CHARTER EQUIPMENT LEASE 1999-1 LLC (Issuer)
CHARTER FINANCIAL, INC. (Seller and Servicer)
FORM OF UNDERWRITING AGREEMENT
August [__], 1999
First Union Capital Markets Corp.
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Ladies and Gentlemen:
Charter Equipment Lease 1999-1 LLC (the "Issuer"), proposes to issue the
asset-backed notes identified in Schedule I hereto (the "Notes"). The Notes will
be issued pursuant to and secured by an indenture (the "Indenture") to be
entered into among the Issuer, Charter Financial, Inc. ("Charter"), as servicer,
and LaSalle Bank National Association, as trustee (the "Trustee"), the form of
which has been filed as an exhibit to the Registration Statement (as defined
below). The Notes identified in Schedule I hereto will be sold in a public
offering through First Union Capital Markets Corp. (the "Underwriter"). To the
extent not defined herein, capitalized terms used herein have the meanings
assigned to such terms in the Indenture.
Section 1. Representations and Warranties. The Issuer and Charter, jointly
and severally, represent and warrant to the Underwriter that:
(a) The Issuer has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement on Form S-1 (registration number 333-64045), including a form of
prospectus, relating to the Notes. The registration statement, and any
post-effective amendment thereto, each in the form heretofore delivered to the
Underwriter and, excluding exhibits thereto, have been declared effective by the
Commission. As used in this Underwriting Agreement, "Effective Time" means the
date and the time as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission and "Effective Date" means the date of the Effective Time. The Issuer
has furnished to the Underwriter, for use by the Underwriter, copies of one or
more preliminary prospectuses (each, a "Preliminary Prospectus"), relating to
the Notes. Except where the context otherwise requires, the registration
statement, as amended at the Effective Time, including all documents filed as a
part thereof, and including any information contained in a prospectus
subsequently filed with the Commission pursuant to Rule 424(b) under the
Securities Act and deemed to be part of the registration statement as of the
Effective Time pursuant to Rule
430A under the Securities Act, is herein called the "Registration Statement",
and the prospectus, in the form filed by the Issuer with the Commission pursuant
to Rule 424(b) under the Securities Act or, if no such filing is required, the
form of final prospectus included in the Registration Statement at the time it
became effective, is hereinafter called the "Prospectus".
(b) The Registration Statement relating to the Notes, has been filed with
the Commission and such Registration Statement has become effective. No stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceeding for that purpose has been instituted or, to the knowledge of
the Issuer or Charter, threatened by the Commission.
(c) The Registration Statement conforms, and any amendments or supplements
thereto and the Prospectus will conform, in all material respects to the
requirements of the Securities Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and do not and will not, as of the
applicable effective date as to the Registration Statement and any amendment
thereto, as of the applicable filing date as to the Prospectus and any amendment
or supplement thereto, and as of the Closing Date, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however that this representation and warranty shall not apply to (i) that part
of the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) of the Trustee under the Trust
Indenture Act or (ii) any Underwriter's Information (as defined in Section 10(d)
herein) contained therein. The Indenture conforms in all respects to the
requirements of the Trust Indenture Act and the rules and regulations of the
Commission thereunder.
(d) The representations and warranties of the Issuer in Section [__] of the
Servicing Agreement will be true and correct as of the Closing Date.
(e) The representations and warranties of Charter in Sections 2 and 3 of
the Servicing Agreement and in Section 3 of the Seller Contribution and Sale
Agreement will be true and correct as of the Closing Date.
(f) Charter and each of its subsidiaries involved in the ownership,
origination, or security of, or otherwise related to, the Leases have been duly
incorporated and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification, and have all
power and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure to so
qualify or have such power or authority could not have, individually or in the
aggregate, a material adverse effect on the condition (financial or otherwise),
results of operations, business or prospects of Charter and its subsidiaries
taken as a whole.
(g) All the outstanding membership interests in the Issuer have been duly
authorized and validly issued, are fully paid and nonassessable and, except to
the extent set forth
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in the Registration Statement, are owned by Charter directly or indirectly
through one or more wholly-owned subsidiaries, free and clear of any claim,
lien, encumbrance, security interest, restriction upon voting or transfer or any
other claim of any third party.
(h) (i) the Servicing Agreement, when duly executed by the Issuer and
Charter and delivered by such parties, will constitute a valid and binding
agreement of the Issuer and Charter enforceable against them in accordance with
its terms; (ii) the Indenture, when duly executed by the Trustee and delivered
by the Trustee, will constitute a valid and binding agreement of the Issuer and
Charter enforceable against the Issuer and Charter in accordance with its terms;
(iii) the Notes, when duly executed, authenticated, issued and delivered as
provided in the Indenture, will be duly and validly issued and outstanding and
will constitute valid and binding obligations of the Issuer entitled to the
benefits of the Indenture and enforceable in accordance with its terms; and (iv)
the Indenture, the Servicing Agreement, the Contribution and Sale Agreement
between Charter and Charter Funding Corporation V (the "Transferor") dated as of
August [__], 1999 (the "Seller Contribution and Sale Agreement") and the
Contribution and Sale Agreement between the Transferor and the Issuer dated as
of August [__], 1999 (the "Transferor Contribution and Sale Agreement")
(collectively, the "Transaction Agreements") and the Notes conform to the
descriptions thereof contained in the Prospectus.
