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EXHIBIT 1.1
December 10, 1998
Wheat First Securities, Inc.,
doing business as First Union Capital Markets,
a division of Wheat First Securities, Inc.
One First Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
as representative of the several Underwriters
First Sierra Financial, Inc. (the "Company") hereby confirms its
agreement to sell certain equipment contract backed notes to Wheat First
Securities, Inc., doing business as First Union Capital Markets, a division of
Wheat First Securities, Inc. (the "Representative"), Prudential Securities
Incorporated ("Prudential") and Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx" and
together with the Representative and Prudential, the "Underwriters") as
described herein. The notes will be secured by the assets of a trust consisting
primarily of a segregated pool (the "Receivable Pool") of certain finance leases
and commercial loans (the "Contracts"), the security interest of the Company, as
originator (in such capacity, the "Originator") or its affiliate, which was
acquired by the Originator or such affiliate at the time of its origination or
purchase of the related Contracts in the underlying equipment or other property
servicing such Contracts (collectively, the "Equipment," together with the
Contracts, the "Receivables") and certain other property. First Sierra Equipment
Contract Trust 1998-1, a common law trust acting through First Union Trust
Company, National Association, not in its individual capacity but solely as
Owner Trustee (the "Issuer" or the "Trust"), established pursuant to the Trust
Agreement dated as of December 1, 1998 (the "Trust Agreement") between the
Company and First Union Trust Company, National Association, not in its
individual capacity but solely as owner trustee (the "Owner Trustee"), pursuant
to the Indenture to be dated as of December 1, 1998 (the "Indenture"), among the
Trust, the Company, as Originator and as servicer (in such capacity, the
"Servicer") and Bankers Trust Company, as indenture trustee (the "Indenture
Trustee"), will pledge the Receivables to the Indenture Trustee and issue the
Class A Notes as described herein.
On or prior to the date of issuance of the Class A Notes, the Company
will obtain the certificate guaranty insurance policy (the "Policy") issued by
MBIA Insurance Corporation (the "Insurer") which will unconditionally and
irrevocably guarantee to the Trustee for the benefit of the holders of the Class
A Notes full and complete payment of all amounts payable on the Class A Notes.
All capitalized terms used but not otherwise defined herein have the
respective meanings set forth in the Indenture. The phrase "This Agreement"
shall refer to this letter by the Company to the Underwriters as agreed to and
accepted by the Underwriters as of the date hereof.
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1. Securities. The securities will be issued in classes as follows: (i)
four classes of senior notes consisting of: (a) 5.215% Equipment Contract-Backed
Notes, Class A-1 (the "Class A-1 Notes"), 5.490% Equipment Contract-Backed
Notes, Class A-2 (the "Class A-2 Notes"), 5.450% Equipment Contract-Backed
Notes, Class A-3 (the "Class A-3 Notes") and 5.628% Equipment Contract Backed
Notes, Class A-4 (the "Class A-4 Notes and collectively with the Class A-1
Notes, the Class A-2 Notes and the Class A-3 Notes, the Class A Notes (the
"Class A Notes"); (ii) three classes of notes subordinate to the Class A Notes
(the "Class B-1 Notes," the "Class B-2 Notes" and the "Class B-3 Notes,"
collectively, the "Class B Notes"); and (iii) a class of certificates
subordinate to the Class A Notes, the Class B-1 Notes, the Class B-2 Notes and
the Class B-3 Notes (the "Trust Certificate"). The Class B Notes and the Trust
Certificate are not being sold hereby.
2. Representations and Warranties of the Company. The Company
represents and warrants to, and covenants with, the Underwriters that:
A. The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement (No. 333-12199) on Form S-3 for the
registration under the Securities Act of 1933, as amended (the "Act"), of
Equipment Contract Backed Securities (issuable in series), which registration
statement, as amended at the date hereof, has become effective. Such
registration statement, as amended to the date of this Agreement, meets the
requirements set forth in Rule 415(a)(1)(x) under the Act and complies in all
other material respects with such Rule. The Company proposes to file with the
Commission pursuant to Rule 424(b)(2) under the Act a supplement dated the date
hereof to the prospectus dated November 25, 1998 relating to the Class A Notes
and the method of distribution thereof and has previously advised the
Underwriters of all further information (financial and other) with respect to
the Class A Notes to be set forth therein. Such registration statement,
including the exhibits thereto, as amended at the date hereof, is hereinafter
called the "Registration Statement"; such prospectus dated November 25, 1998, in
the form in which it will be filed with the Commission pursuant to Rule
424(b)(2) under the Act is hereinafter called the "Basic Prospectus"; such
supplement dated the date hereof to the Basic Prospectus, in the form in which
it will be filed with the Commission pursuant to Rule 424(b)(2) of the Act, is
hereinafter called the "Prospectus Supplement"; and the Basic Prospectus and the
Prospectus Supplement together are hereinafter called the "Prospectus." Any
preliminary form of the Prospectus Supplement which has heretofore been filed
pursuant to Rule 424 is hereinafter called a "Preliminary Prospectus
Supplement." The Company will file with the Commission within fifteen days of
the issuance of the Class A Notes a report on Form 8-K setting forth specific
information concerning the related Receivables (the "8-K").
B. As of the date hereof, when the Registration Statement became
effective, when the Prospectus Supplement is first filed pursuant to Rule
424(b)(2) under the Act, when, prior to the Closing Date (as defined below), any
other amendment to the Registration Statement becomes effective, and when any
supplement to the Prospectus is filed with the Commission, and at the Closing
Date, (i) the Registration Statement, as amended as of any such time, and the
Prospectus, as amended or supplemented as of any such time, will comply in all
material respects with the applicable requirements of the Act and the rules
thereunder and (ii) the Registration Statement, as amended as of any such time,
did not and will not contain any untrue statement of a material fact and did not
and will not omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and the Prospectus, as
amended or
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supplemented as of any such time, did not and will not contain an untrue
statement of a material fact and did not and will not omit 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; provided, however,
that the Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
the information furnished in writing to the Company by or on behalf of the
Underwriters specifically for use in connection with the preparation of the
Registration Statement and the Prospectus.
