the Final Memorandum and this
Agreement and neither the Seller nor any agent acting on its behalf
(other than the Initial Purchasers), has taken or will take any action
which would subject the offer, issuance, sale or delivery of the
Offered Certificates to the provisions of Section 5 of the Securities
Act or to the registration provisions of any state securities laws of
any applicable jurisdiction.
(xii) Neither the Seller nor any of its Affiliates has
directly or through any agent (it being understood that the Seller
makes no representation and warranty in this regard with respect to the
Initial Purchasers or any affiliates of the Initial Purchasers) engaged
in any "directed selling efforts" (as defined in Rule 902(c) under
Regulation S) with respect to the Offered Certificates. The Seller and
its affiliates and any agent acting on their behalf (it being
understood that the Seller makes no representation or warranty in this
regard with respect to the Initial Purchasers or any affiliates of the
Initial Purchasers) have complied with the "offering restrictions" (as
defined in Rule 902(g) under Regulation S) with respect to Offered
Certificates sold outside the United States. Neither the Seller, any of
its Affiliates or any person or entity acting on its behalf (it being
understood that the Seller makes no representation or warranty in this
regard with respect to the Initial Purchasers or any affiliates of the
Initial Purchasers) has entered into any contractual arrangement with
respect to the distribution of the Offered Certificates, except for
this Agreement and the Related Documents.
(xiii) None of the Seller, any of its Affiliates or any person
or entity acting on its or their behalf (it being understood that the
Seller makes no representation or warranty in this regard with respect
to the Initial Purchasers or any affiliates of the Initial Purchasers)
within the six months preceding the date of this Agreement, (A) has
offered or sold any securities which are substantially similar to the
Offered Certificates the result of which would cause the offer and sale
of any of the Offered Certificates pursuant to this Agreement to fail
to be entitled to exemption from registration under the Securities Act
or (B) has offered or will offer to sell the Offered Certificates in
the United States by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the
Securities Act.
(xiv) Neither the Seller nor the Trust is required (or after
giving effect to the transactions contemplated by the Related
Documents, will be required) to be registered as
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an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(b) Fashion Service Corp. ("FSC") represents and warrants to,
and agrees with the Initial Purchasers, that:
(i) As of the Issuance Date (as defined herein), the
representations and warranties of Spirit of America in each of the
Related Documents to which it is a party will be true and correct
except to the extent that such representations and warranties expressly
relate to a date other than the Issuance Date (as defined herein).
(ii) FSC is duly organized and is validly existing as a
Delaware corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) and legal
right to own its properties and conduct its business as currently
conducted, and is duly qualified (or is exempt from such requirement)
as a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in
good standing would not have a material adverse effect on FSC and its
Affiliates taken as a whole or on the transactions contemplated by this
Agreement and the Related Documents.
(iii) Spirit of America is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States of America, and has full corporate power, authority and
legal right to own its properties and conduct its business as described
in the Preliminary Memorandum and the Final Memorandum, and is duly
qualified (or is exempt from such requirement) as a foreign corporation
for the transaction of business and is in good standing under the laws
of each jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, other than where
failure to be so qualified or in good standing would not have a
material adverse effect on Spirit of America and its Affiliates taken
as a whole or on the transactions contemplated by this Agreement and
the Related Documents.
(iv) This Agreement has been duly authorized, executed and
delivered by FSC, and, when executed and delivered by the other parties
hereto will constitute a valid, binding and enforceable agreement of
FSC; provided that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforcement of creditors'
rights in general and such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity)
and subject to the unenforceability, under certain circumstances, of
provisions indemnifying a party against liability where such
indemnification is contrary to public policy.
(v) The Purchase Agreement has been duly authorized, executed
and delivered by Spirit of America and constitutes a valid, binding and
enforceable agreement of Spirit of America; provided that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
6
hereafter in effect affecting the enforcement of creditors' rights in
general and such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity) and subject
to the unenforceability, under certain circumstances, of provisions
indemnifying a party against liability where such indemnification is
contrary to public policy.
(vi) FSC is not in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
agreement or instrument to which it is a party or by which it or its
properties are bound which would have a material adverse effect on the
transactions contemplated in this Agreement or in the Supplemented
Pooling Agreement and the Related Documents. No consent, approval,
authorization or order of, or filing with, any court, governmental
agency or body is required to be obtained or made by FSC for the
consummation of the transactions contemplated by this Agreement, or by
Spirit of America for the consummation of the transactions contemplated
by the Purchase Agreement, except such as have been obtained or made
and remain, and will continue to remain, in full force and effect, such
as may be required under state securities laws and the filing of any
financing statements required to perfect the Trust's and the Seller's
interest in the Receivables.
(vii) The execution, delivery and performance of this
Agreement by FSC, the compliance with the terms and provisions hereof
and the consummation of the transactions contemplated herein and
therein will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, the certificate of
incorporation or by-laws of FSC or result in a breach or violation of
any of the terms and provisions of, or constitute a default under, or
result in the creation or imposition of any Lien under, any statute,
any rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over it or any of its
properties, or any agreement or instrument to which it is a party or by
which it is bound or to which any of the properties of it is subject,
and it has full power and authority (corporate and otherwise) to enter
into this Agreement and to consummate the transactions contemplated
hereby.
(viii) Spirit of America is not in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any agreement or instrument to which it is a party or by
which it or its properties are bound which would have a material
adverse effect on the transactions contemplated in the Purchase
Agreement and the Supplemented Pooling Agreement. The execution,
delivery and performance of the Purchase Agreement by Spirit of
America, the compliance with the terms and provisions thereof and the
consummation of the transactions contemplated herein and therein will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, Spirit of America's charter or
by-laws or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, or result in the creation
or imposition of any Lien under, any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over Spirit of America or any of its
properties, or any agreement or instrument to which Spirit of America
is a party or by which it is bound or to which any of its properties is
subject,
7
and Spirit of America has full power and authority (corporate and
otherwise) to enter into the Purchase Agreement and to consummate the
transactions contemplated thereby.
(ix) Other than as set forth or contemplated in the Final
Memorandum, there are no legal or governmental proceedings or
investigations pending or, to its knowledge, threatened to which Spirit
of America or any of its Affiliates is or may be a party or to which
any property of Spirit of America and its Affiliates is or may be the
subject (x) which, if determined adversely to Spirit of America, could
individually or in the aggregate reasonably be expected to have a
material adverse effect on the general affairs, business, prospects,
management, financial position, stockholders' equity or results of
operations of Spirit of America and its Affiliates, taken as a whole,
or that would reasonably be expected to materially adversely affect the
interests of the holders of the Certificates, (y) asserting the
invalidity of this Agreement, any of the Related Documents or the
Offered Certificates or (z) seeking to prevent the issuance of the
Offered Certificates or of any of the transactions contemplated by this
Agreement or any of the Related Documents.
(x) Other than as set forth or contemplated in the Final
Memorandum, there are no legal or governmental proceedings or
investigations pending or, to its knowledge, threatened to which FSC or
any of its Affiliates is or may be a party or to which any of property
of FSC or its Affiliates is or may be the subject (x) which, if
determined adversely to FSC, could individually or in the aggregate
reasonably be expected to have a material adverse effect on the general
affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of FSC or FSC and its
Affiliates, taken as a whole, or that would reasonably be expected to
materially adversely affect the interests of the holders of the
Certificates, (y) asserting the invalidity of this Agreement, any of
the Related Documents or the Offered Certificates or (z) seeking to
prevent the issuance of the Offered Certificates or of any of the
transactions contemplated by this Agreement or any of the Related
Documents.
(xi) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance by FSC of this
Agreement or the other Related Documents shall have been paid or will
be paid by or on behalf of FSC at or prior to the Issuance Date (as
defined herein) to the extent then due.
(xii) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance by the Servicer
of the Related Documents shall have been paid or will be paid by or on
behalf of the Servicer at or prior to the Issuance Date to the extent
then due.
(xiii) Except as set forth in or contemplated in the Final
Memorandum, there has been no material adverse change in the condition
(financial or otherwise) of FSC or any of its subsidiaries since May 1,
2004.
(xiv) Except as set forth in or contemplated in the Final
Memorandum, there has been no material adverse change in the condition
(financial or otherwise) of the Servicer or any of its subsidiaries
since May 1, 2004.
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(c) SOAI represents and warrants to, and agrees with the
Initial Purchasers, that:
(i) As of the Issuance Date (as defined herein), the
representations and warranties of SOAI in each of the Related Documents
to which it is a party will be true and correct except to the extent
that such representations and warranties expressly relate to a date
other than the Issuance Date (as defined herein).
