Exhibit 1
---------
CHESAPEAKE FUNDING LLC
$295 million
Series 2002-1 Floating Rate Callable Asset Backed Notes, Class A-1
$355 million
Series 2002-1 Floating Rate Callable Asset Backed Notes, Class A-2
UNDERWRITING AGREEMENT
May [__], 2002
X.X. Xxxxxx Securities Inc.
First Union Securities, Inc.
As Representatives of the several Underwriters named in Schedule 1,
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CHESAPEAKE FUNDING LLC, a Delaware special purpose limited liability
company (the "Issuer"), proposes to issue and sell U.S. $295 million principal
amount of its Series 2002-1 Floating Rate Callable Asset Backed Notes, Class A-1
(the "Class A-1 Notes"), and U.S. $355 million principal amount of its Series
2002-1 Floating Rate Asset Backed Notes, Class A-2 (the "Class A-2 Notes";
collectively, with the Class A-1 Notes, the "Securities"). The Securities will
be issued pursuant to the Series 2002-1 Indenture Supplement, dated as of June
[___], 2002 (the "Indenture Supplement") between the Issuer and JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as Indenture Trustee (the
"Indenture Trustee"), the form of which has been filed as Exhibit 4.3 to the
Registration Statement (as defined below), to the Base Indenture, dated as of
June 30, 1999 (as amended or modified from time to time, the "Base Indenture"
and, together with the Indenture Supplement, the "Indenture") between the Issuer
and the Indenture Trustee. The Issuer is a wholly-owned subsidiary of Raven
Funding LLC ("SPV") and an indirect wholly-owned subsidiary of PHH Vehicle
Management Services LLC ("VMS") and VMS is a direct wholly-owned subsidiary of
PHH Corporation ("PHH"). VMS, PHH and the Issuer hereby confirm their agreement
with the several underwriters named in Schedule 1 hereto (the "Underwriters")
concerning the purchase of the Securities from the Issuer by the Underwriters.
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Indenture.
1. Representations, Warranties and Agreements of the Issuer and VMS.
(a) The Issuer and VMS jointly and severally represent and warrant to, and
agree with, the several Underwriters on and as of the date hereof and the
Closing Date (as defined in Section 3) that:
2
(i) A registration statement on Forms S-1 (333-87568-01) and S-3 (No.
333-87568), and amendments thereto, with respect to the Securities have (i)
been prepared by the Issuer and X.X. Xxxxxxxx Trust (the "Origination
Trust") in conformity with the requirements of the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act. Copies
of such registration statement and the amendments to such registration
statement have been delivered by the Issuer and the Origination Trust
(together, the "Registrants") to you as the representatives (collectively,
the "Representative") of the Underwriters. As used in this 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; "Effective Date" means the date of
the Effective Time of such registration statement; "Preliminary Prospectus"
means each prospectus included in such registration statement, or
amendments thereof, before it became effective under the Securities Act and
any prospectus filed with the Commission by the Registrants with the
consent of the Representative pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means the registration statement
referred to in this Section 1(a)(i), as amended at its Effective Time,
including all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations in
accordance with Section 4(a) hereof and deemed to be a part of the
Registration Statement as of the Effective Time of the Registration
Statement pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "Prospectus" means such final prospectus, as first filed
with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Rules and Regulations. Reference made herein to any Preliminary Prospectus
or to the Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any document filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") after the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or the Prospectus,
as the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to include any report of the Issuer filed with
the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act after
the Effective Time that is incorporated by reference in the Registration
Statement. The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus;
(ii) The conditions for use of Form S-3 by the Issuer as set forth in
the General Instructions thereto, have been satisfied;
(iii) Each document, if any, filed or to be filed by the Issuer
pursuant to the Exchange Act, and incorporated by reference in the
Prospectus (the "Incorporated Documents") complied when filed or will
comply when so filed in all material respects with the requirements of the
Securities Act or the Exchange Act and the rules and regulations of the
Commission thereunder, as applicable, and none of such documents
3
contained or will contain when filed an untrue statement of a material fact
or omitted or will omit when filed to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
(iv) The Registration Statement conforms (and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus, when they become effective or are filed with the Commission, as
the case may be, will conform) in all respects to the requirements of the
Securities Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the respective rules thereunder and do not and will
not, as of the applicable effective date (as to the Registration Statement
and any amendment thereto) and as of the applicable filing date and the
Closing Date (as to the Prospectus and any amendment or supplement thereto)
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no representation or
warranty is made as to (A) information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Registrants through the
Representative by or on behalf of any Underwriter specifically for
inclusion therein or (B) that part of the Registration Statement which
shall constitute the Statement of Eligibility and Qualification (Form T-1)
of the Indenture Trustee under the Trust Indenture Act; and the Indenture
has been duly qualified under the Trust Indenture Act and conforms in all
material respects to the requirements of the Trust Indenture Act and the
applicable rules and regulations thereunder;
(v) The Issuer has been duly formed as a limited liability company and
is validly existing and in good standing under the laws of the State of
Delaware, is qualified to do business and is in good standing as a foreign
limited liability company in each jurisdiction in which the ownership or
lease of property or the conduct of its business requires such
qualification, and has the requisite power and authority to own or hold its
properties and to conduct the business in which it is engaged as described
in the Prospectus;
(vi) The Issuer has the requisite power and authority to execute and
deliver this Agreement, the Securities, the Indenture and any other
Transaction Document to which it is a party and perform its obligations
hereunder and thereunder;
(vii) Each of the Transaction Documents to which the Issuer is a party
has been duly authorized, executed and delivered by the Issuer and
constitutes the legal, valid and binding obligation of the Issuer
enforceable in accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency or other similar laws relating to or
affecting generally the enforcement of creditors' rights or by general
equitable principles;
(viii) The Issuer is not in violation of the LLC Agreement or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement or lease to which it is a party or by which it or its properties
may be bound. The execution and delivery of this Agreement
4
and the Transaction Documents and the incurrence of the obligations and
consummation of the transactions herein and therein contemplated will not
conflict with, or constitute a breach of or default under, the LLC
Agreement or any contract, indenture, mortgage, loan agreement or lease, to
which it is a party or by which it or its properties may be bound, or any
law, administrative regulation or court decree;
(ix) This Agreement has been duly authorized, executed and delivered
by the Issuer;
(x) The Securities have been duly authorized for issuance, offer and
sale as contemplated by this Agreement and, when authenticated by the
Indenture Trustee and issued and delivered against payment of the purchase
price therefor, will constitute legal, valid and binding obligations of the
Issuer enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, or other similar laws
relating to or affecting generally the enforcement of creditors' rights or
by general equitable principles;
(xi) No consent, approval, authorization, order, registration or
qualification of or with any court or any regulatory authority or other
governmental agency or body is required for the issuance, offer or sale of
the Securities by the Issuer in accordance with the terms of this Agreement
or for the consummation of the transactions contemplated by this Agreement
and the Transaction Documents except for the registration of the Securities
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act
and applicable state securities laws in connection with the purchase and
distribution of the Securities by the Underwriters and to the extent
provided for in the Transaction Documents;
(xii) There are no legal or governmental proceedings pending to which
the Issuer is a party or of which any property of the Issuer is the subject
(other than any such proceedings involving the Issuer's property which
would not have a Material Adverse Effect (as defined herein)) and, to the
best of its knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(xiii) The Issuer is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(xiv) As of the Closing Date, the representations and warranties of
the Issuer contained in the Transaction Documents to which the Issuer is a
party will be true and correct and are repeated herein as though fully set
forth herein;
(xv) On and immediately after the Closing Date, the Issuer (after
giving effect to the issuance of the Securities and to the other
transactions related thereto as described in the Prospectus) will be
Solvent. As used in this paragraph, the term "Solvent" means, with respect
to a particular date, that on such date (A) the present fair market value
(or present fair saleable value) of the assets of the Issuer is not less
than the total amount required to pay the probable liabilities of the
Issuer on its total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured, (B) the
5
Issuer is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and
become due in the normal course of business, (C) assuming the sale of the
Securities as contemplated by this Agreement and the Prospectus, the Issuer
is not incurring debts or liabilities beyond its ability to pay as such
debts and liabilities mature and (D) the Issuer is not engaged in any
business or transaction, and is not about to engage in any business or
transaction, for which its property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in the
industry in which the Issuer is engaged. In computing the amount of such
contingent liabilities at any time, it is intended that such liabilities
will be computed at the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability;
(xvi) The financial statements of the Issuer and the Origination Trust
(including the related notes) filed as part of the Registration Statement
or included or incorporated by reference in the Prospectus present fairly
the financial condition and results of operations of the entities purported
to be shown thereby, at the dates and for the periods indicated, and have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved;
(xvii) Deloitte & Touche LLP, who have certified the financial
statements of the Issuer and the Origination Trust included or incorporated
by reference in the Prospectus, are independent public accountants as
required by the Securities Act and the Rules and Regulations during the
periods covered by the financial statements on which they reported
contained or incorporated by reference in the Prospectus; the selected
financial data included in the Prospectus present fairly the information
therein and have been compiled on a basis consistent with that of the
audited financials included or incorporated by reference in the Prospectus;
and the other statistical information and data included or incorporated by
reference in the Prospectus are, in all material respects, fairly
presented; and
(xviii) 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 or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(b) VMS represents and warrants to, and agrees with, the several
Underwriters on and as of the date hereof and the Closing Date that:
(i) VMS (A) has been duly formed and is validly existing as a
limited liability company and is in good standing under the laws of the
State of Delaware, (B) is qualified to do business and is in good standing
as a foreign limited liability company in each jurisdiction in which the
ownership or lease of property or the conduct of its business requires such
qualification, except where such lack of qualification or good standing
would not have a material adverse effect on its condition (financial or
other), business or results of operations or its ability to perform its
obligations hereunder or under the
6
Transaction Documents to which it is a party (a "VMS Material Adverse
Effect") and (C) has the requisite power and authority to own or hold its
properties and to conduct the business in which it is engaged as described
in the Prospectus;
(ii) VMS has the requisite power and authority to execute and
deliver this Agreement and any Transaction Document to which it is a party
and perform its obligations hereunder and thereunder;
(iii) This Agreement and each of the Transaction Documents to which
VMS is a party has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws relating to or affecting
generally the enforcement of creditors' rights or by general equitable
principles;
(iv) VMS is not in violation of its organizational documents or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement or lease to which it is a party or by which it or its properties
may be bound which would have a VMS Material Adverse Effect. The execution
and delivery of this Agreement and the Transaction Documents and the
incurrence of the obligations and consummation of the transactions herein
and therein contemplated will not conflict with, or constitute a breach of
or default under any contract, indenture, mortgage, loan agreement or
lease, to which VMS is a party or by which it or its properties may be
bound, or any law, administrative regulation or court decree, with only
such exceptions as would not have a VMS Material Adverse Effect, nor will
such action result in any violation of its organizational documents;
(v) VMS possesses adequate certificates, licenses, authorities or
permits issued by appropriate governmental agencies or bodies necessary to
conduct the business now operated by it, with only such exceptions as would
not have a Material Adverse Effect, and has not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit;
(vi) There are no legal or governmental proceedings pending to which
VMS, SPV or the Origination Trust is a party or of which any of its
property is the subject that, if determined adversely to it, individually
or in the aggregate, could reasonably be expected to have a VMS Material
Adverse Effect; and to the best of VMS's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(vii) As of the Closing Date, VMS's representations and warranties
contained in the Transaction Documents to which it is a party will be true
and correct and are repeated herein as though fully set forth herein;
(viii) As of the Closing Date, the representations and warranties of
each of SPV and the Origination Trust in the Transaction Documents to which
it is a party will be true and correct and are repeated herein as though
fully set forth herein;
7
(ix) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in the
Preliminary Prospectus or the Prospectus has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith;
(x) Since the date as of which information is given in the
Prospectus, there has been no material adverse change or any development
involving a prospective material adverse change in its, or SPV's or the
Origination Trust's, condition, financial or otherwise, or in their
respective earnings, business affairs, management or business prospects,
whether or not arising in the ordinary course of business;
(xi) The Origination Trust has good and marketable title to the
Origination Trust Assets allocated to the Lease SUBI Portfolio and the
1999-1B Sold SUBI Portfolio, free and clear of Liens (except as permitted
by the Transaction Documents), and has not assigned to any person any of
its right, title or interest in any such Origination Trust Assets, or
obtained the release of any such prior assignment other than as described
in the Prospectus;
(xii) If all "employee benefit plans" subject to Title IV of ERISA
which VMS, or any entity which is a member of a "controlled group" of which
VMS is also a member, maintains or sponsors, were terminated on the date
hereof or on the Closing Date, there would be no material unfunded
liabilities with respect to any such plan, its participants or
beneficiaries or with respect to the Pension Benefit Guarantee Corporation;
(xiii) SPV, as Initial Beneficiary, has made the appropriate
allocation of assets within the estate of the Origination Trust to the
appropriate SUBI Portfolios, as required by the Origination Trust
Documents;
(xiv) VMS is the sole member of SPV and owns its membership
interests therein free and clear of Liens; and
(xv) SPV is the sole common member of the Issuer and owns its
membership interests therein free and clear of Liens.
