EXHIBIT 10.2
CHARMING SHOPPES MASTER TRUST
$63,500,000 Fixed Rate Class A Asset Backed Certificates, Series 2002-1
$16,500,000 Fixed Rate Class B Asset Backed Certificates, Series 2002-1
CERTIFICATE PURCHASE AGREEMENT
November 22, 2002
ING Financial Markets LLC
0000 Xxxxxx xx xxx Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Securitization Group
Ladies and Gentlemen:
1. Introduction. Charming Shoppes Receivables Corp. (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 ING Financial Markets LLC (the "Initial
Purchaser") (a) $63,500,000 Series 2002-1 Fixed Rate Class A Asset Backed
Certificates (the "Class A Certificates") and (b) $16,500,000 Series 2002-1
Fixed Rate Class B Asset Backed Certificates (the "Class B Certificates" and,
together with the Class A Certificates, the "Offered Certificates") to be issued
pursuant to the Second Amended and Restated Pooling and Servicing Agreement,
dated as of November 25, 1997 and as amended as of July 22, 1999 and as of May
8, 2001 (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 2002-1 Supplement to the Pooling
Agreement dated as of November 20, 2002 (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 $9,500,000 Series
2002-1 Fixed Rate Class C Asset Backed Certificates (the "Class C Certificates")
and $10,500,000 Series 2002-1 Floating Rate Class D Asset Backed Certificates
(the "Class D Certificates" and, together with the Offered Certificates and the
Class C Certificates, the "Certificates"). The Class C Certificates will be
initially held by the Seller. The Seller will enter into a Certificate Purchase
Agreement (the "Class C Purchase Agreement") with the Trustee, the Seller and
the Servicer. The Class D Certificates will be sold pursuant to the Certificate
Purchase Agreement (the "Class D Purchase Agreement") among the Trustee, the
Seller, the Servicer and the purchasers named therein (the "Class D
Purchasers"). The Class D Certificates will be initially held by the Seller. The
assets of the Trust include, among other things, certain receivables (the
"Receivables") arising under a pool of certain revolving credit card accounts
owned by Spirit of America National Bank ("Spirit of America") which have been
conveyed to the Seller by Spirit of America pursuant to a Purchase and Sale
Agreement dated as of November 25, 1997 and as amended as of September 1, 1999,
November 9, 2000 and May 8, 2001 (the "Purchase Agreement") and conveyed to the
Trust pursuant to the Pooling Agreement.
The Seller, at its own expense, has prepared an offering memorandum dated
October 22, 2002 (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). 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 Preliminary Memorandum, the Final Memorandum, the
Certificates, the Pooling Agreement, the Series Supplement, the Class C
Placement Agreement, the Class C Certificate Purchase Agreement, the Class D
Purchase Agreement, the Purchase Agreement and the Security Agreement, dated
November 25, 1997, executed by Spirit of America in favor of the Trustee (the
"Security 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 the Seller, FSC and the
Servicer.
(a) The Seller represents and warrants to, and agrees with the Initial
Purchaser that:
(i) The Final Memorandum contains all information material to an
investor's decision to purchase the Offered Certificates. 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,
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)).
(ii) As of the Issuance Date (as defined herein), the representations
and warranties of the Seller in each of the Related Documents to which it
is a party will be true and correct in all material respects except to the
extent that such representations and warranties specifically relate to a
date other than the Issuance Date.
(iii) The Seller has been 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) to own its
properties and conduct its business as described in the Preliminary
Memorandum and the Final Memorandum, and has been 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.
2
(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,
will be duly and validly executed, authenticated, issued, delivered and
entitled to the benefits provided by 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 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
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 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 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, 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 it is or may be a party or to
which any of its property 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 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.
3
(viii) Any United States taxes, fees and other governmental charges in
connection with the execution, delivery and performance by the Seller of
this Agreement 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 to
the extent then due.
(ix) No Early Amortization Event, and no event that would become an
Early Amortization Event after any applicable grace period has elapsed,
exists with respect to any outstanding Series of Certificates issued by the
Trust and no event has occurred that would constitute (after the issuance
of the Certificates) an Early Amortization Event or would become an Early
Amortization Event after any applicable grace period has elapsed.
