FLAGSHIP AUTO RECEIVABLES OWNER TRUST 1999-2
ASSET BACKED NOTES
SERIES 1999-2
UNDERWRITING AGREEMENT
UNDERWRITING AGREEMENT
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
November 17, 1999
Ladies and Gentlemen:
Prudential Securities Secured Financing Corporation (the "Depositor")
proposes, subject to the terms and conditions stated herein and in the attached
Underwriting Agreement Standard Provisions, dated November 17, 1999 (the
"Standard Provisions"), between the Depositor, Flagship Credit Corporation (the
"Originator") and Prudential Securities Incorporated, to issue and sell to you
(the "Underwriter") the Securities specified in Schedule I hereto (the "Offered
Securities"). The Depositor and the Originator agree that each of the provisions
of the Standard Provisions is incorporated herein by reference in its entirety,
and shall be deemed to be a part of this Underwriting Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Underwriting Agreement. Each reference to the
"Representative" herein and in the provisions of the Standard Provisions so
incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Standard Provisions are used herein as
therein defined. The Prospectus Supplement and the accompanying Prospectus
relating to the Offered Securities (together, the "Prospectus") are incorporated
by reference herein.
Subject to the terms and conditions set forth herein and in the Standard
Provisions incorporated herein by reference, the Depositor agrees to issue and
sell to the Underwriter, and the Underwriter agrees to purchase from the
Depositor, at the time and place and at the purchase price to the Underwriter
and in the manner set forth in Schedule I hereto, the entire original principal
balance of the Offered Securities.
[Remainder of Page Intentionally Left Blank]
If the foregoing is in accordance with your understanding, please sign and
return to us two counterparts hereof, and upon acceptance hereof by you, this
letter and such acceptance hereof, including the provisions of the Standard
Provisions incorporated herein by reference, shall constitute a binding
agreement between the Underwriter, the Originator and the Depositor.
Yours truly,
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By:
--------------------------
Name:
Title:
FLAGSHIP CREDIT CORPORATION
By:
--------------------------
Name:
Title:
Accepted as of the date hereof:
PRUDENTIAL SECURITIES INCORPORATED
By:
-------------------------------
Name:
Title:
[Signature Page to Underwriting Agreement]
SCHEDULE I
Title of Offered Securities: Flagship Auto Receivables Owner Trust
1999-2, Asset Backed Notes, Series
1999-2, Class A-1, Class A-2, Class A-3
and Class A-4.
Terms of Offered Securities: The Offered Securities shall have the
terms set forth in the Prospectus and
shall conform in all material respects
to the descriptions thereof contained
therein, and shall be issued pursuant
to an Indenture, to be dated as of
November 1, 1999, between the Flagship
Auto Receivables Owner Trust 1999-2, as
issuer, Flagship Credit Corporation, as
servicer and ▇▇▇▇▇▇ Trust and Savings
Bank, as indenture trustee.
Purchase Price: The purchase price for the Offered
Securities shall be 99.625%, 99.625%,
99.625% and 99.625% of the aggregate
note principal balance of the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes
and Class A-4 Notes, respectively, as
of the Closing Date.
Specified funds for payment [Federal Funds (immediately available
of Purchase Price: funds).]
Required Ratings: Aaa by ▇▇▇▇▇'▇ Investors Service, Inc.
AAA by Duff & ▇▇▇▇▇▇ Credit Rating Co.
and AAA by Standard & Poor's Ratings
Services, a division of the ▇▇▇▇▇▇-▇▇▇▇
Companies.
Closing Date: On or about November 24, 1999 at 10:00
A.M. eastern standard time or at such
other time as the Depositor and the
Underwriter shall agree.
Closing Location: ▇▇▇▇▇, Brown & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
Name and address of Designated Representative: Prudential
Representative: Securities Incorporated.
Address for Notices, etc.: ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attn: Group
Head-Asset Backed Finance Group Re:
Flagship Auto Receivables Owner Trust
1999-2
STANDARD PROVISIONS TO UNDERWRITING AGREEMENT
November 17, 1999
From time to time, Prudential Securities Secured Financing Corporation, a
Delaware corporation (the "Depositor") and Flagship Credit Corporation, a
Delaware corporation (the "Originator") may enter into one or more underwriting
agreements (each, an "Underwriting Agreement") that provide for the sale of
designated securities to the several underwriters named therein (such
underwriters constituting the "Underwriters" with respect to such Underwriting
Agreement and the securities specified therein). The several underwriters named
in an Underwriting Agreement will be represented by one or more representatives
as named in such Underwriting Agreement (collectively, the "Representative").
The term "Representative" also refers to a single firm acting as sole
representative of the Underwriters and to Underwriters who act without any firm
being designated as their representative. The standard provisions set forth
herein (the "Standard Provisions") may be incorporated by reference in any
Underwriting Agreement. These Standard Provisions shall not be construed as an
obligation of the Depositor to sell any securities or as an obligation of any of
the Underwriters to purchase such securities. The obligation of the Depositor to
sell any securities and the obligation of any of the Underwriters to purchase
any of the securities shall be evidenced by the Underwriting Agreement with
respect to the securities specified therein. An Underwriting Agreement shall be
in the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of the communications
transmitted. The obligations of the underwriters under these Standard Provisions
and each Underwriting Agreement shall be several and not joint. Unless otherwise
defined herein, the terms defined in the Underwriting Agreement are used herein
as defined in the Prospectus referred to below.
1. The Offered Securities. The Depositor proposes to sell pursuant to the
applicable Underwriting Agreement to the several Underwriters named therein auto
loan backed notes (the "Securities") representing indebtedness secured primarily
by the property of a trust which consists of a pool of retail installment sales
contracts for new or used automobiles, light trucks, vans or mini vans (the
"Auto Loans") and certain related property. The Securities will be issued
pursuant to an Indenture (the "Indenture") by and between Flagship Auto
Receivables Owner Trust 1999-2, as issuer (the "Issuer"), Flagship Credit
Corporation, as servicer (the "Servicer") and ▇▇▇▇▇▇ Trust and Savings Bank, as
indenture trustee (the "Indenture Trustee"). The Issuer will be formed at the
direction of the Depositor, pursuant to the terms of an Amended and Restated
Trust Agreement (the "Trust Agreement") among the Originator, the Depositor, and
First Union National Bank, as owner trustee (the "Owner Trustee"). The Auto
Loans will be sold by the Originator to Flagship Auto Loan Funding LLC 1999-II
("Flagship LLC") pursuant to the Sales and Servicing Agreement (the "Sales and
Servicing Agreement") by and among the Originator, Flagship LLC, the Issuer, the
Indenture Trustee and Copelco Financial Services Group, Inc., as back-up
servicer (the "Back-Up Servicer"). Copelco Financial Services Group, Inc. will
execute a Guarantee guaranteeing the servicing obligations of the Servicer under
the Sales and Servicing Agreement (the "Guaranty"). The Auto Loans will be sold
by Flagship LLC to the Depositor pursuant to the Depositor Purchase Agreement
(the "Depositor Purchase Agreement") between Flagship LLC and the Depositor. The
Auto Loans
will be sold by the Depositor to the Issuer pursuant to the Owner Trust Purchase
Agreement (the "Owner Trust Purchase Agreement") between the Depositor and the
Issuer. The Issuer will pledge the Auto Loans to the Indenture Trustee pursuant
to the terms of the Indenture. The Offered Securities will have the benefit of a
note guaranty insurance policy (the "Policy") issued by MBIA Insurance
Corporation (the "Insurer") pursuant to the terms of an Insurance and Indemnity
Agreement (the "Insurance Agreement") among the Insurer, the Originator,
Flagship LLC, the Depositor and the Issuer. The Issuer, the Insurer and the
Indenture Trustee will enter into an agreement governing the spread account (the
"Spread Account Agreement"). The Indenture, the Trust Agreement, the Sales and
Servicing Agreement, the Depositor Purchase Agreement, the Owner Trust Purchase
Agreement, the Guaranty, the Policy, the Insurance Agreement and the Spread
Account Agreement are collectively referred to therein as the "Transaction
Documents."
