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EXHIBIT 1.1
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UNDERWRITING AGREEMENT
November 8, 1996
First Sierra Receivables II, Inc. (the "Company") hereby
confirms its agreement to sell certain equipment lease backed certificates as
described herein relating to the First Sierra Equipment Lease Trust 1996-2 (the
"Trust"). The certificates will evidence in the aggregate the entire
beneficial interest in a trust fund (the "Trust Fund") consisting primarily of
a segregated pool (the "Receivable Pool") of operating leases and installment
sales contracts (the "Receivables") and certain related property (collectively,
the "Transferred Property"). The Receivables shall have, as of the close of
business on November 1, 1996 (the "Cut-off Date"), a discounted lease balance
(calculated in accordance with the form of Pooling and Servicing Agreement) of
$72,024,443.60. The certificates are to be issued under a Pooling and
Servicing Agreement, to be dated as of November 1, 1996 (the "Pooling and
Servicing Agreement"), among the Company, First Sierra Financial, Inc., as
servicer (the "Servicer"), and Bankers Trust Company, as trustee (the
"Trustee").
On or prior to the date of issuance of the certificates, the
Company will obtain the certificate guaranty insurance policies (the
"Policies") issued by MBIA Insurance Corporation (the "Insurer") which will
unconditionally and irrevocably guarantee to the Trustee for the benefit of the
holders of the Class A Certificates full and complete payment of all amounts
payable on the Class A Certificates. All capitalized terms used but not
otherwise defined herein have the respective meanings set forth in the form of
Pooling and Servicing Agreement heretofore delivered to First Union Capital
Markets Corp. (the "Underwriter").
1. Certificates. The certificates will be issued in classes
as follows: (i) a senior class consisting of the Class A Certificates (the
"Class A Certificates") to be sold to the Underwriter pursuant to this
Agreement, (ii) two subordinate classes with respect to the Class A
Certificates (collectively, the "Class B Certificates") to be privately placed,
and (iii) one subordinate class with respect to the Class A Certificates and
the Class B Certificates (the "Trust
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Certificate"). The Class A Certificates, the Class B Certificates and
the Trust Certificate are hereinafter referred to as the "Certificates."
2. Representations and Warranties of the Company. The
Company represents and warrants to, and covenants with, the Underwriter that:
A. The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement (No. 33-98822)
on Form S-3 for the registration under the Securities Act of 1933, as amended
(the "Act"), of Equipment Lease Backed Notes and Equipment Lease Backed
Certificates (issuable in series), which registration statement, as amended at
the date hereof, has become effective. Such registration statement, as amended
to the date of this Agreement, meets the requirements set forth in rule
415(a)(1)(vii) under the Act and complies in all other material respects with
such Rule. The Company proposes to file with the Commission pursuant to Rule
424(b)(2) under the Act a supplement dated November 8, 1996 to the prospectus
dated April 18, 1996 relating to the Certificates and the method of
distribution thereof and has previously advised the Underwriter of all further
information (financial and other) with respect to the Certificates to be set
forth therein. Such registration statement, including the exhibits thereto, as
amended at the date hereof, is hereinafter called the "Registration Statement";
such prospectus dated April 18, 1996, in the form in which it will be filed
with the Commission pursuant to Rule 424(b)(2) under the Act is hereinafter
called the "Base Prospectus"; such supplement dated November 8, 1996 to the
Base Prospectus, in the form in which it will be filed with the Commission
pursuant to Rule 424(b)(2) of the Act, is hereinafter called the "Prospectus
Supplement"; and the Base Prospectus and the Prospectus Supplement together are
hereinafter called the "Prospectus." Any preliminary form of the Prospectus
Supplement which has heretofore been filed pursuant to Rule 424 is hereinafter
called a "Preliminary Prospectus Supplement." The Company will file with the
Commission within fifteen days of the issuance of the Certificates a report on
Form 8-K setting forth specific information concerning the related Receivables
(the "8-K").