(ii) SOAI is duly organized and is validly existing as a
Delaware corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) and legal
right to own its properties and conduct its business as described in
the Preliminary Memorandum and the Final Memorandum, and is duly
qualified (or is exempt from such requirement) as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not have
a material adverse effect on SOAI and its Affiliates taken as a whole
or on the transactions contemplated by this Agreement and the Related
Documents.
(iii) Each of this Agreement and the Related Documents to
which SOAI is a party have been duly authorized, executed and delivered
by SOAI, and, when executed and delivered by the other parties thereto,
each of this Agreement and the Related Documents to which SOAI is a
party will constitute a valid, binding and enforceable agreement of
SOAI; provided that with respect to all such documents such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights in general and
such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity) and subject to the
unenforceability, under certain circumstances, of provisions
indemnifying a party against liability where such indemnification is
contrary to public policy.
(iv) No consent, approval, authorization or order of, or
filing with, any court, governmental agency or body is required to be
obtained or made by SOAI in connection with the consummation of the
transactions contemplated by this Agreement and the Related Documents,
except such as have been obtained or made and remain, and will continue
to remain, in full force and effect, such as may be required under
state securities laws and the filing of any financing statements
required to perfect the Trust's and the Seller's interest in the
Receivables.
(v) SOAI is not in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
agreement or instrument to which it is a party or by which it or its
properties is bound which would have a material adverse effect on the
transactions contemplated this Agreement or any of the Related
Documents. The execution, delivery and performance of this Agreement
and the other Related Documents, the compliance with the terms and
provisions hereof and thereof and the consummation of the transactions
contemplated herein and therein will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, its
9
certificate of incorporation or by-laws or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, or result in the creation or imposition of any Lien
under, any statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction
over it or any of its properties, or any agreement or instrument to
which it is a party or by which it is bound or to which any of the
properties of it is subject, and it has full power and authority
(corporate and otherwise) to enter into this Agreement and the Related
Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby.
(vi) Other than as set forth or contemplated in the Final
Memorandum, there are no legal or governmental proceedings or
investigations pending or, to its knowledge, threatened to which any of
SOAI or its Affiliates is or may be a party or to which any property of
SOAI or its Affiliates is or may be the subject (x) which, if
determined adversely to SOAI, could individually or in the aggregate
reasonably be expected to have a material adverse effect on the general
affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of SOAI and its
Affiliates, taken as a whole, or that would reasonably be expected to
materially adversely affect the interests of the holders of the
Certificates, (y) asserting the invalidity of this Agreement, any of
the Related Documents or the Offered Certificates or (z) seeking to
prevent the issuance of the Offered Certificates or of any of the
transactions contemplated by this Agreement or any of the Related
Documents.
(vii) No Early Amortization Event, and no event that would
become an Early Amortization Event after any applicable grace period
has elapsed, exists with respect to any outstanding Series of
Certificates issued by the Trust and no event has occurred that would
constitute (after the issuance of the Certificates) an Early
Amortization Event or would become an Early Amortization Event after
any applicable grace period has elapsed.
(viii) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance by SOAI of this
Agreement or the other Related Documents shall have been paid or will
be paid by or on behalf of SOAI at or prior to the Issuance Date (as
defined herein) to the extent then due.
(ix) Except as set forth in or contemplated in the Final
Memorandum, there has been no material adverse change in the condition
(financial or otherwise) of SOAI or any of its subsidiaries since May
1, 2004.
3. Payment and Delivery of Offered Certificates; Fees. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Seller agrees to sell to the
Initial Purchasers and the Initial Purchasers agree to purchase $115,200,000
principal amount of Class A Certificates, $10,800,000 principal amount of the
Class M Certificates and $18,900,000 principal amount of the Class B
Certificates, each Initial Purchaser to purchase the amounts shown on Schedule A
hereto. The Seller hereby agrees, that in consideration of the Initial
Purchasers' efforts in the resale of the Offered Certificates, it shall pay the
Initial Purchasers a fee equal to the sum of
10
0.425% of the aggregate original principal amount of the Class A Certificates,
0.520% of the aggregate original principal amount of the Class M Certificates
and 0.60% of the aggregate original principal amount of the Class B Certificates
(the "Initial Purchaser Fee"), payable in full on August 5, 2004 (or such later
date as may be mutually agreed upon by the parties hereto) (the "Issuance
Date"), to be paid by the Seller by wire transfer in immediately available funds
to an account designated by the Initial Purchasers. The Class A Certificates are
to be purchased at a price equal to 100% of the principal amount thereof, the
Class M Certificates are to be purchased at a price equal to 100% of the
principal amount thereof and the Class B Certificates are to be purchased at a
price equal to 100% of the principal amount thereof.
The closing and sale of the Certificates (the "Closing") shall be held
at the offices of Xxxxx, Brown, Xxxx & Maw LLP in Chicago, Illinois, at 10:00
a.m., Chicago time, on the Issuance Date. Payment of the purchase price for the
Offered Certificates being sold and purchased hereunder shall be made on the
Issuance Date by wire transfer of immediately available funds to an account to
be designated by the Seller prior to the Issuance Date, against delivery to the
Initial Purchasers of the Offered Certificates registered in the name of Cede &
Co., the nominee of The Depository Trust Company ("DTC"). The Initial
Purchasers' interests as beneficial owners of the Offered Certificates will be
represented by book entries on the records of DTC and participating members
thereof.
4. Certain Agreements of the Seller. The Seller agrees with the Initial
Purchasers that:
(a) The Seller shall furnish such information, execute such
instruments and take such actions, if any, as may be reasonably
requested by the Initial Purchasers to effect the resale of the Offered
Certificates under the securities "blue sky" laws of each jurisdiction
in which the Offered Certificates are offered for sale or sold;
provided that the Seller shall not be obligated to qualify to do
business in any jurisdiction in which it is not currently so qualified;
and provided, further, that the Seller shall not be required to file a
general consent to service of process in any jurisdiction.
(b) In order to render the Offered Certificates eligible for
resale pursuant to Rule 144A, the Seller shall make or cause to be made
available to any beneficial owner of the Offered Certificates in
connection with any sale thereof and any prospective purchaser of such
Offered Certificates from such beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act.
(c) The Seller will not at any time offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any
securities under circumstances where such offer, sale, pledge, contract
or disposition would cause the exemption afforded by the Securities Act
to cease to be applicable to the offer and sale of the Offered
Certificates hereunder.
(d) The Seller agrees that it will not and will cause its
affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act) not to solicit any offer to buy or make any offer or
sale of or otherwise negotiate in respect of, the Offered Certificates
if, as a result of the doctrine of "integration" referred to in Rule
502 under the Securities
11
Act, such offer or sale would render invalid (for the purposes of (i)
the sale of the Offered Certificates from Seller to the Initial
Purchasers, (ii) the resale of the Offered Certificates by the Initial
Purchasers to subsequent purchasers or (iii) the resale of the Offered
Certificates by such subsequent purchasers to others) the exemption
from the registration requirements of the Securities Act provided by
Section 4(2) thereof or by Rule 144A or by Regulation S thereunder or
otherwise.
(e) The Seller agrees that neither it nor any of its
affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act) will directly or through any person acting on its
behalf, assuming the accuracy of the representations and warranties of
the Initial Purchasers in Section 5: (i) engage in any form of general
solicitation or general advertising in connection with the offering or
sale of the Offered Certificates in the United States (as those terms
are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act or (ii) engage in any "directed selling efforts" (as
defined in Rule 902(c) under Regulation S) with respect to the Offered
Certificates. The Seller agrees that it and its affiliates (as defined
in Rule 501(b) of Regulation D under the Securities Act) and any person
acting on its behalf, assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 5, will comply with the
"offering restrictions" (as defined in Rule 902(g) under Regulation S)
with respect to any Offered Certificates sold outside the United
States.
(f) Whether or not the transactions contemplated by this
Agreement are terminated for any reason, the Seller agrees to pay
promptly all costs and expenses incident to the performance by the
Seller of its obligations hereunder, including, without limitation, (i)
the preparation, reproduction and printing (to the extent such
documents are printed) of the Preliminary Memorandum and the Final
Memorandum and all amendments or supplements thereto (including the
exhibits thereto), the Pooling Agreement, the Series Supplement, the
Certificates, this Agreement and the other Related Documents, (ii) the
preparation, authentication, issuance and delivery of the Offered
Certificates, (iii) the expenses (including reasonable fees and
disbursements of counsel to the Initial Purchasers), if any, of
registering or qualifying the Offered Certificates under state
securities or "blue sky" laws, (iv) the fees and expenses of the
Seller's accountants and of reasonable fees and expenses of counsel for
the Seller, (v) the reasonable fees and disbursements of counsel for
the Initial Purchasers, (vi) the furnishing to the Initial Purchasers
of such copies of the Preliminary Memorandum and the Final Memorandum
and all amendments or supplements thereto (including the exhibits
thereto) as may be requested for use in connection with the offering
and sale of the Offered Certificates, (vii) fees of each Rating Agency
in connection with their ratings of the Offered Certificates, (viii)
fees of the Trustee under the Pooling Agreement (including the fees and
expenses of its counsel which the Seller shall be obligated to pay
pursuant to this clause (viii)), and (ix) the Seller's performance of
and compliance with all agreements and conditions contained herein, in
the Pooling Agreement, the Series Supplement, the Certificates and the
other Related Documents on its part to be performed or complied with.
