EXHIBIT 1.1
$150,000,000
CHAMPION HOME BUILDERS CO.
11 1/4% SENIOR NOTES DUE 2007
PURCHASE AGREEMENT
April 12, 2002
Credit Suisse First Boston Corporation,
FIRST UNION SECURITIES, INC.
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Ladies and Gentlemen:
1. Champion Home Builders Co., a Michigan corporation (the "COMPANY"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to Credit Suisse First Boston Corporation and First Union Securities, Inc., the
several initial purchasers named in Schedule A hereto (the initial "PURCHASERS")
U.S.$150,000,000 principal amount of its 11 1/4% Senior Notes due 2007 ("OFFERED
SECURITIES"), to be issued under an indenture dated as of April 22, 2002 (the
"INDENTURE"), between the Company, Champion Enterprises, Inc. (the "PARENT") and
the subsidiaries listed on the signature pages hereto ("SUBSIDIARY GUARANTORS,"
and together with Parent, the "GUARANTORS") and Bank One Trust Company, N.A., as
Trustee. The Company, the Parent and the Subsidiary Guarantors are collectively
referred to herein as the "ISSUERS." The Securities Act of 1933 is herein
referred to as the "SECURITIES ACT."
Holders (including subsequent transferees) of the Offered Securities
will have the registration rights set forth in the registration rights agreement
(the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, among the
Issuers and the Purchasers, for so long as such Offered Securities constitute
"TRANSFER RESTRICTED SECURITIES" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Issuers will
agree to file with the Securities and Exchange Commission (the "COMMISSION")
under the circumstances set forth therein, (i) a registration statement under
the Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to the
Company's 11 1/4% Senior Notes due 2007 (the "EXCHANGE SECURITIES"), in a like
aggregate principal amount as the Company issued under the Indenture, identical
in all material respects to the Offered Securities (except that the Exchange
Securities will not contain certain restrictions on transfer) and registered
under the Securities Act to be offered in exchange for the Offered Securities
(such offer to exchange being referred to as the "EXCHANGE OFFER") and the
Guarantees (the "GUARANTEES") thereof and (ii) a shelf registration statement
pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION
STATEMENT" and, together with the Exchange Offer Registration Statement, the
"REGISTRATION STATEMENTS") relating to the resale by certain holders of the
Offered Securities and to use its best efforts to cause such Registration
Statements to be declared and remain effective and usable for the periods
specified in the Registration Rights Agreement and to consummate the Exchange
Offer. The Offered Securities and the Exchange Securities are referred to
collectively as the "SECURITIES."
The Issuers hereby agree with the Purchasers as follows:
2. Representations and Warranties of the Issuers. The Company and the
Parent, jointly and severally, represent and warrant to, and agree with, and
each Subsidiary Guarantor, solely with respect to itself, represents and
warrants to, and agrees with the Purchasers that:
(a) A preliminary offering circular and an offering circular
relating to the Offered Securities to be offered by the Purchasers have
been prepared by the Company. Such preliminary offering circular (the
"PRELIMINARY OFFERING CIRCULAR") and offering circular (the "OFFERING
CIRCULAR"), as supplemented as of the date of this Agreement, and any
other document approved in writing by the Company for use in connection
with the contemplated resale of the Offered Securities are hereinafter
collectively referred to as the "OFFERING DOCUMENT." On the date of
this Agreement, the Offering Document does not include any untrue
statement of a material fact or omit 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. The preceding
sentence does not apply to statements in or omissions from the Offering
Document based upon written information furnished to the Company by the
Purchasers specifically for use therein, it being understood and agreed
that the only such information is that described as such in Section
7(b) hereof. Except as disclosed in the Offering Document, on the date
of this Agreement, Parent's Annual Report on Form 10-K most recently
filed with the Securities and Exchange Commission (the "COMMISSION")
and all subsequent reports (collectively, the "EXCHANGE ACT REPORTS")
which have been filed by Parent with the Commission or sent to its
stockholders pursuant to the Securities Exchange Act of 1934 (the
"EXCHANGE ACT") do not 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. Such documents, when they were filed with the
Commission, conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder.
(b) Each of Parent and the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
State of Michigan, with power and authority (corporate and other) to
own its properties and conduct its business as described in the
Offering Document; and each of Parent 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, except where the
failure to so qualify or to be in good standing would, individually or
in the aggregate not have a material adverse effect on the condition
(financial or otherwise), business, properties or results of operations
of Parent and its subsidiaries, taken as a whole (a "MATERIAL ADVERSE
EFFECT").
(c) The entities listed on Schedule B hereto are the only
direct or indirect subsidiaries of Parent.
(d) Each "significant subsidiary" of Parent other than the
Company (as such term is defined in Rule 1-02 of Regulation S-X) and
each Subsidiary Guarantor which is not a "significant subsidiary" (each
a "SUBSIDIARY" and, collectively, the "SUBSIDIARIES") has been duly
incorporated or organized and is an existing corporation or limited
liability company, as the case may be, in good standing under the laws
of the jurisdiction of its incorporation or organization, with power
and authority (corporate and other) to own its properties and conduct
its business as described in the Offering Document; and each Subsidiary
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,
except where the failure to so qualify or to be in good standing would
not have a Material Adverse Effect; all of the issued and outstanding
capital stock or limited liability company interests, as the case may
be, of each Subsidiary and of the Company has been duly authorized and
validly issued and is fully paid and nonassessable; and the capital
stock or limited liability company interests, as the case may be, of
each Subsidiary and of the Company owned by the Parent, directly or
through subsidiaries, is owned free from liens, encumbrances and
defects.
2
(e) The Indenture has been duly authorized by the Company and
the Guarantors; the Offered Securities have been duly authorized by the
Company; when the Offered Securities are delivered and paid for
pursuant to this Agreement, the Indenture will have been duly executed
and delivered, and, assuming due authorization, valid execution and
delivery thereof by the Trustee, the Indenture and such Offered
Securities will constitute valid and legally binding obligations of the
Company and the Guarantors, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Offered Securities will conform to the description thereof contained in
the Offering Document.
(f) On the Closing Date (AS DEFINED BELOW), the Indenture will
conform in all material respects to the requirements of the Trust
Indenture Act of 1939, as amended (the "TIA" or "TRUST INDENTURE ACT"),
and the rules and regulations of the Commission applicable to an
indenture which is qualified thereunder.
(g) Each Guarantee has been duly authorized by each applicable
Guarantor and, upon endorsement on the Offered Securities in accordance
with the provisions of the Indenture and delivery of the Offered
Securities to the Purchasers against payment therefor pursuant to
Section 3 of this Agreement, will be entitled to the benefits of the
Indenture, will conform to the description thereof contained in the
Offering Document and will be valid and binding obligations of each
such Guarantor, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(h) On the Closing Date, the Exchange Securities will have
been duly authorized by the Company; and when the Exchange Securities
are issued, executed and authenticated in accordance with the terms of
the Exchange Offer and the Indenture, the Exchange Securities will be
entitled to the benefits of the Indenture and will be the valid and
legally binding obligations of each of the Issuers, enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles.
(i) The Guarantees to be endorsed on the Exchange Securities
by each Guarantor have been duly authorized by such Guarantor; and,
when issued, will have been duly executed and delivered by each such
Guarantor and will conform to the description thereof contained in the
Offering Document. When the Exchange Securities have been issued,
executed and authenticated in accordance with the terms of the Exchange
Offer and the Indenture, the Guarantee of each Guarantor endorsed
thereon will constitute valid and legally binding obligations of such
Guarantor, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(j) The Registration Rights Agreement has been duly authorized
by the Company and each of the Guarantors and, on the Closing Date,
will have been duly executed and delivered by the Company and each of
the Guarantors. When the Registration Rights Agreement has been duly
executed and delivered, the Registration Rights Agreement will be a
valid and binding agreement of the Company and each of the Guarantors,
enforceable against the Company and each Guarantor in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles and except as rights to indemnity and contribution
thereunder may be limited by state or federal securities laws or the
public policy underlying such laws. On the Closing Date, the
Registration Rights Agreement will conform as to legal matters to the
description thereof in the Offering Circular.