B. As of the date hereof, when the Registration
Statement became effective, when the Prospectus Supplement is first filed
pursuant to Rule 424(b)(2) under the Act, when, prior to the Closing Date (as
defined below), any other amendment to the Registration Statement becomes
effective, and when any supplement to the Prospectus is filed with the
Commission, and at the Closing Date, (i) the Registration Statement, as amended
as of any such time, and the Prospectus, as amended or supplemented as of any
such time, will comply in
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all material respects with the applicable requirements of the Act and the rules
thereunder and (ii) the Registration Statement, as amended as of any such time,
did not and will not contain any untrue statement of a material fact and did not
and will not omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and the Prospectus, as
amended or supplemented as of any such time, did not and will not contain an
untrue statement of a material fact and did not and will not omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
the information furnished in writing to the Company by or on behalf of the
Underwriter specifically for use in connection with the preparation of the
Registration Statement and the Prospectus; further, provided, that no
representation is made as to documents deemed to be incorporated by reference in
the Prospectus as the result of filing a Form 8-K at the request of the
Underwriter except to the extent such documents reflect information furnished by
the Company to the Underwriter for the purpose of preparing such documents.
C. The Company is duly organized, validly existing and
in good standing under the laws of the State of Delaware, has full power and
authority (corporate and other) to own its properties and conduct its business
as now conducted by it, and as described in the Prospectus, and is duly
qualified to do business in each jurisdiction in which it owns or leases
equipment (to the extent such qualification is required by applicable law) or
in which the conduct of its business requires such qualification except where
the failure to be so qualified does not involve (i) a material risk to, or a
material adverse effect on, the business, properties, financial position,
operations or results of operations of the Company or (ii) any risk whatsoever
as to the enforceability of any Receivable.
D. There are no actions, proceedings or investigations
pending, or, to the knowledge of the Company, threatened, before any court,
governmental agency or body or other tribunal (i) asserting the invalidity of
this Agreement, the Certificates, the Insurance Agreement dated as of November
1, 1996 (the "Insurance Agreement") among MBIA Insurance Corporation (the
"Insurer"), the Company and the Underwriter, the Indemnification Agreement
dated November 8, 1996 (the "Indemnification Agreement") among the Company, the
Insurer and the Underwriter or of the Pooling and Servicing Agreement, (ii)
seeking to prevent the issuance of the Certificates or the consummation of any
of the transactions contemplated by
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this Agreement or the Pooling and Servicing Agreement, (iii) which may,
individually or in the aggregate, materially and adversely affect the
performance by the Company of its obligations under, or the validity or
enforceability of, this Agreement, the Certificates or the Pooling and Servicing
Agreement, or (iv) which may affect adversely the federal income tax attributes
of the Certificates as described in the Prospectus.
E. The execution and delivery by the Company of this
Agreement, the Indemnification Agreement, the Insurance Agreement and the
Pooling and Servicing Agreement, the issuance of the Certificates and the
transfer and delivery of the Receivables to the Trustee, by the Company are
within the corporate power of the Company and have been, or will be, prior to
the Closing Date duly authorized by all necessary corporate action on the part
of the Company and the execution and delivery of such instruments, the
consummation of the transactions therein contemplated and compliance with the
provisions thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any statute or any agreement
or instrument to which the Company or any of its affiliates is a party or by
which it or any of them is bound or to which any of the property of the Company
or any of its affiliates is subject, the Company's charter or bylaws, or any
order, rule or regulation of any court, governmental agency or body or other
tribunal having jurisdiction over the Company, any of its affiliates or any of
its or their properties; and no consent, approval, authorization or order of,
or filing with, any court or governmental agency or body or other tribunal is
required for the consummation of the transactions contemplated by this
Agreement or the Prospectus in connection with the issuance and sale of the
Certificates. Neither the Company nor any of its affiliates is a party to,
bound by or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order, rule or
regulation of any court, governmental agency or body or other tribunal having
jurisdiction over the Company or any of its affiliates, which materially and
adversely affects, or may in the future materially and adversely affect, (i)
the ability of the Company to perform its obligations under the Pooling and
Servicing Agreement, this Agreement, the Insurance Agreement or the
Indemnification Agreement or (ii) the business, operations, results of
operations, financial position, income, properties or assets of the Company.
F. This Agreement, the Indemnification Agreement and the
Insurance Agreement have been duly executed and delivered by the Company, and
the Pooling and Servicing Agreement will be duly executed and delivered by the
Company, and each constitutes and will constitute the legal, valid and binding
obligation of the Company enforceable in accordance
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with their respective terms, except as enforceability may be limited by (i)
bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or
other similar laws affecting the enforcement of the rights of creditors, and
(ii) general principles of equity, whether enforcement is sought in a proceeding
at law or in equity.