12
(g) To the extent, if any, that the ratings provided with
respect to the Offered Certificates by either Rating Agency is
conditional upon the furnishing of documents or the taking of any other
reasonable actions by the Seller, the Seller shall, subject to
availability and the reasonableness of such document request, furnish
such documents and take any such other reasonable actions.
(h) During the period any Offered Certificates shall remain
outstanding, the Seller will furnish or will cause to be furnished to
the Initial Purchasers, copies of all reports or other communication
(financial or other) furnished to the holders of the Offered
Certificates.
5. Representations, Warranties and Covenants of the Initial Purchasers.
Each Initial Purchaser represents and warrants to, and agrees with the Seller,
the Servicer and FSC as of the date hereof, and as of the Issuance Date, that:
(a) It understands that the Offered Certificates have not been
and will not be registered under the Securities Act in reliance upon an
exemption therefrom, or registered or qualified under the securities or
"blue sky" laws of any state in the United States. It has advised
Seller that it proposes to offer the Offered Certificates for resale
upon the terms and conditions set forth herein and in the Final
Memorandum, and it will furnish to each person purchasing the Offered
Certificates from it, the Final Memorandum and any amendment or
supplement thereto. In addition to the foregoing, it will not offer,
sell, transfer, pledge, hypothecate or otherwise dispose of the Offered
Certificates except in accordance with this Agreement and the
Supplemented Pooling Agreement.
(b) It shall not utilize any form of general solicitation or
general advertising within the meaning of Rule 502(c) of the Securities
Act in connection with the resale of the Offered Certificates,
including any advertisement, article, notice or other communication
published in any newspaper, magazine or similar medium or broadcast
over television or radio, or conduct any seminar or meeting with
respect to the Offered Certificates whose attendees have been invited
by general solicitation or general advertising or other action
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(c) It is an "accredited investor" (as defined in Regulation D
under the Securities Act) and a QIB within the meaning of Rule 144A,
purchasing the Offered Certificates. It has such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of an investment in the Offered
Certificates.
(d) It will offer or sell the Offered Certificates only to (i)
persons whom it reasonably believes to be QIBs, purchasing the Offered
Certificates for their own account or for the account of other
investors who are QIBs in transactions meeting the requirements of Rule
144A and (ii) non-U.S. persons (as defined in Regulation S) in offshore
transactions (as defined in Regulation S) made in compliance with
Regulation S. It agrees that it will not offer, sell or deliver any of
the Offered Certificates in any
13
jurisdiction outside the United States (as defined in Regulation S)
except under circumstances which will result in compliance with the
applicable laws thereof, and that it will take whatever action is
required to permit its offer and resale of the Offered Certificates in
such jurisdictions.
(e) It will take reasonable steps to inform, and cause each of
its affiliates to take reasonable steps to inform, persons acquiring
Offered Certificates from it or its affiliates, as the case may be, in
the United States that the Offered Certificates (i) have not been and
will not be registered under the Securities Act, (ii) are being sold to
them without registration under the Securities Act in reliance on Rule
144A or Rule 903 or 904 of Regulation S, and (iii) may not be offered,
sold or otherwise transferred except (A) in offshore transactions to
non-U.S. Persons in accordance with Rule 903 or 904 of Regulation S in
a principal amount of not less than $1,000,000, or (B) to a person whom
the seller reasonably believes is a QIB that is purchasing such Offered
Certificates for its own account or for the account of a QIB to whom
notice is given that the offer, sale or transfer is being made in
reliance on Rule 144A, in a principal amount of not less than
$1,000,000, for the purchaser and each such account, in a transaction
meeting the requirements of Rule 144A.
(f) The transfer restrictions and the other provisions set
forth in the Final Memorandum under the headings "Notice to Investors"
and "Plan of Distribution," including the legend required thereby,
shall apply to the Offered Certificates.
(g) None of it, its affiliates or any person acting on its
behalf has engaged or will engage in any directed selling efforts (as
defined in Regulation S under the Securities Act) with respect to the
Offered Certificates, and it, its affiliates and any person acting on
its behalf have complied and will comply with the offering restriction
requirements of Regulation S. It agrees that, at or before confirmation
of a sale of Offered Certificates (other than a sale of Offered
Certificates pursuant to Rule 144A) it will have sent to each
distributor, dealer or person receiving a selling concession, fee or
other remuneration who purchases the Offered Certificates from or
through it during the distribution compliance period as defined in Rule
902 of Regulation S, a confirmation or notice to substantially the
following effect:
"The Offered Certificates covered hereby have not been
registered under the United States Securities Act of 1933
(the "Securities Act") and may not be offered or sold within
the United States or to or for the account or benefit of
U.S. persons (as defined in Regulation S), except in
accordance with Rule 144A under the Securities Act."
(h) It (x) has complied and shall comply with all applicable
provisions of the Financial Services and Markets Act 2000 ("FSMA") and
the Public Offers of Securities Regulations 1995, as amended (the
"Regulations") with respect to anything done by it in relation to the
Offered Certificates in, from or otherwise involving the United
Kingdom; (y) has only communicated or caused to be communicated and it
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of FSMA) received by it in connection with the issue or sale
of any Offered Certificates in circumstances in which section 21(1) of
14
the FSMA does not apply to the Seller or the Servicer; and (z) has not
offered or sold and, prior to the date which is six months after the
date of issue of the Offered Certificates will not offer or sell any
Offered Certificates to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing,
or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which do not constitute
an offer to the public in the United Kingdom for purposes of the
Regulations.
(i) It represents and warrants that (i) it is duly authorized
and empowered to execute, deliver and perform this Agreement; (ii) the
person signing this Agreement on its behalf has been duly authorized to
do so; (iii) the execution, delivery and performance of this Agreement
does not and will not conflict with, violate or constitute a default
under any applicable law or regulation, its articles of organization or
other organizational document or by-laws and (iv) this Agreement
constitutes a legal, valid and binding obligation of the Initial
Purchasers; provided that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in
equity) and subject to the unenforceability, under certain
circumstances, of provisions indemnifying a party against liability
where such indemnification is contrary to public policy.
Such Initial Purchaser acknowledges that the Seller and others will
rely upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements.
6. Conditions of the Obligations of the Initial Purchasers. The Initial
Purchasers' obligations hereunder will be subject to the accuracy of the
representations and warranties herein made on the part of the Seller, FSC and
the Servicer, to the accuracy of the statements of the officers of each of the
Seller, FSC and the Servicer made pursuant to the provisions hereof, to the
performance by the Seller, FSC and the Servicer of their respective obligations
hereunder and to the following additional conditions precedent:
(a) The Initial Purchasers shall have received fully executed
copies of this Agreement, the Supplemented Pooling Agreement and the
other Related Documents duly executed and delivered by the parties
thereto.
(b) Subsequent to the execution and delivery of this Agreement
and prior to the Issuance Date, there shall not have occurred and be
continuing (i) any change, or any development involving a prospective
change, in or affecting particularly the business or properties of the
Seller, FSC, the Servicer or Spirit of America which, in the reasonable
judgment of the Initial Purchasers after consultation with the Seller
and the Servicer, materially impairs the investment quality of the
Offered Certificates; (ii) any reduction in or withdrawal of the rating
of the Certificates issued by the Trust or any other debt securities of
the Seller, the Servicer or any Affiliate thereof by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Securities Act), or any public announcement that
any such organization has under surveillance or review its rating of
the Certificates issued by the
15
Trust or any other debt securities of the Seller, the Servicer or any
Affiliate thereof (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
reduction in or withdrawal of such rating); (iii) any suspension or
limitation of trading in securities generally on the New York Stock
Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Seller
or the Servicer or any Affiliate of the Seller or the Servicer on any
exchange or in any over-the-counter market; (iv) a general moratorium
on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities; (v) any material
disruption in commercial banking securities settlement or clearance
services; if, in the reasonable judgment of the Initial Purchasers, the
effect of any such disruption makes it impractical or inadvisable to
proceed with completion of the resale of the Offered Certificates; or
(vi) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any
other substantial national or international calamity or emergency if,
in the reasonable judgment of the Initial Purchasers, the effect of any
such outbreak, escalation, declaration, calamity, emergency or change
makes it impractical or inadvisable to proceed with completion of the
resale of the Offered Certificates.