The terms and rights of any particular issuance of Securities shall be as
specified in the Underwriting Agreement relating thereto and in or pursuant to
the Indenture identified in such Underwriting Agreement. The Securities which
are the subject of any particular Underwriting Agreement into which these
Standard Provisions are incorporated are herein referred to as the "Offered
Securities."
The Depositor has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-52021),
including a prospectus relating to the Securities under the Securities Act of
1933, as amended (the "1933 Act"). The term "Registration Statement" means such
registration statement as amended to the date of the Underwriting Agreement. The
Depositor proposes to file with the Commission pursuant to Rule 424(b) ("Rule
424(b)") under the 1933 Act a supplement (the "Prospectus Supplement") to the
prospectus included in the Registration Statement (such prospectus, in the form
it appears in the Registration Statement or in the form most recently revised
and filed with the Commission pursuant to Rule 424(b) is hereunder referred to
as the "Base Prospectus") specifically relating to the Offered Securities. The
Base Prospectus and the Prospectus Supplement, together with any amendment
thereof or supplement thereto, is hereunder referred to as the "Prospectus". The
term "Preliminary Prospectus" means a preliminary prospectus supplement
specifically relating to the Offered Securities together with the Base
Prospectus.
2. Offering by the Underwriters. Upon the execution of the Underwriting
Agreement applicable to any Offered Securities and the authorization by the
Representative of the release of such Offered Securities, the several
Underwriters propose to offer for sale to the public the Offered Securities at
the prices and upon the terms set forth in the Prospectus.
3. Purchase, Sale and Delivery of the Offered Securities. Unless otherwise
specified in the Underwriting Agreement, payment for the Offered Securities
shall be made by certified or official bank check or checks payable to the order
of the Depositor in immediately available or next day funds, at the time and
place set forth in the Underwriting Agreement, upon delivery to the
Representative of the Offered Securities in definitive form (which delivery
shall be made through the facilities of The Depository Trust Company ("DTC")).
The time and date of such
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payment and delivery with respect to the Offered Securities are herein referred
to as the "Closing Date".
4. Conditions of the Underwriters' Obligations. The respective obligations
of the several Underwriters pursuant to the Underwriting Agreement shall be
subject, in the reasonable discretion of the Representative, to the accuracy in
all material respects of the representations and warranties of the Depositor and
the Originator contained herein as of the date of the Underwriting Agreement and
as of the Closing Date as if made on and as of the Closing Date, to the accuracy
in all material respects of the statements of the officers of the Depositor, the
Originator and the Servicer made in any certificates pursuant to the provisions
hereof and of the Underwriting Agreement, to the performance by the Depositor of
its covenants and agreements contained herein and to the following additional
conditions precedent:
(a) All actions required to be taken and all filings required to be
made by or on behalf of the Depositor under the 1933 Act and the Securities
Exchange Act of 1934, as amended (the "1934 Act") prior to the sale of the
Offered Securities shall have been duly taken or made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall be in effect; (ii) no proceedings for such purpose shall be
pending before or threatened by the Commission, or by any authority
administering any state securities or "Blue Sky" laws; (iii) any requests
for additional information on the part of the Commission shall have been
complied with to the Representative's reasonable satisfaction; (iv) since
the respective dates as of which information is given in the Registration
Statement and the Prospectus except as otherwise stated therein, there
shall have been no material adverse change in the condition, financial or
otherwise, earnings, affairs, regulatory situation or business prospects of
the Depositor; (v) there are no material actions, suits or proceedings
pending before any court or governmental agency, authority or body or
threatened, affecting the Depositor or the transactions contemplated by the
Underwriting Agreement; (vi) the Depositor is not in violation of its
charter or its by-laws or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it or its properties may be bound, which
violations or defaults separately or in the aggregate would have a material
adverse effect on the Depositor; and (vii) the Representative shall have
received, on the Closing Date a certificate, dated the Closing Date and
signed by an executive officer of the Depositor, to the foregoing effect.
(c) Subsequent to the execution of the Underwriting Agreement, there
shall not have occurred any of the following: (i) if at or prior to the
Closing Date, trading in securities on the New York Stock Exchange shall
have been suspended or any material limitation in trading in securities
generally shall have been established on such exchange, or a banking
moratorium shall have been declared by New York State or federal
authorities; (ii) if at or prior to the Closing Date, there shall have been
an outbreak or escalation of hostilities
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between the United States and any foreign power, or of any other
insurrection or armed conflict involving the United States which results in
the declaration of a national emergency or war, and, in the reasonable
opinion of the Representative, makes it impracticable or inadvisable to
offer or sell the Offered Securities; or (iii) if at or prior to the
Closing Date, a general moratorium on commercial banking activities in the
State of New York shall have been declared by either federal or New York
State authorities.
(d) The Representative shall have received, on the Closing Date, true
and correct copies of the letter from each nationally recognized
statistical rating organization (as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the 1933 Act) that rated the Offered
Securities and confirming that, unless otherwise specified in the
Underwriting Agreement, the Offered Securities have been rated in the
highest rating categories by each such organization and that each such
rating has not been rescinded since the date of the applicable letter.
(e) The Representative shall have received, on the Closing Date, from
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., General Counsel of Copelco, a favorable opinion,
dated the Closing Date and reasonably satisfactory in form and substance to
the Representative.
(f) The Representative shall have received, on the Closing Date, from
▇▇▇▇▇ ▇▇▇▇▇▇, Esq., General Counsel of Flagship Credit Corporation, a
favorable opinion, dated the Closing Date and reasonably satisfactory in
form and substance to the Representative.
(g) The Representative shall have received, on the Closing Date, from
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, its special counsel, a favorable opinion, dated the
Closing Date and reasonably satisfactory in form and substance to the
Representative.
(h) The Representative shall have received, on the Closing Date, an
opinion of counsel for the Indenture Trustee, dated the Closing Date, in
form and substance satisfactory to the Representative and counsel for the
Underwriters.
(i) The Representative shall have received, on the Closing Date, an
opinion of counsel for the Issuer and First Union National Bank, as owner
trustee (the "Owner Trustee"), dated the Closing Date, in form and
substance satisfactory to the Representative and counsel for the
Underwriters.
(j) The Representative shall have received, on the Closing Date, an
opinion of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq., Associate General Counsel for the
Depositor, dated the Closing Date, in form and substance satisfactory to
the Representative and counsel for the Underwriters.
(k) The Representative shall have received, on or prior to the date of
first use of the prospectus supplement relating to the Offered Securities,
and on the Closing Date if requested by the Representative, letters of
independent accountants of the Originator in the
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form and reflecting the performance of the procedures previously requested
by the Representative.
(l) The Depositor shall have furnished or caused to be furnished to
the Representative on the Closing Date a certificate of an executive
officer of the Depositor satisfactory to the Representative as to the
accuracy of the representations and warranties of the Depositor herein at
and as of such Closing Date as if made as of such date, as to the
performance by the Depositor of all of its obligations hereunder to be
performed at or prior to such Closing Date, and as to such other matters as
the Representative may reasonably request;
(m) Each of the Originator, the Servicer, Flagship LLC and the Issuer
shall have each furnished or caused to be furnished to the Representative
on the Closing Date a certificate of officers of such entity in form and
substance reasonably satisfactory to the Representative;
(n) The Insurance Policy shall have been duly executed and issued at
or prior to the Closing Date and shall conform in all material respects to
the description thereof in the Prospectus Supplement.