G. The Certificates will conform in all material
respects to the description thereof to be contained in the Prospectus and will
be duly and validly authorized and, when duly and validly executed,
authenticated, issued and delivered in accordance with the Pooling and
Servicing Agreement and sold to the Underwriter as provided herein, will be
validly issued and outstanding and entitled to the benefits of the Pooling and
Servicing Agreement.
H. At the Closing Date, the Receivables will conform in
all material respects to the description thereof contained in the Prospectus
and the representations and warranties contained in this Agreement will be true
and correct in all material respects. The representations and warranties set
out in the Pooling and Servicing Agreement are hereby made to the Underwriter
as though set out herein, and at the dates specified in the Pooling and
Servicing Agreement, such representations and warranties were or will be true
and correct in all material respects.
I. The Company possesses all material licenses,
certificates, permits or other authorizations issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by it and as described in the Prospectus and there are no
proceedings, pending or, to the best knowledge of the Company, threatened,
relating to the revocation or modification of any such license, certificate,
permit or other authorization which singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would materially and adversely
affect the business, operations, results of operations, financial position,
income, property or assets of the Company.
J. Any taxes, fees and other governmental charges in
connection with the execution and delivery of this Agreement, the Insurance
Agreement and the Indemnification Agreement and the Pooling and Servicing
Agreement, or the execution and issuance of the Certificates have been or will
be paid at or prior to the Closing Date.
K. There has not been any material adverse change, or
any development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or operations of
the Company or its subsidiaries, taken as a whole, from September 30, 1996.
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L. This Agreement and the Pooling and Servicing
Agreement will conform in all material respects to the descriptions thereof
contained in the Prospectus.
M. The Company is not aware of (i) any request by the
Commission for any further amendment of the Registration Statement or the
Prospectus or for any additional information, (ii) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose
or (iii) any notification with respect to the suspension of the qualification
of the Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
N. Each assignment of Receivables required to be
prepared pursuant to the Pooling and Servicing Agreement is based on forms
recently utilized by the Company with respect to leases or equipment in the
appropriate jurisdiction and used in the regular course of the Company's
business. Based on the Company's experience with such matters it is reasonable
to believe that upon execution each such assignment will be in recordable form
and will be sufficient to effect the assignment of the Receivable to which it
relates as provided in the Pooling and Servicing Agreement.
O. The transfer of the Receivables to the Trust at the
Closing Date will be treated by the Company for financial accounting and
reporting purposes as a sale of assets and not as a pledge of assets to secure
debt.
Any certificate signed by any officer of the Company and
delivered to the Underwriter in connection with the sale of the Certificates
hereunder shall be deemed a representation and warranty as to the matters
covered thereby by the Company to each person to whom the representations and
warranties in this Section 2 are made.
3. Agreements of the Underwriter. The Underwriter agree with
the Company that upon the execution of this Agreement and authorization by the
Underwriter of the release of the Class A Certificates, the Underwriter shall
offer the Class A Certificates for sale upon the terms and conditions set forth
in the Prospectus as amended or supplemented.
4. Purchase, Sale and Delivery of the Certificates. The
Company hereby agrees, subject to the terms and conditions hereof, to sell the
Class A Certificates to the Underwriter, who, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, hereby agree(s) to purchase the entire aggregate
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principal amount of the Class A Certificates. At the time of issuance of the
Certificates, the Receivables will be transferred by the Company to the Trust
pursuant to the Pooling and Servicing Agreement. The Servicer will be
obligated, under the Pooling and Servicing Agreement to service the Receivables
either directly or through sub-servicers.
The Class A Certificates to be purchased by the Underwriter
will be delivered by the Company to the Underwriter (which delivery shall be
made through the facilities of The Depository Trust Company ("DTC")) against
payment of the purchase price therefor, equal to 99.6825% of the aggregate
principal amount of the Class A Certificates, plus interest accrued at the
related Interest Rate on the Class A Certificates from November 10, 1996 to
November 15, 1996, but not including, the settlement date, by a same day
federal funds wire payable to the order of the Company.
Settlement shall take place at the offices of Xxxxx
Xxxxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx at 10 a.m., on
November 15, 1996, or at such other time thereafter as the Underwriter and the
Company determine (such time being herein referred to as the "Closing Date").
The Class A Certificates will be prepared in definitive form and in such
authorized denominations as the Underwriter may request, registered in the name
of Cede & Co., as nominee of DTC.