(c) PHH represents and warrants to, and agrees with, the several
Underwriters on and as of the date hereof and the Closing Date that:
(i) PHH (A) has been duly formed and is validly existing as a
corporation and is in good standing under the laws of the State of
Delaware, (B) is qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the ownership or lease of
property or the conduct of its business requires such qualification, except
where such lack of qualification or good standing would not have a material
adverse effect on its condition (financial or other), business or results
of operations or its ability to perform its obligations hereunder or under
the PHH Guaranty (as defined herein) (a "PHH Material Adverse Effect") and
(C) has the requisite power and authority to own or hold its properties and
to conduct the business in which it is engaged;
8
(ii) PHH has the requisite power and authority to execute and
deliver this Agreement and the PHH Guaranty and to perform its obligations
hereunder and thereunder;
(iii) This Agreement has been duly authorized, executed and delivered
by it and constitutes its legal, valid and binding obligation enforceable
in accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency or other similar laws relating to or affecting
generally the enforcement of creditors' rights or by general equitable
principles;
(iv) The PHH Guaranty has been duly authorized, executed and delivered
by it and the PHH Guaranty constitutes its legal, valid and binding
obligation enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
relating to or affecting generally the enforcement of creditors' rights or
by general equitable principles;
(v) PHH is not in violation of its certificate of incorporation or
by-laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement or lease to which it is a party or by which it or
its properties may be bound which would have a PHH Material Adverse Effect.
The execution and delivery of this Agreement and the PHH Guaranty and the
incurrence of the obligations and consummation of the transactions herein
and therein contemplated will not conflict with, or constitute a breach of
or default under any contract, indenture, mortgage, loan agreement or
lease, to which PHH is a party or by which it or its properties may be
bound, or any law, administrative regulation or court decree, with only
such exceptions as would not have a PHH Material Adverse Effect, nor will
such action result in any violation of its certificate of incorporation or
by-laws;
(vi) PHH possesses adequate certificates, licenses, authorities or
permits issued by appropriate governmental agencies or bodies necessary to
conduct the business now operated by it, with only such exceptions as would
not have a PHH Material Adverse Effect, and has not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit; and
(vii) There are no legal or governmental proceedings pending to which
PHH is a party or of which any of its property is the subject that, if
determined adversely to it, individually or in the aggregate, could
reasonably be expected to have a PHH Material Adverse Effect; and to the
best of PHH's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
2. Purchase of the Securities. On the basis of the representations,
warranties and agreements contained herein, and subject to the terms and
conditions set forth herein, the Issuer agrees to issue and sell to each of the
Underwriters, severally and not jointly, and each of the Underwriters, severally
and not jointly, agrees to purchase from the Issuer, the principal amount of
Class A-1 Notes set forth opposite the name of such Underwriter on Schedule 1
hereto at a purchase price equal to [___]% of the principal amount thereof and
the principal amount of Class
9
A-2 Notes set forth opposite the name of such Underwriter on Schedule 2 hereto
at a purchase price equal to [___]% of the principal amount thereof. Interest on
the Class A-1 Notes will accrue during each Series 2002-1 Interest Period at the
rate of [___]% per annum above One-Month LIBOR and interest on the Class A-2
Notes will accrue during each Series 2002-1 Interest Period at the rate of
[___]% per annum above One-Month LIBOR, in each case as determined in accordance
with the Indenture. The Issuer shall not be obligated to deliver any of the
Securities except upon payment for all of the Securities to be purchased as
provided herein.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of Xxxxxxx Xxxxxxx &
Xxxxxxxx, New York, New York, or at such other place as shall be agreed upon by
the Representative and the Issuer, at 10:00 A.M., New York City time, on June
[__], 2002, or at such other time or date, not later than seven full business
days thereafter, as shall be agreed upon by the Representative and the Issuer
(such date and time of payment and delivery being referred to herein as the
"Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Issuer by wire or book-entry transfer of
same-day funds to such account or accounts as the Issuer shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Representative, for the account of
each of the Underwriters of the certificates evidencing the Securities. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligations of the Underwriters
hereunder. Upon delivery, the Securities shall be in global form, registered in
such names and in such denominations as the Representative shall have requested
in writing not less than two full business days prior to the Closing Date. The
Issuer agrees to make one or more global certificates evidencing the Securities
available for inspection by the Representative in New York, New York at least 24
hours prior to the Closing Date.
4. Further Agreements of the Issuer and VMS. Each of the Issuer and
VMS, jointly and severally, agrees with each of the several Underwriters that:
(a) the Registrants will prepare the Prospectus in a form approved by
the Representative and file the Prospectus pursuant to Rule 424(b) under the
Securities Act not later than 10:00 A.M., New York City time, on the day
following the execution and delivery of this Agreement and the Registrants will
furnish to each of the Underwriters and counsel for the Underwriters, without
charge, as many copies of the Prospectus as may be reasonably requested (the
Prospectus and any amendments or supplements thereto furnished shall be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX);
(b) the Registrants will furnish promptly to the Representative and to
counsel for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith, and a copy of
each Incorporated Document (the copies of the Registration Statement, each
amendment thereto and the exhibits thereto, and each Incorporated Document
furnished to the Representative shall be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX);
10
(c) the Issuer will advise the Representative promptly and, if
requested, confirm such advice in writing, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the qualification
of the Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
the Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such qualification,
to use promptly its best efforts to obtain its withdrawal;
(d) the Issuer will advise the Representative promptly and, if
requested, confirm such advice in writing, of the happening of any event which
makes any statement of a material fact made in the Prospectus untrue or which
requires the making of any additions to or changes in the Prospectus (as amended
or supplemented from time to time) in order to make the statements therein, in
the light of the circumstances under which they were made, when the Prospectus
is delivered, not misleading or, if for any other reason it shall be necessary
to amend or supplement the Prospectus in order to comply with the Securities
Act;
(e) if the delivery of a prospectus is required at any time prior to
the expiration of 180 days after the Effective Time in connection with the
offering or sale of the Securities and if at any such time any event shall occur
or condition exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or counsel for the Issuer, to amend or supplement
the Registration Statement or the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered to a purchaser,
not misleading, or if it is necessary, in the opinion of such counsel, at any
such time to amend or supplement the Prospectus or to file under the Exchange
Act any document incorporated by reference in the Prospectus to comply with the
requirements of the Securities Act or the Rules and Regulations, the Issuer
shall promptly prepare such amendment or supplement or file such document as may
be necessary to correct such untrue statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Issuer will furnish to the Underwriters such number of copies of such amendment
or supplement or such document as the Underwriters may reasonably request;
(f) prior to filing with the Commission any amendment to the
Registration Statement or making any amendment or supplement to the Prospectus
or filing with the Commission any document incorporated by reference in the
Prospectus, for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities, the Issuer shall furnish
a copy thereof to the Representative and counsel for the Underwriters and the
Issuer shall not effect any such amendment or supplement or file any such
document to which the Representative shall reasonably object by notice to the
Issuer after a reasonable period to review;
(g) the Issuer will advise the Representative, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or
11
becomes effective or any supplement to the Prospectus or any amended Prospectus
has been filed and to furnish the Representative with as many copies thereof as
may be reasonably requested;
(h) subject to Section 4(f) of this Agreement, the Issuer will file
timely all documents required to be filed by the Issuer with the Commission
pursuant to Section 13(a), 13(c), or 15(d) of the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities;
(i) the Issuer shall supply to each Underwriter, on a continuing
basis, three (3) copies of (x) all audited annual reports of the Issuer and
copies of all correspondence with, and information that the Issuer and its
Affiliates make available to, the Indenture Trustee in connection with this
Agreement and the Transaction Documents and the transactions contemplated hereby
and thereby and (y) all audited annual reports and all unaudited interim reports
of VMS;
(j) the Issuer shall promptly take from time to time such actions as
the Representative may reasonably request to qualify the Securities for offering
and sale under the securities or Blue Sky laws of such jurisdictions as the
Representative may designate and to continue such qualifications in effect for
so long as required for the resale of the Securities; and to arrange for the
determination of the eligibility for investment of the Securities under the laws
of such jurisdictions as the Representative may reasonably request; provided
that the Issuer shall not be obligated to qualify as a foreign corporation or
limited liability company in any jurisdiction in which it is not so qualified or
to file a general consent to service of process in any jurisdiction;
(k) as soon as practicable after the Effective Date of the
Registration Statement (it being understood that the Issuer shall have until at
least 410 days after the end of the Issuer's current fiscal quarter), the Issuer
shall make generally available to the Noteholders and deliver to the
Representative an earnings statement of the Issuer (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Issuer, Rule 158);
(l) the Issuer and VMS shall assist the Representative in arranging
for the Securities to be eligible for clearance and settlement through The
Depository Trust Company ("DTC");
(m) for a period of 60 days from the date of the Prospectus, the
Issuer and VMS shall not, and shall cause their affiliates not to, offer for
sale, sell, contract to sell or otherwise dispose of, directly or indirectly, or
file a registration statement for, or announce any offer, sale, contract for
sale of or other disposition of any debt securities issued by the Issuer or any
asset-backed securities backed by equipment leases originated by VMS or the
Origination Trust (other than the Securities and those securities described in
the Prospectus to be issued by the Issuer), without the prior written consent of
the Representative;
(n) in connection with the offering of the Securities, until the
Representative has notified the Issuer of the completion of the resale of the
Securities, the Issuer and VMS shall not, and each of their affiliated
purchasers (as defined in Regulation M under the Exchange Act) shall
12
not, either alone or with one or more other persons, bid for or purchase, for
any account in which it or any of its affiliated purchasers has a beneficial
interest, any Securities, or attempt to induce any person to purchase any
Securities; and the Issuer and VMS shall not, and shall cause each of their
affiliated purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent, active trading in or of raising the price of the
Securities;
(o) each of the Issuer and VMS shall do and perform all things
required to be done and performed by it under this Agreement that are within its
control prior to or after the Closing Date, and each of the Issuer and VMS shall
use its best efforts to satisfy all conditions precedent on its part to the
delivery of the Securities;
(p) neither the Issuer nor VMS shall take any action prior to the
Closing Date which would require the Registration Statement or the Prospectus to
be amended or supplemented pursuant to Section 4(e) of this Agreement;
(q) the Issuer shall apply the net proceeds from the sale of the
Securities as set forth in the Prospectus under the heading "Use of Proceeds";
(r) the Issuer and VMS shall use their best efforts to complete the
listing of the Securities on the Luxembourg Stock Exchange, subject only to
official notice of issuance;
(s) to the extent that the ratings to be provided with respect to the
Securities by S&P and Xxxxx'x is conditional upon the furnishing of documents or
the taking of any other actions by the Issuer or any of its affiliates, the
Issuer and VMS shall furnish such documents and take any such other action that
is reasonably requested by S&P or Moody's; and
(t) the Issuer shall furnish to the Representative copies of each
report and certificate and any financial information delivered to the Indenture
Trustee pursuant to the Indenture.