C. The Company is duly organized, validly existing and in good standing
under the laws of the State of Delaware, has full power and authority (corporate
and other) to own its properties and conduct its business as now conducted by
it, and as described in the Prospectus, and is duly qualified to do business in
each jurisdiction in which it owns or leases equipment (to the extent such
qualification is required by applicable law) or in which the conduct of its
business requires such qualification except where the failure to be so qualified
does not involve (i) a material risk to, or a material adverse effect on, the
business, properties, financial position, operations or results of operations of
the Company or (ii) any risk whatsoever as to the enforceability of any
Contract.
D. There are no actions, proceedings or investigations pending, or, to
the knowledge of the Company, threatened, before any court, governmental agency
or body or other tribunal (i) asserting the invalidity of this Agreement, the
Indenture, the Servicing Agreement dated as of December 1, 1998 (the "Servicing
Agreement") among the Company, as Servicer and as Originator, the Issuer and the
Indenture Trustee, the Receivables Transfer Agreement, the Insurance Agreement
dated as of December 1, 1998 (the "Insurance Agreement") among the Insurer, the
Company, in its capacities as Servicer and as Originator, the Issuer, and the
Owner Trustee, the Indemnification Agreement dated December 10, 1998 (the
"Indemnification Agreement" and together with this Agreement, the Indenture, the
Servicing Agreement, the Receivables Transfer Agreement and the Insurance
Agreement, the "Agreements") among the Company, in its capacity as Originator,
the Issuer, the Insurer and the Underwriters, or the Class A Notes; (ii) seeking
to prevent the issuance of the Class A Notes or the consummation of any of the
transactions contemplated by the Agreements; (iii) which may, individually or in
the aggregate, materially and adversely affect the performance by the Company of
its obligations under, or the validity or enforceability of, the Agreements or
the Class A Notes; or (iv) which may affect adversely the federal income tax
attributes of the Class A Notes as described in the Prospectus.
E. The execution and delivery by the Company of the Agreements are
within the corporate power of the Company and have been, or will be, prior to
the Closing Date duly authorized by all necessary corporate action on the part
of the Company and the execution and delivery of such instruments, the
consummation of the transactions therein contemplated and compliance with the
provisions thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any statute or any agreement
or instrument to which the Company or any of its affiliates is a party or by
which it or any of them is bound or to which any of the property of the Company
or any of its affiliates is subject, the Company's charter or bylaws, or any
order, rule or regulation of any court, governmental agency or body or other
tribunal having jurisdiction over the Company, any of its affiliates or any of
its or their properties; and no consent, approval, authorization or order of, or
filing with, any court or governmental agency or body or
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other tribunal is required for the consummation of the transactions contemplated
by this Agreement or the Prospectus in connection with the issuance and sale of
the Class A Notes. Neither the Company nor any of its affiliates is a party to,
bound by or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order, rule or
regulation of any court, governmental agency or body or other tribunal having
jurisdiction over the Company or any of its affiliates, which materially and
adversely affects, or may in the future materially and adversely affect, (i) the
ability of the Company to perform its obligations under the Agreements or (ii)
the business, operations, results of operations, financial position, income,
properties or assets of the Company.
F. This Agreement has been duly executed and delivered by the Company,
and the other Agreements will be duly executed and delivered by the Company, and
each constitutes and will constitute the legal, valid and binding obligation of
the Company enforceable in accordance with their respective terms, except as
enforceability may be limited by (i) bankruptcy, insolvency, liquidation,
receivership, moratorium, reorganization or other similar laws affecting the
enforcement of the rights of creditors and (ii) general principles of equity,
whether enforcement is sought in a proceeding at law or in equity.
G. The Class A Notes will conform in all material respects to the
description thereof to be contained in the Prospectus and will be duly and
validly authorized and, when duly and validly executed, authenticated, issued
and delivered in accordance with the Indenture and sold to the Underwriters as
provided herein, will be validly issued and outstanding and entitled to the
benefits of the Indenture.
H. On the Closing Date, the Receivables will conform in all material
respects to the description thereof contained in the Prospectus and the
representations and warranties contained in this Agreement will be true and
correct in all material respects. The representations and warranties set out in
the Servicing Agreement and the Indenture are hereby made to the Underwriters as
though set out herein, and at the dates specified therein, such representations
and warranties were or will be true and correct in all material respects.
I. The Company possesses all material licenses, certificates, permits
or other authorizations issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now operated by
it and as described in the Prospectus and there are no proceedings, pending or,
to the best knowledge of the Company, threatened, relating to the revocation or
modification of any such license, certificate, permit or other authorization
which singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially and adversely affect the business,
operations, results of operations, financial position, income, property or
assets of the Company.
J. Any taxes, fees and other governmental charges in connection with
the execution and delivery of the Agreements or the execution and issuance of
the Class A Notes have been or will be paid at or prior to the Closing Date.
K. There has not been any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the
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earnings, business or operations of the Company or its subsidiaries, taken as a
whole, from September 30, 1998.
L. The Agreements will conform in all material respects to the
descriptions thereof, if any, contained in the Prospectus.
M. The Company is not aware of (i) any request by the Commission for
any further amendment of the Registration Statement or the Prospectus or for any
additional information; (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose; or (iii) any notification with
respect to the suspension of the qualification of the Class A Notes for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose.
3. Agreements of the Underwriters. Each Underwriter, severally and not
jointly, agrees with the Company that upon the execution of this Agreement and
authorization by each Underwriter of the release of the Class A Notes, each
Underwriter shall offer the Class A Notes for sale upon the terms and conditions
set forth in the Prospectus as amended or supplemented in the amounts set forth
in Annex A hereto.
4. Purchase, Sale and Delivery of the Class A Notes. The Company hereby
agrees, subject to the terms and conditions hereof, to sell the Class A Notes to
the Underwriters, who, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, hereby
severally and not jointly agree to purchase the principal amount of the Class A
Notes set forth in Annex A hereto. At the time of issuance of the Class A Notes,
the Receivables will be transferred by the Sellers, at the direction of the
Company, to the Trust pursuant to the Receivables Transfer Agreement.