(x) Except as set forth in or contemplated in the Final Memorandum,
there has been no material adverse change in the condition (financial or
otherwise) of the Seller since February 2, 2002.
(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 Purchaser complies with the agreements and covenants
contained in this Agreement, ING complies with the agreements and covenants
contained in the Class C Placement Agreement, (iii) the representations
made in this Agreement by the Initial Purchaser and in the Class C
Placement Agreement by ING are true and correct, and (iv) the
representation 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
Purchaser), has taken or will take any action which would subject the
offer, issuance, sale or delivery of the Offered Certificates to the
provisions of Section 5 of the Securities Act or to the registration
provisions of any state securities laws of any applicable jurisdiction.
(xii) Neither the Seller nor any of its Affiliates has directly or
through any agent (it being understood that the Seller makes no
representation and warranty in this regard with respect to the Initial
Purchaser or any affiliates of the Initial Purchaser) engaged in any
"directed selling efforts" (as defined in Rule 902(c) under Regulation S)
with respect to the Offered Certificates. The Seller and its affiliates and
any agent acting on their behalf (it being understood that the Seller makes
no representation or warranty in this regard with respect to the Initial
Purchaser or any affiliates of the Initial Purchaser) have complied with
the "offering restrictions" (as defined in Rule 902(g) under Regulation S)
with respect to Offered Certificates sold outside the United States.
(xiii) None of the Seller, any of its Affiliates or any person or
entity acting on its or their behalf (it being understood that the Seller
makes no representation or warranty in this regard with respect to the
Initial Purchaser or any affiliates of the Initial Purchaser) within the
six months preceding the date of this Agreement, (A) has offered or sold
any securities which are substantially similar to the Offered Certificates
the result of which would cause the offer and sale of any of the Offered
Certificates pursuant to this Agreement to fail to be entitled to exemption
from registration under the Securities Act or (B) has offered or will offer
to sell the Offered Certificates in the United Sates by means of any form
of general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act.
(xiv) Neither the Seller nor the Trust is required (or after giving
effect to the transactions contemplated by the Related Documents, will be
required) to be registered as an
4
"investment company" as such term is defined in the Investment Company Act
of 1940, as amended (the "1940 Act").
(xv) The Seller agrees that the Offered Certificates have not been and
will not be registered under the Securities Act and that the Offered
Certificates will be issued only in reliance upon an exemption therefrom.
The Seller further agrees that it shall only sell Offered Certificates to
(i) QIBs in reliance upon Rule 144A under the Securities Act and (ii)
non-U.S. persons outside the United States, as defined in Regulation S.
(b) Fashion Service Corp. ("FSC") represents and warrants to, and
agrees with the Initial Purchaser, that:
(i) As of the Issuance Date (as defined herein), the representations
and warranties of Spirit of America in each of the Related Documents to
which it is a party will be true and correct except to the extent that such
representations and warranties specifically relate to a date other than the
Issuance Date.
(ii) FSC has been 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) to own its properties and conduct
its business as currently conducted, and has been 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 has been 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 subsidiaries taken as a whole or on the
transactions contemplated by this Agreement and the Related Documents.
(iv) This Agreement has been duly authorized, executed and delivered
by FSC, and, when executed and delivered by the other parties hereto will
constitute a valid, binding and enforceable agreement of FSC; provided that
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity) and subject to the
unenforceability, under certain circumstances, of provisions indemnifying a
party against liability where such indemnification is contrary to public
policy.
(v) The Purchase Agreement has been duly authorized, executed and
delivered by Spirit of America and constitutes a valid, binding and
enforceable agreement of Spirit of America; provided that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the
5
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) 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) 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 the properties of it is subject, and Spirit
of America has full power and authority (corporate and otherwise) to enter
into the Purchase Agreement and to consummate the transactions contemplated
thereby.