3
(k) None of Parent, the Company or any Subsidiary is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to Parent, the Company and the
Subsidiaries, taken as a whole, to which Parent, the Company or any
Subsidiary is a party or by which Parent, the Company or any Subsidiary
or their respective property is bound.
(l) The execution, delivery and performance of the Indenture,
this Agreement and the Registration Rights Agreement and the issuance
and sale of the Offered Securities and compliance with the terms and
provisions thereof will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, (i) any
statute, any rule, regulation or order of any governmental agency or
body or any court, domestic or foreign, having jurisdiction over
Parent, the Company or any Subsidiary or any of their properties, or
(ii) any agreement or instrument to which the Company or any such
Subsidiary is (or will be on the Closing Date) a party or by which
Parent, the Company or any such Subsidiary is (or will be on the
Closing Date) bound or to which any of the properties of Parent, the
Company or any such Subsidiary is (or will be on the Closing Date)
subject, including, without limitation, the Warehouse Facility (as
defined below) or (iii) the charter or by-laws of Parent, the Company
or any such Subsidiary, except, in the case of clauses (i) and (ii),
for such breaches, violations or defaults that would not have a
Material Adverse Effect, and the Company has full power and authority
to authorize, issue and sell the Offered Securities as contemplated by
this Agreement.
(m) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Guarantors.
(n) There are no contracts, agreements or understandings
between the Company or any Guarantor and any person granting such
person the right to require the Company or such Guarantor to include
any securities of the Company or such Guarantor in the Registration
Statements.
(o) No "nationally recognized statistical rating organization"
as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act has indicated to the Company or any Guarantor that it is
considering (i) the downgrading, suspension, or withdrawal of, or any
review for a possible change that does not indicate the direction of
the possible change in, any rating so assigned or (ii) any change in
the outlook for any rating of the Company, any Guarantor or any
securities of the Company or any Guarantor.
(p) Except as disclosed in the Offering Document, there are no
contracts, agreements or understandings between the Company or any
Guarantor and any person that would give rise to a valid claim against
the Company or such Guarantor or the Purchasers for a brokerage
commission, finder's fee or other like payment in connection with the
transaction contemplated hereby.
(q) Assuming the accuracy of the representations and
warranties and due compliance with the covenants and agreements of the
Purchasers contained in Section 4 hereof, no consent, approval,
authorization, or order of, or filing with, any governmental agency or
body or any court is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance and sale
of the Offered Securities by the Company other than such as may be
required under state securities or blue sky laws.
(r) Except as disclosed in the Offering Document, Parent, the
Company and the Subsidiaries have good and marketable title to all
material real properties and all other properties and assets owned by
them, in each case free from liens, encumbrances and defects that would
materially affect the value thereof or materially interfere with the
use made or to be made thereof
4
by them; and except as disclosed in the Offering Document, Parent, the
Company and the Subsidiaries hold any leased real or personal property
under valid and enforceable leases with no exceptions that would
materially interfere with the use made or to be made thereof by them.
(s) Parent, the Company and the Subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated, or
contemplated to be operated upon the acquisition and integration of the
manufactured housing loan origination business of CIT Group, Inc., by
them except where the failure to so possess such certificates,
authorities or permits would not, individually or in the aggregate,
have a Material Adverse Effect and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that could be reasonably expected to
have a Material Adverse Effect.
(t) No labor dispute with the employees of Parent, the Company
or any Subsidiary exists or, to the knowledge of the Issuers, is
imminent that might, individually or in the aggregate, have a Material
Adverse Effect.
(u) Parent, the Company and the Subsidiaries own, possess or
can acquire on reasonable terms, adequate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively,
"INTELLECTUAL PROPERTY RIGHTS") necessary to conduct the business now
operated by them, or presently employed by them, and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that could be
reasonably expected to have a Material Adverse Effect.
(v) Except as disclosed in the Offering Document, none of
Parent, the Company or any of the Subsidiaries is in violation of any
statute, any rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "ENVIRONMENTAL LAWS"),
owns or operates any real property contaminated with any substance that
is subject to any environmental laws, is liable for any off-site
disposal or contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in
the aggregate have a Material Adverse Effect; and the Issuers are not
aware of any pending investigation which might lead to such a claim.
(w) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting Parent, the
Company, any of the Subsidiaries or any of their respective properties
that, if determined adversely to the Company or any of the
Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect, or would materially and adversely affect the ability of
the Issuers to perform their respective obligations under the
Indenture, the Registration Rights Agreement or this Agreement, or
which are otherwise material in the context of the sale of the Offered
Securities; and, to the knowledge of the Issuers, no such actions,
suits or proceedings are threatened or contemplated.
(x) The industry, market and statistical data and estimates
included in the Offering Document are based on or derived from sources
that the Issuers believe to be reliable and accurate.
(y) The financial statements included in the Offering Document
present fairly the financial position of the Parent and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent
basis.
5
(z) Except as disclosed in the Offering Document, since the
date of the latest audited financial statements included in the
Offering Document 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 Parent, the Company and the Subsidiaries taken as a
whole, and, except as disclosed in or contemplated by the Offering
Document, there has been no dividend or distribution of any kind
declared, paid or made by Parent on any class of its capital stock.
(aa) None of the Issuers is an open-end investment company,
unit investment trust or face-amount certificate company that is
required to be registered under Section 8 of the United States
Investment Company Act of 1940 (the "INVESTMENT COMPANY ACT"); and none
of the Issuers is or, after giving effect to the offering and sale of
the Offered Securities and the application of the proceeds thereof as
described in the Offering Document, will be, an "investment company" as
defined in the Investment Company Act.
(bb) No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Offered Securities are
listed on any national securities exchange registered under Section 6
of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system.
(cc) No registration under the Securities Act of the Offered
Securities or the Guarantees is required for the sale of the Offered
Securities and the Guarantees to the Purchasers as contemplated hereby
or for the Exempt Resales (as defined in the Registration Rights
Agreement) assuming the accuracy of the representations and warranties
and due compliance with the covenants and agreements of the Purchasers
set forth in Section 4 hereof; and it is not necessary to qualify an
indenture in respect of the Offered Securities under the United States
Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT").
(dd) The offer and sale of 25,000 shares of Series C
Cumulative Convertible Preferred Stock, no par value (the "PREFERRED
SHARES"), to Fletcher International Ltd. on April 2, 2002 for an
aggregate purchase price of $1,000 per share (the "PREFERRED SHARES
OFFERING"), is exempt from the registration requirements of the
Securities Act by virtue of Section 4(2) thereof.
(ee) Each of Parent, the Company and the Subsidiaries (i)
makes and keeps accurate books and records and (ii) maintains internal
accounting controls that provide reasonable assurance that (A)
transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements, (C) access to its assets is
permitted only in accordance with management's authorization and (D)
the reported accountability for its assets is compared with existing
assets at reasonable intervals.
(ff) No form of general solicitation or general advertising
(as defined in Regulation D under the Securities Act) was used by the
Company, the Guarantors or any of their respective representatives
(other than the Purchasers, as to whom the Company and the Guarantors
make no representation) in connection with the offer and sale of the
Offered Securities contemplated hereby, including, but not limited to,
articles, notices or other communications published in any newspaper,
magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as
the Offered Securities have been issued and sold by the Company within
the six-month period immediately prior to the date hereof.