(o) The Representative shall have received, on the Closing Date, an
opinion of counsel to the Insurer, dated the Closing Date, in form and
substance satisfactory to the Representative and counsel for the
Underwriters and containing opinions as to such matters as the
Representative may reasonably request.
(p) On or prior to the Closing Date there shall not have occurred any
downgrading, nor shall any notice have been given of (i) any intended or
potential downgrading or (ii) any review or possible change in rating the
direction of which has not been indicated, in the rating accorded the
Insurer's claims paying ability by any "nationally recognized statistical
rating organization," as such term is defined for purposes of the 1933 Act.
(q) There has not occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations, since June 30, 1999, of the Insurer, that
is in the Representative's judgment material and adverse and that makes it
in the Representative's judgment impracticable to market the Offered
Securities on the terms and in the manner contemplated in the Prospectus.
(r) The Originator shall have executed and delivered the Sales and
Servicing Agreement which shall include an indemnification provision by the
Originator in favor of the Depositor in form and substance acceptable to
the Representative and the Depositor.
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(s) The Representative shall have been furnished such further
information, certificates, documents and opinions as the Representative and
its counsel may reasonably request.
5. Covenants of the Depositor and the Originator.
(a) In further consideration of the agreements of the Underwriters
contained in the Underwriting Agreement, the Depositor and the Originator,
as applicable, covenant as follows:
i. To furnish the Representative, without charge, copies of the
Registration Statement and any amendments thereto including exhibits
as the Representative may from time to time reasonably request.
ii. Immediately following the execution of the Underwriting
Agreement, the Originator will prepare a prospectus supplement setting
forth the principal amount, notional amount or stated amount, as
applicable, of Offered Securities covered thereby, the price at which
the Offered Securities are to be purchased by the Underwriters from
the Depositor, either the initial public offering price or prices or
the method by which the price or prices at which the Offered
Securities are to be sold will be determined, the selling concessions
and reallowances, if any, any delayed delivery arrangements, and such
other information as the Representative, the Originator and the
Depositor deem appropriate in connection with the offering of the
Offered Securities, but the Depositor will not file any amendment to
the Registration Statement or any supplement to the Prospectus of
which the Representative shall not previously have been advised and
furnished with a copy a reasonable time prior to the proposed filing
or to which the Representative shall have reasonably objected. The
Depositor will use its best efforts to cause any amendment to the
Registration Statement to become effective as promptly as possible.
During the time when a Prospectus is required to be delivered under
the 1933 Act, the Depositor will comply so far as it is able with all
requirements imposed upon it by the 1933 Act and the rules and
regulations thereunder to the extent necessary to permit the
continuance of sales or of dealings in the Offered Securities in
accordance with the provisions hereof and of the Prospectus, and the
Depositor will file with the Commission, promptly upon request by the
Representative, any amendments to the Registration Statement or
supplements to the Prospectus which may be necessary or advisable in
connection with the distribution of the Offered Securities by the
Underwriters, and will use its best efforts to cause the same to
become effective as promptly as possible. The Depositor will advise
the Representative, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement or any amended
Registration Statement has become effective or any supplement to the
Prospectus or any amended Prospectus has been filed. The Depositor
will advise the Representative, promptly after it receives notice or
obtains knowledge thereof, of the
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issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, or
the suspension of the qualification of the Offered Securities for
offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose, or of any request
made by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional
information, and the Depositor will use its best efforts to prevent
the issuance of any such stop order or any order suspending any such
qualification, and if any such order is issued, to obtain the lifting
thereof as promptly as possible.
iii. During the period when a prospectus is required by law to be
delivered in connection with the sale of the Offered Securities
pursuant to the Underwriting Agreement, the Depositor will file, on a
timely and complete basis, all documents that are required to be filed
by the Depositor with the Commission pursuant to Sections 13, 14, or
15(d) of the 1934 Act.
iv. To qualify the Offered Securities for offer and sale under
the securities or "Blue Sky" laws of such jurisdictions as the
Representative shall reasonably request (at the expense of the
Originator, including fees and disbursements of counsel) in connection
with such qualification of the eligibility of the Offered Securities
for investment under the laws of such jurisdictions as the
Representative may designate provided that in connection therewith the
Depositor shall not be required to qualify to do business or to file a
general consent to service of process in any jurisdiction.
v. To make generally available to the Depositor's security
holders, as soon as practicable, but in any event not later than
eighteen months after the date on which the filing of the Prospectus,
as amended or supplemented, pursuant to Rule 424 under the 1933 Act
first occurs, an earnings statement of the Depositor covering a
twelve-month period beginning after the date of the Underwriting
Agreement, which shall satisfy the provisions of Section 11(a) of the
1933 Act and the applicable rules and regulations of the Commission
thereunder (including, at the option of the Depositor, Rule 158).
vi. For so long as any of the Offered Securities remain
outstanding, to furnish to the Representative upon request in writing
copies of such financial statements and other periodic and special
reports as the Depositor and the Originator may from time to time
distribute generally to its creditors or the holders of the Offered
Securities and to furnish to the Representative copies of each annual
or other report the Depositor shall be required to file with the
Commission.
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vii. The Depositor will cause any Computational Materials and any
Structural Term Sheets with respect to the Offered Securities that are
delivered by an Underwriter to the Depositor pursuant to Section 8 to
be filed with the Commission on a Current Report on Form 8-K (a
"Current Report) pursuant to Rule 13a-11 under the Exchange Act in
accordance with Section 10 on the business day immediately following
the date on which this Agreement is executed and delivered. The
Depositor will cause any Collateral Term Sheet with respect to the
Offered Securities that is delivered by the Underwriters to the
Depositor in accordance with the provisions of Section 9 to be filed
with the commission on a Current Report pursuant to Rule 13-a-11 under
the Exchange Act in accordance with Section 10 on the business day
immediately following the day on which such Collateral Term Sheet is
delivered to the Depositor by an Underwriter prior to 10:30 a.m. New
York time. In addition, if at any time prior to the availability of
the related Prospectus, an Underwriter has delivered to any
prospective investor a subsequent Collateral Term Sheet that reflects,
in the reasonable judgment of the Representative and the Depositor, a
material change in the characteristics of the Auto Loans from those on
which a Collateral Terms Sheet with respect to the Offered Securities
previously filed with the Commission was based, the Depositor will
cause any such Collateral Term Sheet that is delivered by an
Underwriter to the Depositor in accordance with the provisions of
Section 9 hereof to be filed with the Commission on a Current Report
in accordance with Section 10. Each such Current Report shall be
incorporated by reference in the related Prospectus and the related
Registration Statement.
