EXHIBIT 10
XXXXXX XXXXXX CREDIT CARD MASTER TRUST
SERIES 1998-1
$400,000,000 5.90% Class A Asset Backed
Certificates, Series 1998-1
UNDERWRITING AGREEMENT
August 5, 1998
XXXXXXX XXXXXXXX INC
As Representative of the Several Underwriters
Seven World Trade Center
New York, NY 10048
Ladies and Gentlemen:
1. INTRODUCTORY. Retailers National Bank, a national banking association
("RNB"), from time to time sells, transfers and conveys receivables (the
"RECEIVABLES") generated from time to time in a portfolio of open end bank
credit card accounts and other rights to Xxxxxx Xxxxxx Capital Corporation, a
Minnesota corporation ("DHCC"). DHCC from time to time sells, transfers and
conveys the Receivables and other rights to Xxxxxx Xxxxxx Receivables
Corporation, a Minnesota corporation (the "TRANSFEROR"). The Transferor from
time to time transfers the Receivables to the Xxxxxx Xxxxxx Credit Card Master
Trust (the "TRUST"), and the Transferor and Xxxxxx Xxxxxx Corporation, a
Minnesota corporation (the "COMPANY"), propose to cause the Trust to issue to
the Transferor $400,000,000 principal amount of 5.90% Class A Asset Backed
Certificates, Series 1998-1 (the "CERTIFICATES"), which the Transferor proposes
to sell to the Underwriters pursuant to the terms hereof, and $ 122,875,817
principal amount of non interest bearing Class B Asset Backed Certificates,
Series 1998-1 (the "CLASS B CERTIFICATES"), which the Transferor intends to
retain. The Receivables are and will be (i) conveyed to DHCC by RNB pursuant to
the Bank Receivables Purchase Agreement, dated as of September 13, 1995, as
amended (the "BANK RECEIVABLES PURCHASE AGREEMENT") between RNB and DHCC, (ii)
conveyed to the Transferor by DHCC pursu-
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ant to the Receivables Purchase Agreement, dated as of September 13, 1995, as
amended (the "RECEIVABLES PURCHASE AGREEMENT") between DHCC and the Transferor
and (iii) transferred from the Transferor to the Trust pursuant to (a) a Pooling
and Servicing Agreement among the Transferor, RNB, as Servicer, and Norwest Bank
Minnesota, National Association, as Trustee, dated as of September 13, 1995, as
amended (the "POOLING AND SERVICING AGREEMENT") and (b) the Series 1998-1
Supplement to the Pooling and Servicing Agreement, to be dated as of August 12,
1998 (the "SUPPLEMENT"), among the Transferor, the Servicer and the Trustee.
Each Certificate represents a specified percentage undivided interest in the
Trust.
This Underwriting Agreement shall hereinafter be referred to as
this "Agreement". This Agreement, the Bank Receivables Purchase Agreement, the
Receivables Purchase Agreement, the Pooling and Servicing Agreement and the
Supplement shall collectively hereinafter be referred to as the "Basic
Documents". Capitalized terms used but not defined herein have the meanings
assigned thereto in the Pooling and Servicing Agreement and the Supplement. The
Transferor and the Company hereby agree with the several Underwriters named in
Schedule A hereto ("UNDERWRITERS") as follows:
2. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR AND THE
COMPANY. The Transferor and the Company hereby jointly and severally represent
and warrant to, and agree with, the several Underwriters that:
(a) A registration statement on Form S-3 (No. 33-92956)
relating to the Certificates, including a form of prospectus, has been
filed with the Securities and Exchange Commission (the "COMMISSION")
and either (i) has been declared effective under the Securities Act of
1933 (the "ACT") and is not proposed to be amended or (ii) is proposed
to be amended by amendment or post-effective amendment. If such
registration statement (the "initial registration statement") has been
declared effective, either (i) an additional registration statement
(the "additional registration statement") relating to the Certificates
may have been filed with the Commission pursuant to Rule 462(b) ("RULE
462(b)") under the Act and, if so filed, has become effective upon
filing pursuant to such Rule and the Certificates
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all have been duly registered under the Act pursuant to the initial
registration statement and, if applicable, the additional registration
statement or (ii) such an additional registration statement is proposed
to be filed with the Commission pursuant to Rule 462(b) and will become
effective upon filing pursuant to such Rule and upon such filing the
Certificates will all have been duly registered under the Act pursuant
to the initial registration statement and such additional registration
statement. If the Transferor does not propose to amend the initial
registration statement or, if an additional registration statement has
been filed and the Transferor does not propose to amend it and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("RULE 462(c)") under the
Act or, in the case of the additional registration statement, Rule
462(b). For purposes of this Agreement, "Effective Time" with respect
to the initial registration statement or, if filed prior to the
execution and delivery of this Agreement, the additional registration
statement means (i) if the Transferor has advised Salomon Brothers Inc
("SALOMON BROTHERS") as representative of the Underwriters (the
"REPRESENTATIVE"), that it does not propose to amend such registration
statement, the date and time as of which such registration statement,
or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (ii) if the Transferor has advised the
Representative that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as of which
such registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by
the Commission. If an additional registration statement has not been
filed prior to the execution and delivery of this Agreement but the
Transferor has advised the Representative that it proposes to
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file one, "Effective Time" with respect to such additional registration
statement means the date and time as of which such registration
statement is filed and becomes effective pursuant to Rule 462(b).