The Class A Notes to be purchased by each Underwriter will be delivered
by the Company to each Underwriter (which delivery shall be made through the
facilities of The Depository Trust Company ("DTC")) against payment of the
purchase price therefor, equal to $247,169,088.46, by a same day federal funds
wire payable to the order of the Company.
Settlement shall take place at the offices of Xxxxx Xxxxxxxxxx, 1301
Avenue of the Americas, New York, New York at 10 a.m., on December 17, 1998, or
at such other time thereafter as the Underwriters and the Company determine
(such time being herein referred to as the "Closing Date"). The Class A Notes
will be prepared in definitive form and in such authorized denominations as each
Underwriter may request, registered in the name of Cede & Co., as nominee of
DTC.
The Company agrees to have the Class A Notes available for inspection
and review by the Underwriters in New York City not later than 10 a.m. New York
City time on the business day prior to the Closing Date.
5. Covenants of the Company. The Company covenants and agrees with the
Underwriters that:
A. The Company will promptly advise each Underwriter and its counsel
(i) when any amendment to the Registration Statement shall have become
effective; (ii) of any request
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by the Commission for any amendment to the Registration Statement or the
Prospectus or for any additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose;
and (iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Class A Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will not file any amendment to the Registration Statement
or supplement to the Prospectus after the date hereof and prior to the Closing
Date for the Class A Notes unless the Company has furnished each Underwriter and
its counsel copies of such amendment or supplement for their review prior to
filing and will not file any such proposed amendment or supplement to which such
Underwriter reasonably objects, unless such filing is required by law. The
Company will use its best efforts to prevent the issuance of any stop order
suspending the effectiveness of the Registration Statement and, if issued, to
obtain as soon as possible the withdrawal thereof.
B. If, at any time during the period in which the Prospectus is
required by law to be delivered, any event occurs as a result of which the
Prospectus as then amended or supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the Act or the rules under the Act, the Company will
promptly prepare and file with the Commission, subject to Paragraph A of this
Section 5, an amendment or supplement that will correct such statement or
omission or an amendment that will effect such compliance and, if such amendment
or supplement is required to be contained in a post-effective amendment to the
Registration Statement, will use its best efforts to cause such amendment of the
Registration Statement to be made effective as soon as possible.
C. The Company will furnish to each Underwriter, without charge,
executed copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a Prospectus by the Underwriters or a dealer may be
required by the Act, as many copies of the Prospectus, as amended or
supplemented, and any amendments and supplements thereto as the Underwriters may
reasonably request. The Company will pay the expenses of printing all offering
documents relating to the offering of the Class A Notes.
D. As soon as practicable, but not later than sixteen months after the
effective date of the Registration Statement, the Company will make generally
available to Class A Noteholders an earnings statement covering a period of at
least twelve months beginning after the effective date of the Registration
Statement which will satisfy the provisions of Section 11(a) of the Act and, at
the option of the Company, will satisfy the requirements of Rule 158 under the
Act.
E. So long as any of the Class A Notes are outstanding, the Company
will cause to be delivered to each Underwriter (i) all documents required to be
distributed to the Class A Noteholders and (ii) from time to time, any other
information filed with any government or regulatory authority that is otherwise
publicly available, as any of the Underwriters may reasonably request.
F. The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay all expenses in
connection with the
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transactions contemplated herein, including but not limited to the expenses of
printing (or otherwise reproducing) all documents relating to the offering, the
fees and disbursements of its counsel and expenses of each Underwriter incurred
in connection with (i) the issuance and delivery of the Class A Notes; (ii)
preparation of all documents specified in this Agreement; (iii) any fees and
expenses of the Indenture Trustee; (iv) any fees and expenses of the Owner
Trustee; (v) any fees and expenses of the Insurer; and (vi) any fees charged by
investment rating agencies for rating the Class A Notes.
G. The Company agrees that, so long as any of the Class A Notes shall
be outstanding, it will deliver or cause to be delivered to each Underwriter (i)
the annual statement as to compliance delivered to the Indenture Trustee
pursuant to the Servicing Agreement; (ii) the annual statement of a firm of
independent public accountants furnished to the Indenture Trustee pursuant to
the Servicing Agreement as soon as such statement is furnished to the Company;
and (iii) any information and reports required to be delivered by the Servicer
pursuant to Article 4 of the Servicing Agreement.
H. The Company will enter into the Agreements and all related
agreements on or prior to the Closing Date.
I. The Company will endeavor to qualify the Class A Notes for sale to
the extent necessary under any state securities or Blue Sky laws in any
jurisdictions as may be reasonably requested by the Underwriters, if any, and
will pay all expenses (including fees and disbursements of counsel) in
connection with such qualification and in connection with the determination of
the eligibility of the Class A Notes for investment under the laws of such
jurisdictions as the Underwriters may reasonably designate, if any.
6. Conditions of the Underwriters' Obligation. The obligation of each
Underwriter to purchase and pay for the Class A Notes as provided herein shall
be subject to the accuracy as of the date hereof and the Closing Date (as if
made at the Closing Date) of the representations and warranties of the Company
contained herein (including those representations and warranties set forth in
the Servicing Agreement and the Indenture and incorporated herein), to the
accuracy of the statements of the Company made in any certificate or other
document delivered pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder, and to the following additional
conditions:
A. The Registration Statement shall have become effective no later than
the date hereof, and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened, and the Prospectus shall have
been filed pursuant to Rule 424(b).
B. The Underwriters shall have received the Indenture and the Class A
Notes in form and substance satisfactory to the Underwriters, duly executed by
all signatories required pursuant to the respective terms thereof.
C. The Underwriters shall have received the favorable opinion of Xxxxx
Xxxxxxxxxx LLP, counsel to the Company with respect to the following items,
dated the Closing Date, to the effect that:
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(1) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, and is qualified to do business in each state necessary to
enable it to perform its obligations under each of the Agreements. The
Company has the requisite power and authority to execute and deliver,
engage in the transactions contemplated by, and perform and observe the
conditions of each of the Agreements.