5. Underwriters' Representation, Warranty and Agreement Concerning UK
Sales. Each Underwriter, severally and not jointly, represents and warrants to,
and agrees with, the Issuer and VMS that it has not offered or sold and will not
offer or sell any Securities in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments, as principal or agent, for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, it has complied and will comply with the
applicable provisions of the Financial Services and Markets Act 2000 (the
"FMSA") with respect to anything done by it in relation to the Securities in,
from, or otherwise involving the United Kingdom, and it has only communicated or
caused to be communicated and will only communicate or cause to be communicated
any invitation or inducement to engage in investment activity (within the
meaning of section 21 of the FMSA) received by it in connection with the issue
and sale of any Securities in circumstances in which section 21(1) of the FMSA
does not apply to the Issuer.
6. Conditions of Underwriters' Obligations. The respective obligations
of the several Underwriters hereunder are subject to the accuracy, on and as of
the date hereof and the Closing Date, of the representations and warranties of
the Issuer, VMS and PHH contained
13
herein, to the accuracy of the statements of the Issuer, VMS, Avis Group
Holdings, Inc. ("Avis") and PHH and their respective officers made in any
certificates delivered pursuant hereto, to the performance by the Issuer and VMS
of their obligations hereunder, and to each of the following additional terms
and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 4(a); no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with.
(b) The Prospectus (and any amendments or supplements thereto) shall
have been printed and copies distributed to the Underwriters as promptly as
practicable on or following the date of this Agreement or at such other date and
time as to which the Representative may agree; and no stop order suspending the
sale of the Securities in any jurisdiction shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or
threatened.
(c) None of the Underwriters shall have discovered and disclosed to
the Issuer or VMS on or prior to the Closing Date that the Prospectus or the
Registration Statement or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Underwriters, is
material or omits to state any fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.
(d) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents, the
Registration Statement and the Prospectus, and all other legal matters relating
to the Transaction Documents and the transactions contemplated thereby, shall be
satisfactory in all material respects to the Representative, and the Issuer,
VMS, Avis, PHH, SPV, and the Origination Trust shall have furnished to the
Representative all documents and information that they or their counsel may
reasonably request to enable them to pass upon such matters.
(e) The Issuer shall have furnished to the Representative a letter
(the "Initial Letter") of Deloitte and Touche, LLP, addressed to the
Underwriters and dated the date hereof, in form and substance satisfactory to
the Representative, concerning the accounting, financial and statistical
information set forth or incorporated by reference in the Prospectus.
(f) The Issuer shall have furnished to the Representative a letter
(the "Bring-Down Letter") of Deloitte and Touche, LLP, addressed to the
Underwriters and dated the Closing Date (i) confirming that they are independent
public accountants with respect to the Issuer and the Origination Trust within
the meaning of Rule 101 of the Code of Professional Conduct of the AICPA and its
interpretations and rulings thereunder, (ii) stating, as of the date of the
Bring-Down Letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
or incorporated by reference in the Prospectus, as of a date not more than three
business days prior to the date of the Bring-
14
Down Letter), that the conclusions and findings of such accountants with respect
to the financial information and other matters covered by the Initial Letter are
accurate and (iii) confirming in all material respects the conclusions and
findings set forth in the Initial Letter.
(g) The Indenture Supplement shall have been duly executed and
delivered by the Issuer and the Indenture Trustee, and the Securities shall have
been duly executed and delivered by the Issuer and duly authenticated by the
Indenture Trustee.
(h) The Representative shall have received a letter from S&P stating
that the Securities have received a rating of "AAA" from S&P and a letter from
Moody's stating that the Securities have received a rating of "Aaa" from
Moody's.
(i) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) 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 any such exchange or market by the Commission, by
any such exchange or by any other regulatory body or governmental authority
having jurisdiction, or (ii) any moratorium on commercial banking activities
shall have been declared by federal or New York state authorities or (iii) an
outbreak or escalation of hostilities or a declaration by the United States of a
national emergency or war or (iv) 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) the effect of which,
in the case of this clause (iv), is, in the judgment of the Representative, so
material and adverse as to make it impracticable or inadvisable to proceed with
the sale or the delivery of the Securities on the terms and in the manner
contemplated by this Agreement and in the Prospectus (exclusive of any amendment
or supplement thereto).
(j) The Representative shall have received an opinion of Xxxxx & Case
LLP, special counsel to the Issuer, VMS, SPV, Avis, PHH and the Origination
Trust, dated as of the Closing Date and addressed to the Underwriters in the
form of Exhibit A attached hereto.
(k) The Representative shall have received an opinion of Xxxxxx
Xxxxxx, Senior Vice President and General Counsel to VMS, dated the Closing Date
and addressed to the Underwriters in the form of Exhibit B attached hereto.
(l) The Representative shall have received an opinion of the General
Counsel of Avis dated the Closing Date and addressed to the Underwriters in the
form of Exhibit C attached hereto.
(m) The Representative shall have received an opinion of the General
Counsel of PHH dated the Closing Date and addressed to the Underwriters in the
form of Exhibit D attached hereto.
(n) The Representative shall have received an opinion of Xxxxxxx
Xxxxxxxx & Xxxx, counsel for the Indenture Trustee, dated the Closing Date and
addressed to the Underwriters and in form and substance satisfactory to the
Representative and to counsel for the Underwriters.
15
(o) The Representative shall have received an opinion of Xxxxxxxx,
Xxxxxx & Finger, counsel for the Wilmington Trust Company, as Origination
Trustee, and special Delaware counsel for the Issuer, VMS and SPV, dated the
Closing Date and addressed to the Underwriters, in the form of Exhibit E
attached hereto.
(p) The Representative shall have received an opinion of Xxxxx Xxxxxxx
Xxxxxxx & Xxxxx LLP, Maryland local counsel to the Issuer and VMS, dated the
Closing Date and addressed to the Underwriters, in form and substance
satisfactory to the Representative and to counsel for the Underwriters and to
the effect that none of the Origination Trust, SPV nor the Issuer will be
treated as an association taxable as a corporation for Maryland state income or
franchise tax purposes.
(q) The Representative shall have received an opinion of Xxxxxxx
Xxxxxxx & Xxxxxxxx, dated the Closing Date and addressed to the Underwriters,
with respect to the validity of the Securities and such other matters as the
Representative may reasonably request.
(r) The Representative shall have received a certificate or
certificates signed by two managers of the Issuer, dated the Closing Date,
stating that (i) the representations and warranties of the Issuer in this
Agreement and any Transaction Documents to which the Issuer is a party are true
and correct on and as of the Closing Date or, in the case of the representations
and warranties in the Transaction Documents, on and as of the dates specified in
such agreements; (ii) that the Issuer has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder or
under the Transaction Documents at or prior to the Closing Date; (iii) the
Registration Statement and the Prospectus, as of the Effective Date, did not
include any untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and since the Effective Date, no event has occurred
which should have been set forth in a supplement or amendment to the
Registration Statement or the Prospectus; and (iv) subsequent to the date as of
which information is given in the Prospectus, there has not been any material
adverse change in the general affairs, business, properties, key personnel,
capitalization, condition (financial or otherwise) or results of operation of
the Issuer except as set forth or contemplated in the Prospectus.
(s) The Representative shall have received a certificate signed by any
two of the Managers, President, any Vice President and the Treasurer of VMS,
dated the Closing Date, in which such officers shall state that, to the best of
their respective knowledge (i) the representations and warranties of VMS in this
Agreement and any Transaction Documents to which VMS is a party are true and
correct on and as of the Closing Date or, in the case of the representations and
warranties in the Transaction Documents, on and as of the dates specified in
such agreements; (ii) VMS has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder or under the
Transaction Documents at or prior to the Closing Date; (iii) the Registration
Statement and the Prospectus, as of the Effective Date, did not include any
untrue statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and since the Effective Date, no event has occurred which should
have been set forth in a supplement or amendment to the Registration Statement
or the Prospectus; and (iv) subsequent to the date as of which information is
given in the Prospectus, there has not been any material adverse change
16
in the general affairs, business, properties, key personnel, capitalization,
condition (financial or otherwise) or results of operation of VMS except as set
forth or contemplated in the Prospectus.
(t) The Representative shall have received a certificate signed by two
managers of SPV, dated the Closing Date, in which such managers shall state
that, to the best of their respective knowledge (i) the representations and
warranties of SPV in the Transaction Documents to which SPV is a party are true
and correct on and as of the dates specified in such agreements; (ii) SPV has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder or under the Transaction Documents at or prior
to the Closing Date; and (iii) subsequent to the date as of which information is
given in the Prospectus, there has not been any material adverse change in the
general affairs, business, properties, key personnel, capitalization, condition
(financial or otherwise) or results of operation of SPV except as set forth or
contemplated in the Prospectus.
(u) The Representative shall have received a certificate signed by two
officers of VMS, in its capacity as Servicer of the Origination Trust, dated the
Closing Date, in which the Servicer shall state that, to the best of its
knowledge (i) the representations and warranties regarding the Origination Trust
in the Transaction Documents are true and correct on and as of the dates
specified in such agreements; (ii) the Origination Trust has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder or under the Transaction Documents at or prior to the Closing Date;
and (iii) subsequent to the date as of which information is given in the
Prospectus, there has not been any material adverse change in the general
affairs, business, properties, key personnel, capitalization, condition
(financial or otherwise) or results of operation of the Origination Trust except
as set forth or contemplated in the Prospectus.
(v) The Representative shall have received a certificate signed by two
officers of Avis, dated the Closing Date, substantially to the effect set forth
in Exhibit F hereto.
(w) The Representative shall have received a certificate signed by two
officers of PHH, dated the Closing Date, in which such officers shall state
that, to the best of their knowledge (i) the representations and warranties of
PHH in this Agreement are true and correct on and as of the dates specified
herein; (ii) PHH has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to the Closing
Date; and (iii) subsequent to the date as of which information is given in the
Prospectus, there has not been any material adverse change in the general
affairs, business, properties, key personnel, capitalization, condition
(financial or otherwise) or results of operation of PHH.
(x) The Representative shall have received evidence satisfactory to it
that the Issuer shall have issued the Series 2002-1 Senior Preferred Membership
Interests on the terms described in the Prospectus and that the Issuer shall
have repaid the Series 1999-3 Notes in the amount described in the Prospectus.