(ix) Other than as set forth or contemplated in the Final Memorandum,
there are no legal or governmental proceedings or investigations pending
or, to its knowledge, threatened to which Spirit of America is or may be a
party or to which any of Spirit of America's property 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) Any United States taxes, fees and other governmental charges in
connection with the execution, delivery and performance by the Servicer of
this Agreement or the other Related
6
Documents shall have been paid or will be paid by or on behalf of the
Seller at or prior to the Issuance Date to the extent then due.
(xi) 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 February 2, 2002.
(c) Servicer represents and warrants to, and agrees with the Initial
Purchaser, that:
(i) As of the Issuance Date (as defined herein), the representations
and warranties of the Servicer 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 specifically relate to a date other than the
Issuance Date.
(ii) The Servicer has been 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) to own its
properties and conduct its business as described in the Preliminary
Memorandum and the Final Memorandum, and has been 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 Servicer 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 the
Servicer is a party has been duly authorized by the Servicer, and, when
executed and delivered by the other parties thereto, each of this Agreement
and the Related Documents to which the Servicer is a party will constitute
a valid, binding and enforceable agreement of the Servicer; 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 the Servicer in connection with the consummation of the transactions
contemplated by 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) The execution, delivery and performance of this Agreement and the
other Related Documents, the compliance with the terms and provisions
hereof and thereof and the consummation of the transactions contemplated
herein and therein will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, its certificate of
incorporation or by-laws or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, or result in the
creation or imposition of any Lien under, any statute, any rule, regulation
or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over it or any of its properties, or any
agreement or instrument to
7
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 it is or may be a party or to
which any of its property is or may be the subject (x) which, if determined
adversely to the Servicer, 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 Servicer 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) Any United States taxes, fees and other governmental charges in
connection with the execution, delivery and performance by the Seller of
this Agreement or the other 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.
(viii) 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 February 2,
2002.
3. Payment and Delivery of Offered Certificates; Fees. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Seller agrees to sell to the Initial
Purchaser and the Initial Purchaser agrees to purchase $63,500,000 principal
amount of Class A Certificates and $16,500,000 principal amount of the Class B
Certificates. The Seller hereby agrees, that in consideration of the Initial
Purchaser's efforts in the resale of the Offered Certificates, it shall pay the
Initial Purchaser a fee equal to the sum of 0.45% of the aggregate original
principal amount of the Class A Certificates and 0.70% of the aggregate original
principal amount of the Class B Certificates (the "Initial Purchaser Fee"),
payable in full on November 22, 2002 (or such later date as may be mutually
agreed upon by the parties hereto) (the "Issuance Date"), to be paid by the
Seller by wire transfer in immediately available funds to an account designated
by the Initial Purchaser. The Class A 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 in Chicago, Illinois, at 10:00 a.m.,
Chicago time, on the Issuance Date. Payment of the purchase price for the
Offered Certificates being sold and purchased hereunder shall be made on the
Issuance Date by wire transfer of immediately available funds to an account to
be designated by the Seller prior to the Issuance Date, against delivery to the
Initial Purchaser of the Offered Certificates registered in the name of Cede &
Co., the nominee of The Depository Trust Company ("DTC"). The Initial
Purchaser's interests as beneficial owners of the Offered Certificates will be
represented by book entries on the records of DTC and participating members
thereof.
8
4. Certain Agreements of the Seller. The Seller agrees with the Initial
Purchaser that:
(a) The Seller shall furnish such information, execute such instruments and
take such actions, if any, as may be reasonably requested by the Initial
Purchaser to effect the resale of the Offered Certificates under the securities
"blue sky" laws of each jurisdiction in which the Offered Certificates are
offered for sale or sold; provided that the Seller shall not be obligated to
qualify to do business in any jurisdiction in which it is not currently so
qualified; and provided, further, that the Seller shall not be required to file
a general consent to service of process in any jurisdiction.
(b) The Seller shall furnish or make available to the Initial Purchaser or
its counsel such additional documents and information regarding the Seller, the
Servicer and Spirit of America and their respective affairs as the Initial
Purchaser may from time to time reasonably request, including any and all
documentation reasonably requested in connection with its due diligence efforts
regarding information in the Preliminary Memorandum and the Final Memorandum and
in order to evidence the accuracy or completeness of any of the conditions
contained in this Agreement; and all actions taken by the Seller to authorize
the sale of the Offered Certificates shall be reasonably satisfactory in form
and substance to the Initial Purchaser.