(2) Each of the Agreements has been duly and validly
authorized, executed and delivered by the Company, all requisite
corporate action having been taken with respect thereto, and each
constitutes the valid, legal and binding agreement of the Company, and
would be enforceable against the Company in accordance with their
respective terms.
(3) Neither the transfer of the Receivables to the Trust, the
issuance or sale of the Class A Notes nor the execution, delivery or
performance by the Company of, the Agreements (A) conflicts or will
conflict with or results or will result in a breach of, or constitutes
or will constitute a default under, (i) any term or provision of the
certificate of incorporation or bylaws of the Company; (ii) to the best
of such counsel's knowledge, any term or provision of any material
agreement, contract, instrument or indenture, to which the Company is a
party or is bound; or (iii) to the best of such counsel's knowledge,
any order, judgment, writ, injunction or decree of any court or
governmental agency or body or other tribunal having jurisdiction over
the Company; or (B) results in, or will result in the creation or
imposition of any lien, charge or encumbrance upon the Trust or upon
the Class A Notes, except as otherwise contemplated by the Indenture.
(4) No consent, approval, authorization or order of,
registration or filing with, or notice to, courts, governmental agency
or body or other tribunal is required under the laws of the State of
New York, for the execution, delivery and performance of the
Agreements, or the offer, issuance, sale or delivery of the Class A
Notes or the consummation of any other transaction contemplated thereby
by the Company, except such which have been obtained.
(5) There are no actions, proceedings or investigations
pending or, to such counsel's knowledge, threatened against the Company
before any court, governmental agency or body or other tribunal (i)
asserting the invalidity of the Agreements or the Class A Notes; (ii)
seeking to prevent the issuance of the Class A Notes or the
consummation of any of the transactions contemplated by the Agreements;
or (iii) which would materially and adversely affect the performance by
the Company of obligations under, or the validity or enforceability of,
the Class A Notes or the Agreements.
(6) Except as to any financial or statistical data contained
in the Registration Statement, to the best of such counsel's knowledge,
the Registration Statement does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading.
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(7) To the best of the knowledge of such counsel, the
Commission has not issued any stop order suspending the effectiveness
of the Registration Statement or any order directed to any prospectus
relating to the Class A Notes (including the Prospectus), and has not
initiated or threatened any proceeding for that purpose.
In rendering their opinions, the counsel described in this Paragraph C
may rely, as to matters of fact, on certificates of responsible officers of the
Company, the Indenture Trustee and public officials. Such opinions may also
assume the due authorization, execution and delivery of the instruments and
documents referred to therein by the parties thereto other than the Company.
D. The Underwriters shall have received a letter from Xxxxxx Xxxxxxxx,
dated on or before the Closing Date, in form and substance satisfactory to the
Underwriters and counsel for the Underwriters, to the effect that they have
performed certain specified procedures requested by the Underwriters with
respect to the information set forth in the Prospectus and certain matters
relating to the Company.
E. The Class A-1 Notes shall have been rated "P-1" by Xxxxx'x Investors
Service, Inc. ("Moody's"), "A-1+" by Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. ("S&P"), "F1+/AAA" by Fitch IBCA,
Inc. ("Fitch") and "D-1+" by Duff & Xxxxxx Credit Rating Co. ("DCR") and the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes shall have been
rated "Aaa" by Moody's and "AAA" by S&P, Fitch and DCR and none of such ratings
shall have been rescinded. The Underwriters and their counsel shall have
received copies of any opinions of counsel supplied to the rating organizations
relating to any matters with respect to the Notes. Any such opinions shall be
dated the Closing Date and addressed to the Underwriters or accompanied by
reliance letters to the Underwriters or shall state that the Underwriters may
rely upon them.
F. The Underwriters shall have received from the Company a certificate,
signed by the president, a senior vice president or a vice president of the
Company, dated the Closing Date, to the effect that the signer of such
certificate has carefully examined the Registration Statement and the Agreements
and that, to the best of his or her knowledge based upon reasonable
investigation:
(1) the representations and warranties of the Company in this
Agreement, as of the Closing Date, and in the other Agreements and in
all related Agreements, as of the date specified in such Agreements,
are true and correct, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date;
(2) there are no actions, suits or proceedings pending, or to
the best of such officer's knowledge, threatened against or affecting
the Company which if adversely determined, individually or in the
aggregate, would be reasonably likely to adversely affect the Company's
obligations under the Agreements in any material way; and no merger,
liquidation, dissolution or bankruptcy of the Company is pending or
contemplated;
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(3) the information contained in the Registration Statement
relating to the Company and the Receivables is true and accurate in all
material respects and nothing has come to his or her attention that
would lead such officer to believe that the Registration Statement
includes any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein not misleading;
(4) the information set forth in the List of Contracts
required to be furnished pursuant to the Receivables Transfer Agreement
is true and correct in all material respects;
(5) there has been no amendment or other document filed
affecting the articles of incorporation or bylaws of the Company since
December 1, 1998, and no such amendment has been authorized. No event
has occurred since November 16, 1998, which has affected the good
standing of the Company under the laws of the State of Delaware;
(6) there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
September 30, 1998; and
(7) each person who, as an officer or representative of the
Company, signed or signs the Registration Statement, the Agreements or
any other document delivered pursuant hereto, on the date of such
execution, or on the Closing Date, as the case may be, in connection
with the transactions described in this Agreement was, at the
respective times of such signing and delivery, and is now, duly elected
or appointed, qualified and acting as such officer or representative,
and the signatures of such persons appearing on such documents are
their genuine signatures.
The Company shall attach to such certificate a true and correct copy of
its articles of incorporation and bylaws which are in full force and effect on
the date of such certificate, and a certified true copy of the resolutions of
its Board of Directors with respect to the transactions contemplated herein.
G. There shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or in
the earnings, business or operations, since September 30, 1998, of (A) the
Company its subsidiaries and affiliates or (B) the Insurer, that is in the
Underwriters' judgment material and adverse and that makes it in the
Underwriters' judgment impracticable to market the Class A Notes on the terms
and in the manner contemplated in the Prospectus.