(i) The execution, delivery and performance of this Underwriting Agreement,
the Transaction Agreements to which Charter or its subsidiaries, as the case may
be, is a party and the issuance and sale of the Notes, the consummation of the
transactions contemplated hereby and thereby will not conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which Charter or any of its subsidiaries is a party
or by which Charter or any of its subsidiaries is bound or to which any of the
property or assets of Charter or any of its subsidiaries is subject, nor will
such actions result in any violation of the provisions of Charter or by-laws of
Charter or any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
Charter or any of its subsidiaries or any of their properties or assets; and
except for the registration of the Notes under the Securities Act, the
qualification of the Indenture under the Trust Indenture Act, such consents,
approvals, authorizations, registrations or qualifications as may be required
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
applicable state securities laws in connection with the purchase and
distribution of the Notes by the Underwriter and the filing of any financing
statements required to perfect the Issuer's interest in the Granted Assets, no
consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Underwriting Agreement or the Transaction
Agreements, the issuance and sale of the Notes and the consummation of the
transactions contemplated hereby and thereby.
(j) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act and which have not been so described or filed.
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(k) There are no legal or governmental proceedings pending to which Charter
or any of its subsidiaries is a party or of which any property or assets of
Charter or any of its subsidiaries is the subject which, individually or in the
aggregate, if determined adversely to Charter or any of its subsidiaries, are
reasonably likely to have a material adverse effect on the condition (financial
or otherwise), results of operations, business or prospects of Charter and its
subsidiaries taken as a whole; and to the best of Charter's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(l) Neither Charter nor any of its subsidiaries involved in the ownership,
origination, or security of, or otherwise related to, the Leases (i) is in
violation of its charter or by-laws, (ii) is in default in any material respect,
and no event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its property or assets is subject or
(iii) is in violation in any respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be subject,
except any violation or default that could not have a material adverse effect on
the condition (financial or otherwise), results of operations, business or
prospects of Charter and its subsidiaries taken as a whole.
(m) This Underwriting Agreement has been duly authorized, executed and
delivered by each of the Issuer and Charter; and
(n) The Issuer is not required to be registered under the Investment
Company Act of 1940, as amended.
Section 2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the covenants, representations and warranties herein set forth,
the Issuer agrees to sell to the Underwriter, and the Underwriter agrees to
purchase from the Issuer, the principal amount of Notes set forth in Schedule II
hereto. The purchase price for the Notes shall be as set forth in Schedule I
hereto.
Section 3. Delivery and Payment. Payment for the Notes shall be made to the
Issuer or to its order by wire transfer of same day funds at the office of Xxxxx
Xxxxxxxxxx LLP in New York, New York at 9:00 A.M., New York time, on the Closing
Date (as hereinafter defined), or at such other time on the same or such other
date as the Underwriter and the Issuer may agree upon. The time and date of such
payment for the Notes as specified in Schedule I hereto are referred to herein
as the "Closing Date." As used herein, the term "Business Day" means any day
other than a day on which banks are permitted or required to be closed in New
York City or Charlotte, North Carolina.
Payment for the Notes shall be made against delivery to the Underwriter of
the Notes registered in the name of Cede & Co. as nominee of The Depository
Trust Company and in such denominations as the Underwriter shall request in
writing not later than two full Business Days prior to the Closing Date. The
Issuer shall make the Notes available for inspection by the
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Underwriter in New York, New York not later than one full Business Day prior to
the Closing Date.
Section 4. Offering by the Underwriter. It is understood that the
Underwriter proposes to offer the Notes for sale to the public, which may
include selected dealers, as set forth in the Prospectus.
Section 5. Covenants of the Issuer and Charter. The Issuer and Charter,
jointly and severally, covenant and agree with the Underwriter as follows:
(a) The Issuer will prepare the Prospectus in a form approved by the
Underwriter and file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Underwriting Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Securities Act.
(b) During the period that a prospectus relating to the Notes is required
to be delivered under the Securities Act in connection with sales of such Notes
(such period being hereinafter sometimes referred to as the "prospectus delivery
period"), before filing any amendment or supplement to the Registration
Statement or the Prospectus, the Issuer will furnish to the Underwriter a copy
of the proposed amendment or supplement for review and will not file any such
proposed amendment or supplement to which the Underwriter reasonably objects.