(b) In further consideration of the agreements of the Underwriters
contained in the Underwriting Agreement, the Originator covenants as
follows:
i. To furnish the Representative, without charge, as many copies
of the Prospectus and any supplements and amendments thereto as the
Representative may from time to time reasonably request.
ii. Immediately following the execution of the Underwriting
Agreement, the Originator will prepare a prospectus supplement setting
forth the principal amount, notional amount or stated amount, as
applicable, of Offered Securities covered thereby, the price at which
the Offered Securities are to be purchased by the Underwriters from
the Depositor, either the initial public offering price or prices or
the method by which the price or prices at which the Offered
Securities are to be sold will be determined, the selling concessions
and reallowances, if any, any delayed delivery arrangements, and such
other information as the Representative, the Originator and the
Depositor deem appropriate in connection with the offering of the
Offered Securities. During the time when a Prospectus is required to
be delivered under the 1933 Act, the Originator will prepare, so that
the Depositor may file with the Commission, promptly upon request by
the Representative, any supplements to
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the Prospectus which may be necessary or advisable in connection with
the distribution of the Offered Securities by the Underwriters
iii. If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the 1933 Act, 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 required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary for any other reason to amend or supplement the Prospectus
to comply with the 1933 Act, to promptly notify the Representative
thereof and upon their request to prepare and file with the
Commission, at the Originator's own expense, an amendment or
supplement which will correct such statement or omission or any
amendment which will effect such compliance.
iv. For so long as any of the Offered Securities remain
outstanding, the Originator will, or will cause the Servicer to,
furnish to the Representative, as soon as available, a copy of (i) the
annual statement of compliance delivered by the Servicer to the
Indenture Trustee under the applicable Sales and Servicing Agreement,
(ii) the annual independent public accountants' servicing report
furnished to the Indenture Trustee pursuant to the applicable Sales
and Servicing Agreement, (iii) each report regarding the Offered
Securities mailed to the holders of such Securities, and (iv) from
time to time, such other information concerning such Securities as the
Representative may reasonably request.
6. Representations and Warranties of the Depositor, the Originator and
Copelco.
(a) The Depositor represents and warrants to, and agrees with, each
Underwriter, as of the date of the Underwriting Agreement, as follows:
i. The Registration Statement including a prospectus relating to
the Securities and the offering thereof from time to time in
accordance with Rule 415 under the 1933 Act has been filed with the
Commission and such Registration Statement, as amended to the date of
the Underwriting Agreement, has become effective. No stop order
suspending the effectiveness of such Registration Statement has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission. A prospectus supplement prepared by the
Originator specifically relating to the Offered Securities will be
filed with the Commission pursuant to Rule 424 under the 1933 Act;
provided, however, that a supplement to the Prospectus prepared
pursuant to Section 5(b) hereof shall be deemed to have supplemented
the Base Prospectus only with respect to the Offered Securities to
which it relates. The conditions to the use of a registration
statement on Form S-3 under the 1933 Act, as
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set forth in the General Instructions on Form S-3, and the conditions
of Rule 415 under the 1933 Act, have been satisfied with respect to
the Depositor and the Registration Statement. There are no contracts
or documents of the Depositor that are required to be filed as
exhibits to the Registration Statement pursuant to the 1933 Act or the
rules and regulations thereunder that have not been so filed.
ii. On the effective date of the Registration Statement, the
Registration Statement conformed in all material respects to the
requirements of the 1933 Act and the rules and regulations thereunder,
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; on the date of the
Underwriting Agreement and as of the Closing Date, the Registration
Statement conforms, and as amended or supplemented, if applicable,
will conform in all material respects to the requirements of the 1933
Act and the rules and regulations thereunder, and on the date of the
Underwriting Agreement and as of the Closing Date, the Registration
Statement does not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Registration Statement as amended or supplemented, if applicable, will
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.
iii. The Depositor has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware.
iv. The Depositor has all requisite power and authority
(corporate and other) and all requisite authorizations, approvals,
orders, licenses, certificates and permits of and from all government
or regulatory officials and bodies to own its properties, to conduct
its business as described in the Registration Statement and the
Prospectus and to execute, deliver and perform these Standard
Provisions, the Underwriting Agreement, and each Transaction Document
to which it is a party, except such as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution by the Underwriter of the Offered Securities; all such
authorizations, approvals, orders, licenses, certificates are in full
force and effect and contain no unduly burdensome provisions; and,
except as set forth or contemplated in the Registration Statement or
the Prospectus, there are no legal or governmental proceedings pending
or, to the best knowledge of the Depositor, threatened that would
result in a material modification, suspension or revocation thereof.
v. The execution and delivery by the Depositor of these Standard
Provisions, the Underwriting Agreement, and each Transaction Document
to which it is a party are within the corporate power of the Depositor
and none of the execution
10
and delivery by the Depositor of these Standard Provisions, the
Underwriting Agreement, and each Transaction Document to which it is a
party, the consummation by the Depositor of the transactions therein
contemplated, or the compliance by the Depositor with the provisions
thereof, will conflict with or result in a breach of, or constitute a
default under, the charter or the by-laws of the Depositor or any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Depositor or its properties, or any of
the provisions of any indenture, mortgage, contract or other
instrument to which the Depositor is a party or by which it is bound,
or will result in the creation or imposition of a lien, charge or
encumbrance upon any of its property pursuant to the terms of any such
indenture, mortgage, contract or other instrument, except such as have
been obtained under the 1933 Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Offered Securities by the
Underwriters.
vi. The Underwriting Agreement has been, and at the Closing Date
each Transaction Document to which it is a party will have been, duly
authorized, executed and delivered by the Depositor.
vii. At the Closing Date, each of the Underwriting Agreement, and
each Transaction Document to which it is a party will constitute a
legal, valid and binding obligation of the Depositor, enforceable
against the Depositor, in accordance with its terms, subject, as to
the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting the rights of
creditors generally, and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
viii. No filing or registration with, notice to, or consent,
approval, non-disapproval, authorization or order or other action of,
any court or governmental authority or agency is required for the
consummation by the Depositor of the transactions contemplated by the
Underwriting Agreement, or the Transaction Documents, except such as
have been obtained and except such as may be required under the 1933
Act, the rules and regulations thereunder, or state securities or
"Blue Sky" laws, in connection with the purchase and distribution of
the Offered Securities by the Underwriters.
ix. The Depositor owns or possesses or has obtained all material
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to lease, own or license, as the case may be,
and to operate, its properties and to carry on its business as
presently conducted and has received no notice of proceedings relating
to the revocation of any such license, permit, consent, order or
approval, which singly or in the aggregate, if the subject of an
unfavorable decision,
11
ruling or finding, would materially adversely affect the conduct of
the business, results of operations, net worth or condition (financial
or otherwise) of the Depositor.
x. There are no legal or governmental proceedings pending to
which the Depositor is a party or of which any property of the
Depositor is the subject which, if determined adversely to the
Depositor would individually or in the aggregate have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, or business or business prospects of the Depositor and, to
the best of the Depositor's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others.
xi. At the time of execution and delivery of the Owner Trust
Purchase Agreement, the Depositor will have good and marketable title
to the Auto Loans being transferred to the Issuer pursuant thereto,
free and clear of any lien, mortgage, pledge, charge, encumbrance,
adverse claim or other security interest (collectively, "Liens"), and
will not have assigned to any person (other than the Issuer and the
Indenture Trustee) any of its right, title or interest in such Auto
Loans or in such Owner Trust Purchase Agreement or the Offered
Securities being issued pursuant thereto, the Depositor will have the
power and authority to transfer such Auto Loans to the Issuer and to
transfer the Offered Securities to each of the Underwriters, and upon
execution and delivery to the Issuer of the Owner Trust Purchase
Agreement and delivery to each of the Underwriters of the Offered
Securities, the Issuer will have good and marketable title to the Auto
Loans and each of the Underwriters will have good and marketable title
to the Offered Securities, in each case free and clear of any Liens.
xii. Any taxes, fees and other governmental charges in connection
with the execution, delivery and issuance of the Underwriting
Agreement, these Standard Provisions, the Transaction Documents and
the Offered Securities have been or will be paid at or prior to the
Closing Date.