H. The Policy relating to the Class A Notes 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.
I. The Underwriters shall have received a favorable opinion of Xxxxx
Xxxx, counsel to the Insurer, dated the Closing Date and in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
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(1) the Insurer is a stock insurance corporation, duly
incorporated and validly existing under the laws of the State of New
York. The Insurer is validly licensed and authorized to issue the
Policy and perform its obligations under the Policy in accordance with
the terms thereof, under the laws of the State of New York;
(2) the execution and delivery by the Insurer of the Policy,
the Insurance Agreement and the Indemnification Agreement are within
the corporate power of the Insurer and have been authorized by all
necessary corporate action on the part of the Insurer; the Policy has
been duly executed and is the valid and binding obligation of the
Insurer enforceable in accordance with its terms except that the
enforcement of the Policy may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium, receivership and
other similar laws affecting creditors' rights generally and by general
principles of equity;
(3) the Insurer is authorized to deliver the Insurance
Agreement and the Indemnification Agreement, and the Insurance
Agreement and the Indemnification Agreement have been duly executed and
are the valid and binding obligations of the Insurer enforceable in
accordance with its terms except that the enforcement of the Insurance
Agreement and the Indemnification Agreement may be limited by laws
relating to bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting creditors' rights
generally and by general principles of equity and by public policy
considerations relating to indemnification for securities law
violations;
(4) no consent, approval, authorization or order of any state
or federal court or governmental agency or body is required on the part
of the Insurer, the lack of which would adversely affect the validity
or enforceability of the Policy; to the extent required by applicable
legal requirements that would adversely affect the validity or
enforceability of the Policy, the form of the Policy has been filed
with, and approved by, all governmental authorities having jurisdiction
over the Insurer in connection with such Policy;
(5) to the extent the Policy constitutes certificates within
the meaning of Section 2(1) of the Securities Act of 1933, as amended
(the "Act"), they are certificates that are exempt from the
registration requirements of the Act; and
(6) the information set forth under the caption "THE NOTE
INSURANCE POLICY AND THE NOTE INSURER" in the Prospectus, insofar as
such statements constitute a description of the Policy, accurately
summarizes the Policy.
In rendering this opinion, such counsel may rely, as to matters of
fact, on certificates of responsible officers of the Company, the Indenture
Trustee, the Insurer and public officials. Such opinion may assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Insurer.
J. On or prior to the Closing Date there shall not have occurred any
downgrading, nor shall any notice have been given of (A) any intended or
potential downgrading or (B) any review or possible change in rating the
direction of which has not been indicated, in the
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rating accorded the Insurer's claims paying ability by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of the Act.
K. The Underwriter shall have received from the Insurer a certificate,
signed by the President, a senior vice president or a vice president of the
Insurer, dated the Closing Date, to the effect that the signer of such
certificate has carefully examined the Policy, the Insurance Agreement, the
Indemnification Agreement and the related documents and that, to the best of his
or her knowledge based on reasonable investigation:
(1) there are no actions, suits or proceedings pending or
threatened against or affecting the Insurer which, if adversely
determined, individually or in the aggregate, would adversely affect
the Insurer's performance under the Policy, the Insurance Agreement or
the Indemnification Agreement;
(2) each person who as an officer or representative of the
Insurer, signed or signs the Policy, the Insurance Agreement, the
Indemnification Agreement or any other document delivered pursuant
hereto, on the date thereof, or on the Closing Date, in connection with
the transactions described in this Agreement was, at the respective
times of such signing and delivery, and is now, duly elected or
appointed, qualified and acting as such officer or representative, and
the signatures of such persons appearing on such documents are their
genuine signatures;
(3) the information contained in the Prospectus under the
caption "THE NOTE INSURANCE POLICY AND THE NOTE INSURER" is true and
correct in all material respects and does not omit to state a material
fact with respect to the description of the Policy or the ability of
the Insurer to meet its payment obligations under the Policy;
(4) the tables regarding the Insurer's capitalization set
forth in the Prospectus under the heading "THE NOTE INSURANCE POLICY
AND THE NOTE INSURER" presents fairly the capitalization of the Insurer
as of September 30, 1998;
(5) on or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating,
the direction of which has not been indicated, in the rating accorded
the claims paying ability of the Insurer by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of the Act;
(6) the consolidated financial statements of the Insurer, a
wholly owned subsidiary of MBIA Inc., and its subsidiaries as of
December 31, 1997 and December 31, 1996 and for the three years ended
December 31, 1997, prepared in accordance with generally accepted
accounting principles, included in the Annual Report on Form 10-K of
MBIA Inc., for the year ended December 31, 1997, and the consolidated
financial statements of the Insurer and its subsidiaries as of
September 30, 1998 and for the nine-month periods ended September 30,
1998 and September 30, 1997 included in the Quarterly Report on Form
10-Q of MBIA Inc. for the period ending September 30, 1998,
incorporated by referenced into the Prospectus, fairly present in all
material respects the financial
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condition of the Insurer as of such date and for the period covered by
such statements in accordance with generally accepted accounting
principles consistently applied; and
(7) to the best knowledge of such officer, since September 30,
1998, no material adverse change has occurred in the financial position
of the Insurer other than as set forth in the Prospectus.
The officer of the Insurer certifying to items 5 through 7 shall be an officer
in charge of a principal financial function.
The Insurer shall attach to such certificate a true and correct copy of
its certificate or articles of incorporation, as appropriate, and its bylaws,
all of which are in full force and effect on the date of such certificate.