The Company agrees to have the Certificates available for
inspection and review by the Underwriter in New York City not later than 10
a.m. New York City time on the business day prior to the Closing Date.
5. Covenants of the Company. The Company covenants and
agrees with the Underwriter that:
A. The Company will promptly advise the Underwriter and
its counsel (i) when any amendment to the Registration Statement shall have
become effective, (ii) of any request by the Commission for any amendment to the
Registration Statement or the Prospectus or for any additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threatening of
any proceeding for that purpose and (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Class A
Certificates for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company will not file any amendment to the
Registration Statement or supplement to the Prospectus after the date hereof and
prior to the Closing Date
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for the Certificates unless the Company has furnished the Underwriter and its
counsel copies of such amendment or supplement for their review prior to filing
and will not file any such proposed amendment or supplement to which the
Underwriter reasonably objects, unless such filing is required by law. The
Company will use its best efforts to prevent the issuance of any stop order
suspending the effectiveness of the Registration Statement and, if issued, to
obtain as soon as possible the withdrawal thereof.
B. If, at any time during the period in which the
Prospectus is required by law to be delivered, any event occurs as a result of
which the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it shall be necessary to amend or supplement
the Prospectus to comply with the Act or the rules under the Act, the Company
will promptly prepare and file with the Commission, subject to Paragraph A of
this Section 5, an amendment or supplement that will correct such statement or
omission or an amendment that will effect such compliance and, if such
amendment or supplement is required to be contained in a post-effective
amendment to the Registration Statement, will use its best efforts to cause
such amendment of the Registration Statement to be made effective as soon as
possible.
C. The Company will furnish to the Underwriter, without
charge, executed copies of the Registration Statement (including exhibits
thereto) and, so long as delivery of a Prospectus by the Underwriter or a
dealer may be required by the Act, as many copies of the Prospectus, as amended
or supplemented, and any amendments and supplements thereto as the Underwriter
may reasonably request. The Company will pay the expenses of printing all
offering documents relating to the offering of the Class A Certificates.
D. As soon as practicable, but not later than sixteen
months after the effective date of the Registration Statement, the Company will
cause the Trust to make generally available to Securityholders an earnings
statement of the Trust covering a period of at least 12 months beginning after
the effective date of the Registration Statement which will satisfy the
provisions of Section 11(a) of the Act and, at the option of the Company, will
satisfy the requirements of Rule 158 under the Act.
E. During a period of 20 calendar days from the date as
of which this Agreement is executed, neither the Company nor any affiliate of
the Company will, without the Underwriter' prior written consent (which consent
shall not be unreasonably withheld), enter into any agreement to offer or
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sell lease backed certificates, except pursuant to this Agreement.
F. So long as any of the Class A Certificates are
outstanding, the Company will cause to be delivered to the Underwriter (i) all
documents required to be distributed to Certificateholders and (ii) from time
to time, any other information concerning the Trust filed with any government
or regulatory authority that is otherwise publicly available, as the
Underwriter may reasonably request.
G. The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated, will
pay all expenses in connection with the transactions contemplated herein,
including but not limited to the expenses of printing (or otherwise
reproducing) all documents relating to the offering, the fees and disbursements
of its counsel and expenses of the Underwriter incurred in connection with (i)
the issuance and delivery of the Certificates, (ii) preparation of all
documents specified in this Agreement, (iii) any fees and expenses of the
Trustee, the Insurer and any other credit support provider (including legal
fees), accounting fees and disbursements and (iv) any fees charged by
investment rating agencies for rating the Class A Certificates.
H. The Company agrees that, so long as any of the Class
A Certificates shall be outstanding, it will deliver or cause to be delivered
to the Underwriter (i) the annual statement as to compliance delivered to the
Trustee pursuant to the Pooling and Servicing Agreement, (ii) the annual
statement of a firm of independent public accountants furnished to the Trustee
pursuant to the Pooling and Servicing Agreement as soon as such statement is
furnished to the Company and (iii) any information required to be delivered by
the Company or the Servicer pursuant to Section 5.09 of the form of Pooling and
Servicing Agreement heretofore delivered to the Underwriter.
I. The Company will enter into the Pooling and Servicing
Agreement, the Indemnification Agreement and all related agreements on or prior
to the Closing Date.