(y) The interest rate cap in the form filed as Exhibit 10.13 to the
Registration Statement having a notional amount at least equal to the aggregate
Lease Balance of all Fixed Rate Leases allocated to the Lease SUBI Portfolio as
of the Closing Date, plus, in the case of all such Fixed Rate Leases that are
Closed-End Leases, the aggregate Stated Residual Values of the
17
related Leased Vehicles, and an effective strike rate based on the eurodollar
rate set forth therein in effect at the most equal to the weighted average fixed
rate of interest on such Fixed Rate Leases minus [___]% per annum shall have
been duly executed and delivered by Bank of America, National Association to the
Indenture Trustee.
(z) An interest rate cap in the form filed as Exhibit 10.14 to the
Registration Statement and otherwise satisfying the requirements of a Series
2002-1 Required Lease Rate Cap shall have been duly executed and delivered by
JPMorgan Chase Bank to the Indenture Trustee.
(aa) The Representative shall have received a certificate signed by an
officer of SPV, dated the Closing Date, substantially to the effect set forth in
Exhibit G hereto.
(bb) The Representative shall have received a certificate signed by an
officer of the Issuer, dated the Closing Date, substantially to the effect set
forth in Exhibit H hereto.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this 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 Underwriters.
7. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representative, in its absolute discretion, by notice given to
and received by the Issuer prior to delivery of and payment for the Securities
if, prior to that time, any of the events described in Sections 6(i), 6(r)(iv),
6(s)(iv), 6(t)(iii), 6(u)(iii), or 6(w)(iii) or paragraph 1 of Exhibit F shall
have occurred and be continuing.
8. Defaulting Underwriters. (a) If, on the Closing Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the Representative may make arrangements for the purchase of the Securities
which such defaulting Underwriter agreed but failed to purchase by other persons
satisfactory to the Issuer and the Representative, but if no such arrangements
are made within 36 hours after such default, the Issuer may make arrangements
for the purchase of the Securities which the defaulting Underwriter agreed but
failed to purchase by other persons satisfactory to the Representative, but if
no such arrangements are made within 72 hours after such default, this Agreement
shall terminate without liability on the part of the non-defaulting Underwriters
or the Issuer, except that the Issuer will continue to be liable for the payment
of expenses to the extent set forth in Sections 9 and 13 and except that the
provisions of Sections 10 and 11 shall not terminate and shall remain in effect.
As used in this Agreement, the term "Underwriters" includes, for all purposes of
this Agreement unless the context otherwise requires, any party not listed in
Schedule 1 hereto that, pursuant to this Section 8, purchases Securities which a
defaulting Underwriter agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Issuer or any non-defaulting Underwriter for
damages caused by its default. If other persons are obligated or agree to
purchase the Securities of a defaulting Underwriter, either the Representative
or the Issuer may postpone the Closing Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Issuer or
counsel for the Underwriters may be necessary in the Registration Statement, the
18
Prospectus or in any other document or arrangement, and the Issuer agrees to
promptly prepare any amendment or supplement that effects any such changes.
9. Reimbursement of Underwriters' Expenses. If (a) this Agreement
shall have been terminated pursuant to Section 7 or 8, (b) the Issuer shall fail
to tender the Securities for delivery to the Underwriters for any reason
permitted under this Agreement or (c) the Underwriters shall decline to purchase
the Securities for any reason permitted under this Agreement, VMS shall
reimburse the Underwriters for such out-of-pocket expenses (including reasonable
fees and disbursements of counsel) as shall have been reasonably incurred by the
Underwriters in connection with this Agreement and the proposed purchase and
resale of the Securities. If this Agreement is terminated pursuant to Section 8
by reason of the default of one or more of the Underwriters, VMS shall not be
obligated to reimburse any defaulting Underwriter on account of such expenses.
10. Indemnification. (a) Each of the Issuer and VMS shall, jointly and
severally, indemnify and hold harmless each Underwriter, its affiliates, their
respective officers, directors, shareholders, partners, trustees, employees,
representatives and agents, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act or the Exchange Act
(collectively referred to for purposes of this Section 10(a) and Section 11 as
an Underwriter), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, without limitation, any
loss, claim, damage, liability or action relating to purchases and sales of the
Securities), to which that Underwriter may become subject, whether commenced or
threatened, under the Securities Act, the Exchange Act, any other federal or
state statutory law or regulation, at common law 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 Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state in the Preliminary Prospectus, the Registration
Statement, the Prospectus or in any amendment or supplement thereto 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, and shall reimburse each Underwriter promptly upon demand for any
legal or other expenses reasonably incurred by that Underwriter in connection
with investigating or defending or preparing to defend 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 the Issuer and
VMS shall not 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 of such documents in reliance upon and in conformity with any Underwriters'
Information; and provided, further, that with respect to any such untrue
statement in or omission from the Preliminary Prospectus the indemnity agreement
contained in this Section 10(a) shall not inure to the benefit of any such
Underwriter to the extent that the sale to the person asserting any such loss,
claim, damage, liability or action was an initial resale by such Underwriter and
any such loss, claim, damage, liability or action of or with respect to such
Underwriter results from the fact that both (A) a copy of the Prospectus was not
sent or given to such person within the time required by the Securities Act and
(B) the untrue statement in or omission from the Preliminary Prospectus was
corrected in the Prospectus unless, in either case, such failure to deliver the
Prospectus was a result of non-compliance by the Issuer with Section 4(a)
hereof.
19
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Issuer, VMS and their respective affiliates, officers,
directors, employees, representatives and agents, and each person, if any, who
controls the Issuer or VMS within the meaning of the Securities Act or the
Exchange Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Issuer or VMS may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common law 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 Preliminary Prospectus, the Registration
Statement, the Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state in the Preliminary Prospectus, the
Registration Statement, the Prospectus or in any amendment or supplement thereto
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, 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 any Underwriters' Information furnished
by such Underwriter, and shall reimburse the Issuer and VMS, as the case may be,
for any legal or other expenses reasonably incurred by the Issuer or VMS in
connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action 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 pursuant to Section 10(a) or 10(b), 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 which it may have under this Section 10 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) 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; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the
20
defense of such action on behalf of the indemnified party) or (4) the
indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. 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 or claim 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 for the plaintiff in any such action or claim, 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. No
indemnifying party shall, without the prior written consent of the indemnified
party (which consent shall not be unreasonably withheld), 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.
The obligations of the Issuer, VMS and the Underwriters in this
Section 10 and in Section 11 are in addition to any other liability that the
Issuer, VMS or the Underwriters, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
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 10(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 action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Issuer and VMS on the one hand and the Underwriters on
the other from the offering of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Issuer and VMS on the one hand and the
Underwriters on the other with respect to the statements or omissions that
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Issuer and VMS on the one hand and the Underwriters 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 Securities purchased under this
Agreement (before deducting expenses) received by or on behalf of the Issuer on
the one hand, and the total discounts and commissions received by the
Underwriters with respect to the Securities purchased under this Agreement, on
the other, bear to the total gross proceeds from the sale of the Securities
under this Agreement, 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
21
alleged omission to state a material fact relates to the Issuer or VMS or
information supplied by the Issuer or VMS on the one hand or to any
Underwriters' Information 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. The Issuer, VMS and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 11 were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that 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, or action in respect thereof,
referred to above in this Section 11 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 or preparing to
defend any such action or claim. Notwithstanding the provisions of this Section
11, no Underwriter shall be required to contribute any amount in excess of the
amount by which the total discounts and commissions received by such Underwriter
with respect to the Securities purchased by it under this Agreement exceeds the
amount of any damages which such 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. The Underwriters' obligations to contribute as provided in
this Section 11 are several in proportion to their respective purchase
obligations and not joint.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Issuer, VMS,
PHH and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except as provided in
Sections 10 and 11 with respect to affiliates, officers, directors, employees,
representatives, agents and controlling persons of the Issuer, VMS and the
Underwriters. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 12, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
13. Expenses. The Issuer agrees with the Underwriters to pay (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Securities and any taxes payable in that connection; (b) the costs incident
to the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto and 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, the Prospectus and any amendment or
supplement to the Prospectus or any Incorporated Document, all as provided in
this Agreement; (c) the costs of reproducing and distributing each of the
Transaction Documents; (d) the costs incident to the preparation, printing and
delivery of the certificates evidencing the Securities, including stamp duties
and transfer taxes, if any, payable upon issuance of the Securities; (e) the
reasonable fees and expenses of counsel to the Issuer, SPV, Avis, PHH, the
Origination Trust, VMS and independent accountants; (f) the reasonable fees and
expenses of counsel to the Underwriters; (g) the fees and expenses of qualifying
the Securities under the securities laws of the several jurisdictions and of
preparing, printing and distributing Blue Sky Memoranda (including related fees
and expenses of counsel for the Underwriters); (h) any fees charged by rating
agencies for rating the Securities;
22
(i) the fees and expenses of the Indenture Trustee and any paying agent
(including reasonable related fees and expenses of any counsel to such parties);
(j) all expenses and application fees incurred in connection with the approval
of the Securities for book-entry transfer by DTC; (k) the fees and expenses
incurred by the Issuer, VMS and PHH in connection with any "roadshow"
presentations to investors; and (l) all other costs and expenses incident to the
performance of the obligations of the Issuer, PHH and VMS under this Agreement
which are not otherwise specifically provided for in this Section 13; provided,
however, that except as provided in this Section 13 and Section 9, the
Underwriters shall pay their own costs and expenses.
14. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Issuer, VMS, PHH and the
Underwriters contained in this Agreement or made by or on behalf of the Issuer,
VMS, Avis, PHH or the Underwriters pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the
Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.
15. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Representative or the Underwriters, shall be
delivered or sent by mail or telecopy transmission to X.X. Xxxxxx
Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxx Xxxxx (telecopier no.: (000) 000-0000);
(b) if to the Issuer, shall be delivered or sent by mail or
telecopy transmission to the address of the Issuer set forth in the
Registration Statement, Attention: Xxxxxx Xxxxxx (telecopier no.:
(000) 000-0000); or
(c) if to VMS or PHH, shall be delivered or sent by mail or
telecopy transmission to 000 Xxxxxxxxxxxxx Xxxxxx, Xxxx Xxxxxx,
Xxxxxxxx 00000, Attention: Xxxx Xxxxxx, (telecopier no.: (410)
771-3362);
provided that any notice to an Underwriter pursuant to Section 10(c) shall also
be delivered or sent by mail to such Underwriter at its address set forth on the
signature page hereof. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Issuer, VMS and PHH shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by the Representative.
16. Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading and (b) except where otherwise expressly provided, the term
"affiliate" has the meaning set forth in Rule 405 under the Securities Act.
17. Underwriters' Information. The parties hereto acknowledge and
agree that, for all purposes of this Agreement, the Underwriters' Information
consists solely of the following information in the Prospectus: the [second and
eleventh] paragraphs under the
23
heading "Underwriting" and the [second sentence in the tenth paragraph] under
the heading "Underwriting".
18. Guarantee. (a) PHH hereby unconditionally guarantees to the
Underwriters the due and punctual payment and performance of all obligations of
VMS under this Agreement.
(b) PHH hereby agrees that its obligations pursuant to paragraph (a)
shall be construed as a continuing, absolute and unconditional obligation
without regard to (i) the validity, regularity or enforceability of this
Agreement or (ii) any other circumstance whatsoever which constitutes, or might
be construed to constitute, an equitable or legal discharge of VMS, in
bankruptcy or in any other instance. When pursuing its rights and remedies
hereunder against PHH, the Underwriters may, but shall be under no obligation
to, pursue such rights and remedies as it may have against VMS or any other
Person or any right of offset with respect thereto, and any failure by the
Underwriters to pursue such other rights or remedies or to collect any payments
from VMS or any such other Person or to exercise any such right of offset shall
not relieve PHH of any liability hereunder and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter of law,
of the Underwriters against PHH.
19. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
20. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
21. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
22. 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 Agreement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the Issuer, VMS, PHH and the
several Underwriters in accordance with its terms.
Very truly yours,
CHESAPEAKE FUNDING LLC
By:______________________________
Name:
Title:
24
PHH VEHICLE MANAGEMENT SERVICES, LLC
By:______________________________
Name:
Title:
PHH CORPORATION
By:______________________________
Name:
Title:
25
Accepted:
X.X. XXXXXX SECURITIES INC.
By:____________________________
Authorized Signatory
Address:
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn:
For itself and as Representative of the
several Underwriters
FIRST UNION SECURITIES, INC.
By:____________________________
Authorized Signatory
For itself and as Representative of the
several Underwriters
[Address]
SCHEDULE 1
Principal Amount of Principal Amount of
Underwriters Class A-1 Notes Class A-2 Notes
X.X. Xxxxxx Securities Inc. $ $
First Union Securities, Inc.
EXHIBIT A
FORM OF OPINIONS OF XXXXX & CASE LLP
The Representative shall have received the favorable opinion, dated as
of the Closing Date, of White & Case LLP, special counsel to the Issuer, SPV,
Avis, PHH and the Origination Trust, in form and substance, and subject to such
qualifications and assumptions as are, satisfactory to the Representative and to
counsel for the Underwriters, addressed to the Underwriters and to the effect
that:
(a) The Registration Statement has become effective under the Securities
Act and the Indenture has been qualified under the Trust Indenture Act. The
Prospectus was filed with the Commission as required by Rule 424 under the
Securities Act. To the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose is pending or threatened by the Commission;
(b) The Registration Statement, as of the Effective Date, and the
Prospectus, as of its date, and any further amendments or supplements thereto,
as of their respective dates, made by the Registrants prior to the Closing Date
(other than the financial statements and other financial and statistical data
contained therein, as to which such counsel need express no opinion) appear on
their face to comply as to form in all material respects with the requirements
of the Securities Act and the Rules and Regulations; the Incorporated Documents
(other than the financial statements and other financial and statistical data
contained therein, as to which such counsel need express no opinion), when they
were filed with the Commission appeared on their face to comply as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; and the Indenture conforms in all
material respects to the requirements of the Trust Indenture Act and the
applicable rules and regulations thereunder;
(c) The Series 2002-1 Investor Notes, the Indenture and the other
Transaction Documents conform in all material respects to the descriptions
thereof contained in the Prospectus.
(d) The Series 2002-1 Investor Notes are in the form contemplated by the
Base Indenture and the Indenture Supplement, and when duly executed by the
Issuer and authenticated by the Indenture Trustee in the manner provided in the
Base Indenture and the Indenture Supplement and issued and delivered against
payment of the purchase price therefor, will constitute valid and binding
obligations of the Issuer, enforceable against the Issuer in accordance with
their terms and will be entitled to the benefits of the Base Indenture and the
Indenture Supplement.
(e) Each of the Transaction Documents to which the Issuer, VMS, PHH
Consumer Lease, SPV, Avis, PHH or the Origination Trust (each, a "Party") is a
party, and which by its terms provides it is to be governed by New York law,
will constitute the valid and binding agreement of such Party, enforceable
against such Party in accordance with its terms, except (i) as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or other
2
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (regardless of whether the issue of enforceability
is considered in a proceeding in equity or at law) and (ii) such counsel need
not express an opinion as to the enforceability of any rights to indemnification
which are violative of the public policy underlying any law, rule or regulation.
(f) The statements in the Prospectus under the headings "Risk Factors--Our
Indirect Ownership of the Leases, the Vehicles and the Receivables Could Result
in Reduced Payments to You" and "--Insolvency or Bankruptcy of Vehicle
Management Services Could Result in Delayed or Reduced Payments to You,"
"Material Legal Aspects of the Origination Trust," "Material Legal Aspects of
the Leases and the Vehicles", "Employee Benefit Considerations", "Structural
Summary--Material Federal and Certain State Income Tax Consequences" and
"Material Federal and Certain State Income Tax Consequences--U.S. Federal Income
Tax Consequences" and in the fourth paragraph under the heading "Material
Federal and Certain State Income Tax Consequences --State Income Tax
Consequences", to the extent that they constitute summaries of matters of law,
documents or proceedings or legal conclusions relating to U.S. federal law, have
been prepared or reviewed by such counsel and are correct in all material
respects.
(g) To the knowledge of such counsel after due inquiry, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments to which the Issuer, SPV, VMS or the Origination Trust is a party
that would be required to be described in the Prospectus or filed as exhibits to
the Registration Statement by the Securities Act or by the Rules and Regulations
which have not been described or filed as exhibits to the Registration Statement
or incorporated therein by reference as permitted by the Rules and Regulations.
(h) None of the Parties is an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(i) The execution, delivery and performance by VMS, PHH and the Issuer of
the Underwriting Agreement, the issuance of the Securities to the Underwriters
and the offering of the Securities, and the execution, delivery and performance
by each of the Parties of each of the Transaction Documents to which it is a
party and the consummation by each of the Parties of the applicable transactions
provided for therein do not and will not (a) require any authorization, consent,
approval, license or other action by or in respect of, or notice to or filing
with, any federal or New York state governmental, legislative, judicial,
administrative or regulatory body, agency or official, except for the filing of
the applicable financing statements; or (b) contravene, violate or constitute a
default under any provision of any federal or New York state law, rule or
regulation or any order, writ, judgment or decree, of which such counsel is
aware after due inquiry, of any New York State or federal court or governmental
authority binding upon any such Party.
(j) It is not necessary to qualify the LLC Agreement or the Origination
Trust Documents under the Trust Indenture Act.
(k) The provisions of the Transfer Agreement are effective to create a
valid and enforceable ownership or security interest, as the case may be, in the
Lease SUBI and the Fleet
3
Receivable SUBI and the other Transferred Assets (as defined in the Transfer
Agreement) in favor of the Issuer.
(l) The provisions of the Asset Sale Agreement are effective to create a
valid and enforceable ownership or security interest, as the case may be, in the
Sold Assets (as defined therein). The provisions of the Additional Equipment
Assets Assignment Agreement are effective to create a valid and enforceable
ownership or security interest, as the case may be, in the Additional Equipment
Assets (as defined therein). The provisions of the Additional Equipment Assets
Sale Agreement are effective to create a valid and enforceable ownership or
security interest, as the case may be, in the Additional Equipment Assets sold
and assigned to SPV pursuant thereto (the "PHH Financial Assets").
(m) The provisions of the Receivables Purchase Agreement and the
Receivables Assignments are effective to create a valid and enforceable
ownership or security interest, as the case may be, in the Transferred Fleet
Receivables (as defined therein) described therein.
(n) The provisions of the Indenture and the Series 2002-1 Indenture
Supplement are effective to create a valid and enforceable security interest in
the Collateral and the Series 2002-1 Collateral and the Proceeds thereof in
favor of the Indenture Trustee.
(o) Each of the financing statements naming VMS, PHH Consumer Lease, SPV or
the Issuer as debtor (the "Financing Statements") filed with the Secretary of
State of New York and Nassau County Clerk's office (the "Filing Offices") were
when filed in the appropriate form for filing under the Uniform Commercial Code
of the State of New York, as it was in effect on the dates of such filings. The
ownership or security interest, as the case may be, of the respective secured
parties in the collateral described in the Financing Statements and the proceeds
thereof constitutes a continuing perfected first priority ownership or security
interest, as the case may be, therein under the Uniform Commercial Code of the
State of New York, as it is in effect on the date hereof (the "New York UCC")
and as it was in effect prior to July 1, 2001. No further filing or other action
is necessary to perfect and maintain the perfection and priority of such
ownership or security interest, as the case may be, against third parties.
(p) Section 9-301 of the New York UCC provides that the local law in which
a debtor is located governs perfection of a security interest in the collateral
described in the Financing Statements and that the local law in which a debtor
is located governs the effect of perfection or nonperfection and the priority of
a nonpossessory security interest in such collateral except to the extent that
such collateral consists of negotiable documents, goods, instruments, money or
tangible chattel paper. Section 9-301 of the New York UCC also provides that the
local law of the jurisdiction in which the collateral is located governs the
effect of the perfection or nonperfection and the priority of a nonpossessory
security interest in negotiable documents, goods, instruments, money and
tangible chattel paper.
(q) VMS, SPV and the Issuer are located in the State of Delaware under
Section 9-307(e) of the New York UCC. PHH Consumer Lease is located in the State
of Maryland under Section 9-307(e) of the New York UCC. The filing of a
financing statement in the New York Filing Offices naming VMS, PHH Consumer
Lease, SPV or the Issuer, as debtor, and covering any of the collateral
described in the Financing Statements on or after July 1, 2001 would have
4
no effect under the New York UCC. There are no financing statements on file in
the New York Filing Offices naming VMS, PHH Consumer Lease, SPV or the Issuer as
debtor covering any of the collateral described in the Financing Statements
other than the Financing Statements.
(r) The Lease SUBI Certificate is either an "instrument", a "certificated
security", "tangible chattel paper" or a "general intangible", as such terms are
defined in the New York UCC. Each of the Fleet Receivable SUBI Certificates is
either an "instrument," a "certificated security," a "general intangible" or an
"account," as such terms are defined in the New York UCC.
(s) With respect to the delivery of the SUBI Certificates to the Issuer by
the SPV pursuant to the Transfer Agreement:
(I) Assuming that (i) each of the SUBI Certificates is an
"instrument" (as defined in the New York UCC), and have been delivered
to, and are continually in the possession of the Issuer in the State
of New York and (ii) if the Issuer is deemed to be a purchaser of the
SUBI Certificates, the Issuer took possession of the SUBI Certificates
in good faith and without knowledge that the purchase violates the
rights of a secured party, the Issuer has a perfected ownership or
security interest, as the case may be, in the SUBI Certificates, as
determined in accordance with Article 9 of the New York UCC.
(II) Assuming that (i) each of the SUBI Certificates is a
"certificated security" (as defined in the New York UCC), and have
been delivered to, and are continually in the possession of the Issuer
in the State of New York and (ii) the SUBI Certificates are registered
in the name of the Issuer, the Issuer will have a perfected ownership
or security interest, as the case may be, in the SUBI Certificates, as
determined in accordance with Article 9 of the New York UCC.
(III) Assuming that the SUBI Certificates are "general
intangibles", "chattel paper" or "accounts" (in the case of the Fleet
Receivables) (as defined in the New York UCC), the perfection and
priority of the ownership interest or security interest, as the case
may be, in the SUBI Certificates received by the Issuer under the
Transfer Agreement in favor of the Issuer is addressed in paragraph
(o) of this opinion.
(t) With respect to the delivery of the Collateral to the Indenture Trustee
in accordance with the Indenture and the Series 2002-1 Indenture Supplement:
(a) Assuming that the Collateral is comprised of an "instrument"
(as defined in the New York UCC), and has been delivered to, and is
continually in the possession of, the Indenture Trustee in the State
of New York, the Indenture Trustee has a perfected security interest
in such Collateral, as determined in accordance with Article 9 of the
New York UCC.
(b) Assuming that (i) the Collateral is comprised of a
"certificated security" (as defined in the New York UCC), and has been
delivered to, and is continually in the possession of the Indenture
Trustee in the State of New York
5
and (ii) such Collateral is registered in the name of the Indenture
Trustee or is endorsed to the Indenture Trustee or in blank by an
effective endorsement, the Indenture Trustee has a perfected security
interest in such Collateral, as determined in accordance with Article
9 of the New York UCC.