(c) The Initial Purchasers shall have received an opinion of
Xxxxx X. Xxxxx, Esq., Executive Vice President and General Counsel to
Charming, dated the Issuance Date and addressed to the Initial
Purchasers, satisfactory in form and substance to the Representative
and its counsel as to the matters set forth in Exhibit A.
(d) The Initial Purchasers shall have received an opinion of
local tax counsel for the Seller and the Servicer, each dated the
Issuance Date, regarding certain Ohio and Georgia tax matters in form
and substance reasonable satisfactory to the Representative and its
counsel.
(e) The Initial Purchasers shall have received an opinion of
Xxxxx, Xxxxx, Xxxx & Maw LLP, dated the Issuance Date and addressed to
the Initial Purchasers, satisfactory in form and substance to the
Representative and its counsel as to the matters set forth in Exhibit
B. Such counsel shall also deliver a letter, dated the Issuance Date
and addressed to the Initial Purchasers, stating that such counsel has
participated in conferences with representatives of the Seller and the
Servicer, the Initial Purchasers and counsel to the Initial Purchasers
concerning the Final Memorandum, and that, on the basis of the
information such counsel gained in the course of performing its
professional engagement, nothing came to its attention that caused it
to believe that the Final Memorandum, as of its date, or as of the
Closing Date, contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that it need
not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Final Memorandum (except
for the statements under the headings "Structural Summary--ERISA
Considerations for Investors." "Legal Aspects of the Receivables" and
"Certain ERISA Considerations", in each case to the extent they
constitute matters of law or legal conclusions with respect thereto),
and it need not express any belief with
16
respect to the financial statements or other financial, statistical or
accounting data contained in the Final Memorandum.
(f) The Initial Purchasers shall have received an opinion of
Xxxxx, Xxxxx, Xxxx & Maw LLP, dated the Issuance Date and addressed to
the Initial Purchasers, to the effect that the transfer of Receivables
from the Seller to the Trust creates a first priority perfected
security interest in such Receivables in favor of the Trustee, in form
and substance satisfactory to the Representative and its counsel.
(g) The Initial Purchasers shall have received an opinion of
Xxxxxx, Xxxxxxx & Xxxxxxx LLP, dated the Issuance Date and addressed to
the Initial Purchasers, to the effect that the transfer of Receivables
from Spirit of America to the Seller creates a first priority perfected
security interest in such Receivables in favor of the Seller, in form
and substance satisfactory to the Representative and its counsel.
(h) The Initial Purchasers shall have received an opinion of
Xxxxx, Xxxxx, Xxxx & Maw LLP, dated the Issuance Date and addressed to
the Initial Purchasers, with respect to (a) the nonconsolidation of FSC
with the Seller and (b) certain matters relating to the transfer of the
Receivables from Spirit of America to the Seller, in each case in form
and substance satisfactory to the Representative and its counsel.
(i) The Initial Purchasers shall have received copies of UCC-1
financing statements filed in the offices of the Secretaries of State
of the State of Ohio and the District of Columbia, in the case of
Spirit of America, and the State of Delaware, in the case of the
Seller, reflecting the interests of the Seller and the Trust in the
Receivables.
(j) The Representative shall have received an opinion of
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, special counsel for the Initial
Purchasers, subject to customary qualifications, assumptions,
limitations and exceptions, dated the Issuance Date, in form and
substance reasonably satisfactory to the Representative, to the effect
set forth in Exhibit C.
(k) The Initial Purchasers shall have received an opinion from
Pepper, Xxxxxxxx & Sheetz, counsel for the Trustee, dated the Issuance
Date and addressed to the Initial Purchasers, with respect to general
corporate matters, enforceability of the Related Documents to which the
Trustee is a party, due authentication and delivery of the Offered
Certificates and such other matters as the Representative shall
request, in form and substance satisfactory to the Representative and
its counsel.
(l) The Initial Purchasers shall have received a certificate
or certificates, dated the Issuance Date, of a vice president or more
senior officer of each of the Seller, FSC and the Servicer in which
such officer, to the best of his or her knowledge after reasonable
investigation, shall state that (A) the representations and warranties
of the Seller, FSC and the Servicer, as applicable, contained in this
Agreement are true and correct in all material respects on and as of
the Issuance Date, (B) the Seller, FSC and the Servicer, as applicable,
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Issuance
Date, (C) the
17
representations and warranties of the Seller, FSC or the Servicer, as
applicable, in the Related Documents to which it is a party are true on
the Issuance Date, except to the extent such representations and
warranties relate to an earlier date, and (D) subsequent to the date as
of which information is given in the Final Memorandum, and except as
set forth or contemplated in the Final Memorandum or such certificate,
there has been no material adverse change in the condition (financial
or otherwise) of the Seller, FSC or the Servicer, as applicable, or any
of their respective Affiliates.
(m) The Initial Purchasers shall have received a letter of
Xxxxx & Xxxxx addressed to the Seller and the Initial Purchasers
regarding the Receivables, substantially in the form heretofore agreed
to and otherwise in form and in substance satisfactory to the
Representative and its counsel.
(n) The Initial Purchasers shall have received letters from
each of the Rating Agencies stating that (i) the Class A Certificates
have received a rating of "AAA" and "Aaa" by Standard & Poor's and
Xxxxx'x, respectively, (ii) the Class M Certificates have received a
rating of "AA" and "Aa2" by Standard & Poor's and Xxxxx'x respectively,
(iii) the Class B Certificates have received a rating of "A" and "A2"
by Standard and Poor's and Xxxxx'x, respectively, (iv) the Class C
Certificates have received a rating of "Baa2" by Xxxxx'x and (v)
confirming that the rating of any certificates of any other Series
issued by the Trust will not be withdrawn or reduced as a result of the
issuance of the Certificates.
(o) The Initial Purchasers shall have received from the
Servicer a Servicer Report dated as of the Issuance Date, calculated
after giving effect to all transactions contemplated on the Issuance
Date.
(p) The Seller and the Servicer will furnish the Initial
Purchasers with such number of conformed copies of such opinions,
certificates, letters and documents as it may reasonably request.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Initial Purchasers by notice to the Seller at any time at or prior to the
Issuance Date, and such termination shall be without liability of any party to
any other party except as provided in Section 8.
7. Indemnification and Contribution.
(a) CSRC, SOAI and FSC, jointly and severally, agrees to
indemnify and hold harmless each Initial Purchaser, and each person, if
any, who controls the Initial Purchasers within the meaning of Section
15 of the Securities Act or Section 20 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), from and against any and all
losses, claims, damages, liabilities and expenses (including, without
limitation, the reasonable legal fees and other reasonable expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of
any material fact contained in the Final Memorandum or the Preliminary
Memorandum or caused by any omission or alleged
18
omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except
insofar as any such loss, claim, damage, expense or liability arises
out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from any of such documents in
reliance upon and in conformity with the Initial Purchaser Information
(as defined in subsection (b) below); provided, further, that none of
CSRC, SOAI or FSC will be liable under the indemnity agreement in this
subsection (a) with respect to the Preliminary Memorandum to the extent
that any loss, claim, damage or liability of the Initial Purchasers (or
any Person controlling the Initial Purchasers within the meaning of the
Securities Act) results from the fact that the Initial Purchasers sold
Offered Certificates to a person as to whom it is established that
there was not sent or given, at or prior to consummation of such sale,
a copy of the Final Memorandum (including any amendment or supplement
but excluding documents incorporated by reference) if the Seller or the
Servicer previously furnished copies of the Final Memorandum (including
any amendment or supplement but excluding documents incorporated by
reference) to the Initial Purchasers and the loss, claim, damage or
liability of the Initial Purchasers (or any Person controlling the
Initial Purchasers within the meaning of the Securities Act) results
from an untrue statement or omission of a material fact contained in
the Preliminary Memorandum that is corrected in the Final Memorandum or
any amendment or supplement to the Final Memorandum.