J. The Company will endeavor to qualify the Class A
Certificates for sale to the extent necessary under any state certificates or
Blue Sky laws in any jurisdictions as may be reasonably requested by the
Underwriter, if any, and will pay all expenses (including fees and disbursements
of counsel) in connection with such qualification and in connection with the
determination of the eligibility of the Class A Certificates for investment
under the laws of such jurisdictions as the Underwriter may reasonably
designate, if any.
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6. Conditions of the Underwriter'(s) Obligation. The
obligation of the Underwriter to purchase and pay for the Class A Certificates
as provided herein shall be subject to the accuracy as of the date hereof and
the Closing Date (as if made at the Closing Date) of the representations and
warranties of the Company contained herein (including those representations and
warranties set forth in the Pooling and Servicing Agreement and incorporated
herein), to the accuracy of the statements of the Company made in any
certificate or other document delivered pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
following additional conditions:
A. The Registration Statement shall have become
effective no later than the date hereof, and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened, and the
Prospectus shall have been filed pursuant to Rule 424(b).
B. The Underwriter shall have received the Pooling and
Servicing Agreement and the Class A Certificates in form and substance
satisfactory to the Underwriter, duly executed by all signatories required
pursuant to the respective terms thereof.
C. The Underwriter shall have received the favorable opinion
of Xxxxx Xxxxxxxxxx, counsel to the Company with respect to the following
items, dated the Closing Date, to the effect that:
1. The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, and is qualified to do business
in each state necessary to enable it to perform its
obligations under the Pooling and Servicing Agreement. The
Company has the requisite power and authority to execute and
deliver, engage in the transactions contemplated by, and
perform and observe the conditions of, this Agreement, the
Insurance Agreement and the Pooling and Servicing Agreement and
the Indemnification Agreement.
2. This Agreement, the Certificates, the
Insurance Agreement and the Pooling and Servicing Agreement
and the Indemnification Agreement have been duly and validly
authorized, executed and delivered by the Company, all
requisite corporate action having been taken with respect
thereto, and each (other than the Certificates) constitutes
the valid, legal and binding agreement of the Company,
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and, if such agreements (other than the Certificates) were
governed by the laws of the State of New York, would be
enforceable against the Company in accordance with their
respective terms.
3. Neither the transfer of the Receivables to
the Trust, the issuance or sale of the Certificates nor the
execution, delivery or performance by the Company of the
Pooling and Servicing Agreement, the Insurance Agreement, this
Agreement or the Indemnification Agreement (A) conflicts or
will conflict with or results or will result in a breach of,
or constitutes or will constitute a default under, (i) any
term or provision of the articles of incorporation or bylaws
of the Company; (ii) any term or provision of any material
agreement, contract, instrument or indenture, to which the
Company is a party or is bound; or (iii) any order, judgment,
writ, injunction or decree of any court or governmental agency
or body or other tribunal having jurisdiction over the
Company; or (B) results in, or will result in the creation or
imposition of any lien, charge or encumbrance upon the Trust
Fund or upon the Certificates, except as otherwise
contemplated by the Pooling and Servicing Agreement.
4. The endorsement and delivery of each
Receivable, and the preparation, delivery and recording of an
Assignment with respect to each Receivable is sufficient fully
to transfer to the Trust all right, title and interest of the
Company in the Receivables, and will be sufficient to permit
the Trustee to avail itself of all protection available under
applicable law against the claims of any present or future
creditors of the Company and to prevent any other sale,
transfer, assignment, pledge or other encumbrance of the
Receivables by the Company from being enforceable.
5. No consent, approval, authorization or order
of, registration or filing with, or notice to, courts,
governmental agency or body or other tribunal is required
under the laws of the State of New York, for the execution,
delivery and performance of the Pooling and Servicing
Agreement, the Insurance Agreement, this Agreement, the
Indemnification Agreement or the offer, issuance, sale or
delivery of the Certificates or the consummation of any other
transaction contemplated
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thereby by the Company, except such which have been obtained.
6. There are no actions, proceedings or
investigations pending or, to such counsel's knowledge,
threatened against the Company before any court, governmental
agency or body or other tribunal (i) asserting the invalidity
of the Pooling and Servicing Agreement, this Agreement, the
Indemnification Agreement, the Insurance Agreement or the
Certificates (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by the Pooling and Servicing Agreement, the
Indemnification Agreement, the Insurance Agreement or this
Agreement, (iii) which would materially and adversely affect
the performance by the Company of obligations under, or the
validity or enforceability of, the Pooling and Servicing
Agreement, the Certificates, the Indemnification Agreement,
the Insurance Agreement or this Agreement.