(b) The Originator represents and warrants to, and agrees with, each
Underwriter and the Depositor, as of the date of the Underwriting
Agreement, as follows:
i. The Originator is a Delaware corporation with full power and
authority to own its properties and conduct its business, as presently
conducted, and to enter into and perform its obligations under the
Transaction Documents to which it is a party.
ii. The Prospectus Supplement does not contain 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.
12
iii. The Underwriting Agreement has been and as of the Closing
Date, each of the Other Transaction Documents to which the Originator
is a party will have been duly authorized, executed and delivered by
the Originator and as of the Closing Date, each Transaction Document
will constitute a valid and binding agreement of Originator.
iv. The Originator is not subject to or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it
or any of its properties, which materially and adversely affects (A)
the ability of the Originator to perform any of its obligations under
the Transaction Documents, or (B) the business, operations, financial
condition, properties or assets of the Originator, and the Originator
is not a party to, bound by or in breach or violation of any
indenture, mortgage, deed of trust or other agreement or instrument,
which materially and adversely affects the ability of the Originator
to perform any of its obligations under the Transaction Documents to
which it is a party, or the ability of the Originator to perform any
of its obligations hereunder.
v. There are no actions, proceedings or investigations to which
the Originator, or any of its affiliates, is a party pending, or, to
the knowledge of the Originator, threatened, before any court,
regulatory body, administrative agency or other tribunal or
governmental instrumentality (A) asserting the invalidity of the
Transaction Documents to which it is a party or the Offered
Securities, (B) seeking to prevent the issuance of the Offered
Securities or the consummation of any of the transactions contemplated
by the Transaction Documents, (C) which might materially and adversely
affect the performance by the Originator of its obligations under the
Transaction Documents to which it is a party, (D) which might
materially and adversely affect the validity or enforceability of the
Transaction Documents to which it is a party or the Offered Securities
or (E) which might adversely affect the federal income tax attributes
of the Offered Securities described in the Prospectus.
vi. Any taxes, fees and other governmental charges arising from
the execution and delivery of Transaction Documents with the
execution, delivery and issuance of the Offered Securities and with
the execution and delivery of the Auto Loans sold by Originator to
Flagship LLC, then sold by Flagship LLC to the Depositor and then sold
by the Depositor to the Issuer, including any amendments thereto and
assignments and/or endorsements thereof have been paid or will be paid
by the Originator except for any re-▇▇▇▇▇▇▇ expenses incurred in
connection with any obligation of the Servicer to re-title any
Financed Vehicle.
vii. The Originator is unaware of any facts or circumstances that
would materially adversely affect its ability to perform its
obligations under the Transaction Documents to which it is a party or
its obligations with respect to the Auto Loans.
13
viii. As of the Closing Date, each of the representations and
warranties of the Originator set forth in the Transaction Documents
will be true and correct. Such representations and warranties are
incorporated by reference in this Section 6(b) and the Representative
and the several Underwriters may rely thereon as if such
representation and warranties were fully set forth herein.
ix. There has not been any material adverse change in the
business, operations, financial condition, properties or assets of the
Originator since the financial statements for the quarter ended June
30, 1999 were delivered to you. Such financial statements (together
with notes and schedules, if any, thereto) fairly present the
financial condition of Originator, as of the dates indicated, for the
periods specified, in conformity with generally accepted accounting
principles applied on a consistent basis during such periods, except
as indicated therein. Since the date of the latest audited financial
statements (together with the Offered Securities and schedules, if
any, thereto) previously delivered to you, the Originator has not
sustained any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute, court or governmental action,
order or decree, or otherwise, or a material adverse change in the
financial condition of the Originator or any material adverse change,
or any development involving a prospective material adverse change in
or affecting the general affairs, management, financial position or
results of operations of the Originator, which would adversely affect
the ability of the Originator to perform its obligations hereunder or
under any of the Transaction Documents to which it is a party.
x. The Offered Securities will conform in all material respects
to the description thereof contained in the Registration Statement and
the Prospectus and will be duly authorized and, when duly and validly
executed in accordance with the Indenture and when delivered and paid
for as provided herein, will be validly issued and outstanding and
entitled to the benefits of the Indenture and will conform in
substance to the description thereof contained in the Registration
Statement.
xi. The execution and delivery by the Originator of these
Standard Provisions, the Underwriting Agreement and as of the Closing
Date, the execution and delivery by the Originator of the Transaction
documents to which it is a party are within the corporate power of the
Originator and the consummation by the Originator of the transactions
herein contemplated, nor the fulfillment of the terms of the Offered
Securities, the Transaction Documents or this Underwriting Agreement,
will result in the breach of any term or provision of the
organizational documents of the Originator or conflict with, result in
a breach, violation or acceleration of or constitute a default under,
the terms of any indenture, mortgage, deed of trust or other agreement
or instrument to which the Originator is a party or by which it is
bound, or result in the creation or imposition of any lien upon any of
its material properties pursuant to the terms of such indenture,
mortgage, deed of trust or other such
14
instrument, other than the lien created pursuant to the Indenture, or
violate any law, statute, order or regulation applicable to the
Originator of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Originator or any of
its properties, except such as have been obtained under the 1933 Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Offered
Securities by the Underwriters.
xii. The Issuer is not, and will not as of the Closing Date, be
an "investment company" under the Investment Company Act of 1940, as
amended (the "1940 Act").
xiv. As of the Closing Date, neither the Originator nor any
Person acting on the Originator's behalf will have offered,
transferred, pledged, sold or otherwise disposed of any of its right,
title and interest in the Auto Loans (except for any pledge or grant
of security interest under the Originator's financing facilities
(each, a "Facility Lien") which will be release on the Closing Date)
or the Sales and Servicing Agreement other than as contemplated by
these Standard Provisions and the Indenture and upon the execution and
delivery of the Indenture and the execution and delivery of the
Offered Securities, the Issuer will have taken all necessary steps to
convey good and marketable title to the Offered Securities to the
Underwriters, in each case free and clear of any Liens.
xvi. At the Closing Date each of the Auto Loans which is a
subject of the Transaction Documents, and all such Auto Loans in the
aggregate will meet the criteria for selection described in the
Prospectus, and at the Closing Date the representations and warranties
made by the Originator in the Transaction Documents will be true and
correct as of such date.
xvii. At the time of execution and delivery of the Transaction
Documents to which it is a party, the Originator will have good and
marketable title to the Auto Loans being transferred to the Flagship
LLC and then from Flagship LLC to the Depositor and then from the
Depositor to the Issuer pursuant to the Transaction Documents, free
and clear of any lien, mortgage, pledge, charge, encumbrance, adverse
claim or other security interest (collectively, "Liens") (other than
any Facility Liens which will be released on the Closing Date), and
will not have assigned to any person (other than the Issuer and the
Indenture Trustee) any of its right, title or interest in such Auto
Loans or in such Transaction Documents, the Originator will have the
power and authority to transfer such Auto Loans, and upon execution
and delivery of the Transaction Documents and delivery of the Auto
Loans to, or on behalf of, the Issuer, the Issuer will have good and
marketable title to the Auto Loans free and clear of any Liens.