(c) 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.
(d) 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.
(e) The Seller shall, at all times upon reasonable request of a purchaser
of the Offered Certificates or its advisors, or both, from the date hereof
through the Issuance Date, (i) make available to each purchaser of the Offered
Certificates or its advisors, or both, prior to acceptance of its purchase, such
information (in addition to that contained in the Preliminary Memorandum or the
Final Memorandum) concerning the offering, the Seller, the Servicer, Spirit of
America and any other relevant matters as it possesses or can acquire without
unreasonable effort or expense and (ii) provide each purchaser of the Offered
Certificates or its advisers, or both, prior to acceptance of its subscription,
the opportunity to ask questions of, and receive answers from, the Seller, the
Servicer and Spirit of America with respect to such matters. The Seller agrees
that it will not and will cause its affiliates (as defined in Rule 501(b) of
Regulation D under the Securities Act) not to solicit any offer to buy or make
any offer or sale of or otherwise negotiate in respect of, the Offered
Certificates if, as a result of the doctrine of "integration" referred to in
Rule 502 under the Securities Act, such offer or sale would render invalid (for
the purposes of (i) the sale of the Offered Certificates from Seller to the
Initial Purchaser, (ii) the resale of the Offered Certificates by the Initial
Purchaser to subsequent purchasers or (iii) the resale of the Offered
Certificates by such subsequent purchasers to others) the exemption from the
registration requirements of the Securities Act provided by Section 4(2) thereof
or by Rule 144A or by Regulation S thereunder or otherwise.
9
(f) 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 Purchaser in Section 5: (i) engage
in any form of general solicitation or general advertising in connection with
the offering or sale of the Offered Certificates in the United States (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act or (ii) engage in any "directed selling efforts" (as defined in Rule 902(c)
under Regulation S) with respect to the Offered Certificates. The Seller agrees
that it and its affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act) and any person acting on its behalf, assuming the accuracy of
the representations and warranties of the Initial Purchaser in Section 5, will
comply with the "offering restrictions" (as defined in Rule 902(g) under
Regulation S) with respect to any Offered Certificates sold outside the United
States.
(g) 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, if any, of registering or qualifying the Offered
Certificates under state securities or "blue sky" laws, (iv) the fees and
expenses of the Seller's accountants and of reasonable fees and expenses of
counsel for the Seller, (v) the reasonable fees and disbursements of counsel for
the Initial Purchaser, (vi) the furnishing to the Initial Purchaser of such
copies of the Preliminary Memorandum and the Final Memorandum and all amendments
or supplements thereto (including the exhibits thereto) as may be requested for
use in connection with the offering and sale of the Offered Certificates, (vii)
fees of each Rating Agency in connection with their ratings of the Offered
Certificates, (viii) fees of the Trustee under the Pooling Agreement (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. In addition to the
foregoing, whether or not the transactions contemplated by this Agreement are
consummated for any reason (other than as a result of a default by ING hereunder
or under the Class C Placement Agreement or the occurrence of an event specified
in clause (iii), (iv) or (v) of Section 6(b)), the Seller shall promptly
reimburse the Initial Purchaser for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) incurred by the Initial Purchaser
in connection with the offering of the Certificates.
(h) 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.
(i) During the period any Offered Certificates shall remain outstanding,
the Seller will furnish or will cause to be furnished to the Initial Purchaser,
copies of all reports or other communication (financial or other) furnished to
the holders of the Offered Certificates.
10
5. Representations, Warranties and Covenants of the Initial Purchaser. The
Initial Purchaser represents and warrants to, and agrees with the Seller, the
Servicer and FSC as of the date hereof, and as of the Issuance Date, that:
(a) The Initial Purchaser 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) The Initial Purchaser shall not utilize any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
the Securities Act in connection with the resale of the Offered
Certificates, including any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio, or conduct any seminar or meeting with
respect to the Offered Certificates whose attendees have been invited by
general solicitation or general advertising or other action involving a
public offering within the meaning of Section 4(2) of the Securities Act.