L. The Underwriters shall have received a favorable opinion of counsel
to the Indenture Trustee, dated the Closing Date and in form and substance
satisfactory to the Underwriters, to the effect that:
(1) the Indenture Trustee is a banking corporation duly
organized, validly existing and in good standing under the laws of the
State of New York and has the power and authority to enter into and to
take all actions required of it under the Indenture;
(2) each of (i) the Indenture, (ii) the Servicing Agreement
and (iii) the Insurance Agreement has been duly authorized, executed
and delivered by the Indenture Trustee and each constitutes the legal,
valid and binding obligation of the Indenture Trustee, enforceable
against the Indenture Trustee in accordance with its respective terms,
except as enforceability thereof may be limited by (A) bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally, as such laws would apply in
the event of a bankruptcy, insolvency or reorganization or similar
occurrence affecting the Indenture Trustee, and (B) general principles
of equity regardless of whether such enforcement is sought in a
proceeding at law or in equity;
(3) no consent, approval, authorization or other action by any
governmental agency or body or other tribunal is required on the part
of the Indenture Trustee in connection with its execution and delivery
of the Indenture, the Servicing Agreement or the Insurance Agreement or
the performance of its obligations thereunder;
(4) the Notes have been duly executed, authenticated and
delivered by the Indenture Trustee and assuming delivery and payment
are validly issued therefor and outstanding and are entitled to the
benefits of the Indenture; and
(5) the execution and delivery of, and performance by the
Indenture Trustee of its obligations under, the Indenture, the
Servicing Agreement or the Insurance Agreement do not conflict with or
result in a violation of any statute or regulation applicable to the
Indenture Trustee, or the charter or bylaws of the Indenture Trustee,
or to the best knowledge of such counsel, any governmental authority
having jurisdiction
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over the Indenture Trustee or the terms of any indenture or other
agreement or instrument to which the Indenture Trustee is a party or by
which it is bound.
In rendering such opinion, such counsel may rely, as to matters of
fact, on certificates of responsible officers of the Company, the Indenture
Trustee and public officials. Such opinion may also assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Indenture Trustee.
M. The Underwriters shall have received from the Indenture Trustee a
certificate, signed by the president, a senior vice president or a vice
president of the Indenture Trustee, dated the Closing Date, to the effect that
each person who, as an officer or representative of the Indenture Trustee,
signed or signs the Notes, the Indenture, the Servicing Agreement or any other
document delivered pursuant hereto, on the date hereof or on the Closing Date,
in connection with the transactions described in the Indenture was, at the
respective times of such signing and delivery, and is now, duly elected or
appointed, qualified and acting as such officer or representative, and the
signatures of such persons appearing on such documents are their genuine
signatures.
N. The Underwriters shall have received a favorable opinion of counsel
to the Owner Trustee, dated the Closing Date and in form and substance
satisfactory to the Underwriters, to the effect that:
(1) The Owner Trustee is duly incorporated, validly existing
and in good standing as a banking corporation under the laws of the
State of Delaware.
(2) The Owner Trustee has the power and authority to execute,
deliver and perform the Trust Agreement, the Receivables Transfer
Agreement, the Servicing Agreement and the Indenture (collectively, the
"Owner Trustee Agreements").
(3) Each of the Owner Trust Agreements has been duly
authorized, executed and delivered by the Owner Trustee and constitutes
a legal, valid and binding obligation of the Owner Trustee, enforceable
against the Owner Trustee, in accordance with its terms.
(4) To the best of counsel's knowledge, without independent
investigation, neither the execution or delivery by the Owner Trustee
of the Owner Trustee Agreements nor the compliance by the Owner Trustee
with any of the terms thereof or consummation of the transactions
contemplated thereby requires the consent or approval of, the giving of
notice to, the registration with, or the taking of any action with
respect to, any governmental authority or agency under the laws of the
State of Delaware.
(5) Neither the execution, delivery and performance by the
Owner Trustee of the Owner Trustee Agreements, nor the consummation of
the transactions contemplated thereby, nor compliance with the terms
thereof, will violate or result in a breach of, or constitute a default
under the provisions of such Owner Trustee Agreements or the articles
of association or by-laws of the Owner Trustee or, to the best of
counsel's knowledge, without independent investigation, any law, rule
or regulation of the State of Delaware applicable to the Owner Trustee.
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O. The Underwriters shall have received from the Owner Trustee a
certificate, signed by the president, a senior vice president or a vice
president of the Owner Trustee, dated the Closing Date, to the effect that each
person who, as an officer or representative of the Owner Trustee, signed or
signs the Certificates, the Owner Trustee Agreements or any other document
delivered pursuant hereto, on the date hereof or on the Closing Date, in
connection with the transactions described in the Indenture was, at the
respective times of such signing and delivery, and is now, duly elected or
appointed, qualified and acting as such officer or representative, and the
signatures of such persons appearing on such documents are their genuine
signatures.
P. The Underwriters shall have received from Xxxxx Xxxxxxxxxx LLP,
special counsel to the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Class A Notes, the Prospectus
and such other related matters as the Underwriters shall reasonably require.
Q. The Underwriters and their counsel shall have received copies of any
opinions of counsel to the Company or the Indenture Trustee supplied to the
Indenture Trustee relating to matters with respect to the Notes, the formation
of the Trust or the acquisition of the Receivables. Any such opinions shall be
satisfactory to the Underwriters in form and substance.
R. The Underwriters shall have received an opinion from Xxxxx
Xxxxxxxxxx LLP, special tax counsel to the Company to the effect that the
statements in the Prospectus Supplement under the heading "CERTAIN FEDERAL
INCOME TAX CONSIDERATIONS" accurately describe the material federal income tax
consequences to the holders of the Class A Notes.
S. The Underwriters shall have received such further information,
certificates and documents as the Underwriters may reasonably have requested not
fewer than three (3) full business days prior to the Closing Date.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all respects when and as provided in this Agreement, if the
Company is in breach of any covenants or agreements contained herein or if any
of the opinions and certificates mentioned above or elsewhere in this Agreement
shall not be in all material respects reasonably satisfactory in form and
substance to the Underwriters and their counsel, this Agreement and all
obligations of the Underwriters hereunder, may be canceled on, or at any time
prior to, the Closing Date by the Underwriters. Notice of such cancellation
shall be given to the Company in writing, or by telephone or telegraph confirmed
in writing.
7. Expenses. If the sale of the Class A Notes provided for herein is
not consummated by reason of a default by the Company in its obligations
hereunder, then the Company will reimburse the Underwriters, upon demand, for
all reasonable out-of-pocket expenses (including, but not limited to, the
reasonable fees and expenses of counsel for the Underwriters) that shall have
been incurred by it in connection with its investigation with regard to the
Company and the Class A Notes and the proposed purchase and sale of the Class A
Notes.
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8. Indemnification and Contribution.