(c) During the prospectus delivery period, the Issuer will advise the
Underwriter promptly after it receives notice thereof, (i) when any amendment to
the Registration Statement shall have become effective; (ii) of any request by
the Commission for any amendment or supplement 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 initiation or threatening of any proceeding for that purpose,
(iv) of the issuance by the Commission of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or the initiation or
threatening of any proceedings for that purpose and (v) of any notification with
respect to any suspension of the qualification of the Notes for offer and sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and will use its best efforts to prevent the issuance of any such stop
order or suspension and, if any is issued, will promptly use its best efforts to
obtain the withdrawal thereof.
(d) If, at any time during the prospectus delivery period, any event occurs
as a result of which the Prospectus as then 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 Securities Act, the Issuer promptly
will prepare and file with the Commission, an amendment or a supplement which
will correct such statement or omission or effect such compliance.
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(e) The Issuer will endeavor to qualify the Notes for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Underwriter shall
reasonably request and will continue such qualification in effect so long as
reasonably required for distribution of the Notes; provided, however, that the
Issuer shall not be obligated to qualify to do business in any jurisdiction in
which it is not currently so qualified; and provided, further, that the Issuer
shall not be required to file a general consent to service of process in any
jurisdiction.
(f) The Issuer will furnish to the Underwriter, without charge, two copies
of the Registration Statement (including exhibits thereto), one of which will be
signed, and to the Underwriter five conformed copies of the Registration
Statement (without exhibits thereto) and, during the prospectus delivery period,
as many copies of any Preliminary Prospectus and the Prospectus and any
supplement thereto as the Underwriter may reasonably request.
(g) For a period from the date of this Underwriting Agreement until the
retirement of the Notes, or until such time as the Underwriter shall cease to
maintain a secondary market in the Notes, whichever first occurs, the Issuer
will deliver to the Underwriter (i) the annual statements of compliance, (ii)
the annual independent certified public accountants' reports furnished to the
Trustee, (iii) all documents required to be distributed to Noteholders and (iv)
all documents filed with the Commission pursuant to the Exchange Act or any
order of the Commission thereunder, in each case as provided to the Trustee or
filed with the Commission, as soon as such statements and reports are furnished
to the Trustee or filed or as soon thereafter as practicable.
(h) To the extent, if any, that the rating provided with respect to the
Notes by the rating agency or agencies that initially rate the Notes is
conditional upon the furnishing of documents or the taking of any other actions
by the Issuer or Charter, the Issuer or Charter, as the case may be, shall
furnish such documents and take any such other actions.
(i) The Issuer will make generally available to Noteholders and to the
Underwriter as soon as practicable an earnings statement covering a period of at
least twelve months beginning with the first fiscal quarter of the Issuer
occurring after the Effective Date of the Registration Statement, which shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of
the Commission promulgated thereunder.
(j) For a period of 90 days from the date hereof, the Issuer will not offer
for sale, sell, contract to sell or otherwise dispose of, directly or
indirectly, or file a registration statement for, or announce any offering of,
any securities collateralized by, or evidencing an ownership interest in, any
asset-backed securities of the Issuer (other than the Notes purchased hereunder)
without the prior written consent of the Underwriter.
Section 6. Conditions to the Obligations of the Underwriter. The
obligations of the Underwriter hereunder are subject to the accuracy, when made
and on the Closing Date, of the representations and warranties of the Issuer and
Charter contained herein, in the Servicing Agreement, the Seller Contribution
and Sale Agreement, the Transferor Contribution and Sale Agreement and in
Indenture, to the accuracy of the statements of the Issuer and Charter made in
any certificates pursuant to the provisions hereof, to the performance by the
Issuer and Charter of
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their respective obligations hereunder and to each of the following additional
terms and conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424 in the manner and within the applicable time period prescribed for such
filing by the rules and regulations of the Commission under the Securities Act
and in accordance with Section 5(a) of this Underwriting Agreement; and, prior
to the Closing Date, no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceedings for such purpose shall have been initiated or threatened by the
Commission; and all requests for additional information from the Commission with
respect to the Registration Statement shall have been complied with to the
reasonable satisfaction of the Underwriter.
(b) (i) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Underwriting Agreement, the Transaction
Agreements, the Notes, the Registration Statement, the Preliminary Prospectus
and the Prospectus, and all other legal matters relating to such agreements and
the transactions contemplated hereby and thereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriter, and the
Issuer shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters and (ii)
prior to or contemporaneously with the purchase of Notes hereunder, all
transactions contemplated to be consummated under such Transaction Agreements on
the Closing Date (including, without limitation, the issuance and placement of
any subordinated, privately-placed securities) shall have been so consummated to
the reasonable satisfaction of the Underwriter.