(c) Assuming that the Collateral is a "general intangible",
"chattel paper" or an "account" (in the case of the Fleet Receivables)
(as defined in the New York UCC), the perfection and priority of the
security interest in such Collateral is addressed in another paragraph
of this opinion.
(d) (i)(A) The security interest in any portion of the Collateral
consisting of a Security Entitlement carried in a Series Account which
is a "securities account" as defined in Section 8-501(a) of the New
York UCC (each a "Securities Account") maintained by the Indenture
Trustee for the benefit of the Series 2002-1 Investor Noteholders
pursuant to and in accordance with the Indenture and the Series 2002-1
Indenture Supplement, will attach upon acquisition by the Issuer and
the Indenture Trustee of rights in such Security Entitlement. Upon
full compliance with the procedures set forth in the Indenture in
respect of a Permitted Investment, the Indenture Trustee will acquire
a Security Entitlement carried in the Securities Account in respect of
such Permitted Investment and will become the Entitlement Holder (as
defined in the New York UCC) of such Security Entitlement. Such
security interest will be perfected upon execution and delivery of the
Series 2002-1 Indenture Supplement by the parties thereto and
acquisition by the Indenture Trustee of such Security Entitlement as
described above and will remain perfected so long as the Base
Indenture and the Series 2002-1 Indenture Supplement remain in effect
and the conditions set forth in this clause (A) are satisfied and the
Indenture Trustee remains the Entitlement Holder of such Security
Entitlement as described above;
(B) such security interest in that portion of the Collateral
consisting of a Securities Account, if any, will be perfected if and
will remain perfected so long as the security interest of the
Indenture Trustee for the benefit of the Series 2002-1 Investor
Noteholders, in all Security Entitlements carried in such Securities
Account is perfected by the means indicated in clause (A) above.
(ii) With respect to the security interest in any Collateral
perfected as described in subparagraph (i) above, if such Collateral
consists of a Securities Account or a Security Entitlement credited to
a Securities Account and so long as such security interest therein is
perfected in the manner specified in clauses (A) and (B) of
subparagraph (i) above, as applicable, and if such security interest
was created for value and without notice (within the meaning of
Section 8-105 of the New York UCC) to the Indenture Trustee or the
Series 2002-1 Investor Noteholders of any adverse claim (as defined in
Section 8-102(a)(1) of the New York UCC) (an "Adverse Claim") to such
Securities Account or Security Entitlement in such Securities Account,
such perfected security interest has priority over all other security
interests theretofore or thereafter created under the New York UCC in
such Securities Account or Security Entitlement (provided that
6
(x) if the Indenture Trustee and another secured party both have
control over such Securities Account and Security Entitlements, their
interests will rank equally, except that any security interest granted
to the Securities Intermediary in such Securities Account or Security
Entitlement would have priority over the security interest therein of
the Indenture Trustee unless otherwise agreed by the Securities
Intermediary, and (y) such priority will be subject to Section 8-511
of the New York UCC, to the Bankruptcy Code and to liens or claims of
the U.S. or otherwise given priority by operation of law, including
New York or federal law).
(u) In the event of the filing of a bankruptcy petition with respect to VMS
under the Bankruptcy Code, the transfer of Transferred Receivables and the
Receivables Property (each as defined in the Receivables Purchase Agreement)
from VMS to SPV would not be recharacterized by a court as a pledge to secure
borrowings but rather properly would be held as a valid sale or contribution, as
applicable, of all of VMS' right, title and interest in the Transferred Fleet
Receivables and, therefore, a court properly would hold that (i) the Transferred
Fleet Receivables and the proceeds thereof are not part of VMS' bankruptcy
estate under Section 541 of the Bankruptcy Code and (ii) the automatic stay
under section 362 of the Bankruptcy Code would not apply to the Transferred
Fleet Receivables or the proceeds thereof.
(v) In the event of the filing of a bankruptcy petition with respect to VMS
under the Bankruptcy Code, the transfer of Leases, Vehicles, Existing Interests
and other Sold Assets (as defined in the Asset Purchase Agreement) from VMS to
SPV (the "VMS Transferred Assets") would not be recharacterized by a court as a
pledge to secure borrowings but rather properly would be held as a valid sale or
contribution, as applicable, of all of VMS' right, title and interest in the VMS
Transferred Assets and, therefore, a court properly would hold that (i) the VMS
Transferred Assets and the proceeds thereof are not part of VMS' bankruptcy
estate under Section 541 of the Bankruptcy Code and (ii) the automatic stay
under section 362 of the Bankruptcy Code would not apply to the VMS Transferred
Assets or the proceeds thereof.
(w) In the event of the filing of a bankruptcy petition with respect to PHH
Consumer Lease under the Bankruptcy Code, the transfer of Consumer Leases and
other Sold Assets (as defined in the Asset Purchase Agreement) from PHH Consumer
Lease to SPV (the "Consumer Lease Transferred Assets") would not be
recharacterized by a court as a pledge to secure borrowings but rather properly
would be held as a valid sale or contribution, as applicable, of all of PHH
Consumer Lease's right, title and interest in the Consumer Lease Transferred
Assets and, therefore, a court properly would hold that (i) the Consumer Lease
Transferred Assets and the proceeds thereof are not part of PHH Consumer
Leases's bankruptcy estate under Section 541 of the Bankruptcy Code and (ii) the
automatic stay under section 362 of the Bankruptcy Code would not apply to the
Consumer Lease Transferred Assets or the proceeds thereof.
(x) Although such counsel assumes no responsibility for the accuracy,
completeness or fairness of the Prospectus (except as provided in paragraphs (c)
and (f) above), nothing has come to the attention of such counsel to cause such
counsel to believe that the Registration Statement, as of the Effective Date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be
7
stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus (including the Incorporated Documents)
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading (except for financial statements and other financial or statistical
data set forth in the Prospectus, as to which such counsel need make no
statement).
(y) In a case under the Bankruptcy Code in which PHH or any of its
Affiliates (other than the Issuer or SPV) was the debtor, subject to certain
facts, assumptions and qualifications specified therein, it would not be a
proper exercise by a court of its equitable discretion to disregard the separate
existence of the Origination Trust so as to order substantive consolidation
under the Bankruptcy Code of the assets and liabilities of the Origination Trust
with the bankruptcy estate of PHH or any of its Affiliates (other than the
Issuer or SPV).
(z) In a case under the Bankruptcy Code in which PHH or any of its
Affiliates (other than the Origination Trust or the Issuer) was the debtor,
subject to certain facts, assumptions and qualifications specified therein, it
would not be a proper exercise by a court of its equitable discretion to
disregard the separate existence of SPV so as to order substantive consolidation
under the Bankruptcy Code of the assets and liabilities of SPV with the
bankruptcy estate of PHH or any of its Affiliates (other than the Issuer or the
Origination Trust).
(aa) State law will govern the determination of what persons or entities
have the authority to file a bankruptcy petition on behalf of a Delaware limited
liability company.
(bb) The Series 2002-1 Investor Notes will be treated as debt for United
States federal income tax purposes.
(cc) None of the Issuer, SPV or the Origination Trust will be classified as
an association or a publicly traded partnership taxable as a corporation for
United States federal income tax purposes.
EXHIBIT B
FORM OF OPINIONS OF COUNSEL TO VMS
The Representative shall have received the favorable opinion, dated as of
the Closing Date, of Xxxxxx Xxxxxx, Senior Vice President and General Counsel of
VMS, in form and substance satisfactory to the Representative and counsel for
the Underwriters, and addressed to the Underwriters and to the effect that:
1. PHH PersonaLease Corporation, a Maryland corporation
("ConsumerLease", and together with VMS, the Issuer, SPV and the
Origination Trust, the "Parties," and each individually, a "Party"), has
been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Maryland.
2. To my best knowledge, there are no pending actions or suits or
judicial, arbitral, rule-making administrative or other proceedings to
which any Party is a party or of which any property or assets of any Party
is the subject which singularly or in the aggregate, if determined
adversely to a Party, could reasonably be expected to have a Material
Adverse Effect or a VMS Material Adverse Effect and to my best knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
3. To my best knowledge, no Party is (A) in violation of its
respective limited liability company agreement or certificate of
incorporation and by-laws, (B) 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 material agreement or instrument to
which it is a party or by which it is bound or to which any of its property
or assets are subject or (C) in violation in any material respect of any
law, ordinance, governmental rule, regulation or court decree to which it
or its property or assets may be subject.
4. None of the execution and delivery by each of the Parties of the
Underwriting Agreement and each Transaction Document to which it is a
party, as the case may be, the consummation by the Parties of the
transactions contemplated thereby or compliance by the Parties with any of
the provisions thereof, including the issuance of the Securities to the
Underwriters and the offering of the Securities, (i) conflicts with or
results in any breach of any provision of the respective organizational
documents of the Parties, (ii) results in a default (or gives rise to any
right of termination, cancellation or acceleration) or results in the
creation or imposition of any mortgage, lien, security interest, charge or
encumbrance upon any of the property or assets of the Parties, under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, agreement, lease or other instrument or obligation known to me
after due inquiry to which any of the Parties is a party or by which its
respective assets may be bound or (iii) contravenes any provision of any
Federal law or the law of the State of Maryland, statute, rule or
regulation or any order, writ, injunction or decree of which such counsel
is aware or any
2
Federal or Maryland State court or governmental entity to which the Parties are
subject.
5. ConsumerLease has the power and authority to execute and deliver
each document to which it is a party and to perform its obligations
thereunder, and all corporate action required to be taken for the due and
proper authorization, execution and delivery of each Transaction Document
to which it is a party and the transactions contemplated thereby have been
duly and validly taken.
6. Each Transaction Document to which ConsumerLease is a party has
been duly executed and delivered by ConsumerLease.
EXHIBIT C
FORM OF OPINIONS OF GENERAL COUNSEL TO AVIS
The Representative shall have received the favorable opinion, dated as of
the Closing Date, of the General Counsel of Avis, in form and substance
satisfactory to the Representative and counsel for the Underwriters, and
addressed to the Underwriters and to the effect that:
1. Avis Group Holdings, Inc. ("Avis"), a Delaware corporation, has
been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware.
2. To such counsel's best knowledge, there are no pending actions or
suits or judicial, arbitral, rule-making administrative or other
proceedings to which Avis is a party or of which any property or assets of
Avis is the subject which singularly or in the aggregate, if determined
adversely to Avis, could reasonably be expected to have an Avis Material
Adverse Effect and to such counsel's best knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
3. To such counsel's best knowledge, Avis is not (A) in violation of
its certificate of incorporation or by-laws, (B) 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 material agreement or
instrument known to such counsel after due inquiry to which it is a party
or by which it is bound or to which any of its property or assets are
subject or (C) in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree known to such counsel after
due inquiry to which it or its property or assets may be subject.
4. The execution and delivery by Avis of the ARAC Guaranty and the
consummation by Avis of the transactions contemplated thereby does not (i)
conflict with or result in any breach of any provision of the certificate
of incorporation or by-laws of Avis or (ii) result in a default (or gives
rise to any right of termination, cancellation or acceleration) or result
in the creation or imposition of any mortgage, lien, security interest,
charge or encumbrance upon any of the property or assets of Avis, under any
of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, agreement, lease or other instrument or obligation
known to such counsel after due inquiry to which Avis is a party or by
which its respective assets may be bound.