15
xvii. On the date of the Underwriting Agreement and as of the
Closing Date, the Prospectus conforms, and as amended or supplemented,
if applicable, will conform in all material respects to the
requirements of the 1933 Act and the rules and regulations thereunder,
and on the date of the Underwriting Agreement and as of the Closing
Date, neither the Prospectus nor any Structural Term Sheets or any
Computational Materials includes any untrue statement of a material
fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and each
such document, as amended or supplemented, if applicable, will 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; provided, however, that the
foregoing does not apply to statements or omissions in any of such
documents based upon the Underwriter Information (as defined herein)
or the Depositor Information (as defined herein)
7. Indemnification and Contribution.
(a) the Depositor and the Underwriters:
i. The Depositor agrees to indemnify and hold harmless each
Underwriter (including Prudential Securities Incorporated acting in
its capacity as Representative and as one of the Underwriters), and
each of its directors and each person or entity who controls any
Underwriter within the meaning of the 1933 Act, against any losses,
claims, damages or liabilities, joint or several, to which such
Underwriter or such director, officer or controlling person may become
subject under the 1933 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 Registration
Statement, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter
and each such controlling person for any legal or other expenses
reasonably incurred by such Underwriter or such director, officer or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action.
ii. Each Underwriter will indemnify and hold harmless the
Depositor, each of the Depositor's directors, each of the Depositor's
officers who signed the Registration Statement and each person, if
any, who controls the Depositor, within the meaning of the 1933 Act,
against any losses, claims, damages or liabilities to which the
Depositor, or any such director, officer or controlling person may
become subject, under the 1933 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
16
statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or any other
prospectus relating to the Offered Securities, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statements or alleged untrue
statements or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Depositor
or the Originator by any Underwriter through the Representative
specifically for use therein; and each Underwriter will reimburse any
legal or other expenses reasonably incurred by the Depositor or any
such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, ▇▇▇▇▇▇▇▇▇ or
action. This indemnity agreement will be in addition to any liability
which such Underwriter may otherwise have. The Depositor acknowledges
that the statements set forth under the caption "UNDERWRITING" in the
Prospectus Supplement (the "Underwriter Information") constitute the
only information furnished to the Depositor by or on behalf of any
Underwriter for use in the Registration Statement, any Preliminary
Prospectus or the Prospectus, and each of the several Underwriters
represents and warrants that such statements are correct as to it.
iii. Promptly after receipt by an indemnified party under this
Section 7(a) 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 this Section 7(a), notify the
indemnifying party in writing of the commencement thereof, but the
omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability which the indemnifying party may
have to any indemnified party hereunder except to the extent such
indemnifying party has been 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
elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to
such indemnified party. After notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section 7(a) for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided,
however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it that are different from or additional to those
available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal
defenses and to otherwise
17
participate in the defense of such action on behalf of such
indemnified party or parties. The indemnifying party shall not be
liable for the expenses of more than one separate counsel.
iv. In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding parts of this Section 7(a) is for any reason held to be
unavailable to or insufficient to hold harmless an indemnified party
under subsection (i) or (ii) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof);
provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. In determining the amount
of contribution to which the respective parties are entitled, there
shall be considered the relative benefits received by the Depositor on
the one hand, and the Underwriters on the other, from the offering of
the Offered Securities (taking into account the portion of the
proceeds of the offering realized by each), the Depositor's and the
Underwriters' relative knowledge and access to information concerning
the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any
other equitable considerations appropriate in the circumstances. The
Depositor and the Underwriters agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per
capita allocation (even if the Underwriters were treated as one entity
for such purpose). No Underwriter or person controlling such
Underwriter shall be obligated to make contribution hereunder which in
the aggregate exceeds the total underwriting fee of the Offered
Securities purchased by such Underwriter under the Underwriting
Agreement, less the aggregate amount of any damages which such
Underwriter and its controlling persons have otherwise been required
to pay in respect of the same or any substantially similar claim. The
Underwriters' obligation to contribute hereunder are several in
proportion to their respective underwriting obligations and not joint.
For purposes of this Section 7(a), each officer or director and each
person who controls an Underwriter within the meaning of the 1933 Act
shall have the same rights to contribution as such Underwriter, and
each director of the Depositor, each officer of the Depositor who
signed the Registration Statement, and each person, if any, who
controls the Depositor within the meaning of Section 15 of the 1933
Act, shall have the same rights to contribution as the Depositor.
(b) The Originator and the Underwriters.
i. The Originator agrees (A) to indemnify and hold harmless each
Underwriter (including Prudential Securities Incorporated acting in
its capacity as
18
Representative and as one of the Underwriters), and each of its
directors and each person or entity who controls any Underwriter or
any such person, within the meaning of the 1933 Act, against any and
all losses, claims, damages or liabilities, joint and several, to
which the such Underwriter or such person or entity may become
subject, under the 1933 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 Structural Term Sheet,
Computational Materials, the Prospectus or any amendment or supplement
to the Prospectus or the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading, but only to the extent that such
untrue statement or alleged untrue statement or omission or alleged
omission relates to the information contained in the Prospectus other
than (x) the Underwriter Information and (y) the information under the
headings "Summary of Terms -- Depositor"; this indemnity agreement
will be in addition to any liability which the Originator may
otherwise have; and (B) to indemnify and to hold each Underwriter
harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses that such Underwriter may sustain in any way
related to the failure of any of the Originator or its affiliates to
perform its duties in compliance with the terms of the Transaction
Documents.
ii. Each Underwriter will indemnify and hold harmless the
Originator, its directors and each person or entity who controls the
Originator or any such person, within the meaning of the 1933 Act,
against any losses, claims, damages or liabilities, joint and several,
to which the Originator or any such director or controlling person may
become subject, under the 1933 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 Registration
Statement, any Preliminary Prospectus, the Prospectus, any amendment
or supplement thereto, or any other prospectus relating to the Offered
Securities, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, and
in each case to the extent, but only to the extent, that such untrue
statements or alleged untrue statements or omission or alleged
omission was made in reliance upon and in conformity with the
Underwriter Information; and each Underwriter will reimburse any legal
or other expenses reasonably incurred by the Depositor or any such
director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action. This indemnity agreement will be in addition to any liability
which such Underwriter may otherwise have. The Originator acknowledges
that the Underwriter Information constitutes the only information
furnished by or on behalf of any Underwriter for use in the
19
Registration Statement, any Preliminary Prospectus or the Prospectus,
and each of the several Underwriters represents and warrants that such
statements are correct as to it.
iii. Promptly after receipt by an indemnified party under this
Section 7(b) 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 this Section 7(b), notify the
indemnifying party in writing of the commencement thereof, but the
omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability which the indemnifying party may
have to any indemnified party hereunder except to the extent such
indemnifying party has been 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
elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to
such indemnified party. After notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section 7(b) for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided,
however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it that are different from or additional to those
available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. The indemnifying party
shall not be liable for the expenses of more than one separate
counsel.
iv. In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding parts of this Section 7(b) is for any reason held to be
unavailable to or insufficient to hold harmless an indemnified party
under subsection (i) or (ii) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof);
provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. In determining the amount
of contribution to which the respective parties are entitled, there
shall be considered the relative benefits received by the Originator
on the one hand, and the Underwriters on the other, from the offering
of the Offered Securities
20
(taking into account the portion of the proceeds of the offering
realized by each), the Originator's and the Underwriters's relative
knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and
prevent any statement or omission, and any other equitable
considerations appropriate in the circumstances. The Originator and
the Underwriters agree that it would not be equitable if the amount of
such contribution were determined by pro rata or per capita allocation
(even if the Underwriters were treated as one entity for such
purpose). No Underwriter or person controlling such Underwriter shall
be obligated to make contribution hereunder which in the aggregate
exceeds the total underwriting fee of the Offered Securities purchased
by such Underwriter under the Underwriting Agreement, less the
aggregate amount of any damages which such Underwriter and its
controlling persons have otherwise been required to pay in respect of
the same or any substantially similar claim. The Underwriters'
obligation to contribute hereunder are several in proportion to their
respective underwriting obligations and not joint. For purposes of
this Section 7(b), each officer, each director and each person, if any
who controls the an Underwriter within the meaning of the 1933 Act
shall have the same rights to contribution as such Underwriter, and
each officer, each director, and each person who controls the
Originator within the meaning of the 1933 Act, shall have the same
rights to contribution as the Originator.