7. Except as to any financial or statistical
data contained in the Registration Statement and the
statements set forth in the Base Prospectus under the captions
"DESCRIPTION OF TRUST AGREEMENTS - Credit and Cash
Enhancements," "CERTAIN TAX CONSIDERATIONS" and "ERISA
CONSIDERATIONS," and the statements set forth in the
Prospectus Supplement under the captions "CERTAIN FEDERAL AND
STATE INCOME TAX CONSIDERATIONS" and "ERISA CONSIDERATIONS"as
to which no opinion or belief need be expressed, to the best
of such counsel's knowledge, the Registration Statement does
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein not
misleading.
8. The Certificates, assuming due execution and
authentication by the Trustee, and delivery and payment
therefore pursuant to this Agreement, are validly issued and
outstanding and are entitled to the benefits of the Pooling and
Servicing Agreement.
9. To the best of the knowledge of such counsel,
the Commission has not issued any stop order suspending the
effectiveness of the Registration Statement or any order
directed to any prospectus relating to the Certificates
(including
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the Prospectus), and has not initiated or threatened any
proceeding for that purpose.
10. For federal income tax purposes, the
Certificates will be characterized as indebtedness that is
secured by the Transferred Property and the issuance of the
Certificates will not be treated as a sale of the Transferred
Property by the Seller.
In rendering their opinions, the counsel described in this
Paragraph C may rely, as to matters of fact, on certificates of responsible
officers of the Company, the Trustee and public officials. Such opinions may
also assume the due authorization, execution and delivery of the instruments
and documents referred to therein by the parties thereto other than the
Company.
D. The Underwriter shall have received a letter from
Certified Public Accountants, dated on or before the Closing Date, in form and
substance satisfactory to the Underwriter and counsel for the Underwriter, to
the effect that they have performed certain specified procedures requested by
the Underwriter with respect to the information set forth in the Prospectus and
certain matters relating to the Company.
E. The Class A Certificates shall have been rated in the
highest rating category by Xxxxx'x Investors Service and by Standard & Poor's
Ratings Services, a division of The XxXxxx-Xxxx Companies, and such ratings
shall not have been rescinded. The Underwriter and counsel for the Underwriter
shall have received copies of any opinions of counsel supplied to the rating
organizations relating to any matters with respect to the Class A Certificates.
Any such opinions shall be dated the Closing Date and addressed to the
Underwriter or accompanied by reliance letters to the Underwriter or shall
state that the Underwriter may rely upon them.
F. The Underwriter shall have received from the Company
a certificate, signed by the president, a senior vice president or a vice
president of the Company, dated the Closing Date, to the effect that the signer
of such certificate has carefully examined the Registration Statement, the
Pooling and Servicing Agreement and this Agreement and that, to the best of his
or her knowledge based upon reasonable investigation:
1. the representations and warranties of the Company in this
Agreement and in the Indemnification Agreement, as of the Closing
Date, in the Pooling and Servicing Agreement, the Insurance Agreement
and in all related agreements, as of the date specified in such
agreements, are true and correct, and the Company has
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complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date;
2. there are no actions, suits or proceedings pending, or to
the best of such officer's knowledge, threatened against or affecting
the Company which if adversely determined, individually or in the
aggregate, would be reasonably likely to adversely affect the
Company's obligations under the Pooling and Servicing Agreement, the
Insurance Agreement, this Agreement or under the Indemnification
Agreement in any material way; and no merger, liquidation, dissolution
or bankruptcy of the Company is pending or contemplated;
3. the information contained in the Registration Statement
relating to the Company, the Receivables or the servicing procedures
of it or its affiliates is true and accurate in all material respects
and nothing has come to his or her attention that would lead such
officer to believe that the Registration Statement includes any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein not misleading;
4. the information set forth in the Schedule of Receivables
required to be furnished pursuant to the Pooling and Servicing
Agreement is true and correct in all material respects;
5. there has been no amendment or other document filed
affecting the articles of incorporation or bylaws of the Company since
April 1, 1996, and no such amendment has been authorized. No event
has occurred since November 7, 1996, which has affected the good
standing of the Company under the laws of the State of California;
6. there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
September 30, 1996;
7. on or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating, if any,
accorded the Company or in any rating accorded any certificates of the
Company, if any, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the Act; and
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8. each person who, as an officer or representative of the
Company, signed or signs the Registration Statement, the Pooling and
Servicing Agreement, the Insurance Agreement, this Agreement, the
Indemnification Agreement or any other document delivered pursuant
hereto, on the date of such execution, or on the Closing Date, as the
case may be, in connection with the transactions described in the
Pooling and Servicing Agreement, the Indemnification Agreement, the
Insurance Agreement and this Agreement was, at the respective times of
such signing and delivery, and is now, duly elected or appointed,
qualified and acting as such officer or representative, and the
signatures of such persons appearing on such documents are their
genuine signatures.