5. Avis has the power and authority to execute and deliver the ARAC
Guaranty and to perform its obligations thereunder, and all corporate
action required to be taken for the due and proper authorization, execution
and delivery of the ARAC Guaranty and the transactions contemplated thereby
have been duly and validly taken.
6. The ARAC Guaranty has been duly executed and delivered by Avis.
EXHIBIT D
FORM OF OPINIONS OF GENERAL COUNSEL TO PHH
The Representative shall have received the favorable opinion, dated as of
the Closing Date, of counsel to PHH, in form and substance satisfactory to the
Representative and counsel for the Underwriters, and addressed to the
Underwriters and to the effect that:
1. PHH Corporation ("PHH"), a Maryland corporation, has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Maryland.
2. To such counsel's best knowledge, there are no pending actions or
suits or judicial, arbitral, rule-making administrative or other
proceedings to which PHH is a party or of which any property or assets of
PHH is the subject which singularly or in the aggregate, if determined
adversely to PHH, could reasonably be expected to have a PHH Material
Adverse Effect and to such counsel's best knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
3. To such counsel's best knowledge, PHH is not (A) in violation of
its certificate of incorporation or by-laws, (B) 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 material agreement or
instrument known to such counsel after due inquiry to which it is a party
or by which it is bound or to which any of its property or assets are
subject or (C) in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree known to such counsel after
due inquiry to which it or its property or assets may be subject.
4. The execution and delivery by PHH of the Underwriting Agreement and
the PHH Guaranty and the consummation by PHH of the transactions
contemplated thereby does not (i) conflict with or result in any breach of
any provision of the certificate of incorporation or by-laws of PHH or (ii)
result in a default (or gives rise to any right of termination,
cancellation or acceleration) or result in the creation or imposition of
any mortgage, lien, security interest, charge or encumbrance upon any of
the property or assets of PHH, under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement,
lease or other instrument or obligation known to such counsel after due
inquiry to which PHH is a party or by which its respective assets may be
bound.
5. PHH has the power and authority to execute and deliver the
Underwriting Agreement and the PHH Guaranty and to perform its obligations
thereunder, and all corporate action required to be taken for the due and
proper authorization, execution and delivery of the Underwriting Agreement
and the PHH Guaranty and the transactions contemplated thereby have been
duly and validly taken.
2
6. The Underwriting Agreement and the PHH Guaranty have been duly
executed and delivered by PHH.
EXHIBIT E
FORM OF OPINIONS OF XXXXXXXX, XXXXXX & FINGER
The Representative shall have received the favorable opinion, dated as of
the Closing Time, of Xxxxxxxx, Xxxxxx & Finger, counsel to Wilmington Trust
Company, as the SUBI Trustee, and special Delaware counsel to the Issuer, VMS,
SPV and the Origination Trust, in form and substance satisfactory to the
Representative and to counsel for the Underwriters and addressed to the
Underwriters, to the effect that:
1. The Origination Trust has been duly formed and is validly existing
in good standing as a business trust under the Delaware Business Trust Act,
12 Del. C. Section 3801, et seq. (the "Act"), and has the power and
authority under the Trust Agreement and the Act to conduct its business as
described in the Prospectus and to execute, deliver and perform its
obligations under the Servicing Agreement, to issue the SUBI Certificates
and to own, lease and operate its properties and to conduct its business as
described in the Origination Trust Agreement.
2. The Origination Trust Agreement constitutes a legal, valid and
binding agreement of the parties thereto, and is enforceable against such
parties, in accordance with its terms.
3. The Servicing Agreement, the Custodian Agreement and the Lockbox
Agreement have been duly authorized, executed and delivered by the
Origination Trust.
4. Each of the SUBI Certificates have been duly authorized, executed
and delivered by the Trust and are validly issued and entitled to the
benefits of the Origination Trust Agreement.
5. Assuming that (i) separate and distinct records are maintained for
each SUBI created pursuant to the Origination Trust Agreement, (ii) the
assets associated with each SUBI are held and accounted for separately from
the other assets of the Origination Trust, or any other SUBI, (iii) the
notice of the limitation on liabilities of a series provided in Section
3804(a) of the Act is continuously set forth in the Certificate of Trust
and (iv) the Origination Trust Agreement continuously provides for those
matters described in (i), (ii) and (iii) of this paragraph 5, each SUBI
shall be entitled to the benefits of the limitation on interseries
liability set forth in Section 3804(a) of the Delaware Business Trust Act.
6. The execution, delivery and performance by the Origination Trust of
the Servicing Agreement, the Custodian Agreement and the Lockbox Agreement,
the issuance by the Origination Trust of the SUBI Certificates and the
consummation by the Origination Trust of the transactions contemplated
thereby do not violate (i) any of the provisions of the Origination Trust
Agreement, (ii) any applicable Delaware law, rule or regulation, or (iii)
to our knowledge, without independent investigation, any contract,
indenture, mortgage, loan agreement, note lease or other instrument to
which the
2
Origination Trust is a party, by which it may be bound or to which its
assets are subject.
7. Neither the execution, delivery and performance by the Origination
Trust of the Servicing Agreement, the Custodian Agreement or the Lockbox
Agreement, the issuance by the Origination Trust of the SUBI Certificates
nor the consummation by the Origination Trust of the transactions
contemplated thereby requires the consent or approval of, the withholding
of objection on the part of, the giving of notice to, the filing,
registration or qualification with, or the taking of any other acting in
respect of, any governmental authority or agency of the State of Delaware,
other than the filing of the Certificate of Trust with the Secretary of
State.
8. Assuming that for federal income tax purposes the Origination Trust
will not be classified as an association or a publicly traded partnership
under Section 7704 of the Internal Revenue Code of 1986, as amended, the
Origination Trust will not be classified as an association or a publicly
traded partnership for income tax purposes under the laws of the State of
Delaware.
9. VMS has been duly formed and is validly existing in good standing
as a limited liability company under the laws of the State of Delaware.
10. SPV has been duly formed and is validly existing in good standing
as a limited liability company under the laws of the State of Delaware.
11. The Issuer has been duly formed and is validly existing in good
standing as a limited liability company under the laws of the State of
Delaware.
12. Under the Delaware Limited Liability Company Act (6 Del. C.
Section 18-101, et seq.) (the "LLC Act") and the VMS Limited Liability
Company Agreement ("VMS Agreement"), VMS has all necessary limited
liability company power and authority to conduct its business as described
in the Prospectus and to execute and deliver, and to perform its
obligations under, the Underwriting Agreement and each of the Transaction
Documents to which it is a party.
13. Under the LLC Act and the SPV Limited Liability Company Agreement
("SPV Agreement"), SPV has all necessary limited liability company power
and authority to conduct its business as described in the Prospectus and to
execute and deliver, and to perform its obligations under, the Transaction
Documents to which it is a party.
14. Under the LLC Act and the Issuer Limited Liability Company
Agreement (the "Issuer Agreement"), the Issuer has all necessary limited
liability company power and authority to conduct its business as described
in the Prospectus and to execute and deliver, and to perform its
obligations under, the Underwriting Agreement and the Transaction Documents
to which it is a party.
15. Under the LLC Act and the VMS Agreement, the execution and
delivery by VMS of the Underwriting Agreement and the Transaction Documents
to which it is a party, and the performance by VMS of its obligations
thereunder, have been duly
3
authorized by all necessary limited liability company action on the part of
VMS.
16. Under the LLC Act and the SPV Agreement, the execution and
delivery by the SPV of the Transaction Documents to which it is a party,
and the performance by the SPV of its obligations thereunder, have been
duly authorized by all necessary limited liability company action on the
part of the SPV.
17. Under the LLC Act and the Issuer Agreement, the execution and
delivery by the Issuer of the Underwriting Agreement and the Transaction
Documents to which it is a party, and the performance by the Issuer of its
obligations thereunder, have been duly authorized by all necessary limited
liability company action on the part of the Issuer.
18. The execution and delivery by VMS of the Underwriting Agreement
and the Transaction Documents to which it is a party, and the performance
by VMS of its obligations thereunder, do not violate (i) any Delaware law,
rule or regulation, or (ii) the VMS Agreement.
19. The execution and delivery by the SPV of the Transaction Documents
to which it is a party, and the performance by the SPV of its obligations
thereunder, do not violate (i) any Delaware law, rule or regulation, or
(ii) the SPV Agreement.
20. The execution and delivery by the Issuer of the Underwriting
Agreement and the Transaction Documents to which it is a party, and the
performance by the Issuer of its obligations thereunder, do not violate (i)
any Delaware law, rule or regulation, or (ii) the Issuer Agreement.
21. No authorization, consent, approval, order, filing or
qualification of or with any Delaware court or any Delaware governmental or
administrative body is required solely in connection with the execution and
delivery by VMS of the Underwriting Agreement and the Transaction Documents
to which it is a party, and the performance by VMS of its obligations
thereunder (other than the filing of financing statements).
22. No authorization, consent, approval, order, filing or
qualification of or with any Delaware court or any Delaware governmental or
administrative body is required solely in connection with the execution and
delivery by the SPV of the Transaction Documents to which it is a party,
and the performance by the SPV of its obligations thereunder (other than
the filing of financing statements).
23. No authorization, consent, approval, order, filing or
qualification of or with any Delaware court or any Delaware governmental or
administrative body is required solely in connection with the execution and
delivery by the Issuer of the Underwriting Agreement and the Transaction
Documents to which it is a party, and the performance by the Issuer of its
obligations thereunder, including the issuance of the Securities to the
Underwriters and the offering of the Securities (other than the filing of
financing statements).
4
24. The SPV Agreement constitutes a legal, valid and binding agreement
of VMS, as sole economic member (the "SPV Member"), and is enforceable
against the SPV Member, in accordance with its terms.
25. The Issuer Agreement constitutes a legal, valid and binding
agreement of SPV, as the sole common member (the "Common Member"), and is
enforceable against the Common Member, in accordance with its terms.
26. If properly presented to a Delaware court, a Delaware court
applying Delaware law would conclude that (i) in order for a Person to file
a voluntary bankruptcy petition on behalf of the SPV, the prior unanimous
consent of the Managers (as defined in the SPV Agreement), including each
of the Independent Managers (as defined in the SPV Agreement), as provided
for in Section 4.4(b) of the SPV Agreement, is required and (ii) such
provision, contained in Section 4.4(b) of the SPV Agreement, that requires
the prior unanimous consent of the Managers (as defined in the SPV
Agreement), including each of the Independent Managers (as defined in the
SPV Agreement), in order for a Person to file a voluntary bankruptcy
petition on behalf of the SPV, constitutes a legal, valid and binding
agreement of the SPV Member, and is enforceable against the SPV Member, in
accordance with its terms.
27. If properly presented to a Delaware court, a Delaware court
applying Delaware law would conclude that (i) in order for a Person to file
a voluntary bankruptcy petition on behalf of the Issuer, the prior
unanimous consent of the Managers, including the Independent Manager, and
the affirmative vote of Preferred Members holding Preferred Membership
Interests of at least 66-2/3% of the aggregate stated liquidation
preference of all Preferred Membership Interests then outstanding, voting
as a single class, in person or by proxy at a special meeting called for
the purpose, or by unanimous written consent of the Preferred Members
without such meeting, as provided for in Section 3.4(b), Section 9.2(f) and
Section 10.2(f) of the Issuer Agreement, is required and (ii) such
provisions, contained in Section 3.4(b), Section 9.2(f) and Section 10.2(f)
of the Issuer Agreement, that require the prior unanimous consent of the
Managers, including the Independent Manager, and the affirmative vote of
Preferred Members holding Preferred Membership Interests of at least
66-2/3% of the aggregate stated liquidation preference of all Preferred
Membership Interests then outstanding, voting as a single class, in person
or by proxy at a special meeting called for the purpose, or by unanimous
written consent of the Preferred Members without such meeting, in order for
a Person to file a voluntary bankruptcy petition on behalf of the Issuer,
constitute legal, valid and binding agreements of the Common Member, and is
enforceable against the Common Member, in accordance with its terms.