8. Computational Materials and Structural Term Sheets.
(a) Each Underwriter agrees to provide to the Depositor no less
than two business days prior to the date on which the Prospectus is
proposed to be filed pursuant to Rule 424(b) under the Act, for the
purpose of permitting the Depositor to comply with the filing
requirement set forth herein, all information (in such written or
electronic format as required by the Depositor) with respect to the
Offered Securities which constitutes "Computational Materials", as
defined in the Commission's No-Action Letter, dated May 20, 1994,
addressed to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Acceptance Corporation I, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
& Co. Incorporated and ▇▇▇▇▇▇ Structured Asset Corporation, and the
no-action letter dated May 27, 1994 issued by the Division of
Corporation Finance of the Commission to the Public Securities
Association (together, the "▇▇▇▇▇▇ Letters"), the filing of which
material is a condition of the relief granted in such letters (such
materials being the "Computational Materials"), and (ii) "Structural
Term Sheets" within the meaning of the no-action letter dated February
17, 1995 issued by the Division of Corporation Finance of the
Commission to the Public Securities Association (the "PSA Letter") and
the filing of such material is a condition of the relief granted in
such letter (such materials being the "Structural Term Sheets"), such
delivery to be made not later than 10:30 a.m. New York on the business
day immediately following the date on which such Computational
Materials or Structural Terms Sheets was first delivered to a
prospective investors in the Offered Securities. Each delivery of
Computational
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Materials and Structural Terms Sheets to the Depositor pursuant to
this paragraph (a) shall be effected in accordance with Section 10.
(b) Each Underwriter represents and warrants to and agrees with the
Depositor, as of the date hereof and as of the Closing Date, that:
i. the Computational Materials furnished to the Depositor by such
Underwriter pursuant to Section 8(a) constitute (either in original,
aggregated or consolidated form) all of the materials furnished to
prospective investors by such Underwriter prior to the time of
delivery thereof to the Depositor that are required to be filed with
the Commission with respect to the Offered Securities in accordance
with the ▇▇▇▇▇▇ Letters, and such Computational Materials comply with
the requirements of the ▇▇▇▇▇▇ Letters; and
ii. the Structural Term Sheets furnished to the Depositor by such
Underwriter pursuant to Section 8(a) constitute all of the materials
furnished to prospective investors by such Underwriter prior to the
time of delivery thereof to the Depositor that are required to be
filed with the Commission as "Structural Term Sheets" with respect to
the related Offered Securities in accordance with the PSA Letter, and
such Structural Term Sheets comply with the requirements of the PSA
Letter.
9. Collateral Term Sheets.
(a) Prior to the delivery of any "Collateral Term Sheet" within the
meaning of the PSA Letter, the filing of which material is a condition of
the relief granted in such letter (such material being the "Collateral Term
Sheets"), to a prospective investor in the Offered Securities, the
Underwriters shall notify the Depositor and its counsel by telephone of
their intention to deliver such materials and the approximate date on which
the first such delivery of such materials is expected to occur. Not later
than 10:30 a.m., New York time, on the business day immediately following
the date on which any Collateral Term Sheet was first delivered to a
prospective investor in the Offered Securities, the Underwriters shall
deliver to the Depositor one complete copy of all materials provided by the
Underwriters to prospective investors in such Offered Securities which
constitute "Collateral Term Sheets." Each delivery of a Collateral Term
Sheet to the Depositor pursuant to this paragraph (a) shall be effected in
accordance with Section 10. (Collateral Term Sheets and Structural Term
Sheets are, together, referred to herein as "ABS Term Sheets.") At the time
of each such delivery, the Underwriter making such delivery shall indicate
in writing that the materials being delivered constitute Collateral Term
Sheets, and, if there has been any prior such delivery with respect to the
Offered Securities, shall indicate whether such materials differ in any
material respect from any Collateral Term Sheets previously delivered to
the Depositor with respect to the Offered Securities pursuant to this
Section 9(a) as a result of the occurrence of the material change in the
characteristics of the related Auto Loans.
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(b) Each Underwriter represents and warrants to and agrees with the
Depositor as of the date of this Agreement and as of the Closing Date,
that:
i. The Collateral Term Sheets furnished to the Depositor by such
Underwriter pursuant to Section 9(a) constitute all of the materials
furnished to prospective investors by such Underwriter prior to time
of delivery thereof to the Depositor that are required to be filed
with the Commission as "Collateral Term Sheets" with respect to the
Offered Securities in accordance with the PSA Letter, and such
Collateral Term Sheets comply with the requirements of the PSA Letter.
(c) If, at any time when a Prospectus relating to the Offered
Securities is required to be delivered under the Act, it shall be necessary
to amend or supplement the related Prospectus as a result of an untrue
statement of a material fact contained in any Collateral Term Sheets
provided by any Underwriter pursuant to this Section 9 or the omission to
state therein a material fact required, when considered in conjunction with
the related Prospectus, to be stated therein or necessary to make the
statements therein, when read in conjunction with the related Prospectus,
not misleading, or if it shall be necessary to amend or supplement any
Current Report relating to any Collateral Term Sheets to comply with the
Act or the rules thereunder, such Underwriter promptly will prepare and
furnish to the Depositor for filing with the Commission an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance.
10. Delivery and Filing of Current Reports, Collateral Term Sheets,
Structural Term Sheets.
(a) Any Current Report, Collateral Term Sheet or Structural Term Sheet
that is required to be delivered by the Underwriter to the Depositor
hereunder shall be effected by the delivery of one copy to counsel for the
Depositor and, if requested, one copy in computer readable format to the
Financial Printer on or prior to 10:30 a.m. on the date so specified
herein.
(b) The Depositor shall cause its counsel or the Financial Printer to
file with the Commission any such Current Report, Collateral Term Sheet or
Structural Term Sheet within one business day immediately following the
delivery thereof pursuant to the preceding subsection. The Depositor shall
use its best efforts to cause any such Current Report, Collateral Term
Sheet or Structural Term Sheet to be so filed prior to 4:00 p.m., New York
time, on such business day and will promptly advise the Representative of
such filing.
11. Survival of Certain Representations and Obligations. The respective
representations, warranties, agreements, covenants, indemnities and other
statements of the Depositor and the Originator, its officers and the several
Underwriters set forth in, or made pursuant to, the Underwriting Agreement shall
remain in full force and effect, regardless of any investigation, or statement
as to the result thereof, made by or on behalf of any Underwriter, the
Depositor, the
23
Originator or any of the officers or directors or any controlling person of any
of the foregoing, and shall survive the delivery of and payment for the Offered
Securities.
12. Termination.
(a) The Underwriting Agreement may be terminated by the Depositor by
notice to the Representative in the event that a stop order suspending the
effectiveness of the Registration Statement shall have been issued or
proceedings for that purpose shall have been instituted or threatened.
(b) The Underwriting Agreement may be terminated by the Representative
by notice to the Depositor in the event that the Depositor or the
Originator shall have failed, refused or been unable to perform all
obligations and satisfy all conditions to be performed or satisfied
hereunder by the Depositor and the Originator at or prior to the Closing
Date.