A. Regardless of whether any Class A Notes are sold, the Company will
indemnify and hold harmless each Underwriter, each of their respective officers
and directors and each person who controls each Underwriter within the meaning
of the Act or the Securities Exchange Act of 1934 (the "1934 Act"), against any
and all losses, claims, damages, or liabilities (including the cost of any
investigation, legal and other expenses incurred in connection with and amounts
paid in settlement of any action, suit, proceeding or claim asserted), joint or
several, to which they may become subject, under the Act, the 1934 Act or other
federal or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained (i) in the Registration Statement, or any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary to make the
statements therein, not misleading or (ii) in the Basic Prospectus or the
Prospectus Supplement or any amendment thereto or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will reimburse
each such indemnified party for any legal or other expenses reasonably incurred
by it in connection with investigating or defending against such loss, claim,
damage, liability or action; provided, however, that the Company shall 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 or omission or alleged omission made therein in reliance upon and in
conformity with written information relating to the Underwriter furnished to the
Company by such Underwriter specifically for use in connection with the
preparation thereof.
B. Regardless of whether any Class A Notes are sold, each Underwriter,
severally and not jointly, will indemnify and hold harmless the Company, each of
its officers and directors and each person, if any, who controls the Company
within the meaning of the Act or the 1934 Act against any losses, claims,
damages or liabilities to which they become subject under the Act, the 1934 Act
or other federal or state law or regulation, at common law or otherwise, to the
same extent as the foregoing indemnity, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in (i)
the Registration Statement, or any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact necessary to make the statements therein not misleading or in
(ii) the Basic Prospectus or the Prospectus Supplement or any amendment thereto
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in 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
therein in reliance upon and in conformity with written information relating to
the Underwriter furnished to the Company by such Underwriter specifically for
use in the preparation thereof and so acknowledged in writing, and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending against such loss, claim,
damage, liability or action.
C. In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to paragraphs
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A, B and E of this Section 8, such person (hereinafter called the indemnified
party) shall promptly notify the person against whom such indemnity may be
sought (hereinafter called the indemnifying party) in writing thereof; but the
omission to notify the indemnifying party shall not relieve such indemnifying
party from any liability which it may have to any indemnified party otherwise
than under such Paragraph. The indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such proceeding
any indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel, or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties, and that
all such fees and expenses shall be reimbursed as they are incurred. Such firm
shall be designated in writing by the Underwriters in the case of parties
indemnified pursuant to paragraph A of this Section 8 and by the Company in the
case of parties indemnified pursuant to paragraphs B and E of this Section 8.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
above, the indemnifying party agrees that it shall be liable for any settlement
of any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding 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 claims that are the subject matter of such
proceeding.
D. Each Underwriter agrees, severally and not jointly, to provide the
Company no later than the date on which the Prospectus Supplement is required to
be filed pursuant to Rule 424 with a copy of any Derived Information (defined
below) for filing with the Commission on Form 8-K.
E. Each Underwriter agrees, jointly and not severally, assuming all
Company-Provided Information (defined below) is accurate and complete in all
material respects, to indemnify and hold harmless the Company, its respective
officers and directors and each person who controls the Company within the
meaning of the Securities Act or the Exchange Act against any and all losses,
claims, damages
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or liabilities, joint or several, to which they 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 of a material fact contained in the Derived
Information provided by such Underwriter, 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, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by him, her or it in connection with investigating or defending or
preparing to defend any such loss, claim, damage, liability or action as such
expenses are incurred. The several obligations of each Underwriter under this
Section 8(E) shall be in addition to any liability which each Underwriter may
otherwise have.
The procedures set forth in Section 8(C) shall be equally applicable to
this Section 8(E).
F. For purposes of this Section 8, the term "Derived Information" means
such portion, if any, of the information delivered to the Companies pursuant to
Section 8(D) for filing with the Commission on Form 8-K as: (i) is not contained
in the Prospectus without taking into account information incorporated therein
by reference; and (ii) does not constitute Company-Provided Information.
"Company-Provided Information" means any computer tape furnished to the
Underwriters by the Company concerning the assets comprising the Trust.
G. If the indemnification provided for in this Section 8 is unavailable
to an indemnified party in respect of any losses, claims, damages or liabilities
referred to herein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and each Underwriter from the sale of the Class A Notes 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 relative benefits
referred to in clause (i) above but also the relative fault of the Company and
of each Underwriter in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company and each
Underwriter shall be deemed to be in such proportion so that each Underwriter is
responsible for that portion determined by multiplying the total amount of such
losses, claims, damages and liabilities, including legal and other expenses, by
a fraction, the numerator of which is (x) the excess of the Aggregate Resale
Price (as defined below) of the Class A Notes underwritten by such Underwriter
over the aggregate purchase price of such Class A Notes specified in Section 4
of this Agreement and the related Prospectus Supplement, and the denominator of
which is (y) the Aggregate Resale Price of such Class A Notes, and the Company
is responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of the immediately preceding
sentence, the "Aggregate Resale Price" of the Class A Notes at the time of any
determination shall be the weighted average of the purchase prices (in each case
expressed as a percentage of the aggregate principal amount of the Class A Notes
so purchased), determined on the basis of such principal amounts, paid to the
Underwriter by all subsequent purchasers that purchased the Class A Notes on or
prior to such date of determination. The relative fault of the Company and each
Underwriter 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
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fact relates to information supplied by the Company or by any of the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
H. The Company and each Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph G of this Section 8. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph G of this Section 8
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Xxxxxxx 0, xxxx of the Underwriters shall
be required to contribute any amount by which the Aggregate Resale Price exceeds
the amount of any damages that such Underwriter has otherwise been required to
pay by reason of any untrue or alleged untrue statement or omission or alleged
omission.
I. The Company and each Underwriter each expressly waive, and agree not
to assert, any defense to their respective indemnification and contribution
obligations under this Section 8 which they might otherwise assert based upon
any claim that such obligations are unenforceable under federal or state
securities laws or by reasons of public policy.