(c) It is an "accredited investor" (as defined in Regulation D under
the Securities Act) and a QIB within the meaning of Rule 144A, purchasing
the Offered Certificates. It has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of an investment in the Offered Certificates.
(d) It will offer or sell the Offered Certificates only to (i) persons
whom it reasonably believes to be QIBs, purchasing the Offered Certificates
for their own account or for the account of other investors who are QIBs in
transactions meeting the requirements of Rule 144A and (ii) non-U.S.
persons (as defined in Regulation S) in offshore transactions (as defined
in Regulation S) made in compliance with Regulation S. It agrees that it
will not offer, sell or deliver any of the Offered Certificates in any
jurisdiction outside the United States (as defined in Regulation S) except
under circumstances which will result in compliance with the applicable
laws thereof, and that it will take whatever action is required to permit
its offer and resale of the Offered Certificates in such jurisdictions.
(e) [reserved].
(f) [reserved].
(g) [reserved].
(h) The Initial Purchaser represents and warrants that (x) it 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) it 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 the FSMA
11
does not apply to the Seller or the Servicer; and (z) it 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; and
(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.
The Initial Purchaser acknowledges that the Seller and others will rely
upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements.
6. Conditions of the Obligations of the Initial Purchaser. The Initial
Purchaser's obligations hereunder will be subject to the accuracy of the
representations and warranties herein made on the part of the Seller, FSC and
the Servicer, to the accuracy of the statements of the officers of each of the
Seller and the Servicer made pursuant to the provisions hereof, to the
performance by the Seller and the Servicer of their respective obligations
hereunder and to the following additional conditions precedent:
(a) The Initial Purchaser shall have received fully executed copies of
this Agreement, the Supplemented Pooling Agreement and the other Related
Documents duly executed and delivered by the parties thereto; and all
documents incident hereto and all Related Documents shall be satisfactory
in form and substance to the Initial Purchaser and its counsel. The Initial
Purchaser and its counsel shall have received such information,
certificates, reliance letters and documents as they may reasonably
request.
(b) Subsequent to the execution and delivery of this Agreement and
prior to the Issuance Date, there shall not have occurred (i) any change,
or any development involving a prospective change, in or affecting
particularly the business or properties of the Seller, the Servicer or
Spirit of America which, in the reasonable judgment of the Initial
Purchaser after consultation with the Seller, the Servicer and Charming,
materially impairs the investment quality of the Offered Certificates; (ii)
any reduction in or withdrawal of the rating of any 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 any 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 the over-the-counter market; (iv) any banking moratorium declared by
Federal authorities; or (v) any outbreak or escalation of major hostilities
in which the United States is involved, any declaration of war by Congress
or any other substantial national or international calamity or emergency
if, in the reasonable judgment of the Initial Purchaser, the effect of any
such outbreak, escalation, declaration, calamity, emergency or change makes
it impractical or inadvisable to proceed with completion of the resale of
the Offered Certificates.
12
(c) The Initial Purchaser shall have received an opinion of Xxxxx X.
Xxxxx, Esq., Executive Vice President and General Counsel to Charming,
dated the Issuance Date and addressed to the Initial Purchaser, regarding
general corporate matters with respect to the Seller, the Servicer, FSC and
Spirit of America, in form and substance satisfactory to the Initial
Purchaser and its counsel.
(d) The Initial Purchaser shall have received an opinion of Xxxxx,
Xxxxx, Xxxx & Maw, counsel for the Seller and the Servicer, dated the
Issuance Date and addressed to the Initial Purchaser, regarding general
corporate matters and enforceability of the Related Documents with respect
to the Seller and the Servicer, in form and substance satisfactory to the
Initial Purchaser and its counsel. The Initial Purchaser shall have
received an opinion of local tax counsel for the Seller and the Servicer,
each dated the Issuance Date, regarding certain Ohio, Georgia and Florida
matters.
(e) The Initial Purchaser shall have received an opinion of Xxxxx,
Xxxxx, Xxxx & Maw, dated the Issuance Date and addressed to the Initial
Purchaser, regarding the substantive consolidation of the assets and
liabilities of the Seller and Spirit of America, in form and substance
satisfactory to the Initial Purchaser and its counsel.