(c) Xxxxx Xxxxxxxxxx LLP shall have furnished to the Underwriter their
written opinion, as U.S. counsel to the Issuer and Charter, addressed to the
Underwriter and dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriter and its counsel with respect to, or to the
effect that: (i) the Notes have been duly authorized, executed and delivered by
the Issuer and constitute the legal, valid and binding obligations of the
Issuer, enforceable in accordance with their terms (subject to customary
exceptions as to bankruptcy and laws affecting creditors' rights) and are
entitled to the benefits of the Indenture; (ii) there is no legal or
governmental proceeding pending or, to the best of such counsel's knowledge,
threatened against the Issuer or Charter which (A) asserts the invalidity of
this Underwriting Agreement, the Transaction Agreements or the Notes, (B) would
have a material adverse effect on the issuance of the Notes or the tax
characteristics of the Notes, or (C) would have a material adverse effect on the
consummation of, or any of Charter's, the Transferor's or the Issuer's
performance under, any of the transactions contemplated by this Underwriting
Agreement or the Transaction Agreements; (iii) each of this Underwriting
Agreement and the Transaction Agreements are the legal, valid and binding
obligation of the Issuer, the Transferor and Charter, as applicable, enforceable
against each of them in accordance with its terms (subject to customary
exceptions relating to bankruptcy and laws affecting creditors' rights); (iv)
assuming no prior financing statements covering the Leases are in effect based
on a review of certain UCC searches, that financing statements covering the
Leases and naming (A) Charter as debtor and the Transferor as secured party, (B)
the Issuer as secured party and Transferor as debtor and (C) the
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Issuer as debtor and the Trustee as secured party are being filed in the
appropriate filing offices of the State of New York, and assuming that the
Trustee has taken possession of the Leases, the Trustee has a first priority
perfected security interest in all right, title and interest of Charter, the
Transferor and the Issuer in the Leases; (v) on the Closing Date the
Registration Statement is effective, and, that to the best of such counsel's
knowledge no stop order suspending the effectiveness of the Registration
Statement has been issued or is threatened, and that although such counsel is
not passing on the factual accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus, nothing came to such
counsel's attention that leads such counsel to believe that either the
Registration Statement or the Prospectus (as of the Effective Date or the date
of the Prospectus) contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (vi) the Indenture has been duly qualified under the Trust
Indenture Act; (vii) the execution, delivery and performance of the Transaction
Agreements by the parties thereto do not require compliance with any "bulk
sales" laws; (viii) the Notes will be classified as indebtedness for tax
purposes; (ix) none of Charter, the Transferor or the Issuer are, or will be as
a result of the transactions contemplated under the Transaction Agreements, an
"investment company" or a company "controlled by" an "investment company", in
each case within the meaning of the Investment Company Act of 1940, as amended;
(x) the tax and ERISA sections in the Prospectus are accurate and fairly present
the information required to be shown therein; and (x) such other matters as the
Underwriter shall reasonably request. In rendering such opinion, counsel may
rely, to the extent deemed proper and as stated therein, as to matters of fact
on certificates of responsible officers of the Issuer or Charter and public
officials and as to matters of state law of jurisdictions other than the
jurisdictions in which such counsel is admitted to practice, on opinions of
local counsel satisfactory to the Underwriter.
(d) Xxxxxxx Xxxxxxxx shall have furnished to the Underwriter his written
opinion, as General Counsel to Charter, addressed to the Underwriter and dated
the Closing Date, in form and substance reasonably satisfactory to the
Underwriter and its counsel with respect to, or to the effect that: (i) the due
formation and qualification of each of the Issuer, the Transferor and Charter
and that the Issuer, the Transferor and Charter, as applicable, have the
requisite power and authority to perform their respective obligations under this
Underwriting Agreement and the Transaction Agreements and the transactions
contemplated herein and therein; (ii) the due authorization, execution, delivery
and enforceability of this Underwriting Agreement and the Transaction Agreements
applicable, by the Issuer, the Transferor and Charter; and (iii) the issuance
and sale of the Notes by the Issuer, the performance of this Underwriting
Agreement by the Issuer and Charter and the compliance by the Issuer, the
Transferor and Charter with the terms of the Transactions Agreements, as
applicable, and the consummation of the transactions contemplated herein and
therein will not conflict with the organizational documents of the Issuer, the
Transferor or Charter, or any other contracts to which the Issuer, the
Transferor or Charter is a party or by which any of them is bound.
(e) The Underwriter shall have received from Cadwalader, Xxxxxxxxxx & Xxxx,
counsel for the Underwriter, such opinion or opinions, dated the Closing Date,
with respect
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to such matters as the Underwriter may require, and the Issuer shall have
furnished to such counsel such documents as they reasonably request for enabling
them to pass upon such matters.