J. The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Underwriter within the meaning of the Act or the 1934 Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any liability
that the Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company and to each person, if any, who
controls the Company within the meaning of the Act or the 1934 Act; provided,
however, that in no event shall the Company or any of the Underwriters be liable
for double indemnification.
9. Information Supplied by Underwriters. The statements set forth on
the front cover page of the Prospectus Supplement regarding market-making and
under the heading "Method of Distribution" in the Prospectus Supplement (to the
extent such statements relate to the Underwriter) constitute the only
information furnished by the Underwriters to the Company for the purposes of
Sections 2(B) and 8(A) hereof. Each Underwriter confirms that such statements
(to such extent) are correct.
10. Notices. All communications hereunder shall be in writing and, if
sent to the Underwriters, shall be mailed or delivered or telecopied and
confirmed in writing to Wheat First Securities, Inc., doing business as First
Union Capital Markets, a division of Wheat First Securities, Inc., Xxx Xxxxx
Xxxxx Xxxxxx, XX-00, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxx Xxxxxxxxx;
and, if sent to the Company, shall be mailed, delivered or telegraphed and
confirmed in writing to First Sierra Financial, Inc., 000 Xxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000, Attention: Xxxxx Xxxxxxx.
11. Survival. All representations, warranties, covenants and agreements
of the Company contained herein or in agreements or certificates delivered
pursuant hereto, the
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agreements of the Underwriters and the Company contained in Section 8 hereof,
and the agreement of the Underwriters contained in Section 3 hereof, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of the Underwriters or any controlling persons, or any
subsequent purchaser or the Company or any of its officers, directors or any
controlling persons, and shall survive delivery of and payment for the Class A
Notes. The provisions of Sections 5, 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
12. Termination. The Underwriters shall have the right to terminate
this Agreement by giving notice as hereinafter specified at any time at or prior
to the Closing Date if (a) trading generally shall have been suspended or
materially limited on or by, as the case may be, the New York Stock Exchange or
the American Stock Exchange, (b) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (c) a
general moratorium on commercial banking activities shall have been declared by
either federal or New York State authorities, (d) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis which, in the Underwriters' reasonable judgment, is material
and adverse, and, in the case of any of the events specified in clauses (a)
through (d), such event singly or together with any other such event makes it in
the Underwriters' reasonable judgment impractical to market the Class A Notes.
Any such termination shall be without liability of any other party except that
the provisions of Paragraph G of Section 5 (except with respect to expenses of
the Underwriters) and Sections 7 and 8 hereof shall at all times be effective.
This Agreement will inure to the benefit of and be binding upon the
signatories hereto and their respective successors and assigns (which successors
and assigns do not include any person purchasing a Class A Note from the
Underwriters), and the officers and directors and controlling persons referred
to in Section 8 hereof and their respective successors and assigns, and no other
persons will have any right or obligations hereunder.
14. APPLICABLE LAW; VENUE. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. ANY
ACTION OR PROCEEDING BROUGHT TO ENFORCE OR ARISING OUT OF ANY PROVISION OF THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A STATE OR FEDERAL COURT LOCATED IN THE
BOROUGH OF MANHATTAN, NEW YORK CITY, NEW YORK, AND THE PARTIES HERETO EXPRESSLY
CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO WAIVE ANY DEFENSE OR
CLAIM OF FORUM NON CONVENIENS THEY MAY HAVE WITH RESPECT TO ANY SUCH ACTION OR
PROCEEDING BROUGHT.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall together constitute but one and the same
instrument.
16. Amendments and Waivers. This Agreement may be amended, modified,
altered or terminated, and any of its provisions waived, only in a writing
signed on behalf of the signatories hereto.
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17. Default of Underwriters. If any of the Underwriters defaults
in its obligations to purchase the Class A Notes offered to it hereunder (such
Underwriter, the "Defaulting Underwriter"), then the remaining Underwriters (the
"Performing Underwriters") shall have the option, but not the obligation, to
purchase all, but not less than all, of the Class A Notes offered to the
Defaulting Underwriter. If a Performing Underwriter elects not to exercise such
option, then this Agreement will terminate without liability on the part of such
Performing Underwriter. Nothing contained herein shall relieve the Defaulting
Underwriter from any and all liabilities to the Company and the Performing
Underwriters resulting from the default of the Defaulting Underwriter.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and the Company in accordance with its terms.
Very truly yours,
FIRST SIERRA FINANCIAL, INC.
By: /s/ E. Xxxxx Xxxxxxx
--------------------------------
Name: E. Xxxxx Xxxxxxx
Title: Senior Vice President
Agreed to and Accepted by:
(as of the date hereof)
WHEAT FIRST SECURITIES, INC.,
doing business as FIRST UNION CAPITAL MARKETS,
a division of WHEAT FIRST SECURITIES, INC.
as Representative of the Several Underwriters
By: /s/ Xxxxxx Xxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
[Underwriting Agreement Signature Page]
23
Annex A
Underwriting
Class A-1 Notes
Principal
Underwriter Percentage Amount
--------------------------------------------------------------------------------
First Union Capital Markets 50% $35,343,570
Prudential Securities Incorporated 40% $28,274,856
Bear, Xxxxxxx & Co. Inc. 10% $ 7,068,714
TOTAL 100% $70,687,140
Class A-2 Notes
Principal
Underwriter Percentage Amount
--------------------------------------------------------------------------------
First Union Capital Markets 50% $26,928,435
Prudential Securities Incorporated 40% $21,542,748
Bear, Xxxxxxx & Co. Inc. 10% $ 5,385,687
TOTAL 100% $53,856,869
Class A-3 Notes
Principal
Underwriter Percentage Amount
--------------------------------------------------------------------------------
First Union Capital Markets 50% $26,255,224
Prudential Securities Incorporated 40% $21,004,179
Bear, Xxxxxxx & Co. Inc. 10% $ 5,251,045
TOTAL 100% $52,510,447
Class A-4 Notes
Principal
Underwriter Percentage Amount
--------------------------------------------------------------------------------
First Union Capital Markets 50% $35,343,570
Prudential Securities Incorporated 40% $28,274,856
Bear, Xxxxxxx & Co. Inc. 10% $ 7,068,714
TOTAL 100% $70,687,140