(gg) None of the Company, the Guarantors nor any of their
respective affiliates or any person acting on its or their behalf
(other than the Purchasers, as to whom the Company and the Guarantors
make no representation) has engaged or will engage in any directed
selling efforts
6
within the meaning of Regulation S under the Securities Act
("REGULATION S") with respect to the Offered Securities or the
Guarantees.
(hh) The sale of the Offered Securities pursuant to Regulation
S is not part of a plan or scheme to evade the registration provisions
of the Securities Act.
(ii) Parent is subject to Section 13 or 15(d) of the Exchange
Act and files reports with the Commission on the Electronic Data
Gathering, Analysis and Retrieval (EDGAR) system.
(jj) On the Closing Date, the warehouse facility in an
aggregate amount of $150.00 million to be issued to a third party
borrower by Credit Suisse First Boston Corporation, New York Branch,
and the ancillary agreements attached as exhibits thereto
(collectively, the "WAREHOUSE FACILITY"), in connection with the
Issuers' acquisition and operation of the manufactured housing loan
origination business of CIT Group, Inc., will have been duly
authorized, executed and delivered and, assuming due authorization,
execution and delivery thereof by the other parties thereto, will
constitute the valid and legally binding obligation of such third party
borrower, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Purchasers, and the Purchasers agree to purchase from the Company, at a purchase
price of 97.214% of the principal amount thereof plus accrued interest from
April 22, 2002 to the Closing Date (as hereinafter defined) the Offered
Securities.
The Company will deliver against payment of the purchase price the
Offered Securities in the form of one or more permanent global Securities in
definitive form (the "GLOBAL SECURITIES") 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 Offering Document. Payment for the Offered
Securities shall be made by the Purchasers in Federal (same day) funds by wire
transfer to an account at a bank acceptable to the Purchasers at the office of
Weil, Gotshal & Manges LLP at 10:00 A.M. (New York time), on April 22, 2002, or
at such other time not later than seven full business days thereafter as the
Purchasers and the Company determine, such time being herein referred to as the
"Closing Date", against delivery to the Trustee as custodian for DTC of the
Global Securities representing all of the Offered Securities. The Global
Securities will be made available for checking at the above office at least 24
hours prior to the Closing Date.
4. Representations by Purchasers; Resale by Purchasers.
(a) The Purchasers represent and warrant to the Issuers that
they are "accredited investors" within the meaning of Regulation D
under the Securities Act.
(b) The Purchasers acknowledge that the Offered Securities
have not been registered under the Securities Act and may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance with Regulation S or
pursuant to an exemption from the registration requirements of the
Securities Act. The Purchasers represent and agree that they have
offered and sold the Offered Securities, and will offer and sell the
Offered Securities only in accordance with Rule 903 or Rule 144A under
the Securities Act ("RULE 144A"). Accordingly, neither the Purchasers
nor their affiliates, nor any persons acting on its or their behalf,
have engaged or will engage in any directed selling efforts with
respect to the Offered Securities, and the Purchasers, their affiliates
and all persons acting on their behalf have
7
complied and will comply with the offering restrictions requirement of
Regulation S and Rule 144A.
(c) The Purchasers agree that they and each of their
affiliates have not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except with the prior written consent of Parent or the Company.
(d) The Purchasers agree that they and each of their
affiliates will not offer or sell the Offered Securities in the United
States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general solicitation
or general advertising. The Purchasers agree, with respect to resales
made in reliance on Rule 144A of any of the Offered Securities, to
deliver either with the confirmation of such resale or otherwise prior
to settlement of such resale a notice to the effect that the resale of
such Offered Securities has been made in reliance upon the exemption
from the registration requirements of the Securities Act provided by
Rule 144A.
(e) The Purchasers (i) have not offered or sold and prior to
the expiry of a period of six months from the Closing Date, will not
offer or sell any Securities 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 have
not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995; (ii) have only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitations or inducement to engage in investment activity (within the
meaning of section 21 of the Financial Services and Markets Act 2000
(the "FSMA") received by it in connection with the issue or sale of any
Securities in circumstances in which section 21(1) of the FSMA does not
apply to the Issuers; and (iii) have complied and will comply with all
applicable provisions of the FSMA with respect to anything done by it
in relation to the Securities in, form or otherwise involving the
United Kingdom.
5. Certain Agreements of the Issuers. The Parent and the Company,
jointly and severally, agree with the Purchasers that:
(a) The Company will advise the Purchasers promptly of any
proposal to amend or supplement the Offering Document, will furnish the
Purchasers with copies of any such amendment or supplement in a
reasonable amount of time prior to its use and will use its best
efforts to reflect in such document such comments as the Purchasers or
their counsel may reasonably propose. If, at any time prior to the
completion of the resale of the Offered Securities by the Purchasers,
any event occurs as a result of which the Offering Document as then
amended or supplemented would include an untrue statement of a material
fact or omit 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, the Company promptly will notify the
Purchasers of such event and promptly will prepare, at its own expense,
an amendment or supplement which will correct such statement or
omission. Neither the Purchasers' consent to, nor their delivery to
offerees or investors of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(b) The Company will furnish to the Purchasers copies of any
preliminary offering circular, the Offering Document and all amendments
and supplements to such documents, in each case as soon as available
and in such quantities as the Purchasers request, and the Company will
furnish to the Purchasers on the date hereof three copies of the
Offering Document signed by a
8
duly authorized officer of the Company, one of which will include the
independent accountants' reports therein manually signed by such
independent accountants. At any time when Parent or the Company is not
subject to Section 13 or 15(d) of the Exchange Act, the Company will
promptly furnish or cause to be furnished to the Purchasers and, upon
request of holders and prospective purchasers of the Offered Securities
to such holders and purchasers, copies of the information required to
be delivered to holders and prospective purchasers of the Offered
Securities pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto) in order to permit compliance with Rule
144A in connection with resales by such holders of the Offered
Securities. The Company shall pay the expenses of printing and
distributing to the Purchasers all such documents.
(c) The Company will endeavor, in cooperation with the
Purchasers and their counsel, to qualify the Offered Securities for
sale and determine their eligibility for investment under the laws of
such jurisdictions in the United States and Canada as the Purchasers
designate and will continue such qualifications in effect so long as
required for the resale of the Offered Securities by the Purchasers,
provided that the Company will not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
such state.
(d) During the period of two years after the Closing Date, the
Company shall, upon request, furnish to the Purchasers and any holder
of Offered Securities a copy of the restrictions on transfer applicable
to the Offered Securities.
(e) During the period of two years after the Closing Date, the
Issuers shall not, and shall not permit any of their respective
affiliates (as defined in Rule 144 under the Securities Act) to, resell
any of the Offered Securities that have been reacquired by any of them.
(f) During the period of two years after the Closing Date, no
Issuer will be or become, an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act.
(g) The Company shall pay all expenses incidental to the
performance of its obligations under this Agreement and the Indenture,
including (i) the fees and expenses of the Trustee and its professional
advisers; (ii) all expenses in connection with the execution, issue,
authentication, packaging and initial delivery of the Securities, the
preparation and printing of this Agreement, the Offered Securities, the
Indenture, the Offering Document and amendments and supplements
thereto, and any other document relating to the issuance, offer, sale
and delivery of the Offered Securities; (ii) the cost of listing and
qualifying the Offered Securities for trading in The Portal(SM) Market
("PORTAL") and any expenses incidental thereto; (iii) the cost of any
advertising approved by the Issuers in connection with the issue of the
Offered Securities; (iv) for any expenses (including fees and
disbursements of counsel) incurred in connection with qualification of
the Securities for sale under the laws of such jurisdictions in the
United States and Canada as the Purchasers designate and the printing
of memoranda relating thereto, (v) for any fees charged by investment
rating agencies for the rating of the Offered Securities, and (vi) for
expenses incurred in distributing preliminary offering circulars and
the Offering Document (including any amendments and supplements
thereto) to the Purchasers. The Issuers shall also pay or reimburse the
Purchasers (to the extent incurred by them) for all travel expenses of
the Purchasers and the Issuers' officers and employees and any other
expenses of the Purchasers and the Issuers in connection with attending
or hosting meetings with prospective purchasers of the Offered
Securities from the Purchasers.