(f) The Initial Purchaser shall have received opinions of Xxxxx,
Xxxxx, Xxxx & Maw, dated the Issuance Date and addressed to the Initial
Purchaser, to the effect that each of (i) the transfer of the Receivables
from Spirit of America to the Seller and (ii) the transfer of Receivables
from the Seller to the Trust creates a first priority perfected security
interest in such Receivables in favor of the Seller and the Trustee, as
applicable, in form and substance satisfactory to the Initial Purchaser and
its counsel.
(g) The Initial Purchaser shall have received an opinion of Xxxxx,
Xxxxx, Xxxx & Maw, dated the Issuance Date and addressed to the Initial
Purchaser, (i) with respect to the accuracy and completeness of certain
information provided in the Final Memorandum and (ii) stating that the
statements in the Final Memorandum under the heading "U.S. Federal Income
Tax Consequences" accurately describe the material federal tax consequences
to holders of the Offered Certificates, in form and substance satisfactory
to the Initial Purchaser and its counsel.
(h) The Initial Purchaser shall have received copies of executed UCC-1
financing statements suitable for filing in the offices of the Secretaries
of State of the State of Ohio, in the case of Spirit, and the State of
Delaware, in the case of the Seller, reflecting the interests of the Seller
and the Trust in the Receivables.
(i) The Initial Purchaser shall have received an opinion from Pepper,
Xxxxxxxx & Sheetz, counsel for the Trustee, dated the Issuance Date and
addressed to the Initial Purchaser, with respect to general corporate
matters, enforceability of the Related Documents to which the Trustee is a
party and such other matters as the Initial Purchaser shall request, in
form and substance satisfactory to the Initial Purchaser and its counsel.
(j) The Initial Purchaser shall have received a certificate or
certificates, dated the Issuance Date, of a vice president or more senior
officer of each of the Seller, FSC and the Servicer in which such officer,
to the best of his or her knowledge after reasonable investigation, shall
state that (A) the representations and warranties of the Seller, FSC and
the Servicer, as applicable, contained in this Agreement are true and
correct in all material respects on and as of the Issuance Date, (B) the
Seller, FSC or the Servicer, as applicable, has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or
13
prior to the Issuance Date, (C) the representations and warranties of the
Seller, FSC or the Servicer, as applicable, in the Related Documents to
which it is a party are true 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.
(k) The Initial Purchaser shall have received a letter of Xxxxx &
Xxxxx addressed to the Seller and the Initial Purchaser regarding the
Receivables, in form and substance satisfactory to the Initial Purchaser
and its counsel.
(l) The Initial Purchaser shall have received letters from each of the
Rating Agencies stating that (i) the Class A Certificates have received a
rating of AAA and Aaa by Standard & Poor's and Xxxxx'x, respectively, (ii)
the Class B Certificates have received a rating of "A2" by Xxxxx'x, (iii)
the Class C Certificates have received a rating of "Baa2" by Xxxxx'x and
(iv) 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.
(m) The Initial Purchaser shall have received from the Servicer (i) a
Servicer Report dated as of the Closing Date, calculated after giving
effect to all transactions contemplated on the Closing Date and (ii) the
most recent servicer reports for each other outstanding series.
(n) The Seller and the Servicer will furnish the Initial Purchaser
with such number of conformed copies of such opinions, certificates,
letters and documents as it may reasonably request.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Initial Purchaser by notice to the Seller at any time at or prior to the
Issuance Date, and such termination shall be without liability of any party to
any other party except as provided in Section 8.