"Effective Date" with respect to the initial registration statement or
the additional registration statement (if any) means the date of the
Effective Time thereof. The initial registration statement, as amended
at its Effective Time, including all material incorporated by reference
therein, including all information contained in the additional
registration statement (if any) and deemed to be a part of the initial
registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form
on which it is filed and including all information (if any) deemed to
be a part of the initial registration statement as of its Effective
Time pursuant to Rule 430A(b) ("RULE 430A(b)") under the Act, is
hereinafter referred to as the "Initial Registration Statement." The
additional registration statement, as amended at its Effective Time,
including the contents of the initial registration statement
incorporated by reference therein and including all information (if
any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to
as the "Additional Registration Statement". The Initial Registration
Statement and the Additional Registration Statement are hereinafter
referred to collectively as the "Registration Statements" and
individually as a "Registration Statement". The form of prospectus
relating to the Certificates, as first filed with the Commission
pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under
the Act or (if no such filing is required) as included in a
Registration Statement, including all material incorporated by
reference in such prospectus, is hereinafter referred to as the
"Prospectus". No document has been or will be prepared or distributed
in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (i)
on the Effective Date of the Initial Registration Statement, the
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Initial Registration Statement conformed in all material respects to
the requirements of the Act and the rules and regulations of the
Commission (the "RULES AND REGULATIONS") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed,
or will conform, in all respects to the requirements of the Act and the
Rules and Regulations and did not include, or will not include, any
untrue statement of a material fact and did not omit, or will not omit,
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and (iii) on the date of
this Agreement, the Initial Registration Statement and, if the
Effective Time of the Additional Registration Statement is prior to the
execution and delivery of this Agreement, the Additional Registration
Statement each conforms, and at the time of filing of the Prospectus
pursuant to Rule 424(b) or (if no such filing is required) at the
Effective Date of the Additional Registration Statement in which the
Prospectus is included, each Registration Statement and the Prospectus
conforms or will conform, in all material respects to the requirements
of the Act and the Rules and Regulations, and neither of such documents
includes, or will include, any untrue statement of a material fact or
omits, or will omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. If
the Effective Time of the Initial Registration Statement is subsequent
to the execution and delivery of this Agreement: on the Effective Date
of the Initial Registration Statement, the Initial Registration
Statement and the Prospectus will conform in all material respects to
the requirements of the Act and the Rules and Regulations, and neither
of such documents will include any untrue statement of a material fact
or will omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and no
Additional Registration Statement has been or will be filed. The
preceding two sentences do not apply to statements in or
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omissions from a Registration Statement or the Prospectus based upon
written information furnished to the Transferor or the Company by any
Underwriter through the Representative specifically for use therein, it
being understood and agreed that the only such information is that
described as such in Section 7(b).
(c) Each of the Transferor and the Company has been duly
incorporated and is an existing corporation in good standing under the
laws of the State of Minnesota, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Prospectus; and each of the Transferor and the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification and where the
failure to so qualify might permanently impair title to property
material to its operation or its right to enforce a material contract
against others or expose it to substantial liability in such
jurisdiction.
(d) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation by the Transferor or the Company of the
transactions contemplated by this Agreement in connection with the
issuance and sale of the Certificates, except such as have been
obtained and made under the Act, and except such as may be required
under state securities laws.
(e) Neither the Transferor nor the Company is in violation
of its Articles of Incorporation or Bylaws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any agreement or instrument to which it is a
party or by which it or its properties are bound which would have a
material adverse effect on the transactions contemplated in the Basic
Documents. The execution, delivery and performance of the Basic
Documents and the issuance and sale of the Certificates and compliance
with the terms and provisions thereof will not result in a material
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breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order
of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Transferor or the Company or any
subsidiary of either of them or any of their properties, or any
material agreement or instrument to which the Transferor or the Company
or any such subsidiary is a party or by which the Transferor or the
Company or any such subsidiary is bound or to which any of the
properties of the Transferor or the Company or any such subsidiary is
subject, or the Articles of Incorporation or Bylaws of the Transferor
or the Company or any such subsidiary, and the Transferor has full
power and authority to authorize, issue and sell the Certificates as
contemplated by this Agreement and each of the Transferor and the
Company has full power and authority to enter into the Basic Documents
to which it is a party.
(f) As of the Closing Date, the representations and
warranties of the Transferor in the Basic Documents to which it is a
party will be true and correct.
(g) This Agreement has been duly authorized, executed and
delivered by the Transferor and the Company.
(h) The Transferor has authorized the conveyance of the
Receivables to the Trust, and the Transferor has authorized the Trust
to issue and sell the Certificates.
(i) The Company has delivered to you complete and correct
copies of its Form 10-Q for the first quarter of 1998 and its Form 10-K
for 1997. Except as set forth in or contemplated in the Registration
Statement and the Prospectus, there has been no material adverse
change, nor any development or event involving a prospective material
adverse change, in the condition (financial or other) of either the
Transferor or the Company or the credit card business of the Company or
its Affiliates since the date of the information provided pursuant to
the preceding sentence.
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(j) Any taxes, fees and other governmental charges due and
payable from or by the Transferor or the Company in connection with the
execution, delivery and performance of the Basic Documents and the
Certificates and any other agreements contemplated therein shall have
been paid or will be paid by the Transferor or the Company, as the case
may be, at or prior to the Closing Date to the extent then due.
3. PURCHASE, SALE AND DELIVERY OF CERTIFICATES. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Transferor agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Transferor, at a purchase price of 99.60729% of the principal amount
thereof, the respective principal amounts of Certificates set forth opposite the
names of the Underwriters in Schedule A hereto.
The Transferor will deliver against payment of the purchase price
the Certificates in the form of one or more permanent global securities in
definitive form (the "GLOBAL CERTIFICATES") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent global securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Prospectus. Payment for the Certificates shall
be made by the Underwriters in Federal (same day) funds by wire transfer to an
account previously designated to Salomon Brothers by the Transferor or the
Company at 10:00 a.m. (New York time), on August 12, 1998, or at such other time
not later than seven full business days thereafter as Salomon Brothers and the
Transferor determine, such time being herein referred to as the "Closing Date,"
against delivery to the Trustee as custodian for DTC of the Global Certificates
representing all of the Certificates. For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), the Closing
Date (if later than the otherwise applicable settlement date) shall be the
settlement date for payment of funds and delivery of the Certificates. The
Global Certificates will be made available for checking at the above offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx
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York, New York, at least 24 hours prior to the Closing Date.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Certificates for sale to the public (which may
include selected dealers) as set forth in the Prospectus.