(h) In connection with the offering, until the Purchasers
shall have notified the Company of the completion of the resale of the
Offered Securities, neither the Issuers nor any of their respective
affiliates have or will, either alone or with one or more other
persons, bid for or purchase for any account in which it or any of its
affiliates has a beneficial interest any Offered
9
Securities or attempt to induce any person to purchase any Offered
Securities; and neither they nor any of their respective affiliates
will make bids or purchases for the purpose of creating actual, or
apparent, active trading in, or of raising the price of, the Offered
Securities.
6. Conditions of the Obligations of the Purchasers. The obligations of
the Purchasers to purchase and pay for the Offered Securities will be subject to
the accuracy of the representations and warranties on the part of the Issuers
herein, to the accuracy of the statements of officers of the Issuers made
pursuant to the provisions hereof, to the performance by the Issuers of their
respective obligations hereunder and to the following additional conditions
precedent:
(a) The Purchasers shall have received a letter, dated the
date of this Agreement, of PricewaterhouseCoopers, LLP confirming that
they are independent public accountants within the meaning of the
Securities Act and the applicable published rules and regulations
thereunder ("RULES AND REGULATIONS") and to the effect that:
(i) in their opinion the financial statements
examined by them and included in the Offering Document and in
the Exchange Act Reports comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the related published Rules and
Regulations;
(ii) on the basis of the review referred to in clause
(i) above, inquiries of officials of Parent who have
responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that
caused them to believe that:
(A) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in short-term or long-term indebtedness of
Parent and its consolidated subsidiaries or, at the
date of the latest available balance sheet read by
such accountants, there was any decrease in
consolidated net assets, as compared with amounts
shown on the latest balance sheet included in the
Offering Document; or
(B) for the period from the closing date of
the latest income statement included in the Offering
Document to the closing date of the latest available
income statement read by such accountants there were
any decreases, as compared with the corresponding
period of the previous year, in consolidated net
sales, net operating income or consolidated net
income;
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Offering Document
discloses have occurred or may occur or which are described in
such letter; and
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Offering Document (to
the extent that such dollar amounts, percentages and other
financial information are derived from the general accounting
records of Parent and its subsidiaries subject to the internal
controls of Parent's accounting system or are derived directly
from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have
found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as
otherwise specified in such letter.
10
(b) 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
Parent or its subsidiaries taken as one enterprise which, in the
judgment of the Purchasers, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the offering
or the sale of and payment for the Offered Securities; (ii) any
downgrading in the rating of any debt securities of Parent or the
Company 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 Parent or
the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of
such rating) or any announcement that Parent or the Company has been
placed on negative outlook; (iii) any change in U.S. or international
financial, political or economic conditions or currency exchange rates
or exchange controls as would, in the judgment of the Purchasers, be
likely to prejudice materially the success of the proposed issue, sale
or distribution of the Offered Securities, whether in the primary
market or in respect of dealings in the secondary market; (iv) any
material 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 Parent or the Company on any exchange or in the
over-the-counter market; (v) any banking moratorium declared by U.S.
Federal or New York authorities; (vi) any major disruption of
settlements of securities or clearance services in the United States;
or (vii) any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration of war by
Congress or any other national or international calamity or emergency
if, in the judgment of the Purchasers, the effect of any such attack,
outbreak, escalation, act, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the offering
or sale of and payment for the Offered Securities.
(c) The Purchasers shall have received an opinion, dated the
Closing Date, of (i) Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel for the Issuers, substantially in the form of Exhibit A, (ii)
Dykema Gossett PLLC, special counsel for the Issuers, substantially in
the form of Exhibit B, and (iii) regulatory counsel to the Company,
substantially in the form of Exhibit C.
(d) The Purchasers shall have received from Weil, Gotshal &
Manges LLP, counsel for the Purchasers, such opinion or opinions, dated
the Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities, the Offering Circular, the
exemption from registration for the offer and sale of the Offered
Securities by the Company to the Purchasers and the resales by the
Purchasers as contemplated hereby and other related matters as the
Purchasers may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters with reference to same in the Offering
Circular. In rendering such opinion, Weil, Gotshal & Manges LLP may
rely as to the incorporation of the Company and all other matters
governed by Michigan law upon the opinion of Dykema Gossett PLLC,
referred to above.
(e) The Purchasers shall have received a certificate, dated
the Closing Date, of the President or any Vice President and a
principal financial or accounting officer of each of Parent (as to
itself and the Subsidiary Guarantors) and the Company (as to itself) in
which such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
Parent and the Company and the Subsidiary Guarantors in this Agreement
are true and correct, that the Issuers have complied with all
agreements and satisfied all conditions on their part to be performed
or satisfied hereunder at or prior to the Closing Date, and that,
subsequent to the date of the most recent financial statements in the
Offering Document, 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
11
of Parent and its Subsidiaries taken as a whole except as set forth in
or contemplated by the Offering Document or as described in such
certificate.
(f) The Purchasers shall have received a letter, dated the
Closing Date, of PricewaterhouseCoopers LLP 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 three days prior to the Closing Date for the purposes of this
subsection.
(g) The Issuers shall have completed and delivered to the
Purchasers definitive documentation with respect to (i) the Warehouse
Facility and (ii) Parent's acquisition of CIT Group Inc.'s manufactured
housing loan origination business.
(h) The Issuers shall have completed and delivered to the
Purchasers definitive documentation with respect to the mergers and
related transactions to (i) establish the Company as the only direct
subsidiary of Parent and (ii) transfer Parent's cash management
operations to the Company.
The Company will furnish the Purchasers with such conformed copies of
such opinions, certificates, letters and documents as the Purchasers reasonably
request. The Purchasers may waive compliance with any conditions to the
obligations of the Purchasers hereunder.
7. Indemnification and Contribution. (a) The Issuers, jointly and
severally, will indemnify and hold harmless the Purchasers, their partners,
directors and officers and each person, if any, who controls such Purchasers
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which the Purchasers may
become subject, under the Securities Act or the Exchange 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 the Offering Document, or any
amendment or supplement thereto, or any related preliminary offering circular,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
including any losses, claims, damages or liabilities arising out of or based
upon the Company's failure to perform its obligations under Section 5(a) of this
Agreement, and will reimburse the Purchasers for any legal or other expenses
reasonably incurred by the Purchasers in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Issuers will not 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 Issuers by the Purchasers
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 the foregoing indemnity with respect to any untrue
statement contained in or omission from any preliminary offering circular shall
not inure to the benefit of the Purchasers (or any person controlling the
Purchasers) from whom the person asserting any such loss, claim, damage or
liability purchased any of the Offered Securities that are the subject thereof
if such person was not sent or given a copy of the Offering Document (or the
Offering Document as amended or supplemented) at or prior to the written
confirmation of the initial resale of such Offered Securities to such person and
the untrue statement contained in or omission from such preliminary offering
circular was corrected in the Offering Document (or the Offering Document as
amended or supplemented).