28. Under the LLC Act and the SPV Agreement, the Bankruptcy (as
defined in the SPV Agreement) or dissolution of the SPV Member will not, by
itself, cause the SPV to be dissolved or its affairs to be wound up.
29. Under the LLC Act and the Issuer Agreement, the occurrence of an
Insolvency Event with respect to, or dissolution of, the Common Member will
not, by itself, cause the Issuer to be dissolved or its affairs to be wound
up.
5
30. While under the LLC Act, on application to a court of competent
jurisdiction, a judgment creditor of the SPV Member may be able to charge
the SPV Member's share of any profits and losses of the SPV and the SPV
Member's right to receive distributions of the SPV's assets (the "SPV
Member's Interest"), and the court may appoint a receiver of the share of
distributions due or to become due to the SPV Member in respect of the SPV,
the receiver shall have only the rights of the assigner of the SPV Member's
Interest. Under the LLC Act, no creditor of the SPV Member shall have any
right to obtain possession of, or otherwise exercise legal or equitable
remedies with respect to, the property of the SPV. Thus, under the LLC Act,
a judgment creditor of the SPV Member may not satisfy its claims against
the SPV Member by asserting a claim against the assets of the SPV.
31. While under the LLC Act, on application to a court of competent
jurisdiction, a judgment creditor of the Common Member may be able to
charge the Common Member's share of any profits and losses of the Issuer
and the Common Member's right to receive distributions of the Issuer's
assets (the "Common Member's Interest"), and the court may appoint a
receiver of the share of distributions due or to become due to the Common
Member in respect of the Issuer, the receiver shall have only the rights of
an assignee of the Common Member's Interest. Under the LLC Act, no creditor
of the Common Member shall have any right to obtain possession of, or
otherwise exercise legal or equitable remedies with respect to, the
property of the Issuer. Thus, under the LLC Act, a judgment creditor of the
Common Member may not satisfy its claims against the Common Member by
asserting a claim against the assets of the Issuer.
32. Under the LLC Act (i) the SPV is a separate legal entity, and (ii)
the existence of the SPV as a separate legal entity shall continue until
the cancellation of the SPV Certificate of Formation.
33. Under the LLC Act (i) the Issuer is a separate legal entity, and
(ii) the existence of the Issuer as a separate legal entity shall continue
until the cancellation of the Issuer Certificate of Formation.
34. None of VMS, the SPV or the Issuer will be treated as an
association taxable as a corporation for Delaware state income tax
purposes.
35. Each of the financing statements naming the Issuer or SPV and
filed in the State of Delaware (the "Financing Statements") in connection
with the Transaction Documents is and was at the time it was filed in an
appropriate form for filing in the of State of Delaware and was duly filed
in the appropriate filing office in the State of Delaware.
36. Each of the "in lieu" financing statements naming VMS, SPV or the
Issuer filed in the State of Delaware (the "New Financing Statements") in
connection with the
6
Transaction Documents is and was at the time it was filed in the
appropriate form for filing in the State of Delaware is and was duly filed
in the appropriate filing office in the State of Delaware.
37. Insofar as Article 9 of the Uniform Commercial Code as in effect
in the State of Delaware (the "UCC") is applicable (without regard to
principles of conflict of laws), and assuming that the security interest
created by the Indenture in favor of the Trustee in the Collateral and the
proceeds thereof has been duly created and has attached, then, (A) the
Trustee has a perfected security interest in the Issuer's rights in that
portion of the Collateral that may be perfected by the filing of a UCC
financing statement with the Secretary of State of the State of Delaware,
and the proceeds thereof, and (B) such security interest is prior to any
other security interest granted by the Issuer that is perfected solely by
the filing of financing statements under the UCC in the State of Delaware,
excluding purchase money security interests under Section 9-103 of the UCC
and temporarily perfected security interests in proceeds under Section
9-315 of the UCC.
38. Insofar as Article 9 of the UCC is applicable (without regard to
principles of conflict of laws), and assuming that the security interest
created by the Indenture in favor of the Indenture Trustee in the Series
2002-1 Collateral and the proceeds thereof has been duly created and has
attached, then, upon the filing of the Financing Statements relating to the
Series 2002-1 Collateral with the Secretary of State of the State of
Delaware, (A) the Indenture Trustee will have a perfected security interest
in the Issuer's rights in that portion of the Series 2002-1 Collateral that
may be perfected by the filing of a UCC financing statement with the
Secretary of State of the State of Delaware, and the proceeds thereof, and
(B) such security interest will be prior to any other security interest
granted by the Issuer that is perfected solely by the filing of financing
statements under the UCC in the State of Delaware, excluding purchase money
security interests under Section 9-103 of the UCC and temporarily perfected
security interests in proceeds under Section 9-315 of the UCC.
39. Insofar as Article 9 of the UCC is applicable (without regard to
principles of conflict of laws), and assuming that the security interest
created by the Transfer Agreement in favor of the Issuer in the Transferred
Assets and the proceeds thereof pursuant to the Transfer Agreement has been
duly created and has attached, (A) the Issuer has a perfected security
interest in the SPV's rights in that portion of the Transferred Assets that
may be perfected by the filing of a UCC financing statement with the
Secretary of State of the State of Delaware, and the proceeds thereof, and
(B) such security interest is prior to any other security interest granted
by SPV that is perfected solely by the filing of financing statements under
the UCC in the State of Delaware, excluding purchase money security
interests under Section 9-103 of the UCC and temporarily perfected security
interests in proceeds under Section 9-315 of the UCC.
40. Insofar as Article 9 of the UCC is applicable (without regard to
principles of conflict of laws), and assuming that the security interest
created by the Asset Purchase Agreement and the Additional Equipment Assets
Assignment Agreement in favor of SPV has been duly created and has
attached, (A) SPV has a perfected security interest in VMS's
7
rights in that portion of the Sold Assets and the Additional Equipment
Assets that may be perfected by the filing of a UCC financing statement
with the Secretary of State of the State of Delaware, and the proceeds
thereof, and (B) such security interest is prior to any other security
interest granted by VMS that is perfected solely by the filing of financing
statements under the UCC in the State of Delaware, excluding purchase money
security interests under Section 9-103 of the UCC and temporarily perfected
security interests in proceeds under Section 9-315 of the UCC.
41. Insofar as Article 9 of the UCC is applicable (without regard to
principles of conflict of laws), and assuming that the security interest
created by the Receivables Purchase Agreement and the Receivables
Assignments in favor of SPV has been duly created and has attached, (A) SPV
has a perfected security interest in VMS's rights in that portion of the
Transferred Fleet Receivables that may be perfected by the filing of a UCC
financing statement with the Secretary of State of the State of Delaware,
and the proceeds thereof, and (B) such security interest is prior to any
other security interest granted by VMS that is perfected solely by the
filing of financing statements under the UCC in the State of Delaware,
excluding purchase money security interests under Section 9-103 of the UCC
and temporarily perfected security interests in proceeds under Section
9-315 of the UCC.
42. Wilmington Trust Company ("Wilmington Trust") is duly incorporated
and is validly existing in good standing as a banking corporation with
trust powers under the laws of the State of Delaware.
43. Wilmington Trust has the power and authority to execute, deliver
and perform its obligations under the Origination Trust Agreement.
44. The Origination Trust Agreement has been duly authorized, executed
and delivered by Wilmington Trust.
45. The execution, delivery and performance by Wilmington Trust of the
Origination Trust Agreement does not conflict with or constitute a breach
of the charter or by-laws of Wilmington Trust.
46. No consent, approval or authorization of, or registration with or
notice to, any governmental authority or agency of the State of Delaware or
the United States of America governing the banking or trust powers of
Wilmington Trust is required for the execution, delivery or performance by
Wilmington Trust of the Origination Trust Agreement.
EXHIBIT F
OFFICERS' CERTIFICATE OF AVIS GROUP HOLDINGS, INC.
The Representative shall have received an Officers' Certificate, dated the
Closing Date, of two officers of Avis to the effect that:
1. To the best of his or her knowledge, subsequent to the date as of
which information is given in the Prospectus, there has not been any
material adverse change in the general affairs, business, properties, key
personnel, capitalization, condition (financial or otherwise) or results of
operation of Avis.
2. Avis (A) has been duly formed and is validly existing as a
corporation and is in good standing under the laws of the State of
Delaware, (B) is qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the ownership or lease of
property or the conduct of its business requires such qualification, except
where such lack of qualification or good standing would not have a material
adverse effect on its condition (financial or other), business or results
of operations or its ability to perform its obligations under the ARAC
Guaranty (a "Material Adverse Effect") and (C) has the requisite power and
authority to own or hold its properties and to conduct the business in
which it is engaged.
3. Avis has the requisite power and authority to execute and deliver
the ARAC Guaranty and to perform its obligations thereunder.
4. The ARAC Guaranty has been duly authorized, executed and delivered
by Avis and constitutes a legal, valid and binding obligations enforceable
in accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency or other similar laws relating to or affecting
generally the enforcement of creditors' rights or by general equitable
principles.
5. Avis is not in violation of its certificate or incorporation or
by-laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement or lease to which it is a party or by which it or
its properties may be bound which would have a Material Adverse Effect. The
execution and delivery of the ARAC Guaranty and the incurrence of the
obligations and consummation of the transactions therein contemplated will
not conflict with, or constitute a breach of or default under any contract,
indenture, mortgage, loan agreement or lease, to which Avis is a party or
by which it or its properties may be bound, or any law, administrative
regulation or court decree, with only such exceptions as would not have a
Material Adverse Effect, nor will such action result in any violation of
its certificate of incorporation or by-laws.
EXHIBIT G
OFFICER'S CERTIFICATE OF RAVEN FUNDING LLC
The Representative shall have received an Officer's Certificate, dated the
Closing Date, of a manager of SPV to the effect that:
1. The Transfer Agreement creates a valid and continuing security
interest (as defined in the UCC) in the Transferred Assets in favor of the
Issuer which security interest is prior to all other Liens, and is
enforceable as such against creditors of and purchasers from SPV.
2. SPV has received all consents and approvals required by the terms
of any of the Transferred Assets to the transfer of the Transferred Assets
to the Issuer pursuant to the Transfer Agreement.
3. SPV has not authorized the filing of any financing statement
against SPV that includes a description of collateral covering the
Transferred Assets other than any financing statement relating to the
security interest granted to the Issuer under the Transfer Agreement.
EXHIBIT H
OFFICER'S CERTIFICATE OF CHESAPEAKE FUNDING LLC
The Representative shall have received an Officer's Certificate, dated the
Closing Date, of a manager of the Issuer to the effect that:
1. The Issuer has good title to the Collateral free and clear of all
Liens, other than Permitted Liens.
2. The Issuer has received all consents and approvals required by the
terms of any of the Collateral to the pledge of the Collateral to the
Indenture Trustee pursuant to the Indenture.
3. The SUBI Certificates have been delivered to the Indenture Trustee.
4. The Issuer has not authorized the filing of any financing statement
against the Issuer that includes a description of collateral covering the
Collateral other than any financing statement relating to the security
interest granted to the Indenture Trustee under the Indenture.