5. CERTAIN AGREEMENTS OF THE TRANSFEROR AND THE COMPANY. The
Transferor and the Company jointly and severally covenant and agree with the
several Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Transferor will file the Prospectus with the Commission pursuant to
Rule 424(b)(1) (or if applicable, and if insisted to by the
Underwriters pursuant to Rule 424(b)(4)) not later than the
Commission's close of business on the second business day following the
earlier of (A) the date of determination of the offering price or (B)
the date the Prospectus is first used after effectiveness in connection
with a public offering or sale.
The Transferor will advise the Representative promptly of any such
filing pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement and an additional registration statement is necessary to
register a portion of the Certificates under the Act but the Effective
Time thereof has not occurred as of such execution and delivery, the
Transferor will file the additional registration statement or, if
filed, will file a post-effective amendment thereto with the Commission
pursuant to and in accordance with Rule 462(b) on or prior to 10:00
P.M., New York time, on the date of this Agreement or, if earlier, on
or prior to the time the Prospectus is printed and distributed to any
Underwriter, or will make such filing at such later date as shall have
been consented to by Salomon Brothers.
(b) The Transferor or the Company will advise the
Representative promptly of any proposal
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to amend or supplement the initial or any additional registration
statement as filed or the related prospectus, or the Initial
Registration Statement, the Additional Registration Statement (if any)
or the Prospectus, and will not effect such amendment or
supplementation without the Representative's consent; and the
Transferor or the Company will also advise the Representative promptly
of the effectiveness of each Registration Statement (if its Effective
Time is subsequent to the execution and delivery of this Agreement) and
of any amendment or supplementation of a Registration Statement or the
Prospectus and of the institution by the Commission of any stop order
proceeding in respect of a Registration Statement and each of the
Transferor and the Company will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(c) If, at any time when a prospectus relating to the
Certificates is required to be delivered under the Act in connection
with sales by any Underwriter or dealer, any event occurs as a result
of which the Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Transferor will promptly notify the Representative of such event
and will promptly prepare and file with the Commission (subject to the
Representative's prior review pursuant to paragraph (b) of this Section
5), at its own expense, an amendment or supplement which will correct
such statement or omission, or an amendment which will effect such
compliance. Neither the Representative's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Transferor will cause the
Trust to make generally available to the Certificateholders an earnings
statement of the Trust covering a period of at least
10
12 months beginning after the Effective Date of the Initial
Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the Trust's
fourth fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Trust's fiscal year, "Availability Date" means the 90th
day after the end of such fourth fiscal quarter.
(e) The Transferor or the Company will furnish to the
Representative copies of each Registration Statement (two of which will
be signed and will include all exhibits), each related preliminary
prospectus, and, so long as delivery of a prospectus relating to the
Certificates is required to be delivered under the Act in connection
with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Representative requests. The
Prospectus shall be so furnished on or prior to 10:00 A.M., New York
time, on the business day following the later of the execution and
delivery of this Agreement or the Effective Time of the Initial
Registration Statement. All other such documents shall be so furnished
as soon as available. The Transferor or the Company will pay the
expenses of printing and distributing to the Underwriters all such
documents.
(f) The Transferor will cooperate in the qualification of
the Certificates for sale and the determination of their eligibility
for investment under the laws of such jurisdictions as the
Representative designates and in the continuation of such
qualifications in effect so long as required for the distribution of
the Certificates.
(g) For a period from the date of this Agreement until the
retirement of the Certificates (i) RNB, as Servicer, will furnish to
the Representative and, upon request, to each of the other
Underwriters, copies of each certificate and the annual statements of
compliance delivered to the
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Trustee pursuant to Article III of the Pooling and Servicing Agreement
and Section 5.2 of the Supplement and the annual independent certified
public accountant's servicing reports furnished to the Trustee pursuant
to Article III of the Pooling and Servicing Agreement, by either
first-class mail or electronic transfer as soon as practicable after
such statements and reports are furnished to the Trustee, and (ii) any
other periodic certificates or reports as may be delivered to the
Trustee or the Certificateholders under the Pooling and Servicing
Agreement or the Supplement.
(h) So long as any of the Certificates is outstanding, the
Transferor will furnish to the Representative by either first-class
mail or electronic transfer as soon as practicable, copies of all
documents (A) distributed, or caused to be distributed, by the
Transferor to Certificateholders, (B) filed, or caused to be filed, by
the Transferor with the Commission pursuant to the Exchange Act, any
order of the Commission thereunder or pursuant to a "no-action" letter
from the staff of the Commission and (C) from time to time, such other
information in the possession of the Transferor concerning the Trust as
the Representative may reasonably request. The Transferor will
register the Certificates under the Exchange Act within 120 days after
the end of the fiscal year of the Trust during which the offering of
the Certificates to the public occurred.
(i) The Transferor will pay all expenses incident to the
performance of its obligations under this Agreement and will reimburse
the Underwriters (if and to the extent incurred by them) for any filing
fees and other expenses (including fees and disbursements of their
counsel) incurred by them in connection with qualification of the
Certificates for sale and determination of their eligibility for
investment under the laws of such jurisdictions as the Representative
designates and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the
Certificates, for any travel expenses of the Transferor's officers and
employees and any other expenses of the Transferor in connection with
attend-
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ing or hosting meetings with prospective purchasers of the Certificates
and for expenses incurred in distributing preliminary prospectuses and
the Prospectus (including any amendments and supplements thereto).
(j) To the extent, if any, that the ratings provided with
respect to the Certificates by the Rating Agencies is conditional upon
the furnishing of documents or the taking of any other action by the
Transferor or the Company agreed upon on or prior to the Closing Date,
the Transferor or the Company shall furnish such documents and take any
such other action.