7. Indemnification and Contribution.
(a) Each of the Seller, the Servicer and Charming shall, jointly and
severally, indemnify and hold harmless the Initial Purchaser, the
directors, officers, employees, affiliates and agents of the Initial
Purchaser, and each person, if any, who controls the Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (each an
"Indemnified Party"), (i) against any and all losses, claims, damages,
expenses or liabilities to which an Indemnified Party may become subject,
under the Securities Act or the Exchange Act or otherwise, insofar as such
losses, claims, damages, expenses or liabilities, joint or several (or
actions in respect thereof) arise out of an untrue statement or alleged
untrue statement of any material fact contained in (x) the Final Memorandum
or (y) any materials distributed by the Initial Purchasers to prospective
purchasers of the Offered Certificates, which materials are attached hereto
as Exhibit A, to the extent not in conflict with the Final Memorandum, in
each case as of the respective dates thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, (ii) against any and all losses, claims, damages or
liabilities, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation or any investigation or proceeding by any
governmental agency or
14
body, commenced or threatened, or of any claim whatsoever arising out of or
based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, if such settlement is effected with the prior
written consent of the Seller, Charming or the Servicer; and (iii) against
any and all expenses whatsoever (including the fees and disbursements of
outside counsel of the Indemnified Party) reasonably incurred in
investigating, preparing and defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any alleged untrue statement or omission, to the extent any
such expense is not paid under (ii) or (iii) above as such are incurred;
provided, however, that neither the Seller, Charming nor the Servicer will
be liable in any such case to the extent that 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 written information
furnished to the Seller, Charming or the Servicer by the Initial Purchaser
or any person that directly or indirectly, is in control of, controlled by,
or under common control with the Initial Purchaser specifically for use
therein, it being understood and agreed that the only such information
consists of the information described as such in subsection (b) below;
provided, further, that none of Seller, the Servicer or Charming will be
liable under the indemnity agreement in this subsection (a) with respect to
the Final Memorandum to the extent that any loss, claim, damage or
liability of the Initial Purchaser (or any Person controlling the Initial
Purchaser within the meaning of the Securities Act) results from the fact
that the Initial Purchaser sold Offered Certificates to a person as to whom
it is established that there was not sent or given, at or prior to
consummation of such sale, a copy of the Final Memorandum (including any
amendment or supplement but excluding documents incorporated by reference)
if the Seller or the Servicer previously furnished copies of the Final
Memorandum (including any amendment or supplement but excluding documents
incorporated by reference) to the Initial Purchaser and the loss, claim,
damage or liability of the Initial Purchaser (or any Person controlling the
Initial Purchaser within the meaning of the Securities Act) results from an
untrue statement or omission of a material fact contained in the Final
Memorandum that is corrected any amendment or supplement to the Final
Memorandum.
(b) The Initial Purchaser agrees to indemnify and hold harmless each
of the Servicer, FSC and the Seller and each person, if any, who controls
the Servicer, Charming or the Seller within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, (i) against any and
all losses, claims, damages, expenses or liabilities, to which the Seller,
Charming or such other person may become subject under the Securities Act
or the Exchange Act or otherwise arising out of any untrue statement or
alleged untrue statement of any material fact contained in any offering
material or other information distributed by the Initial Purchaser or any
person that, directly or indirectly, is in control of, is controlled by, or
is under common control with, the Initial Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, if
related to the Offered Certificates or any omission or alleged omission
from such offering material or other information of a material fact
necessary in order to make the statements therein, in the 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 upon or in conformity with written
information furnished to the Seller, Charming or the Servicer by the
Initial Purchaser specifically for use therein, (ii) against any and all
losses, claims, damages or liabilities, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation or any investigation
or proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever arising out of or based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, if
such settlement is effected with the prior written consent of the Initial
Purchaser; and (iii) against any and all expenses whatsoever (including the
fees and disbursements of outside
15
counsel of the Indemnified Party) reasonably incurred in investigating,
preparing and defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any alleged untrue statement or omission, to the extent any such expense is
not paid under (ii) or (iii) above as such are incurred. It is hereby
acknowledged and agreed that the only such information furnished by the
Initial Purchaser or any person in control of, controlled by or under
common control with the Initial Purchaser consists of its name as it
appears on the front page of the Preliminary Memorandum and the Final
Memorandum and the information in the Preliminary Memorandum and the Final
Memorandum in the second paragraph under the heading "Plan of Distribution"
(the "Initial Purchaser Information").