(b) Each Initial Purchaser, severally and not jointly, agrees
to indemnify and hold harmless each of CSRC, SOAI and FSC and each
person, if any, who controls the CSRC, SOAI or FSC within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and
expenses (including, without limitation, the reasonable legal fees and
other reasonable expenses incurred in connection with any suit, action
or proceeding or any claim asserted) caused by any untrue statement or
alleged untrue statement of any material fact contained in the Final
Memorandum or the Preliminary Memorandum or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, but
only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance on or in
conformity with the Initial Purchaser Information. The "Initial
Purchaser Information" includes the names of the Initial Purchasers as
they appear on the front page of the Preliminary Memorandum and the
Final Memorandum and the information in the Preliminary Memorandum and
the Final Memorandum in the third paragraph under the heading "Plan of
Distribution".
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under
subsection (a) or (b) above except and to the extent of any prejudice
to such indemnifying party arising from such failure to provide such
notice. In case any such action is brought against any indemnified
party
19
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may elect by written notice to the indemnified party,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 7 for any
legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation unless (i) the named parties in any such proceeding
include both the indemnified party and the indemnifying party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interest between
them, (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement
of the action and assumption of the defense thereof, or (iii) the
indemnifying party has authorized in writing the employment of counsel
for the indemnified party; it is understood that the indemnifying party
shall not, in connection with any proceeding or related proceeding in
the same jurisdiction, be liable for the fees and expenses of more than
one separate firm (in addition to any local counsel) for all
indemnified parties. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on
any claims that are the subject matter of such action and does not
include a statement as to, or an admission of, fault, culpability or
failure to act by or on behalf of any indemnified party. No
indemnifying party shall be liable under this section for any
settlement of any claim or action effected without its prior written
consent, which shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then in order to provide for just and
equitable contribution, each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the
losses, claims, damages, expenses or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the CSRC, SOAI and FSC on the
one hand and the Initial Purchasers on the other from the offering of
the Offered Certificates, or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of CSR, SOAI and FSC on
the one hand and the Initial Purchasers on the other in connection with
the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by CSRC, SOAI and FSC on
the one hand and the Initial Purchasers on the other shall be deemed to
be in the same proportion as the total net proceeds from the sale of
the Offered Certificates (before deducting expenses) received by CSRC
bear to the Initial Purchaser Fee. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material
20
fact relates to information supplied by CSRC, SOAI or FSC, on the one
hand, or information supplied by the Initial Purchasers, on the other
hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement
or omission with respect to the Offered Certificates and any other
equitable consideration appropriate under the circumstances. The amount
paid by an indemnified party as a result of the losses, claims,
damages, expenses or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any action or claim which is the subject of this subsection
(d). Notwithstanding the provisions of this subsection (d), the Initial
Purchasers shall not be required to contribute any amount in excess of
the amount by which the Initial Purchaser Fee exceeds the amount of
damages which the Initial Purchasers have otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission with respect to the Offered Certificates. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of CSRC, SOAI and FSC under this section
shall be in addition to any liability which CSRC, SOAI and FSC may
otherwise have and shall extend, upon the same terms and conditions, to
the directors and officers of the Initial Purchasers and each Person,
if any, who controls any Initial Purchaser within the meaning of the
Securities Act; and the obligations of the Initial Purchasers under
this section shall be in addition to any liability which the Initial
Purchasers may otherwise have and shall extend, upon the same terms and
conditions and to each Person, if any, who controls CSRC, SOAI or FSC
within the meaning of the Securities Act.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
CSRC, SOAI or FSC or their respective officers and of the Initial Purchasers or
their respective officers set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of the Initial Purchasers, the
Seller, FSC or the Servicer or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and payment
for the Offered Certificates. If this Agreement is terminated, in whole or in
part, or for any reason other than solely because of the occurrence of an event
specified in clauses (iii), (iv) or (v) of Section 6(b), and the purchase of the
Offered Certificates is not consummated, the Seller shall remain responsible for
the expenses to be paid or reimbursed by it pursuant to Section 4(f) and the
obligations of the Seller, FSC and the Servicer pursuant to Section 7 shall
remain in effect.
9. Notices. All communications hereunder will be in writing and
effective only upon receipt, and, if sent to the Initial Purchasers, will be
mailed, delivered or telecopied and confirmed to the Representative, at the
following address:
Barclays Capital Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxx
Xxxxxxxxx: (000) 000-0000
21
if sent to the CSRC, FSC or SOAI, will be mailed, delivered or telecopied and
confirmed to the CSRC, FSC or SOAI, at the following address:
.
000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
Xxxxxxxxx: (000) 000-0000
with a copy to:
General Counsel
Charming Shoppes, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
10. Other Services. Nothing in this Agreement is intended to obligate
or commit the Initial Purchasers or any of its affiliates to provide any
services other than as set forth herein.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns and
the officers and directors and controlling persons referred to in Section 7
hereof, and no other person will have any right or obligation hereunder.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAWS PROVISIONS THEREOF.
13. Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon Seller, the Servicer, FSC, the Initial Purchasers, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Offered Certificates from the
Initial Purchasers shall be deemed to be a successor by reason merely of such
purchase.
14. Representative. The Representative will act for the several Initial
Purchasers in connection with this Agreement and the transactions contemplated
hereby and any action undertaken under this Agreement taken by the
Representative will be binding upon the Initial Purchasers.
22
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement among the Seller, FSC, SOAI and the Initial
Purchasers in accordance with its terms.
Very truly yours,
CHARMING SHOPPES RECEIVABLES CORP.
By:
--------------------------------
Name:
Title:
SPIRIT OF AMERICA, INC.
By:
---------------------------------
Name:
Title:
FASHION SERVICE CORP.
By:
---------------------------------
Name:
Title:
The foregoing Certificate
Purchase Agreement is hereby
confirmed and accepted as
of the date first above written:
BARCLAYS CAPITAL INC.,
as Representative of the Initial
Purchasers
By
----------------------------------
Name:
Title:
S-1
EXHIBIT A
August 5, 2004
To the Persons listed
on Schedule A
Re: Charming Shoppes Master Trust - Series 2004-1
Ladies and Gentlemen:
This opinion is being rendered in connection with the transactions
contemplated by the following agreements:
(i) the Purchase and Sale Agreement, dated as of November 25,
1997 (as amended as of July 22, 1999, November 9, 2000 and May 8, 2001,
the "Purchase Agreement"), between Spirit of America National Bank
("Spirit") and Charming Shoppes Receivables Corp. ("CSRC");
(ii) the Second Amended and Restated Pooling and Servicing
Agreement, dated as of November 25, 1997 (as amended as of July 22,
1999 and May 8, 2001, the "Pooling and Servicing Agreement"), between
CSRC, as Seller, Spirit of America, Inc. ("SOAI"), as Servicer, and
Wachovia Bank, National Association (formerly known as First Union
National Bank), as the Trustee (the "Trustee") for the Charming Shoppes
Master Trust (the "Trust");
(iii) the Series 2004-1 Supplement to the Pooling and
Servicing Agreement, dated as of August 5, 2004 (the "Supplement");
(iv) the Certificate Purchase Agreement, dated as of July 21,
2004 (the "Certificate Purchase Agreement"), among Fashion Service
Corp. ("FSC"), CSRC, SOAI, and Barclays Capital Inc. ("Barclays"), as
representative of the several initial purchaser;
(v) the Certificate Purchase Agreement, dated as of July [ ],
2004 (the "Class C Purchase Agreement") among the Trustee, the Seller,
SOAI and the purchasers of the Class C Certificates (as defined in the
Supplement) named therein; and
(vi) the Certificate Purchase Agreement, dated as of July [ ],
2004 (the "Class D Purchase Agreement") among the Trustee, the Seller,
SOAI and the purchasers of the Class D Certificates (as defined in the
Supplement) named therein.
Spirit, SOAI, FSC, CSRC and Charming Shoppes are referred to herein as
the "Companies." The Class A Certificates (as defined in the Supplement), Class
M Certificates (as defined in the Supplement), Class B Certificates (as defined
in the Supplement), Class C Certificates and Class D Certificates are referred
to herein as the "Series 2004-1 Certificates."
Exh. A-1
Capitalized terms not defined herein shall have the same meanings as
ascribed to them in the Certificate Purchase Agreement or Pooling and Servicing
Agreement, as applicable.
I or members of my staff have examined each of (i) the Purchase
Agreement, (ii) the Pooling and Servicing Agreement, (iii) the Supplement, (iv)
the Certificate Purchase Agreement, (v) the Class C Purchase Agreement and (vi)
the Class D Purchase Agreement. The documents listed in clauses (i) through (vi)
are referred to herein as the "Subject Agreements." I or members of my staff
have also examined such corporate documents and records of the Companies and
such other instruments and certificates of public officials, officers and
representatives of the Companies and other Persons as I have deemed necessary or
appropriate for the purposes of this opinion.