(k) The Transferor or the Company shall not, until after the
Closing Date, offer, sell or contract to sell, directly or indirectly,
or file with the Commission a registration statement under the Act
relating to, securities substantially similar to the Certificates.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligation of the several Underwriters to purchase and pay for the Certificates
on the Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Transferor and the Company herein, to the accuracy
of the statements of officers of the Transferor and the Company made pursuant to
the provisions hereof, to the performance by each of the Transferor and the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) The Representative shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of Xxxxx & Young LLP, in form and substance satisfactory to the
Underwriters and counsel for the Underwriters, confirming that they are
independent
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public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating in effect that
(i) they have performed certain specified procedures as a result of
which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general
accounting records of RNB) set forth in the Registration Statements and
the Prospectus (and any supplements thereto), agrees with the
accounting records of RNB, excluding any questions of legal
interpretation, and (ii) they have performed certain specified
procedures with respect to the accounts.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration Statement is
subsequent to such execution and delivery, "Registration Statements"
shall mean the Initial Registration Statement and the additional
registration statement as proposed to be filed or as proposed to be
amended by the post-effective amendment to be filed shortly prior to
its Effective Time, and (iii) "Prospectus" shall mean the prospectus
included in the Registration Statements. All financial statements
included in material incorporated by reference into the Prospectus
shall be deemed included in the Registration Statements for purposes of
this subsection.
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or such later date as shall
have been consented to by the Representative. If the Effective Time of
the Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement,
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such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or, if earlier, the time the
Prospectus is printed and distributed to any Underwriter, or shall have
occurred at such later date as shall have been consented to by Salomon
Brothers. If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement, the
Prospectus shall have been filed with the Commission in accordance with
the Rules and Regulations and Section 5(a) of this Agreement. Prior to
such Closing Date, no stop order suspending the effectiveness of a
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the
Transferor, the Company or the Representative, shall be contemplated by
the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
any of the Transferor, DHCC, the Company or RNB or its credit card
business which, in the judgment of a majority in interest of the
Underwriters including the Representative, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Certificates; (ii)
any downgrading in the rating of any debt securities of the Company by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its rating
of any debt securities of the Company (other than an announcement with
positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating) if in the judgment of a majority
in interest of the Underwriters including the Representative, the
effect of any such downgrading or public announcement makes it
impractical or inadvisable to proceed with the completion of the public
offering or the sale of and payment for the Certificates; (iii) any
suspension or limitation of trading in securities generally on the New
York
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Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the
Transferor or the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by U.S. Federal or New
York authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of
war by Congress or any substantial national or international calamity
or emergency if, in the judgment of a majority in interest of the
Underwriters including the Representative, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Certificates.
(d) You shall have received from Xxxxx X. Xxxx, General
Counsel for the Transferor, the Company, DHCC and RNB, such opinion or
opinions dated the Closing Date and satisfactory in form and substance
to you and your counsel, substantially to the effect that:
(i) Each of the Transferor, the Company and DHCC has
been duly incorporated and is validly existing and in good standing
under the laws of the State of Minnesota with full corporate power,
authority and legal right to own its properties and conduct its
business as such properties are currently owned and such business is
currently conducted, to execute, deliver and perform its obligations
under each of the Basic Documents to which it is a party and, solely
with respect to the Transferor, to execute and deliver to the Trustee
the Certificates pursuant to the Pooling and Servicing Agreement;
(ii) RNB is a national banking corporation duly
organized, validly existing and in good standing under the laws of the
United States, and has full corporate power, authority and legal right
to execute, deliver and perform its obligations under the Basic
Documents to which it is a party and, in all material respects, to own
its properties and conduct its business as such properties are
presently owned and as such business is presently conducted;
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(iii) Each of the Transferor, the Company, DHCC and RNB
is duly qualified to do business and is in good standing as a foreign
corporation (or is exempt from such requirements), and has obtained all
necessary licenses and approvals in each jurisdiction in which failure
to so qualify or to obtain such licenses and approvals would render any
Credit Card Agreement relating to an Account owned by the Credit Card
Originator or any Receivable transferred to the Trust by the Transferor
unenforceable by the Credit Card Originator, the Transferor, the
Servicer or the Trustee and would have a material adverse effect on the
interests of the Certificateholders under the Pooling and Servicing
Agreement or under any Supplement;
(iv) The Certificates have been duly authorized,
executed and delivered by the Transferor and, when duly authenticated
by the Trustee in accordance with the terms of the Pooling and
Servicing Agreement and delivered to and paid for by the Underwriters
in accordance with the terms of this Agreement, will be validly issued
and outstanding and entitled to the benefits provided by the Pooling
and Servicing Agreement;
(v) Each of the Basic Documents to which the applicable
entity is a party has been duly authorized, executed and delivered by
the Transferor, the Company, DHCC and/or the Servicer, as the case may
be, and constitutes the legal, valid and binding agreement of the
Transferor, the Company, DHCC and/or the Servicer, as the case may be,
enforceable against the Transferor, the Company, DHCC and/or the
Servicer, as the case may be, in accordance with its terms, except (x)
to the extent that the enforceability thereof may be limited by (A)
bankruptcy, insolvency, receivership, conservatorship, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
or affecting the rights and remedies of creditors generally and the
rights of creditors as the same may be applied in the event of