(f) [___________________] shall have furnished to the Underwriter their
written opinion, as counsel to the Trustee, addressed to the Underwriter and
dated the Closing Date, in form and substance reasonably satisfactory to the
Underwriter.
(g) Each of the Issuer and Charter shall have furnished to the Underwriter
a certificate, dated the Closing Date, of any of its Chairman of the Board,
President or Vice President and its chief financial officer stating that (i)
such officers have carefully examined the Registration Statement and the
Prospectus, (ii) the Prospectus 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, in the light of the
circumstances under which they were made, not misleading (provided that each of
the Issuer and Charter may exclude the Underwriter's Information (as defined in
Section 10(d) herein) from such representation), (iii) the representations and
warranties of Charter or the Issuer, as the case may be, contained in this
Underwriting Agreement and the Transaction Agreements are true and correct in
all material respects on and as of the Closing Date, (iv) Charter or the Issuer,
as the case may be, has complied in all material respects with all agreements
and satisfied in all material respects all conditions on its part to be
performed or satisfied hereunder and under such agreements at or prior to the
Closing Date, (v) no stop order suspending the effectiveness of the Registration
Statement has been issued and is outstanding and no proceedings for that purpose
have been instituted and not terminated or, to the best of his or her knowledge,
are contemplated by the Commission, and (vi) since the date of its most recent
financial statements, there has been no material adverse change in the financial
position or results of operations of Charter or the Issuer, as applicable, or
any change, or any development including a prospective change, in or affecting
the condition (financial or otherwise), results of operations or business of
Charter or the Issuer except as set forth in or contemplated by the Registration
Statement and the Prospectus.
(h) Subsequent to the date of this Underwriting Agreement, there shall not
have occurred any of the following events: (i) any change, or any development
involving a prospective change, in or affecting particularly the business or
properties of the Issuer or Charter which materially impairs the investment
quality of the Notes; (ii) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the over-the-counter market shall have
been suspended or limited, or minimum prices shall have been established on
either of such exchanges or such market by the Commission, by such exchange or
by any other regulatory body or governmental authority having jurisdiction, or
trading in securities of the Issuer or Charter on any exchange or in the
over-the-counter market shall have been suspended or (iii) a general moratorium
on commercial banking activities shall have been declared by Federal or New York
State authorities or (iv) an outbreak or escalation of hostilities or a
declaration by the United States of a national emergency or war or such a
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of the Underwriter,
impracticable or inadvisable to proceed with the public offering or the delivery
of the Notes on the terms and in the manner contemplated in the Prospectus.
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(i) The Underwriter shall have received from independent accountants of the
Issuer and Charter, one or two letters, one such letter dated the date of the
Prospectus relating to the Notes and satisfactory in form and substance to the
Underwriter and counsel for the Underwriter, and a second letter, if necessary,
dated the Closing Date, as to such matters as the Underwriter may reasonably
request in form and substance satisfactory to the Underwriter and counsel to the
Underwriter, provided by the Issuer and Charter.
(j) The Underwriter shall receive evidence satisfactory to them that, on or
before the Closing Date, UCC-1 financing statements have been or are being filed
in each office in each jurisdiction in which such financing statements are
required to perfect the first priority security interests created by the
Transferor Contribution and Sale Agreement reflecting the interest of the Issuer
in the Leases and the proceeds thereof.
(k) Subsequent to the execution and delivery of this Underwriting
Agreement, there shall not have occurred any (i) downgrade, withdrawal or
qualification shall have occurred with respect to the rating accorded the Notes
or any of the Issuer's other debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Securities Act and (ii) public announcement by
any such organization that it has under surveillance or review (other than an
announcement with positive implications of a possible upgrading), its rating of
the Notes or any of the Issuer's other debt securities.
All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Underwriting Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
Section 7. Termination. The obligations of the Underwriter hereunder may be
terminated by the Underwriter, in its absolute discretion, by notice given to
and received by the Issuer and Charter prior to delivery of and payment for the
Notes if, prior to that time, any of the events described in Section 6(h) or
clauses (i) and (ii) of Section 6(k) shall have occurred.
Section 8. Reserved.
Section 9. Reimbursement of the Underwriter's Expenses. If (i) the Issuer
shall fail to tender the Notes for delivery to the Underwriter for any reason
not permitted under this Underwriting Agreement or (ii) the Underwriter shall
decline to purchase the Notes for any reason permitted under this Underwriting
Agreement, the Issuer shall reimburse the Underwriter for the fees and expenses
of its counsel and for such other out-of-pocket expenses as shall have been
reasonably incurred by it in connection with this Underwriting Agreement and the
proposed purchase of the Notes, and upon demand the Issuer shall pay the full
amount thereof to the Underwriter.
Section 10. Indemnification.