(b) The Purchasers will indemnify and hold harmless the Issuers, their
directors and officers and each person, if any, who controls the Issuers within
the meaning of Section 15 of the Securities Act, against any losses, claims,
damages or liabilities to which an Issuer may become subject, under the
Securities Act or the Exchange 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 the Offering Document, or any amendment or supplement thereto, or
any
12
related preliminary offering circular, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, 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 reliance upon and in conformity with written
information furnished to the Issuers by the Purchasers specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Issuers 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 the Purchasers consists
of paragraphs 3, 5, 8, 9 and 10 under the caption "Plan of Distribution";
provided, however, that the Purchasers shall not be liable for any losses,
claims, damages or liabilities arising out of or based upon the Company's
failure to perform its obligations under Section 5(a) of this Agreement.
(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 to the extent actually prejudiced
thereby. 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 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. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action and does not include a statement as to or an admission of fault,
culpability or failure to act by or on behalf of any indemnified party. No
indemnifying party shall be liable for any settlement of any proceeding effected
without its written consent, which consent shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then 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 Issuers on the one hand and the Purchasers on the other from the offering of
the Offered Securities 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 Issuers on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Issuers on the one hand
and the Purchasers 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 Issuers bear to the total discounts and commissions received by the
Purchasers. 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 Issuers or the Purchasers 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
13
this subsection (d), the Purchasers shall not be required to contribute any
amount in excess of the amount by which the total discounts, fees and
commissions received by the Purchasers exceeds the amount of any damages which
the Purchasers have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
(e) The obligations of the Issuers under this Section 7 shall be in
addition to any liability which the Issuers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Purchasers within the meaning of the Securities Act or the Exchange Act; and the
obligations of the Purchasers under this Section shall be in addition to any
liability which the Purchasers may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls the Issuers
within the meaning of the Securities Act or the Exchange Act.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Issuers or their respective officers and of the Purchasers 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 Purchasers, the Issuers or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If for any reason the purchase of the
Offered Securities by the Purchasers is not consummated, the Issuers shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 5 and the respective obligations of the Issuers and the Purchasers
pursuant to Section 7 shall remain in effect. If the purchase of the Offered
Securities by the Purchasers is not consummated for any reason other than solely
because of the occurrence of any event specified in clauses (iii), (iv), (v),
(vi) or (vii) of Section 6(b), the Issuers will reimburse the Purchasers for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered Securities.
9. Notices. All communications hereunder will be in writing and, if
sent to the Purchasers will be mailed, delivered or telegraphed and confirmed to
the Purchasers, c/o CSFBC at Eleven Madison Avenue, New York, N.Y. 10010-3629,
Attention: Investment Banking Department -- Transactions Advisory Group, or, if
sent to the Issuers, will be mailed, delivered or telegraphed and confirmed to
the Parent at 2701 Cambridge Ct., Suite 300, Auburn Hills, MI 48236, Attention:
Treasurer.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders of Offered Securities shall
be entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Company as if such
holders were parties thereto.
11. 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.
12. 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 Issuers hereby submit to the non-exclusive 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.
14
If the foregoing is in accordance with the Purchasers' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Issuers and the
Purchasers in accordance with its terms.
Very truly yours,
CHAMPION HOME BUILDERS CO.
By: ______________________________
Name:
Title:
15
CHAMPION ENTERPRISES, INC.
By: _____________________________
Name:
Title:
A-1 CHAMPION GP, INC.
A-1 HOMES GROUP, L.P.
ALPINE HOMES, INC.
AMERICAN TRANSPORT, INC.
ART RICHTER INSURANCE, INC.
AUBURN CHAMP, INC.
BUILDERS CREDIT CORPORATION
CAC FUNDING CORPORATION
CARE FREE HOMES, INC.
CENTRAL MISSISSIPPI MANUFACTURED HOUSING, INC.
CHAMPION FINANCIAL CORPORATION
CHAMPION GP, INC.
CHAMPION RETAIL, INC.
CHAMPION HOME COMMUNITIES, INC.
CHAMPION MOTOR COACH, INC.
CHANDELEUR HOMES, INC.
CHI, INC.
CLIFF AVE. INVESTMENTS, INC.
CREST RIDGE HOMES, INC.
CRESTPOINTE FINANCIAL SERVICES, INC.
DUTCH HOUSING, INC.
FACTORY HOMES OUTLET, INC.
FLEMING COUNTY INDUSTRIES, INC.
GATEWAY ACCEPTANCE CORP.
GATEWAY MOBILE & MODULAR HOMES, INC.
GATEWAY PROPERTIES CORP.
GEM HOMES, INC.
GENESIS HOME CENTERS, LIMITED PARTNERSHIP
GRAND MANOR, INC.
HEARTLAND HOMES, L.P.
HOMEPRIDE FINANCE CORP.
HOMES AMERICA FINANCE, INC.
HOMES AMERICA OF ARIZONA, INC.
HOMES AMERICA OF CALIFORNIA, INC.
HOMES AMERICA OF OKLAHOMA, INC.
HOMES AMERICA OF UTAH, INC.
HOMES AMERICA OF WYOMING, INC.
HOMES OF KENTUCKIANA, L.L.C.
HOMES OF LEGEND, INC.
HOMES OF MERIT, INC.
I.D.A., INC.
ISEMAN CORP.
LAMPLIGHTER HOMES, INC.
LAMPLIGHTER HOMES (OREGON), INC.
MANUFACTURED HOUSING OF LOUISIANA, INC.
16
MODULINE INTERNATIONAL, INC.
NORTHSTAR CORPORATION
PHILADELPHIA HOUSING CENTER, INC.
PRAIRIE RIDGE, INC.
REDMAN BUSINESS TRUST
REDMAN HOMES MANAGEMENT COMPANY, INC.
REDMAN HOMES, INC.
REDMAN INDUSTRIES, INC.
REDMAN INVESTMENT, INC.
REDMAN MANAGEMENT SERVICES BUSINESS TRUST
REDMAN RETAIL, INC.
REGENCY SUPPLY COMPANY, INC.
SAN JOSE ADVANTAGE HOMES, INC.
SERVICE CONTRACT CORPORATION
SOUTHERN SHOWCASE FINANCE, INC.
SOUTHERN SHOWCASE HOUSING, INC.
STAR FLEET, INC.
THE OKAHUMPKA CORPORATION
TRADING POST MOBILE HOMES, INC.
U.S.A. MOBILE HOMES, INC.
VICTORY INVESTMENT COMPANY
WESTERN HOMES CORPORATION
WHITWORTH MANAGEMENT, INC.,
each as SUBSIDIARY GUARANTOR,
By:
--------------------------
Name:
Title:
17
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
FIRST UNION SECURITIES, INC.
By: Credit Suisse First Boston Corporation
By:
--------------------------
Name:
Title:
18
SCHEDULE A
PRINCIPAL AMOUNT OF
PURCHASERS OFFERED SECURITIES
----------
Credit Suisse First Boston Corporation............................. $135,000,000
First Union Securities, Inc........................................ $ 15,000,000
------------
Total.................................... $150,000,000
============
19
SCHEDULE B
Subsidiaries
A-1 Champion GP, Inc.
A-1 Homes Group, L.P.
Alpine Homes, Inc.
American Transport, Inc.
Art Richter Insurance, Inc.
Auburn Champ, Inc.
Builders Credit Corporation
CAC Funding Corporation
Care Free Homes, Inc.
Cedar River Development, L.L.C.
Central Mississippi Manufactured Housing, Inc.
Champion Development Corp.
Champion Financial Corporation
Champion GP, Inc.
Champion Home Communities, Inc.
Champion Motor Coach, Inc.
Champion Retail, Inc.
Champion-Phoenix Development Corp.
Chandeleur Homes, Inc.
CHI, Inc.
Cliff Ave. Investments, Inc.
Comal Farms Homes, L.P.
Comal Farms, Ltd.
Comal Management, L.L.C.
Covington Estates Limited Partnership
Covington Homes, L.L.C.