In rendering the opinions expressed below, I have assumed, with your
permission, without independent investigation or inquiry, (a) the authenticity
of all documents submitted as originals, (b) the genuineness of all signatures
on all documents that I have examined (other than those of the Companies and
officers of the Companies) and (c) the conformity to authentic originals of
documents submitted as certified, conformed or photostatic copies.
I am employed by Charming Shoppes, Inc. as its general counsel and as
general counsel for its subsidiaries, including the Companies, and have acted in
that capacity in connection with the execution and delivery of the Subject
Agreements and all other documents executed and delivered by the Companies in
connection with the foregoing.
I am qualified to practice law in the Commonwealth of Pennsylvania and
I do not purport to express an opinion on any laws other than the laws of the
Commonwealth of Pennsylvania, the General Corporation Law of the State of
Delaware, and the Federal laws of the United States of America.
Based upon the foregoing and upon such investigation as I have deemed
appropriate, I am of the following opinion:
1. Spirit (a) is a national banking association validly existing and in
good standing under the laws of the United States of America, (b) is duly
qualified to transact business and is registered as a foreign corporation in
each jurisdiction where the conduct of its business as presently conducted
requires such qualification or registration, except to the extent that the
failure to be so qualified or registered would not, in the aggregate, have a
material adverse effect on the Certificateholders, (c) has full power, authority
and legal right to own its properties and conduct its credit card business as
such properties are presently owned and such business is presently conducted and
(d) had at all relevant times and has full power, authority and legal right to
execute and deliver each of the Subject Agreements to which it is a party and to
perform its obligations under each of the Subject Agreements to which it is a
party.
2. CSRC (a) is a corporation validly existing and in good standing
under the laws of the State of Delaware, (b) is duly qualified to transact
business and is registered as a foreign corporation in each jurisdiction where
the conduct of its business as presently conducted requires such qualification
or registration, except to the extent that the failure to be so qualified
Exh. A-2
or registered would not, in the aggregate, have a material adverse effect on the
Certificateholders, (c) has full corporate power, authority and legal right to
own its properties and conduct its business as such properties are presently
owned and such business is presently conducted and (d) had at all relevant times
and has full power, authority and legal right to execute and deliver each of the
Subject Agreements to which it is a party and to perform its obligations under
each of the Subject Agreements to which it is a party, including the execution
and delivery of the Series 2004-1 Certificates.
3. SOAI (a) is a corporation validly existing and in good standing
under the laws of the State of Delaware, (b) is duly qualified to transact
business and is registered as a foreign corporation in each jurisdiction where
the conduct of its business as presently conducted requires such qualification
or registration, except to the extent that the failure to be so qualified or
registered would not, in the aggregate, have a material adverse effect on the
Certificateholders, (c) has full corporate power, authority and legal right to
own its properties and conduct its business as such properties are presently
owned and such business is presently conducted and (d) had at all relevant times
and has full corporate power, authority and legal right to execute and deliver
each of the Subject Agreements to which it is a party and to perform its
obligations under each of the Subject Agreements to which it is a party.
4. FSC (a) is a corporation validly existing and in good standing under
the laws of the State of Delaware, (b) is duly qualified to transact business
and is registered as a foreign corporation in each jurisdiction where the
conduct of its business as presently conducted requires such qualification or
registration, except to the extent that the failure to be so qualified or
registered would not, in the aggregate, have a material adverse effect on the
Certificateholders, (c) has full corporate power, authority and legal right to
own its properties and conduct its business as such properties are presently
owned and such business is presently conducted and (d) had at all relevant times
and has full corporate power, authority and legal right to execute and deliver
each of the Subject Agreements to which it is a party and to perform its
obligations under each of the Subject Agreements to which it is a party.
5. Charming Shoppes (a) is a corporation validly existing and in good
standing under the laws of the State of Pennsylvania, (b) is duly qualified to
transact business and is registered as a foreign corporation in each
jurisdiction where the conduct of its business as presently conducted requires
such qualification or registration, except to the extent that the failure to be
so qualified or registered would not, in the aggregate, have a material adverse
effect on the Certificateholders, (c) has full corporate power, authority and
legal right to own its properties and conduct its business as such properties
are presently owned and such business is presently conducted and (d) had at all
relevant times and has full corporate power, authority and legal right to
execute and deliver each of the Subject Agreements to which it is a party and to
perform its obligations under each of the Subject Agreements to which it is a
party.
6. The execution, delivery and performance by each of the Companies of
the Subject Agreements to which it is a party and the transactions contemplated
therein are within its corporate powers and have been duly authorized by all
necessary corporate action.
Exh. A-3
7. Neither the execution, delivery or performance by any of the
Companies of the Subject Agreements to which it is a party will conflict with,
result in a breach of or violation of, any material term of, or constitute a
default under, its articles of association or incorporation, as applicable, or
its bylaws, or any order of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it or the material terms of any
material indenture or other material agreement or instrument known to me to
which it is a party or by which it or its properties are bound.
8. There are no actions, proceedings or investigations pending or, to
the best of my knowledge, threatened before any court, administrative agency or
other tribunal against any of the Companies (A) asserting the invalidity of any
of the Subject Agreements or the Series 2004-1 Certificates, (B) seeking to
prevent the issuance of the Series 2004-1 Certificates or the consummation of
any of the transactions contemplated by the Subject Agreements or the Series
2004-1 Certificates, which might materially and adversely affect the performance
by any of the Companies of its obligations under, or the validity or
enforceability of any of the Subject Agreements to which it is a party, or in
the case of CSRC, the Series 2004-1 Certificates, or (C) seeking adversely to
affect the federal income tax attributes of the Series 2004-1 Certificates.
9. Each of the Subject Agreements has been duly authorized, executed
and delivered by each of the Companies that is a party thereto.
The opinions rendered herein may be relied upon by the addressees
hereto. This opinion may not be relied upon for any other purpose or by any
other party for any purpose without my prior written consent.
Very truly yours,
Executive Vice President
and General Counsel - Charming
Shoppes, Inc.
Exh. A-4
Schedule A
Xxxxx'x Investors Service
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Standard & Poor's Corporation
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0003
Wachovia Bank, National Association, as Trustee
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx, XX 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Barclays Capital Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Bear, Xxxxxxx & Co. Inc.
[address]
New York, New York [ ]
Exh. A-5
EXHIBIT B
August 5, 2004
Barclays Capital Inc.
Barclays Capital Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Bear, Xxxxxxx & Co. Inc.
------------------------
New York, New York _____
Re: Charming Shoppes Master Trust -- Series 2004-1
Ladies and Gentlemen:
This opinion is being furnished to you pursuant to Section 6(e) of the
Certificate Purchase Agreement, dated as of July 21, 2004 (the "Certificate
Purchase Agreement") among Charming Shoppes Receivables Corp. ("CSRC"), Spirit
of America, Inc. ("SOAI"), Fashion Service Corp. ("FSC") and Barclays Capital
Inc. and Bear Xxxxxxx & Company, Inc., as initial purchasers (in such capacity,
the "Initial Purchasers").
Unless otherwise defined, all capitalized terms used herein have the
meanings ascribed thereto in the Certificate Purchase Agreement. The Series
2004-1 Class A Certificates, Class B Certificates, Class M Certificates, Class C
Certificates and Class D Certificates are collectively called the "Series 2004-1
Certificates." Spirit of America National Bank ("Spirit"), SOAI, FSC and CSRC
are referred to herein as the "Companies."
We have acted as special counsel to the Companies in connection with
the preparation, execution and delivery of each of (i) the Certificate Purchase
Agreement, (ii) the Supplement, (iii) the Class C Purchase Agreement, dated as
of July [__], 2004 (the "Class C Purchase Agreement") among the Class C Holders
named therein, CSRC, as Seller, SOAI as Servicer and Wachovia Bank, National
Association (the "Trustee") and (iv) the Class D Purchase Agreement, dated as of
July [__], 2004 (the "Class D Purchase Agreement") among the Class D Holders
named therein, CSRC, as Seller, SOAI, as Servicer, and the Trustee.
In such connection we have examined (i) the Certificate Purchase
Agreement, (ii) the Second Amended and Restated Pooling and Servicing Agreement,
dated as of November 25, 1997 (as amended on July 22, 1999 and May 8, 2001, the
"Pooling and Servicing Agreement") among CSRC, SOAI and the Trustee, (iii) the
Supplement, (iv) the Purchase Agreement, dated as of November 25, 1997 (as
amended on July 22, 1999, November 9, 2000 and May 8, 2001, the "Purchase
Agreement"), between Spirit and CSRC, (v) the Class C Purchase Agreement and
(vi)
Exh. B-1
August 5, 2004
Page 2
the Class D Purchase Agreement (collectively, the "Subject Agreements"). We
understand that the Initial Purchaser intends to offer and sell the 2004-1
Certificates pursuant to an exemption from registration under the Securities Act
of 1933, as amended (the "Securities Act").