(a) Charter and the Issuer shall, jointly and severally, indemnify and hold
harmless the Underwriter and each person, if any, who controls the Underwriter
within the
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meaning of the Securities Act (collectively referred to for the purposes of this
Section 10 as the Underwriter) against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which that Underwriter
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment thereof or
supplement thereto, or in any Preliminary Prospectus or the Prospectus or in any
amendment thereof or supplement thereto or (ii) 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 shall reimburse the Underwriter
for any legal or other expenses reasonably incurred by that Underwriter directly
in connection with investigating or preparing to defend or defending against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that neither Charter nor the Issuer shall be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any Registration Statement as originally filed or in any
amendment thereof or supplement thereto, or in any Preliminary Prospectus or the
Prospectus or in any amendment thereof or supplement thereto in reliance upon
and in conformity with the Underwriter's Information (as defined in Section
10(d) herein).
(b) The Underwriter shall indemnify and hold harmless each of the Issuer,
Charter, and each of their directors, each officer of the Issuer or Charter who
signed the Registration Statement and each person, if any, who controls the
Issuer or Charter within the meaning of the Securities Act (collectively
referred to for the purposes of this Section 10 as the Issuer or Charter, as
appropriate), against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Issuer and Charter may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment thereof or
supplement thereto, or in any Preliminary Prospectus or the Prospectus or in any
amendment thereof or supplement thereto or (ii) 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, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with the Underwriter's
Information (as defined in Section 10(d) herein), and shall reimburse the Issuer
and Charter for any legal or other expenses reasonably incurred by the Issuer
and Charter in connection with investigating or preparing to defend or defending
against or appearing as third party witness in connection with any such loss,
claim, damage or liability (or any action in respect thereof) as such expenses
are incurred.
(c) Promptly after receipt by an indemnified party under this Section 10 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 10, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability
-11-
which it may have under this Section 10 except to the extent it has been
materially prejudiced by such failure; and, provided, further, that the failure
to notify the indemnifying party shall not relieve it from any liability which
it may have to an indemnified party otherwise than under this Section 10. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation. Each indemnified party, as
a condition of the indemnity agreements contained in Sections 10(a) and 10(b),
shall use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(d) The Underwriter confirm that the information (such information, the
"Underwriter's Information") set forth in (i) the last paragraph on the cover
page, (ii) [the first paragraph on the second page], and (iii) the [_______]
paragraph under the caption "Plan of Distribution" in the Prospectus is correct
and constitutes the only information furnished in writing to the Issuer and
Charter by or on behalf of the Underwriter specifically for inclusion in the
Registration Statement and the Prospectus.
The obligations of Charter, the Issuer and the Underwriter in this Section
10 are in addition to any other liability which Charter, the Issuer or the
Underwriter, as the case may be, may otherwise have.
Section 11. Contribution. If the indemnification provided for in Section 10
is unavailable or insufficient to hold harmless an indemnified party under
Section 10(a) or (b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
any action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by Charter and the Issuer on the one hand
and the Underwriter on the other from the offering of the 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 the relative benefits
referred to in clause (i) above but also the relative fault of Charter and the
Issuer on the one hand and the Underwriter on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or any action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by Charter and the Issuer on the
one hand and the Underwriter on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Notes purchased
-12-
hereunder (before deducting expenses) received by the Issuer bear to the total
underwriting discounts and commissions received by the Underwriter with respect
to the Notes purchased hereunder, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by Charter and the Issuer on the one hand or the
Underwriter on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. Charter, the Issuer and the Underwriter agree that
it would not be just and equitable if contributions pursuant to this Section 11
were to be determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim damage or liability referred to above in Section 10
shall be deemed to include, for purposes of this Section 11, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such claim or any action. Notwithstanding the
provisions of this Section 11, the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Notes underwritten by it and distributed to the public were offered to the
public less the amount of any damages which the Underwriter has otherwise paid
or become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Section 12. Persons Entitled to Benefit of Agreement. This Underwriting
Agreement shall inure to the benefit of and be binding upon the Underwriter, the
Issuer and Charter and their respective successors. Nothing expressed or
mentioned in this Underwriting Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriter, the Issuer and
Charter and their respective successors and the controlling persons and officers
and directors referred to in Sections 10 and 11 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Underwriting Agreement or any provision contained herein.