(c) Termination of the Underwriting Agreement pursuant to this Section
12 shall be without liability of any party to any other party other than as
provided in Sections 7 and 14 hereof.
13. Default of Underwriters. If any Underwriter or Underwriters defaults or
default in their obligation to purchase Offered Securities which it or they have
agreed to purchase under the Underwriting Agreement and the aggregate principal
amount of the Offered Securities which such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent (10%) or less of the
aggregate principal amount, notional amount or stated amount, as applicable, of
the Offered Securities to be sold under the Underwriting Agreement, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments under the Underwriting Agreement to purchase the
Offered Securities which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters so defaults or default
and the aggregate principal amount of the Offered Securities with respect to
which such default or defaults occurs or occur is more than ten percent (10%) of
the aggregate principal amount, notional amount or stated amount, as applicable,
of Offered Securities to be sold under the Underwriting Agreement, as the case
may be, and arrangements satisfactory to the Representative and the Depositor
for the purchase of such Offered Securities by other persons (who may include
one or more of the non-defaulting Underwriters including the Representative) are
not made within 36 hours after any such default, the Underwriting Agreement will
terminate without liability on the part of any non-defaulting Underwriters or
the Depositor except for the expenses to be paid or reimbursed by the Originator
pursuant to Section 14 hereof. As used in the Underwriting Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 13. Nothing herein shall relieve a defaulting Underwriter from liability
for its default.
14. Expenses.
(a) The Originator agrees with the several Underwriters that:
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i. whether or not the transactions contemplated in the
Underwriting Agreement are consummated or the Underwriting Agreement
is terminated, the Originator will pay all fees and expenses incident
to the performance of its obligations under the Underwriting
Agreement, including, but not limited to, (i) the expenses of printing
and distributing the Underwriting Agreement and any related
underwriting documents, the Registration Statement, any Preliminary
Prospectus, the Prospectus, any amendments or supplements to the
Registration Statement or the Prospectus, the Structural Term Sheets
and Computational Materials (including in each case all exhibits,
amendments and supplements thereto), and any Blue Sky memorandum or
legal investment survey and any supplements thereto, (ii) fees and
expenses of rating agencies, the Insurer, accountants and counsel for
the Depositor and the Underwriter and (iii) the expenses referred to
in Section 4.7 of the Sales and Servicing Agreement;
ii. all out-of-pocket expenses, including counsel fees,
disbursements and expenses, reasonably incurred by the Underwriters in
connection with investigating, preparing to market and marketing the
Offered Securities and proposing to purchase and purchasing the
Offered Securities under the Underwriting Agreement will be borne and
paid by the Originator if the Underwriting Agreement is terminated by
the Depositor pursuant to Section 12(a) hereof or by the
Representative on account of the failure, refusal or inability on the
part of the Depositor or the Originator to perform all obligations and
satisfy all conditions on the part of the Depositor or the Originator
to be performed or satisfied hereunder; and
iii. the Originator will pay the cost of preparing the
certificates for the Offered Securities.
(b) In connection with the transactions contemplated under this
Underwriting Agreement and the Transaction Documents, the Originator shall
promptly pay (or shall promptly reimburse the Depositor to the extent that
the Depositor shall have paid or otherwise incurred): (i) the fees and
disbursements of the Depositor's and the Originators' counsel; (ii) the
fees of DCR, S&P and ▇▇▇▇▇'▇; (iii) any of the fees of the Indenture
Trustee and the fees and disbursements of the Indenture Trustee's counsel;
(iv) any of the fees of the Owner Trustee and the fees and disbursements of
the Owner Trustee's counsel; (v) expenses incurred in connection with
printing the Prospectus, the Prospectus Supplement, the Structural Terms
Sheets and Computational Materials any amendment or supplement thereto, any
Preliminary Prospectus and the Offered Securities; (vi) fees and expenses
relating to the filing of documents with the Commission (including without
limitation periodic reports under the Exchange Act); (vii) the shelf
registration amortization fee of 0.04% of the principal balance of the
Offered Securities on the Closing Date, paid in connection with the
issuance of Offered Securities; (viii) the fees and disbursements for KPMG,
accountants for the Originator; and (ix) all of the initial expenses of the
Insurer including, without limitation,
25
legal fees and expenses, accountant fees and expenses and expenses in
connection with due diligence conducted on the Auto Loan Files. For the
avoidance of doubt, the parties hereto acknowledge that it is the intention
of the parties that the Depositor shall not pay any of the Indenture
Trustee's or Owner Trustee's fees and expenses in connection with the
transactions contemplated by this Underwriting Agreement and the
Transaction Documents. All other costs and expenses in connection with the
transactions contemplated hereunder shall be borne by the party incurring
such expenses.
(c) Except as otherwise provided in this Section 14, the Underwriters
agree to pay all of their expenses in connection with investigating,
preparing to market and marketing the Offered Securities and proposing to
purchase and purchasing the Offered Securities under the Underwriting
Agreement, including any advertising expenses incurred by them in making
offers and sales of the Offered Securities.
15. Notices. All communications under the Underwriting Agreement shall be
in writing and, (i) if sent to the Underwriters, shall be mailed, delivered or
telegraphed and confirmed to the Representative at the address and to the
attention of the person specified in the Underwriting Agreement, (ii) if sent to
the Depositor, shall be mailed, delivered or telegraphed and confirmed to
Prudential Securities Secured Financing Corporation, One New York Plaza, New
York, New York 10292, Attention: Managing Director-Asset Backed Finance Group;
and (iii) if sent to the Originator, shall be mailed, delivered or telegraphed
and confirmed to Flagship Credit Corporation, One International Plaza,
Philadelphia, Pennsylvania 08054, Attention: General Counsel; provided, however,
that any notice to any Underwriter pursuant to the Underwriting Agreement shall
be mailed, delivered or telegraphed and confirmed to such Underwriter at the
address furnished by it.
16. Representative of Underwriters. Any Representative identified in the
Underwriting Agreement will act for the Underwriters of the Offered Securities
and any action taken by the Representative under the Underwriting Agreement will
be binding upon all of such Underwriters.
17. Successors. The Underwriting Agreement shall inure to the benefit of
and shall be binding upon the several Underwriters, the Depositor and the
Originator and their respective successors and legal representatives, and
nothing expressed or mentioned herein or in the Underwriting Agreement is
intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of the Underwriting Agreement, or any
provisions herein contained, the Underwriting Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the representations and warranties of the Depositor and the Originator contained
herein or in the Underwriting Agreement shall also be for the benefit of any
person or persons who controls or control any Underwriter within the meaning of
Section 15 of the 1933 Act, and (ii) the indemnities by the several Underwriters
shall also be for the benefit of the directors of the Depositor, the officers of
the Depositor who have signed the Registration Statement and any person or
persons who control the Depositor within the meaning of Section 15 of the 1933
Act. No purchaser of the Offered Securities from any Underwriter shall be deemed
a successor
26
because of such purchase. These Standard Provisions and each Underwriting
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
18. Time of the Essence. Time shall be of the essence of each Underwriting
Agreement.
19. Governing Law. These Standard Provisions and each Underwriting
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
[Signature Page Follows]
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If the foregoing is in accordance with your understanding, please sign and
return two counterparts hereof.
Yours truly,
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By:
------------------------------------
Name:
Title:
FLAGSHIP CREDIT CORPORATION
By:
------------------------------------
Name:
Title:
Accepted as of the date hereof:
PRUDENTIAL SECURITIES INCORPORATED
By:
----------------------------------
Name:
Title:
[Signature Page to Underwriting Agreement Standard Provisions]
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