bankruptcy, insolvency, receivership, reorganization,moratorium or
other similar event in respect of the Transferor, the Company, DHCC
and/or the Servicer, (B) general principles of equity (regardless of
whether considered and applied in a proceed-
17
ing in equity or in law) and (C) with respect to the Pooling and
Servicing Agreement and the Supplement, the qualification that certain
of the remedial provisions of the Pooling and Servicing Agreement and
the Supplement may be unenforceable in whole or in part, but the
inclusion of such provisions does not affect the validity of the
Pooling and Servicing Agreement or the Supplement taken as a whole, and
the Pooling and Servicing Agreement and the Supplement, together with
applicable law, contain adequate provisions for the practical
realization of the benefits of the security created thereby; and (y)
such counsel expresses no opinion as to the enforceability of any
rights to contribution or indemnification which are violative of public
policy underlying any law, rule or regulation;
(vi) No consent, approval, authorization or order of
any governmental agency or body is required for (A) the execution,
delivery and performance by the Transferor, the Company, DHCC or the
Servicer of its obligations under any of the Basic Documents or the
Certificates to which it is a party, or (B) the issuance or sale of the
Certificates, except such as have been obtained under the Act and as
may be required under state securities or blue sky laws in connection
with the purchase and distribution of the Certificates by the
Underwriters;
(vii) None of the execution and delivery of the Basic
Documents or the Certificates by the Transferor, the Company, DHCC
and/or the Servicer, as the case may be, or the performance by the
Transferor, the Company, DHCC and/or the Servicer, as the case may be,
of the transactions therein contemplated or the fulfillment of the
terms thereof does or will result in any violation of any statute or
regulation or any order or decree of any court or governmental
authority binding upon the Transferor, the Company, DHCC or the
Servicer or the property of the Transferor, the Company, DHCC or the
Servicer, or conflict with, or result in a breach or violation of any
term or provision of, or result in a default under any of the terms and
provisions of, the charter or by-laws of the Transferor, the Company,
DHCC or the Servicer, or any material indenture,
18
loan agreement or other material agreement to which the Transferor, the
Company, or the Servicer is a party or by which any of them is bound;
(viii) There are no proceedings or investigations
pending or, to the best knowledge of such counsel, threatened against
the Transferor, the Company, DHCC or RNB, before any court, regulatory
body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of any of the Basic
Documents or the Certificates, (ii) seeking to prevent the issuance of
the Certificates or the consummation of any of the transactions
contemplated by any of the Basic Documents or the Certificates, (iii)
seeking any determination or ruling that, in the reasonable judgment of
such counsel, would materially and adversely affect the performance by
the Transferor of its obligations under any of the Basic Documents,
(iv) seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of any of the Basic
Documents or the Certificates or (v) seeking to affect adversely the
income tax attributes of the Trust under the Federal or applicable
state income or franchise tax systems;
(e) You shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, special counsel to the Transferor, such opinion or opinions
dated the Closing Date and satisfactory in form and substance to you and your
counsel, substantially to the effect that the Certificates will be treated as
indebtedness for Federal income tax purposes and that the Trust will not be
classified as an association taxable as a corporation.
(f) You shall have received from Xxxxxxxxx, Xxxxx, Xxxxxxx &
Xxxxx, special South Dakota tax counsel to RNB, such opinion or opinions dated
the Closing Date and satisfactory in form and substance to you and your counsel,
substantially to the effect that, to the extent that the Certificates will be
characterized as debt for Federal income tax purposes, the Certificates will be
characterized as debt for South Dakota income tax purposes, and to the effect
that, to the extent that the Trust will not be sub-
19
ject to tax at the entity level for Federal income tax purposes, the Trust will
not be subject to tax at the entity level for South Dakota income tax purposes.
(g) You shall have received from Faegre & Xxxxxx, special
Minnesota tax counsel to the Transferor, such opinion or opinions dated the
Closing Date and satisfactory in form and substance to you and your counsel,
substantially to the effect that when the Certificates are beneficially owned by
a person that is not a member of the Transferor's consolidated group, the
certificates will be characterized as debt for Minnesota income tax purposes and
to the effect that the Trust will not be subject to tax at the entity level.
(h) You shall have received from Xxxxxxx, Arps, Slate,
Xxxxxxx & Xxxx LLP, special counsel to the Transferor, such opinion or opinions
dated the Closing Date and satisfactory in form and substance to you and your
counsel, substantially to the effect that:
(i) Each of the Pooling and Servicing Agreement and
the Supplement constitutes the valid and binding obligation of the
Transferor, RNB and the Trustee, enforceable against the Transferor,
RNB and the Trustee in accordance with its terms, except (x) to the
extent that the enforceability thereof may be limited by (a)
bankruptcy, insolvency, receivership, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally and the rights of creditors as the same may be applied
in the event of the bankruptcy, insolvency, receivership,
reorganization, moratorium or other similar event in respect of the
Transferor, RNB or the Trustee, (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at
law or in equity) and (c) the qualification that certain of the
remedial provisions of the Pooling and Servicing Agreement may be
unenforceable in whole or in part, but the inclusion of such provisions
does not affect the validity of the Pooling and Servicing Agreement
taken as a whole, and the Pooling and Servicing Agreement, together
with applicable law, contain adequate provisions for the practical
realization of the benefits of the security created thereby and (y)
such counsel expresses no opinion as to the enforceability of any
rights to contribution
20
or indemnification which are violative of public policy underlying any
law, rule or regulation;
(ii) The Bank Receivables Purchase Agreement
constitutes the valid and binding obligation of RNB and DHCC,
enforceable against RNB and DHCC in accordance with its terms, except
(x) to the extent that the enforceability thereof may be limited by (a)
bankruptcy, insolvency, receivership, conservatorship, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and the rights of creditors as the same may
be applied in the event of the bankruptcy, insolvency, receivership,
conservatorship, reorganization, moratorium or other similar event in
respect of RNB or DHCC and (b) general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in
equity) and (y) such counsel expresses no opinion as to the
enforceability of any rights to contribution or indemnification which
are violative of public policy underlying any law, rule or regulation;
(iii) The Receivables Purchase Agreement constitutes
the valid and binding obligation of DHCC and the Transferor,
enforceable against DHCC and the Transferor in accordance with its
terms, except (x) to the extent that the enforceability thereof may