Section 13. Expenses. The Issuer and Charter, jointly and severally, agree
with the Underwriter to pay (i) the costs incident to the authorization,
issuance, sale, preparation and delivery of the Notes and any taxes payable in
that connection; (ii) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (iii) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus and the
Prospectus, all as provided in this Underwriting Agreement; (iv) the costs of
reproducing and distributing this Underwriting Agreement and any other
underwriting and selling group documents by mail, telex or other means of
communications; (v) the fees and expenses of qualifying the Notes under the
securities laws of the several jurisdictions as provided in Section 5(e) and of
preparing, printing and distributing Blue Sky Memoranda and Legal Investment
Surveys (including the related reasonable and documented fees and expenses of
counsel to the Underwriter); (vi) any fees
-13-
charged by rating agencies for rating the Notes; (vii) all fees and expenses of
the Trustee and its counsel; (viii) any transfer taxes payable in connection
with its sale of the Notes pursuant to this Underwriting Agreement; and (ix) all
other costs and expenses incident to the performance of the obligations of the
Issuer and Charter under this Underwriting Agreement; provided that, except as
otherwise provided in this Section 13, the Underwriter shall pay its own costs
and expenses, including, the costs and expenses of its counsel and the expenses
of advertising any offering of the Notes made by the Underwriter.
Section 14. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Issuer, Charter and the
Underwriter contained in this Underwriting Agreement or made by or on their
behalf, respectively, pursuant to this Underwriting Agreement, shall survive the
delivery of and payment for the Notes and shall remain in full force and effect,
regardless of any termination or cancellation of this Underwriting Agreement or
any investigation made by or on behalf of any of them or any person controlling
any of them.
Section 15. Notices. All communication hereunder shall be in writing and,
(i) if sent to the Underwriter will be mailed, delivered or telecopied and
confirmed to them at First Union Capital Markets Corp., Asset Securitization
Division, 000 Xxxxx Xxxxxxx Xxxxxx, XX-0, Xxxxxxxxx, Xxxxx Xxxxxxxx, 00000-0000,
Telecopy Number: (000) 000-0000; (ii) if sent to the Issuer, will be mailed,
delivered or telecopied and confirmed to them at the address of the Issuer set
forth in the Registration Statement, Attention: Chief Financial Officer; and
(iii) if sent to Charter, will be mailed, delivered or telecopied and confirmed
to them at the address of Charter set forth in the Registration Statement,
Attention: Vice President and Treasurer. Any such statements, requests, notices
or agreements shall take effect at the time of receipt thereof.
Section 16. Governing Law. This Underwriting Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to provisions of conflicts of law.
Section 17. Submission to Jurisdiction; Appointment of Agent for Service;
Currency Indemnity.
(a) To the fullest extent permitted by applicable law, each of the Issuer
and Charter irrevocably submits to the jurisdiction of any Federal or State
court in the City, County and State of New York, United States of America, in
any suit or proceeding based on or arising under this Underwriting Agreement,
and irrevocably agrees that all claims in respect of such suit or proceeding may
be determined in any such court. Each of the Issuer and Charter hereby
irrevocably and fully waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding. Each of the Issuer and Charter hereby
irrevocably designates and appoints CT Corporation (the "Process Agent"), as its
authorized agent upon whom process may be served in any such suit or proceeding,
it being understood that the designation and appointment of CT Corporation as
such authorized agent shall become effective immediately without any further
action on the part of the Issuer or Charter. Each of the Issuer and Charter
represents to the Underwriter that it has notified the Process Agent of such
designation and appointment and
-14-
that the Process Agent has accepted the same in writing. Each of the Issuer and
Charter hereby irrevocably authorizes and directs the Process Agent to accept
such service. Each of the Issuer and Charter further agrees that service of
process upon the Process Agent and written notice of said service to the Issuer
or Charter, as the case may be, mailed by first class mail or delivered to the
Process Agent at its principal office, shall be deemed in every respect
effective service of process upon the Issuer or Charter, as the case may be, in
any such suit or proceeding. Nothing herein shall affect the right of the
Underwriter or any person controlling the Underwriter to serve process in any
other manner permitted by law. Each of the Issuer and Charter agrees that a
final action in any such suit or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other lawful
manner.
(b) The obligation of the parties to make payments hereunder is in U.S.
dollars (U.S. dollars and such other currencies referred to above being called
the "Obligation Currency") and such obligation shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency or any other
realization in such other currency, whether as proceeds of set-off, security,
guarantee, distributions, or otherwise, except to the extent to which such
tender, recovery or realization shall result in the effective receipt by the
party which is to receive such payment of the full amount of the Obligation
Currency expressed to be payable hereunder, and the party liable to make such
payment agrees to indemnify the party which is to receive such payment (as an
additional, separate and independent cause of action) for the amount (if any) by
which such effective receipt shall fall short of the full amount of the
Obligation Currency expressed to be payable hereunder and such obligation to
indemnify shall not be affected by judgment being obtained for any other sums
due under this Underwriting Agreement.
Section 18. Counterparts. This Underwriting Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument.
Section 19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Underwriting Agreement.
Section 20. Effectiveness. This Underwriting Agreement shall become
effective upon execution and delivery.
-15-
If you are in agreement with the foregoing, please sign the counterpart
hereof and return it to the Issuer, whereupon this letter and your acceptance
shall become a binding agreement among the Issuer, Charter and the Underwriter.