CR Forest, L.L.C.
Creekside of North Carolina, L.L.C.
Crest Ridge Homes, Inc.
Crestpointe Financial Services, Inc.
Dutch Housing, Inc.
Factory Homes Outlet, Inc.
FC Napannee, L.L.C.
Fleming County Industries, Inc.
Foley Grove, L.L.C.
Forest Communities Corp.
Forest Development, L.L.C.
Forest Homes, L.L.C.
Forest Management, L.L.C.
Forest Manager Corp.
Gateway Acceptance Corp.
20
Gateway Mobile & Modular Homes, Inc.
Gateway Properties Corp.
Gem Homes, Inc.
Genesis Home Centers, Limited Partnership
Grand Manor, Inc.; Heartland Homes, L.P.
Hidden Meadows, L.L.C.
Holmchamp, L.L.C.
HomePride Finance Corp.
Homes America Finance, Inc.
Homes America of Arizona, Inc.
Homes America of California, Inc.
Homes America of Oklahoma, Inc.
Homes America of Utah, Inc.
Homes America of Wyoming, Inc.
Homes of Kentuckiana, L.L.C.
Homes of Legend, Inc.
Homes of Merit, Inc.
I.D.A., Inc.
Iseman Corp.
Lamplighter Homes (Oregon), Inc.
Lamplighter Homes, Inc.
Manufactured Housing of Louisiana, Inc.
Moduline Industries, Ltd.
Moduline International, Inc.
Napanee Manager, L.L.C.
Northstar Corporation
Philadelphia Housing Center, Inc.
Phoenix Woodlake Homes, L.P.
Phoenix Woodlake Management, L.L.C.
Phoenix Woodlake, Ltd.
Prairie Ridge, Inc.
Prairie Wind of Kansas, L.L.C.
Redman Business Trust
Redman Homes Management Company, Inc.
Redman Homes, Inc.
Redman Industries, Inc.
Redman Investment, Inc.
Redman Management Services Business Trust
Redman Retail, Inc.
Regency Supply Company, Inc.
21
San Jose Advantage Homes, Inc.
Service Contract Corporation
Southern Showcase Finance, Inc.
Southern Showcase Housing, Inc.
Star Fleet, Inc.
Sunchamp, L.L.C.
The Okahumpka Corporation
Trading Post Mobile Homes, Inc.
U.S.A. Mobile Homes, Inc.
Victory Investment Company
Western Homes Corporation
Whitworth Management, Inc.,
22
EXHIBIT A
Opinion of Shadden, Arps, Slate, Meagher & Flom LLP
SUBJECT TO OPINION COMMITTEE REVIEW
April , 2002
--
Credit Suisse First Boston Corporation
First Union Securities, Inc.
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010
Re: % Senior Notes due 2007
of Champion Home Builders Co.
Ladies and Gentlemen:
We have acted as special counsel to Champion Home Builders
Co., a Michigan corporation (the "Company"), in connection with the purchase by
you, as Initial Purchasers (the "Initial Purchasers"), and the sale by the
Company to you of $150,000,000 aggregate principal amount of the Company's ___%
Senior Notes due 2007 (the "Securities") to be issued under an Indenture, dated
as of April _, 2002 (the "Indenture"), among the Company, the Guarantors (as
defined herein) and Bank One Trust Company, NA, as Trustee (the "Trustee"),
pursuant to a Purchase Agreement, dated April __, 2002 (the "Purchase
Agreement"), among you, the Company and the Guarantors. The Indenture provides
for the Securities to be guaranteed by Champion Enterprises, Inc., a Michigan
corporation (the "Parent"), and certain subsidiaries of the Company named in the
Indenture (the "Subsidiary Guarantors" and, together with the Parent, the
"Guarantors").
This opinion is being furnished pursuant to Section 6(c)(i) of
the Purchase Agreement. Capitalized terms used and not otherwise defined herein
shall have the respective meanings set forth in the Purchase Agreement.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such copies. In making our examination of
executed documents, we have assumed that the parties thereto, including the
Company and the Guarantors, had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and the execution and delivery by
such parties of such documents and, except to the extent expressly set forth in
paragraphs 1, 2, 5, 6 and 7 below, the validity and binding effect thereof on
such parties. We have also assumed that each of the Company, the Parent and the
Subsidiary Guarantors has been duly organized and is validly existing in good
standing under the laws of its respective jurisdiction of incorporation or
organization and that each of the Company, the Parent and the Subsidiary
Guarantors has complied with all aspects of applicable laws of jurisdictions
other than the federal laws of the United States of America and the State of New
York in connection with the transactions contemplated by the Transaction
Documents (as defined herein). As to any facts material to the opinions
expressed herein which we did not independently establish or verify, we have
relied upon statements and representations of officers and other representatives
of the Company and others and of public officials, including the facts set forth
in the Officers' Certificate described below.
23
In rendering the opinions set forth herein, we have examined
and relied on originals or copies of the following:
(a) the final confidential offering circular, dated April _, 2002
(the "Offering Circular"), relating to the issuance and sale
of the Securities;
(b) an executed copy of the Purchase Agreement;
(c) an executed copy of the Registration Rights Agreement, dated
April _, 2002 (the "Registration Rights Agreement"), among the
Initial Purchasers, the Company and the Guarantors;
(d) specimens of the Securities;
(e) an executed copy of the Indenture;
(f) the certificate of __________________, [Chief Executive
Officer] of the Parent, and _____________________, [Chief
Financial Officer] of the Parent, dated the date hereof, a
copy of which is attached as Exhibit A hereto (the "Officers'
Certificate");
(g) the certificate of ___________________, Secretary of the
Company, dated the date hereof; and
(h) copies of each of the Applicable Contracts (as defined below).
We have also examined originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company and
such agreements, certificates and receipts of public officials, certificates of
officers or other representatives of the Company and others, and such other
documents as we have deemed necessary or appropriate as a basis for the opinions
set forth below.
The Purchase Agreement, the Securities, the Indenture and the
Registration Rights Agreement are referred to herein collectively as the
"Transaction Documents." "Applicable Contracts" means those agreements or
instruments identified in Schedule I hereto. "Applicable Laws" means those laws,
rules and regulations of the State of New York and the federal laws of the
United States of America, in each case, which, in our experience, are normally
applicable to transactions of the type contemplated by the Purchase Agreement
and the other Transaction Documents (other than the United States federal
securities laws, state and foreign securities or blue sky laws, antifraud laws
and the rules and regulations of the National Association of Securities Dealers,
Inc.), without our having made any special investigation as to the applicability
of any specific law, rule or regulation, and which are not the subject of a
specific opinion herein referring expressly to a particular law or laws.
"Governmental Authorities" means any court, regulatory body, administrative
agency or governmental body of the State of New York or the United States of
America having jurisdiction over the Company under Applicable Laws.
"Governmental Approval" means any consent, approval, license, authorization or
validation of, or filing, qualification or registration with, any Governmental
Authority required to be made or obtained by the Company pursuant to Applicable
Laws, other than any consent, approval, license, authorization, validation,
filing, qualification or registration which may have become applicable solely as
a result of the involvement of any other party (other than the Company) in the
transactions contemplated by the Purchase Agreement and the other Transaction
Documents or because of such parties' legal or regulatory status or because of
any other facts specifically pertaining to such parties. "Applicable Orders"
means those judgments, orders or decrees identified on Schedule II hereto.