We have also examined the final offering memorandum, dated July [__],
2004 (together with any exhibits attached thereto, the "Offering Memorandum").
Our opinions set forth below are subject to the following assumptions,
exceptions, qualifications and limitations:
(a) We have assumed for purposes of our opinions that:
(i) all parties to the Subject Agreements are duly organized,
validly existing and in good standing under the laws of their
respective jurisdictions of organization;
(ii) each such party is duly qualified to engage in the
activities contemplated by the Subject Agreements and has the requisite
organizational power and authority to execute, deliver and perform its
respective obligations under the Subject Agreements to which it is a
party;
(iii) each Subject Agreement has been duly authorized,
executed and delivered by each party thereto;
(iv) each Subject Agreement constitutes the valid and binding
obligation of each party thereto (other than, with respect to the
Subject Agreements, the Companies), enforceable against each such other
party in accordance with its terms (subject to the limitations on
enforceability described in paragraph (c) below);
(v) the execution, delivery and performance of the Subject
Agreements by the Companies party thereto will not contravene (A) such
Company's by-laws or charter, (B) any statute, rule, regulation or
contractual restriction binding on or affecting such Company or its
properties, or (C) require any consents, approvals, authorizations,
registrations or filings under any statute, rule or regulation (other
than items with respect to the Companies of the type described in
paragraphs 1 and 6 below);
(vi) there are no actions, suits or proceedings pending or
threatened against any Company or any of its subsidiaries before any
court, governmental agency or arbitrator which are likely to materially
adversely affect the ability of such Company to perform its obligations
under, or which purport to affect the legality, validity or
enforceability of the Subject Agreements to which it is a party;
Exh. B-2
August 5, 2004
Page 3
(vii) the representations and warranties of all parties in the
Subject Agreements are true and correct as of the date hereof;
(viii) each such party has complied and will comply with its
covenants and other obligations under the Subject Agreements;
(ix) there has not been any fraud, duress, undue influence or
material mistake of fact in connection with the transactions
contemplated by the Subject Agreements;
(x) due consideration for performance of the Subjects
Agreements has been received;
(xi) there are no agreements between or among any parties that
would alter the agreements set forth in the initial Subject Agreements;
(xii) all statutes, judicial and administrative decisions, and
rules and regulations of governmental agencies, constituting the law of
the State of New York are generally available (i.e., in terms of access
and distribution following publication or other release) to lawyers
practicing in that jurisdiction;
(xiii) the constitutionality or validity of a relevant
statute, rule, regulation or agency action is not at issue unless a
reported decision in the State of New York has specifically addressed
but not resolved, or has established, its unconstitutionality or
validity; and
(xiv) the Initial Purchasers have not offered or sold any
Class A Certificates, Class M Certificates or Class B Certificates
except (A) within the United States to, or for the benefit of, U.S.
Persons (as defined in Regulation S) who are qualified institutional
buyers ("QIBs") (as defined in Rule 144A of the Securities Act)
purchasing for their own account or for the accounts of one or more
QIBs for which the purchaser is acting as fiduciary or agent in
accordance with 144A in reliance on the exemption from registration in
Section 4(2) of the Securities Act and (B) to Non-U.S. Persons (as
defined in Regulation S under the Securities Act) who acquire the Class
A Certificates, Class M Certificates and Class B Certificates in an
offshore transaction in accordance with Regulation S under the
Securities Act.
(b) We are opining herein as to the effect on the subject transactions
only of the internal laws of the State of New York (other than state securities
laws) and the Federal laws of the United States of America. We express no
opinion with respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction or as to any matters of municipal law or the laws
of any local agencies within any state.
Exh. B-3
August 5, 2004
Page 4
(c) Our opinion in paragraph 2 below may be subject to or limited by
(i) 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 or remedies of creditors, and (ii) the effect of general
principles of equity (including without limitation concepts of materiality,
reasonableness, good faith and fair dealing), regardless of whether considered
in a proceeding in equity or at law, and the discretion of the court before
which any proceeding therefor may be brought. Without limiting the foregoing, we
point out that such laws may limit the extent to which property acquired by a
debtor after the commencement of an insolvency or similar proceeding may be
subject to a security interest arising from a security agreement entered into by
the debtor before the commencement of such case.
(d) We express no opinion with respect to the enforceability of the
waiver of rights or defenses set forth in the Subject Agreements to the extent
such rights or defenses may not be waived under, or are limited by, applicable
law.
(e) The opinions set forth in paragraphs 6, 8 and 10 below are based
upon the applicable provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), Treasury Regulations promulgated and proposed thereunder, current
positions of the Internal Revenue Service (the "IRS") contained in published
Revenue Rulings and Revenue Procedures, current administrative positions of the
IRS and existing judicial decisions. The statutory provisions, regulations and
interpretations on which our opinions in paragraphs 6, 8 and 10 are based are
subject to change, which changes could apply retroactively. In addition, there
can be no assurance that positions contrary to those stated in such opinions may
not be taken by the IRS.
(f) Except as specifically provided in paragraphs 6, 8 and 10 below, we
are not providing any opinion concerning the Federal income tax consequences of
any other aspect of the execution, delivery and performance of the Subject
Agreements, nor is any opinion provided as to the tax consequences of the
transactions contemplated by the Subject Agreements under any other tax laws.
Without limiting the foregoing, we have assumed that, prior to giving effect to
the issuance of the Series 2004-1 Certificates, the Investor Certificates of any
outstanding Certificate Series would have constituted indebtedness or an
interest in a partnership (other than a publicly traded partnership) for Federal
income tax purposes and that the Trust was not an association (or publicly
traded partnership) taxable as a corporation for Federal income tax purposes and
we render no opinion herein with respect to such matters.
(g) We express no opinion as to the enforceability 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.
Exh. B-4
August 5, 2004
Page 5
(h) We point out that certain rights, remedies and waivers contained in
the Subject Agreements may also be rendered ineffective or limited by applicable
laws or judicial decisions governing such provisions but, subject to clauses (c)
and (g) above, such laws and judicial decisions do not, in our opinion, affect
the validity of the Subject Agreements, and the Subject Agreements contain
adequate provisions for the practical realization of the rights and benefits
intended to be afforded thereby, although we note that the enforceability of
such provisions may result in delays in the enforcement of rights and remedies
by certain parties under the Subject Agreements (and we express no opinion as to
the economic consequences, if any, of such delays).
(i) Whenever our opinion with respect to the existence or absence of
facts is indicated to be based on our knowledge or awareness, we are referring
only to the actual knowledge of the Xxxxx, Xxxxx, Xxxx & Maw attorneys who have
represented the Companies in connection with the transactions contemplated by
the Subject Agreements. Except as expressly set forth herein, we have not
undertaken any independent investigation to determine the existence or absence
of such facts and no inference as to our knowledge concerning such facts should
be drawn.
(j) For the purposes of our opinion in paragraph 9 we assume that (i)
the purchasers have sufficient knowledge and experience, are sufficiently
sophisticated in financial matters and are capable of evaluating the risks
involved in transactions of this nature; (ii) the purchasers are able and
prepared to bear the economic risk of investing in and holding the Series 2004-1
Certificates; (iii) prior to purchasing the Series 2001-1 Certificates, the
purchasers had access to such financial information and other information
regarding the transaction and the parties thereto as they deemed necessary; and
(iv) the purchasers were afforded the opportunity to ask questions of
representatives of the Companies, and received answers as they deemed necessary.
(k) We express no opinion as to the priority or perfection of any
transfer of or security interest in any asset or property transferred pursuant
to the Subject Agreements and refer you to our opinion dated as of the date
hereof which addresses these matters.
(l) We express no opinion as to principles of equitable subordination.
(m) We express no opinion as to provisions regarding forum selection,
venue, service of process, or provisions requiring submission or consent to the
jurisdiction (both as to personal jurisdiction and subject matter jurisdiction)
of any court or waiver of jury trial.
(n) We express no opinion with respect to the validity, creation,
priority, perfection or enforceability of any security interest, or the
existence of, or title to, any collateral, or whether any transfer pursuant to a
Subject Agreement is a "true sale".
Exh. B-5
August 5, 2004
Page 6
(o) We express no opinion as to compliance by any party to the Subject
Agreements (other than the Companies to the extent expressly set forth herein)
with any state or federal laws or regulations applicable to the transactions
contemplated by the Subject Agreements because of the nature of such party's
business.