be limited by (a) bankruptcy, insolvency, receivership,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and the rights of
creditors as the same may be applied in the event of the bankruptcy,
insolvency, receivership, reorganization, moratorium or other similar
event in respect of DHCC and the Transferor and (b) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) and (y) such counsel
expresses no opinion as to the enforceability of any rights to
contribution or indemnification which are violative of public policy
underlying any law, rule or regulation;
(iv) The Certificates, when executed and authenticated
in accordance with the terms of the Pooling and Servicing Agreement and
the Supplement and delivered to and paid for by the Under-
21
writers pursuant to this Agreement, will be duly and validly issued and
outstanding and will be entitled to the benefits of the Pooling and
Servicing Agreement and the Supplement;
(v) This Agreement has been duly authorized, executed
and delivered by the Transferor and the Company;
(vi) Neither the execution, delivery or performance by
each of the Transferor, the Company, DHCC or RNB of the Basic Documents
to which it is a party, nor the compliance by each of the Transferor,
the Company, DHCC or RNB, as the case may be, with the terms and
provisions thereof or hereof, will contravene any provision of any
applicable law;
(vii) Based on such counsel's review of applicable
laws, no governmental approval, which has not been obtained or taken
and is not in full force and effect, is required to authorize or is
required in connection with the execution, delivery or performance by
each of the Transferor, the Company, DHCC or RNB, of the Basic
Documents to which it is a party;
(viii) The Certificates and the Basic Documents conform
in all material respects to the descriptions thereof contained in the
Prospectus;
(ix) The Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of 1939, as
amended, and the Trust is not required to be registered under the
Investment Company Act of 1940, as amended (the "1940 ACT");
(x) The statements in the Prospectus under the heading
"Certain Legal Aspects of the Receivables," to the extent that they
constitute matters of law or legal conclusions with respect thereto,
have been reviewed by such counsel and are correct in all material
respects;
(xi) The Initial Registration Statement has become
effective under the Act, the Additional Registration Statement (if any)
was filed and became effective under the Act, and the Prospectus
22
Supplement has been filed with the Commission pursuant to Rule 424(b)
thereunder, no stop order suspending the effectiveness of a
Registration Statement has been issued and no proceeding for that
purpose has been instituted or threatened; and
(xii) Each of the Registration Statements, as of their
effective dates, and the Prospectus, as of its date, appeared on its
face to be appropriately responsive in all material respects to the
requirements of the Act and the General Rules and Regulations under the
Act, except that in each case such counsel expresses no opinion as to
the financial data included therein or excluded therefrom or the
exhibits to a Registration Statement, and such counsel does not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in a Registration Statement and the Prospectus.
Such opinion shall also state that such counsel has
participated in conferences with officers and representatives of the Transferor,
the Company, DHCC and RNB, counsel for the Transferor, the Company, DHCC and
RNB, representatives of the independent accountants of the Transferor, the
Company, DHCC and RNB, and the Underwriters at which the contents of the
Prospectus and related matters were discussed and, although such counsel need
not pass upon, and need not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Prospectus and shall
have made no independent check or verification thereof, except for those made
under the caption "Certain Legal Aspects of the Receivables" to the extent set
forth in paragraph (x) above, on the basis of the foregoing, no facts shall have
come to such counsel's attention that shall have led such counsel to believe
that the Prospectus, as of its date or the date of its opinion, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that such counsel need not
express an opinion or belief with respect to the financial statements, schedules
and other financial information included in such Prospectus or excluded
therefrom.
23
(i) You shall have received from Xxxxxxxxx, Xxxxx, Xxxxxxx
& Xxxxx special South Dakota counsel to RNB, such opinion or opinions dated the
Closing Date and satisfactory in form and substance to you and your counsel,
substantially to the effect that:
(i) The security interest created by the Bank
Receivables Purchase Agreement in the Receivables has been perfected under
Article 9 of the Uniform Commercial Code of South Dakota by the proper filing of
UCC-1 financing statements with the appropriate filing offices in South Dakota,
and such security interest is of first priority under Article 9 of the South
Dakota Uniform Commercial Code; and
(ii) The UCC-1 financing statements have been
previously filed, have not been amended or terminated and no other filings or
other actions, with respect to DHCC's interest in the Receivables, are necessary
to perfect the interest of DHCC in the Receivables, and the proceeds thereof,
conveyed to DHCC, except that appropriate continuation statements must be filed
in accordance with the applicable state's requirements.
(j) You shall have received from Faegre & Xxxxxx, special
Minnesota counsel to the Transferor and DHCC, such opinion or opinions dated the
Closing Date and satisfactory in form and substance to you and your counsel,
substantially to the effect that:
(i) Each of the security interest created by the
Receivables Purchase Agreement and the security interest created by the Pooling
and Servicing Agreement in the Receivables has been perfected under Article 9 of
the Uniform Commercial Code of Minnesota by the proper filing of UCC-1 financing
statements with the appropriate filing offices in Minnesota, and each such
security interest is of first priority under Article 9 of the Minnesota Uniform
Commercial Code; and
(ii) The UCC-1 financing statements have been
previously filed have not been amended or terminated and (a) no other filings or
other actions, with respect to the Transferor's interest in the Receivables, are
necessary to perfect the interest of the Transferor in the Receivables, and the
proceeds thereof, conveyed to the Transferor thereunder and (b) no other
24
filings or other actions, with respect to the Trustee's interest in the
Receivables, are necessary to perfect the interest of the Trustee in the
Receivables, and proceeds thereof, against third parties, except, in each case,
that appropriate continuation statements must be filed in accordance with the
applicable state's requirements.
(k) You shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, special counsel to RNB, DHCC and the Transferor, such
opinion or opinions dated the Closing Date and satisfactory in form and
substance to you and your counsel, substantially to the effect that the Bank
Receivables Purchase Agreement creates in favor of DHCC a security interest
under Article 9 of the Delaware Uniform Commercial Code (the "DELAWARE UCC") in
the rights of RNB in the Receivables, the Receivables Purchase Agreement creates
in favor of the Transferor a security interest under Article 9 of the Delaware
UCC in the rights of DHCC in the Receivables and the Pooling and Servicing
Agreement creates in favor of the Trustee a security interest under Article 9 of
the Delaware UCC in the rights of the Transferor in the Receivables.