(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 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
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
provided that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have concluded (based upon advice of counsel) that there may be legal
defenses available to it which are inconsistent with those available to the
indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party, and
the indemnified party shall have the right to select separate counsel to
assert such legal defenses on its behalf, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof and approval by the indemnified party, 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 indemnified party shall have employed separate
counsel in connection with the assertion of legal defenses in accordance
with the preceding proviso (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to one local counsel in the jurisdiction in
which any action is brought) representing the indemnified party who is a
party to such action), (ii) the indemnifying party shall not have employed
counsel 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.
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. Servicer, Charming and Seller shall not be liable
under this section for any settlement of any claim or action effected
without their prior written consent, which shall not be unreasonably
withheld.
16
(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 Seller and the Servicer on the one hand and the
Initial Purchaser on the other from the offering of the Offered
Certificates, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Seller, Charming and the Servicer on the one
hand and the Initial Purchaser on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Seller, Charming and the Servicer on the
one hand and the Initial Purchaser 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 the Seller bear to the
Initial Purchaser Fee. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by Seller, FSC or the Servicer, on the one
hand, or information supplied by the Initial Purchaser, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission with
respect to the Offered Certificates and any other equitable consideration
appropriate under the circumstances. The amount paid by an indemnified
party as a result of the losses, claims, damages, expenses or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is the
subject of this subsection (d). 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 the Seller, Charming and the Servicer under
this section shall be in addition to any liability which the Seller,
Charming and the Servicer may otherwise have and shall extend, upon the
same terms and conditions, to the directors and officers of the Initial
Purchaser and each Person, if any, who controls the Initial Purchaser
within the meaning of the Securities Act; and the obligations of the
Initial Purchaser under this section shall be in addition to any liability
which the Initial Purchaser may otherwise have and shall extend, upon the
same terms and conditions and to each Person, if any, who controls the
Seller, Charming or the Servicer within the meaning of the Securities Act.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Seller, FSC or the Servicer or their respective officers and of the Initial
Purchaser or its officers set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of the Initial Purchaser, the
Seller, FSC or the Servicer or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and payment
for the Offered Certificates. If this Agreement is terminated, in whole or in
part, or for any reason other than solely because of the occurrence of an event
specified in clauses (iii), (iv) or (v) of Section 6(b), and the purchase of the
Offered Certificates is not consummated, the Seller shall remain responsible for
the expenses to be paid or reimbursed by it pursuant to Section 4(i) and the
obligations of the Seller, FSC and the Servicer pursuant to Section 7 shall
remain in effect.
17
9. Notices. All communications hereunder will be in writing and effective
only upon receipt, and, if sent to the Initial Purchaser, will be mailed,
delivered or telecopied and confirmed to the Initial Purchaser, at the following
address:
ING Financial Markets LLC
0000 Xxxxxx xx xxx Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Securitization Group
if sent to the Seller, FSC or the Servicer, will be mailed, delivered or
telecopied and confirmed to the Seller, FSC or the Servicer, at the following
address:
c/o Charming Shoppes, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
with a copy to:
General Counsel
Charming Shoppes, Inc.
0000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
10. Other Services. Nothing in this Agreement is intended to obligate or
commit the Initial Purchaser or any of its affiliates to provide any services
other than as set forth herein.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and 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, Charming, the Initial Purchaser, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Offered Certificates from the
Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.
18
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, the Servicer and the Initial
Purchaser in accordance with its terms.
Very truly yours,
CHARMING SHOPPES RECEIVABLES CORP.
By:
-------------------------------------------
Name:
Title:
SPIRIT OF AMERICA, INC.
By:
-------------------------------------------
Name:
Title:
FASHION SERVICE CORP.
By:
-------------------------------------------
Name:
Title:
The foregoing Certificate Purchase
Agreement is hereby confirmed and
accepted as of the date first
above written:
ING FINANCIAL MARKETS LLC
By
----------------------------------
Name:
Title:
19
Section 7 of the foregoing Certificate Purchase Agreement is hereby agreed to as
of the date first above written.
CHARMING SHOPPES, INC.
By:
-------------------------------------------
Name:
Title:
20
Exhibit A
1. Presentation to Investors, September 2002
2. Presentation to Investors, October 2002
3. Presentation to Investors, October 31, 2002
21