(p) We express no opinion as to whether a court sitting in any
jurisdiction other than New York will honor the choice of New York law to govern
the Subject Agreements.
(q) Our opinion that the New York choice of law provision in the
Subject Agreements is enforceable is subject to the qualifications that such
enforceability (i) may be limited by public policy considerations of any
jurisdiction, other than the courts of the State of New York, in which
enforcement of such provisions, or of a judgment upon an agreement containing
such provisions, is sought, and (ii) does not apply to the extent provided to
the contrary in subsection two of Section 1-105 of the UCC as in effect on the
date hereof in the State of New York.
(r) We express no opinion with respect to the severability provision of
any Subject Agreement.
(s) We express no opinion with respect to provisions appointing one
Person as an attorney in fact for any other Person or providing that the
decision of or calculations by any particular Person will be conclusive or
binding on others.
(t) We express no opinion with respect to provisions that provide for
the appointment of a receiver, successor servicer or administrator.
(u) We express no opinion with respect to confidentiality agreements.
(v) We express no opinion with respect to any provision of the Subject
Agreements (i) restricting access to legal or equitable remedies (including, but
not limited to, legal or equitable remedies under bankruptcy laws), (ii)
purporting to establish evidentiary standards or to waive either illegality as a
defense to the performance of contract obligations or any other defense to such
performance which cannot, as a matter of law, be effectively waived, (iii) which
provides that any Subject Agreement may be amended, modified or waived only in
writing, (iv) stating that all rights or remedies of any party are cumulative
and may be enforced in addition to any other right or remedy, and that the
election of a particular remedy does not preclude recourse to one or more other
remedies, (v) which provides that the failure to exercise or the delay in
exercising rights or remedies will not operate as a waiver of any such rights or
remedies, or (vi) which provides for set off, unless there is mutuality between
the parties, or that relates to any set-off owed to any affiliate of a party,
severability, cumulative rights and remedies or usury.
Exh. B-6
August 5, 2004
Page 7
(w) We express no opinion as to any provision of the Subject
Agreements: (i) that may require a party to pay any amount determined to be a
forfeiture penalty, including without limitation any setoff section as applied
to any unmatured obligation or any obligation to pay additional interest
following the entry of a judgment; or (ii) that may require a party to pay any
consequential, special, incidental, indirect, contingent or exemplary damages or
amount.
(x) We express no opinion with respect to the legality, validity or
enforceability, other than under the laws of the State of New York, of any
agreement as to the compounding of interest.
(y) We express no opinion as to the existence of any violation of, or
default under, any financial covenant, ratio or test that may be contained in
any agreement or instrument.
Based on the foregoing, and subject to the qualifications and
assumptions set forth herein, it is our opinion that:
1. No consent, authorization, approval, or other action by, and no
notice to or filing with, any Federal or New York State governmental authority
or regulatory body is required for the due execution, delivery and performance
by any Company of the Subject Agreements to which it is a party; and such
execution, delivery and performance will not contravene any Federal or New York
statute, rule or regulation applicable to the Companies.
2. Each of the Subject Agreements is the legal, valid and binding
obligation of each Company party thereto, enforceable against it in accordance
with its terms.
3. The Series 2004-1 Certificates, when duly executed and authenticated
and delivered by the Trustee in accordance with the terms of the Pooling and
Servicing Agreement and delivered pursuant to the Supplement and delivered and
paid for pursuant to the Certificate Purchase Agreement, the Class C Purchase
Agreement or the Class D Purchase Agreement, as applicable, will be duly issued
and outstanding, and will be entitled to the benefits afforded by the Pooling
and Servicing Agreement, as supplemented by the Supplement.
4. The Trust is not, and immediately following the sale of the Class A
Certificates, the Class M Certificates and Class B Certificates to the Initial
Purchasers and the sale of the Class C Certificates and the Class D Certificates
to the purchasers thereof, will not be, an "investment company" required to be
registered under the Investment Company Act of 1940, as amended.
5. Neither the Pooling and Servicing Agreement nor the Supplement is
required to be qualified under the Trust Indenture Act of 1939, as amended.
Exh. B-7
August 5, 2004
Page 8
6. The issuance of the Series 2004-1 Certificates will not (i)
adversely affect the characterization of the Investor Certificates of any
outstanding Certificate Series as indebtedness for Federal income tax purposes
or (ii) cause the Trust to be treated as an association (or publicly traded
partnership) taxable as a corporation for Federal income tax purposes.
7. The Pooling and Servicing Agreement, the Purchase Agreement, the
Supplement and the Series 2004-1 Certificates conform in all material respects
to the descriptions thereof contained in the Offering Memorandum.
8. The statements contained in the Offering Memorandum 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," in each
case to the extent that they constitute statements of matters of law or legal
conclusions with respect thereto, have been reviewed by us and are correct in
all material respects.
9. Assuming the Class A Certificates, Class M Certificates and the
Class B Certificates are offered and sold to the Initial Purchaser and resold by
the Initial Purchaser only under the circumstances contemplated by the
Certificate Purchase Agreement, the offer, sale and initial resale by the
Initial Purchaser of the Class A Certificates, Class M Certificates and the
Class B Certificates will be exempt from the registration requirements of the
Securities Act. We express no opinion as to how and when the Class A
Certificates, the Class M Certificates and the Class B Certificates may
subsequently be resold.
Exh. B-8
The opinions rendered herein may be relied upon by the addressees
hereto. This opinion may not be relied upon for any other purpose or by any
other party for any purpose without our prior written consent, except that each
of Xxxxx'x Investors Service, Inc. and Standard & Poor's may rely upon this
opinion to the same extent as if such opinion were addressed to it.
Very truly yours,
XXXXX, XXXXX, XXXX & MAW LLP
MCF/JAG/JHK
Exh. B-9
EXHIBIT C
(i) The Supplemented Pooling Agreement is not required to be qualified under the
Trust Indenture Act of 1939, as amended, and neither the Seller nor the Trust is
now, and immediately following the sale of the Offered Certificates pursuant to
this Agreement will be, required to be registered under the 1940 Act.
(ii) The Supplemented Pooling Agreement constitutes a legal, valid and binding
agreement of the Seller and the Servicer, enforceable against the Seller and the
Servicer in accordance with its terms (subject to customary qualifications
relating to bankruptcy or other laws and general principles of equity).
(iii) When the Offered Certificates have been duly executed and delivered by the
Seller, authenticated by the Trustee in accordance with the Supplemented Pooling
Agreement and delivered and paid for by the Initial Purchasers pursuant to this
Agreement, the holder of record of any Offered Certificate will be entitled to
the benefits afforded by the Supplemented Pooling Agreement, and the Offered
Certificates will be validly issued and outstanding, enforceable in accordance
with their respective terms.
(iv) Assuming the accuracy of the representations and warranties contained in
this Agreement of each of the parties hereto, compliance by such parties with
their respective covenants and agreements contained herein and that the Offered
Certificates are offered and sold in the manner contemplated by the Final
Memorandum and this Agreement, the offer and sale of the Offered Certificates do
not require registration under the Securities Act.
Such counsel shall also state that they have participated in conferences with
representatives of the Initial Purchasers and representatives of the Seller and
the Servicer and counsel to the Seller and the Servicer concerning the Final
Memorandum and have considered the matters required to be stated therein and the
matters stated therein, although they have not independently verified the
accuracy, completeness or fairness of such statements and make no independent
check or verification thereof other than as specified therein, and based upon
and subject to the foregoing, nothing has come to such counsel's attention to
cause them to believe that the Final Memorandum, as of its date or as of the
Issuance Date, contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel has not been requested to,
and does not, make any comment in this paragraph with respect to the financial
statements, supporting schedules and other financial or statistical information
contained in the Final Memorandum, or with respect to the information set forth
under the heading "Description of the Certificates--Interest Rate Swap
Counterparty" contained in the Final Memorandum).
Exh. C-1
SCHEDULE A
Class A Certificates
Initial Purchasers Principal Amount of
Class A Certificates
Barclays Capital Inc. $ 100,200,000
Bear, Xxxxxxx & Co. Inc. $ 15,000,000
-------------
Total $ 115,200,000
Class M Certificates
Initial Purchasers Principal Amount of
Class M Certificates
Barclays Capital Inc. $ 9,394,000
Bear, Xxxxxxx & Co. Inc. $ 1,406,000
------------
Total $ 10,800,000
Class B Certificates
Initial Purchasers Principal Amount of
Class B Certificates
Barclays Capital Inc. $ 16,440,000
Bear, Xxxxxxx & Co. Inc. $ 2,460,000
-------------
Total $ 18,900,000
Sched. A