(l) You shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, special counsel to the Transferor, such opinion or opinions
dated the Closing Date and satisfactory in form and substance to you and your
counsel, substantially to the effect that:
(i) In a properly presented and argued case in a
proceeding under Title 11 of the United States Code, 11 U.S.C. Section Section
101, ET SEQ. (the "BANKRUPTCY CODE"), if the matter were properly briefed and
presented to a court, the court would hold that (1) the transfer of the
Receivables by DHCC to the Transferor in the manner set forth in the Receivables
Purchase Agreement would constitute the sale of the Receivables from DHCC to the
Transferor, and (2) in the event that DHCC were to become a debtor under the
Bankruptcy Code, the transfer of Receivables under the Receivables Purchase
Agreement would not, after full consideration of all relevant factors, be
properly characterized as a pledge of the Receivables to secure a borrowing by
DHCC from the Transferor, and accordingly, the Receivables and the proceeds
thereof would not be part of the estate of DHCC under Section 541 of the
Bankruptcy Code in such event, and consequently Section 362 of the Bankruptcy
Code would not
25
be applicable to the Receivables and the proceeds thereof; and
(ii) If DHCC should become a debtor in a case under the
Bankruptcy Code, and the Transferor would not otherwise properly be a debtor in
a case under the Bankruptcy Code, and if the matter were properly briefed and
presented to a court exercising bankruptcy jurisdiction, it would not be a
proper exercise by the court of its equitable discretion to disregard the
separate corporate existence of the Transferor so as to order substantive
consolidation under the Bankruptcy Code of the assets and liabilities of the
Transferor with the bankruptcy estate of DHCC.
(m) You shall have received from Xxxxxxx Xxxxxx, Assistant
Vice President and Senior Counsel for Norwest Corporation, parent of the
Trustee, such opinion or opinions dated the Closing Date and satisfactory in
form and substance to you and your counsel, substantially to the effect that:
(i) The Trustee is a national banking association duly
organized, validly existing and in good standing under the Federal laws
of the United States of America;
(ii) The Trustee has all requisite power and authority
as a national banking association to execute and deliver, and to
perform its obligations under the Pooling and Servicing Agreement and
the Supplement and to consummate the transactions contemplated by the
Pooling and Servicing Agreement and the Supplement;
(iii) The Trustee's performance of its obligations
under the Pooling and Servicing Agreement and the execution, delivery
and performance of the Trustee's obligations pursuant to the
Supplement by the Trustee does not conflict with or result in a
violation of the Articles of Association or By-Laws of the Trustee;
(iv) The Pooling and Servicing Agreement and the
Supplement have been duly authorized, executed and delivered by the
Trustee; and
26
(v) The Certificates have been duly authenticated by
the Trustee pursuant to the Pooling and Servicing Agreement.
(n) You shall have received a certificate, dated the Closing
Date and satisfactory in form and substance to you and your counsel, of the
Chairman, President or any Vice President and a principal financial or
accounting officer of each of the Transferor, DHCC, RNB and the Company, as
applicable, in which such officers, to the best of their knowledge after
reasonable investigation, shall state that the representations and warranties of
the Transferor and the Company, as the case may be, in this Agreement are true
and correct, that each of the Transferor and the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, that the representations and
warranties of each of the Transferor, DHCC, RNB and the Company, as applicable,
in the Basic Documents are true and correct as of the dates specified therein,
that no stop order suspending the effectiveness of a Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission, that, subsequent to the date of the Prospectus,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of the Transferor, DHCC,
RNB or the Company, as the case may be, or its respective credit card business
except as set forth in or contemplated by the Prospectus or as described in such
certificate and that nothing has come to the attention of the Transferor, DHCC,
RNB or the Company that would lead the Transferor, DHCC, RNB or the Company to
believe that a Registration Statement contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(o) You shall have received evidence satisfactory to you and
your counsel that the Certificates shall be rated "AAA" by Standard & Poor's
Ratings Group and "Aaa" by Xxxxx'x Investors Service, Inc.
(p) You shall have received a letter, dated such Closing Date
and satisfactory in form and substance
27
to you and your counsel, which meets the requirements of subsection (a) of this
Section, except that the specified date referred to in such subsection will be a
date not more than five days prior to such Closing Date for the purposes of this
subsection (p).
(q) You shall also receive from each counsel rendering an
opinion not otherwise addressed to you a letter dated the Closing Date and
satisfactory in form and substance to you and your counsel, stating that you may
rely on the opinions of such counsel as delivered to Xxxxx'x Investors Service,
Inc. and Standard & Poor's Ratings Group in connection with the rating of the
Certificates.
(r) On the Closing Date, $122,875,817 aggregate principal amount
of the Class B Certificates shall have been issued to the Transferor.
(s) All proceedings in connection with the transactions
contemplated by this Agreement and the other Basic Documents and all documents
incident hereto and thereto shall be reasonably satisfactory in form and
substance to you and your counsel, and you and your counsel shall have received
such information, certificates and documents as you and your Counsel may
reasonably request.
The Transferor will furnish you with such conformed copies
of such opinions, certificates, letters and documents as you reasonably request.
Salomon Brothers may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Transferor and the
Company, will jointly and severally indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in a Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon
28
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that neither the Transferor nor the Company will be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from any of such documents in reliance upon
and in conformity with written information furnished to the Transferor or the
Company by any Underwriter through the Representative specifically for use
therein, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in subsection
(b) below; and PROVIDED FURTHER, HOWEVER, that neither the Transferor nor the
Company will be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any preliminary
prospectus that was eliminated or remedied in the Prospectus, if a copy of the
Prospectus was not sent or given with or prior to the written confirmation of
the sale of any Certificate to the person asserting the loss, claim, damage or
liability, if required by the Act.