The opinions set forth below are subject to the following
qualifications, assumptions and limitations:
24
(a) in rendering the opinion set forth in paragraph 5 below,
we have assumed that the Trustee's certificates of authentication of the
Securities have been manually signed by one of the Trustee's authorized officers
and that the Securities, in the form delivered to you today, conform to the
specimens thereof examined by us;
(a) we do not express any opinion as to the effect on the opinions
expressed herein of (i) the compliance or noncompliance of any
party to the Purchase Agreement (other than the Company) with
any state, federal or other laws or regulations applicable to
it or them or (ii) the legal or regulatory status or the
nature of the business of any party;
(b) we have assumed that the execution and delivery by the Company
and the Guarantors of each of the Transaction Documents and
the performance by the Company and the Guarantors of their
respective obligations thereunder do not and will not violate,
conflict with or constitute a default under (i) any agreement
or instrument to which the Company and the Guarantors or any
of their respective properties are subject (except that we do
not make the assumption set forth in this clause (i) with
respect to the Applicable Contracts ), (ii) any law, rule, or
regulation to which the Company and the Guarantors or any of
their respective properties is subject (except that we do not
make the assumption set forth in this clause (ii) with respect
to Applicable Laws), (iii) any judicial or regulatory order or
decree of any governmental authority (except that we do not
make the assumption set forth in this clause (iii) with
respect to Applicable Orders) or (iv) any consent, approval,
license, authorization or validation of, or filing, recording
or registration with any governmental authority (except that
we do not make the assumption set forth in this clause (iv)
with respect to Governmental Approvals as to which we express
our opinion in paragraph 4 below);
(c) enforcement of any agreements or instruments may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally
and by general principles of equity (regardless of whether
enforcement is sought in equity or at law);
(d) we do not express any opinion as to the applicability or
effect of any fraudulent transfer, preference or similar law
on each of the Transaction Documents, or any transactions
contemplated thereby;
(e) we do not express any opinion as to the enforceability of any
rights to contribution or indemnification which may be
violative of the public policy underlying any law, rule or
regulation (including any federal or state securities law,
rule or regulation); and
(f) we express no opinion on the enforceability of any provision
in a Transaction Document purporting to prohibit, restrict or
condition assignability to the extent such restriction on
assignability is governed by sections 9-406 through 9-409 of
the Uniform Commercial Code as in effect on the date hereof in
the State of New York.
Members of our firm are admitted to the bar in the State of
New York, and we do not express any opinion as to the laws of any jurisdiction
other than the federal laws of the United States of America to the extent
referred to specifically herein. Insofar as the opinions expressed herein relate
to matters governed by laws other than those set forth in the preceding
sentence, we have assumed, but without having made any independent
investigation, that such laws do not affect any of the opinions set forth
herein. The opinions expressed herein are based on laws in effect on the date
hereof, which laws are subject to change with possible retroactive effect.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
25
1. The Indenture is a valid and binding agreement of the Company and the
Guarantors, enforceable against the Company and the Guarantors in
accordance with its terms.
2. The Registration Rights Agreement constitutes a valid and binding
agreement of Company and the Guarantors, enforceable against the
Company and the Guarantors in accordance with its terms.
3. The execution and delivery by the Company and the Guarantors of each of
the Transaction Documents to which its is a party and the consummation
by the Company and the Guarantors of the transactions contemplated
thereby, including the issuance and sale of the Securities, will not
(i) constitute a violation of, or a breach or default under, the terms
of any Applicable Contract or (ii) violate or conflict with, or result
in any contravention of, any Applicable Law or any Applicable Order. We
do not express any opinion, however, as to whether the execution,
delivery or performance by the Company and the Guarantors of each of
the Transaction Documents to which it is a party will constitute a
violation of, or a default under, any covenant, restriction or
provision with respect to financial ratios or tests or any aspect of
the financial condition or results of operations of the Parent or any
of its subsidiaries.
4. 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 or delivery of each of the
Transaction Documents by the Company or the Guarantors or the
consummation by the Company or the Guarantors of the transactions
contemplated thereby.
5. When issued and delivered by the Company against payment therefor in
accordance with the terms of the Purchase Agreement, the Securities
will constitute valid and binding obligations of the Company entitled
to the benefits of the Indenture and enforceable against the Company in
accordance with their terms.
6. When the Securities are issued and delivered by the Company against
payment therefor in accordance with the terms of the Purchase
Agreement, each Guarantee will constitute the valid and binding
obligation of each applicable Guarantor, enforceable against such
Guarantor in accordance with its terms.
7. When the Exchange Securities have been duly executed, authenticated,
issued and delivered in exchange for the Securities in accordance with
the terms of the Indenture, the Registration Rights Agreement and the
Exchange Offer (as defined in the Registration Rights Agreement), the
Exchange Securities will constitute valid and binding obligations of
the Company, entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms.
8. The statements in the Offering Circular under the caption "Description
of the Notes", insofar as such statements purport to summarize certain
provisions of the documents referred to therein fairly summarize such
provisions in all material respects.
9. The statements set forth in the Offering Circular under the caption
"Certain United States Federal Income Tax Considerations", insofar as
such statements purport to summarize certain provisions of the laws
referred to therein, fairly summarize such provisions in all material
respects.
10. The Company is not and, solely after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described under the caption "Use of Proceeds" in the Offering
Memorandum, will not be subject to registration and regulation as an
"investment company," as such term is defined in the Investment Company
Act of 1940, as amended.
11. Assuming (i) the accuracy of the representations and warranties of the
Company and the Guarantors set forth in Section 2 of the Purchase
Agreement and of you in Section 4 of the Purchase Agreement, (ii) the
due performance by the Company and the Guarantors of the
26
covenants and agreements set forth in Section 5 of the Purchase
Agreement and the due performance by you of the covenants and
agreements set forth in Section 4 of the Purchase Agreement, (iii) your
compliance with the offering and transfer procedures and restrictions
described in the Offering Circular, (iv) the accuracy of the
representations and warranties made in accordance with the Purchase
Agreement and the Offering Circular by purchasers to whom you initially
resell the Securities and (v) that purchasers to whom you initially
resell the Securities receive a copy of the Offering Circular prior to
or simultaneously with the confirmation of such sale, the offer, sale
and delivery of the Securities to you in the manner contemplated by the
Purchase Agreement and the Offering Circular and the initial resale of
the Securities by you in the manner contemplated in the Offering
Circular and the Purchase Agreement, do not require registration under
the Securities Act of 1933, as amended (the "Securities Act"), and the
Indenture does not require qualification under the Trust Indenture Act
of 1939, as amended, it being understood that we do not express any
opinion as to any subsequent resale of any Security.
In addition, we have participated in conferences with officers
and other representatives of the Company, counsel for the Company,
representatives of the independent accountants of the Company and you and your
counsel at which the contents of the Offering Circular and related matters were
discussed. Although we are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Offering Circular and have made no independent check or
verification thereof (except to the limited extent referred to in paragraphs 8
and 9 above), on the basis of the foregoing, no facts have come to our attention
that have led us to believe that the Offering Circular, as of its date and as of
the date hereof, contained or contains an untrue statement of a material fact or
omitted or omits 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 we express no opinion or belief with respect to the
financial statements, schedules and other financial and statistical data
included therein or excluded therefrom. For purposes of the foregoing, we note
that the Offering Circular has been prepared in the context of a Rule 144A
transaction and not as part of a registration statement under the Securities Act
and does not contain all the information that would be required in a
registration statement under the Securities Act.
This opinion is being furnished only to you in connection with
the Purchase Agreement and is solely for your benefit and is not to be used,
circulated, quoted or otherwise referred to for any other purpose or relied upon
by any other person for any other purpose without our prior written consent.
Very truly yours,
27
Schedule I
Applicable Contracts
12. Indenture dated as of May 3, 1999 between the Company, the Subsidiary
Guarantors and Bank One Trust Company, NA (formerly The First National
Bank of Chicago), as Trustee.