Very truly yours,
CHARTER EQUIPMENT LEASE 1999-1 LLC
By: CHARTER FUNDING CORPORATION V
By:
------------------------------
Name:
Title:
CHARTER FINANCIAL, INC.
By:
------------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date hereof.
FIRST UNION CAPITAL MARKETS CORP.,
as Underwriter
By:
------------------------------
Name:
Title:
SCHEDULE I
Date of Underwriting Agreement: August [___], 1999
Underwriter: First Union Capital Markets Corp.
Underwriter's Address: First Union Capital Markets Corp.
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Title, Purchase Price and Description of Notes:
Class A-1 Notes
---------------
Title: $50,642,266 [_______]% Class A-1
Lease-Backed Notes, Series 1999-1
Price to public: [______]%
Purchase price: [______]%
Underwriting
discount: [_____]%
Payment Dates: The 25th calendar day of each month (if such
day is not a Business Day, the next
succeeding Business Day), commencing August
25, 1999
Maturity: August 2000 Payment Date
Redemption
provisions: Notes remaining outstanding may be redeemed
in whole, but not in part, on any Payment
Date at the Issuer's option if the Aggregate
Discounted Lease Balance of the Leases at
such time is less than 10% of the initial
Aggregate Discounted Lease Balance of the
Leases as of the Closing Date.
Class A-2 Notes
---------------
Title: $40,355,556 [_____]% Class A-2 Lease-Backed
Notes, Series 1999-1
Price to public: [________]%
Purchase price: [________]%
Underwriting
discount: [_____]%
Payment Dates: The 25th calendar day of each month (if such
day is not a Business Day, the next
succeeding Business Day), commencing August
25, 1999
Maturity: February 2002 Payment Date
Redemption
provisions: Notes remaining outstanding may be redeemed
in whole, but not in part, on any Payment
Date at the Issuer's option if the Aggregate
Discounted Lease Balance of the Leases at
such time is less than 10% of the initial
Aggregate Discounted Lease Balance of the
Leases as of the Closing Date.
Class A-3 Notes
---------------
Title: $18,990,850 [____]% Class A-3 Lease-Backed
Notes, Series 1999-1
Price to public: [______]%
Purchase price: [______]%
Underwriting
discount: [___]%
Payment Dates: The 25th calendar day of each month (if such
day is not a Business Day, the next
succeeding Business Day), commencing August
25, 1999
Maturity: September 2002 Payment Date
Redemption
provisions: Notes remaining outstanding may be redeemed
in whole, but not in part, on any Payment
Date at the Issuer's option if the Aggregate
Discounted Lease Balance of the Leases at
such time is less than 10% of the initial
Aggregate Discounted Lease Balance of the
Leases as of the Closing Date.
Class A-4 Notes
---------------
Title: $48,708,013 [___]% Class A-4 Lease-Backed
Notes, Series 1999-1
Price to public: [______]%
Purchase price: [______]%
Underwriting
discount: [___]%
Payment Dates: The 25th calendar day of each month (if such
day is not a Business Day, the next
succeeding Business Day), commencing August
25, 1999
Maturity: January 2006 Payment Date
Redemption
provisions: Notes remaining outstanding may be redeemed
in whole, but not in part, on any Payment
Date at the Issuer's option if the Aggregate
Discounted Lease Balance of the Leases at
such time is less than 10% of the initial
Aggregate Discounted Lease Balance of the
Leases as of the Closing Date.
Class B Notes
-------------
Title: $7,473,251 [___]% Class B Lease-Backed
Notes, Series 1999-1
Price to public: [______]%
Purchase price: [______]%
Underwriting
discount: [______]%
Payment Dates: The 25th calendar day of each month (if such
day is not a Business Day, the next
succeeding Business Day), commencing August
25, 1999
Maturity: October 2006 Payment Date
Redemption
provisions: Notes remaining outstanding may be redeemed
in whole, but not in part, on any Payment
Date at the Issuer's option if the Aggregate
Discounted Lease Balance of the Leases at
such time is less than 10% of the initial
Aggregate Discounted Lease Balance of the
Leases as of the Closing Date.
Closing Date, Time and Location:
Date: August [___], 1999
Time: 9:00 New York time
Location: Xxxxx Xxxxxxxxxx LLP [______________] New
York, New York
SCHEDULE II
PRINCIPAL AMOUNT OF THE NOTES TO BE PURCHASED
$50,642,266 Principal Amount of Class A-1 Notes to be Purchased
$40,355,556 Principal Amount of Class A-2 Notes to be Purchased
$18,990,850 Principal Amount of Class A-3 Notes to be Purchased
$48,708,013 Principal Amount of Class A-4 Notes to be Purchased
$7,473,251 Principal Amount of Class B Notes to be Purchased