(b) Each Underwriter will severally and not jointly indemnify and
hold harmless the Transferor and the Company against any losses, claims, damages
or liabilities to which the Transferor or the Company may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omission
or the alleged omission to state therein in a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
29
reliance upon and in conformity with written information furnished to the
Transferor or the Company by such Underwriter through the Representative
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Transferor or the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Underwriter consists of the following information
in the Prospectus furnished on behalf of each Underwriter: the last paragraph at
the bottom of the cover page concerning the terms of the offering by the
Underwriters, the legend concerning overallotments and stabilizing on the inside
front cover page and the concession and reallowance figures appearing in the
paragraph under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In case any such
action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indem-
30
nified party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject
matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Transferor and the Company on the one hand and the Underwriters on the other
from the offering of the Certificates or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Transferor and/or the Company on the
one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities as well
as any other relevant equitable considerations. The relative benefits received
by the Transferor and the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Transferor and the
Company bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Transferor or the Company on the one hand or by the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Under-
31
writer shall be required to contribute any amount in excess of the amount by
which the total price at which the Certificates underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Transferor and the Company under this
Section shall be in addition to any liability which the Transferor and the
Company may otherwise have and shall extend, upon the same terms and conditions,
to each person, if any, who controls any Underwriter within the meaning of the
Act; and the obligations of the Underwriters under this Section shall be in
addition to any liability which the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each director of the
Transferor and the Company, to each officer of the Transferor and the Company
who has signed a Registration Statement and to each person, if any, who controls
the Transferor or the Company within the meaning of the Act.
8. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters
default in their obligations to purchase Certificates hereunder on the Closing
Date and the aggregate principal amount of Certificates that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total principal amount of Certificates that the Underwriters are obligated
to purchase on such Closing Date, the Representative may make arrangements
satisfactory to the Transferor for the purchase of such Certificates by other
persons, including any of the Underwriters, but if no such arrangements are made
by such Closing Date, the nondefaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Certificates that such defaulting Underwriters agreed but failed to purchase
on such Closing Date. If any Underwriter or Underwriters so default and the ag-
32
gregate principal amount of the Certificates with respect to which such default
or defaults occur exceeds 10% of the total principal amount of the Certificates
that the Underwriters are obligated to purchase on such Closing Date and
arrangements satisfactory to the Representative and the Transferor for the
purchase of such Certificates by other persons are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Transferor or the Company, except as
provided in Section 9. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The
respective indemnities, agreements, representations, warranties and other
statements of the Transferor and the Company and of their respective officers
and of the several Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the Transferor, the Company or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and payment
for the Certificates. If this Agreement is terminated pursuant to Section 8 or
if for any reason the purchase of the Certificates by the Underwriters is not
consummated, the Transferor and the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Transferor and the Company and the Underwriters pursuant to
Section 7 shall remain in effect, and if any Certificates have been purchased
hereunder the representations and warranties in Section 2 and all obligations
under Section 5 shall also remain in effect. If the purchase of the
Certificates by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(c),
the Transferor and the Company, jointly and severally, will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by them in connection with the offering of the
Certificates.
33
10. NOTICES. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Representative at Salomon Brothers, Seven World Trade Center,
00xx Xxxxx Xxx Xxxx, XX 00000, Attention Syndicate Manager (facsimile no.
(000)000-0000); if sent to the Transferor, will be mailed, delivered or
telegraphed and confirmed to it at Xxxxxx Xxxxxx Receivables Corporation, 00
Xxxxx Xxxxxx Xxxxxx, 00xx xxxxx, Xxxxx 0000, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention of Treasurer, (facsimile no. (000) 000-0000); and if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at Xxxxxx
Xxxxxx Corporation, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention
of Treasurer (facsimile no. (000) 000-0000); PROVIDED; HOWEVER, that any notice
to an Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed
and confirmed to such Underwriter.
11. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7, and no
other person will have any right or obligation hereunder.
12. REPRESENTATIONS OF UNDERWRITERS. The Representative will act
for the several Underwriters in connection with this financing, and any action
under this Agreement taken by the Representative will be binding upon all the
Underwriters. Each of the Underwriters represents and warrants to, and agrees
with, the Transferor that (w) it has only issued or passed on and shall only
issue or pass on in the United Kingdom any document received by it in connection
with the issue of the Certificates to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 or who is a person to whom the document may otherwise
lawfully be issued or passed on, (x) it has complied and shall comply with all
applicable provisions of the Financial Services Act 1986 and other applicable
laws and regulations with respect to anything done by it in relation to the
Certificates in, from or otherwise involving the United Kingdom and (y) if that
Underwriter is an authorized person under the Financial Services Act 1986, it
has only promoted and shall only promote (as that term is defined in Regulation
34
1.02 of the Financial Services (Promotion of Unregulated Schemes) Regulations
1991) to any person in the United Kingdom the scheme described in the Prospectus
if that person is of a kind described either in Section 76(2) of the Financial
Services Act 1986 or in Regulation 1.04 of the Financial Services (Promotion of
Unregulated Schemes) Regulations 1991.
13. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
The Transferor and the Company hereby submit to the nonexclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
35
If the foregoing is in accordance with the Representative's
understanding of our agreement, kindly sign and return to the Transferor and the
Company one of the counterparts hereof, whereupon it will become a binding
agreement between the Transferor, the Company and the several Underwriters in
accordance with its terms.
Very truly yours,
XXXXXX XXXXXX RECEIVABLES
CORPORATION
By /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
XXXXXX XXXXXX CORPORATION
By /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
Acting on behalf of itself
and as the Representative of
the several Underwriters.
SALOMON BROTHERS INC
By /s/ Xxxx X. Xxxx
-------------------------------
Name: Xxxx X. Xxxx
Title: Associate
36
SCHEDULE A
Underwriters Principal
------------ Amount of
Certificates
------------
Salomon Brothers Inc . . . . . . . . . . . . . . . . $133,400,000
Xxxxxxx, Xxxxx & Co . . . . . . . . . . . . . . . . 133,300,000
X.X. Xxxxxx Securities Inc.. . . . . . . . . . . . . 133,300,000
------------
Total . . . . . . . . . . . . . . . . . . . $400,000,000
------------
A-1