13. Supplemental Indenture dated as of July 30, 1999 between the Company,
the Subsidiary Guarantors and Bank One Trust Company, NA (formerly The
First National Bank of Chicago), as Trustee.
14. Supplemental Indenture dated as of October 4, 1999 between the Company,
the Subsidiary Guarantors and Bank One Trust Company, NA, as Trustee.
15. Supplemental Indenture dated as of February 10, 2000 between the
Company, the Subsidiary Guarantors and Bank One Trust Company, NA, as
Trustee.
16. Supplemental Indenture dated as of September 5, 2000, among the
Company, the Subsidiary Guarantors and Bank One Trust Company, NA, as
Trustee.
17. Registration Rights Agreement dated as of April 28, 1999 between the
Company; Credit Suisse First Boston Corporation; Donaldson, Lufkin &
Jenrette Securities Corporation; and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as initial purchasers.
28
Schedule II
Applicable Orders
None.
29
EXHIBIT B
Opinion of Dykema Gossett PLLC
(1) LAW OFFICES
(Dykema Gossett PLLC Letterhead)
APRIL __, 2002
DG DRAFT 4/12/02
Credit Suisse First Boston Corporation
First Union Securities, Inc.
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629
Re: CHAMPION HOME BUILDERS CO.
Ladies and Gentlemen:
We have acted as counsel for Champion Home Builders Co., a Michigan
corporation (the "Company") and Champion Enterprises, Inc., (a Michigan
corporation, the "Parent"), in connection with the sale by the Company of 11 1/2
% Senior Notes due 2007 in an aggregate principal amount of $150,000,000 (the
"Notes") pursuant to a Purchase Agreement, dated April 12, 2002 (the "Purchase
Agreement") between the several Purchasers, the Company, Parent and the
Subsidiary Guarantors. This Opinion Letter is being rendered pursuant to Section
6(c) of the Purchase Agreement. Except as otherwise indicated herein,
capitalized terms used in this Opinion Letter are defined as set forth in the
Purchase Agreement or the Accord (as defined below).
This Opinion Letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord (the "Accord") of the American Bar
Association Section of Business Law (1991). As a consequence, it is subject to a
number of qualifications, exceptions, definitions, limitations on coverage and
other limitations, all as more particularly described in the Accord, and this
Opinion Letter should be read in conjunction therewith. This Opinion Letter is
limited to matters governed by the laws of the State of Michigan.
In accordance with the Accord, we have relied on certain Public
Authority Documents and certificates of officials of the Company, Parent the
Subsidiary Guarantors. In addition, we have relied upon the representations and
warranties made by the Company, Parent and the Subsidiary Guarantors in Section
2 of the Purchase Agreement, excluding, however, representations and warranties
that constitute legal conclusions covered by this Opinion Letter. The General
Qualifications set forth in the Accord shall apply to the opinions set forth in
paragraph (9). With respect to the opinions set forth in paragraph (9), we
express no opinion concerning the Indenture, dated as of May 3, 1999, among
Parent, certain subsidiary
30
guarantors, and The First National Bank of Chicago (the "1999 Indenture"). We
note that the opinion of Skadden, Arps, Slate, Meagher & Flom LLP is being
separately provided to you.
Based upon and subject to the foregoing, we are of the opinion that:
(1) Each of Parent and the Company has been validly incorporated and is
an existing corporation in good standing under the laws of the State of
Michigan, with corporate power and authority to own its properties and conduct
its business as described in the Offering Document.
(2) Each Subsidiary Guarantor has been duly incorporated and is an
existing corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its properties and
conduct its business as described in the Offering Document.
(3) The Indenture has been duly authorized, executed and delivered by
the Company and each of the Guarantors.
(4) The Exchange Securities have been duly authorized by the Company
and the Guarantors.
(5) The Guarantees have been duly authorized and endorsed on the
Offered Securities by the Guarantors.
(6) The Guarantee to be endorsed on the Exchange Securities by each
Guarantor has been duly authorized by such Guarantor.
(7) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and each of the Guarantors.
(8) The Agreement has been duly authorized, executed and delivered by
the Company and each of the Guarantors.
(9) The execution, delivery and performance of the Indenture, the
Registration Rights Agreement and the Agreement and the issuance and sale of the
Offered Securities and compliance with the terms and provisions thereof, will
not result in a breach or violation of any of the terms and provisions of, or
constitute a default under, (x) any statute, rule, regulation or order of any
governmental agency or body or any court having jurisdiction over Parent, the
Company or any Subsidiary Guarantor or any of their properties, or (y) any
agreement or instrument to which the Company or any Subsidiary Guarantor is a
party (other than the 1999 Indenture) and is filed with the Commission as an
exhibit to the Company's Annual Report on Form 10-K for the year ended December
29, 2001, or (z) the charter of bylaws or other organizational documents of
Parent, the Company or any Subsidiary Guarantor except, in the case of clauses
(x) and (y), for such breaches, violations or defaults that would have not have
a Material Adverse Effect, and the Company has full corporate power and
authority to authorize, issue and sell the Offered Securities as contemplated by
the Agreement.
(10) Assuming the accuracy of the representations and warranties and
due compliance with the covenants and agreements of the Purchasers contained in
Section 4 of the Agreement, no consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court of the State of
Michigan is required for the consummation of the transactions contemplated by
the Operative Documents in connection with the issuance or sale of the Offered
Securities by the Company, except such as may be required under state securities
or blue sky laws.
(11) Assuming the accuracy of the representations and warranties and
due compliance with the covenants and agreements of Fletcher International Ltd.
contained in the Agreement, dated as of March 29, 2002, with Parent, the offer
and sale of the Preferred Shares in connection with the Preferred Share Offering
did not require registration under the Securities Act.
31
This Opinion is being rendered solely for your benefit and the benefit
of Bank One Trust Company, N.A., as Trustee under the Indenture, and no other
person or entity shall be entitled to rely on matters set forth herein, or shall
be entitled to quote or refer to any portion thereof, without the express
written consent of the undersigned.
Sincerely,
DYKEMA GOSSETT PLLC
D. Richard McDonald
32
EXHIBIT C
Opinion of Regulatory Counsel
RE: HOMEPRIDE FINANCE CORP.
Ladies and Gentlemen:
We have acted as special consumer credit regulatory counsel to HomePride Finance
Corp, regarding certain statements in the Champion Home Builders Co. Preliminary
Confidential Offering Circular ("Offering Circular"), dated as of April 12,
2002.
In our opinion, the statements in the Champion Home Builders Co. Preliminary
Confidential Offering Circular ("Offering Circular"), dated as of April 12,
2002, under the caption "Government Regulation", insofar as such statements
constitute a summary of the legal matters, documents or proceedings referred to
therein, accurately summarize the matters referred to therein in all material
respects.
We are members of the Bar of the State of New York and do not express any
opinion with respect to the applicability of the laws of any jurisdiction other
than the State of New York (without regard to conflicts of laws principles) and
the federal laws of the United States of America.
In reaching the conclusions set forth herein, we have not undertaken any
independent investigation of any records maintained by any party to the
transactions contemplated by Offering Circular. We also have not reviewed of any
of the documents related to the transactions contemplated by Offering Circular,
other than the portions of the Offering Circular under the caption "Consumer
Finance Business."
This opinion is based upon laws, regulations, and administrative interpretations
currently in effect, and upon reported decisions through April 12, 2002. Unless
HomePride instructs us otherwise in writing and we agree to do so, we undertake
no obligation to inform you of any changes in such laws, regulations or
interpretations which may result in any inaccuracy in this opinion.
This opinion is issued to the named addressees, and may not be furnished or
quoted to, or relied upon by any other person or entity for any purpose without
our prior express written permission.
Very truly yours,
McNamee, Lochner, Titus & Williams, P.C.
Marc J. Lifset
33