The Company shall attach to such certificate a true and
correct copy of its articles of incorporation and bylaws which are in full
force and effect on the date of such certificate, and a certified true copy of
the resolutions of its Board of Directors with respect to the transactions
contemplated herein.
G. The Underwriter shall have received a favorable
opinion of counsel to the Trustee, dated the Closing Date and in form and
substance satisfactory to the Underwriter, to the effect that:
1. the Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of
New York and has the power and authority to enter into and to take all
actions required of it under the Pooling and Servicing Agreement;
2. the Pooling and Servicing Agreement has been duly
authorized, executed and delivered by the Trustee and the Pooling and
Servicing Agreement constitutes the legal, valid and binding obligation
of the Trustee, enforceable against the Trustee in accordance with its
terms, except as enforceability thereof may be limited by (A)
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally, as such laws would
apply in the event of a bankruptcy, insolvency or reorganization or
similar occurrence affecting the Trustee, and (B) general principles of
equity regardless of whether such enforcement is sought in a proceeding
at law or in equity;
3. no consent, approval, authorization or other action by any
governmental agency or body or other tribunal is required on the part
of the Trustee in connection with its execution and delivery of the
Pooling
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and Servicing Agreement or the performance of its obligations
thereunder;
4. the Certificates have been duly executed, authenticated
and delivered by the Trustee; and
5. the execution and delivery of, and performance by the
Trustee of its obligations under, the Pooling and Servicing Agreement
do not conflict with or result in a violation of any statute or
regulation applicable to the Trustee, or the charter or bylaws of the
Trustee, or to the best knowledge of such counsel, any governmental
authority having jurisdiction over the Trustee or the terms of any
indenture or other agreement or instrument to which the Trustee is a
party or by which it is bound.
In rendering such opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the Company, the
Trustee and public officials. Such opinion may also assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Trustee.
H. The Underwriter shall have received from the Trustee
a certificate, signed by the President, a senior vice president or a vice
president of the Trustee, dated the Closing Date, to the effect that each
person who, as an officer or representative of the Trustee, signed or signs the
Certificates, the Pooling and Servicing Agreement or any other document
delivered pursuant hereto, on the date hereof or on the Closing Date, in
connection with the transactions described in the Pooling and Servicing
Agreement was, at the respective times of such signing and delivery, and is now,
duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such documents
are their genuine signatures.
I. On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or potential
downgrading or (B) any review or possible changes in rating the direction of
which has not been indicated, in the rating, if any, accorded the Company or in
any rating accorded any certificates of the Company, if any, by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of the Act.
J. There has not occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or in
the earnings, business or operations, since September 30, 1996, of (A) the
Company its subsidiaries and affiliates or (B) the Insurer, that is in the
Underwriter'(s) judgment material and adverse and that makes
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it in the Underwriter'(s) judgment impracticable to market the Class A
Certificates on the terms and in the manner contemplated in the Prospectus.
K. The Underwriter shall have received from Xxxxx
Xxxxxxxxxx, special counsel to the Underwriter, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the Certificates,
the Prospectus and such other related matters as the Underwriter shall
reasonably require.
L. The Underwriter and counsel for the Underwriter shall
have received copies of any opinions of counsel to the Company or the Insurer
supplied to the Trustee relating to matters with respect to the Certificates or
the Policies. Any such opinions shall be dated the Closing Date and addressed
to the Underwriter or accompanied by reliance letters to the Underwriter or
shall state the Underwriter may rely thereon.
M. The Underwriter shall have received such further
information, certificates and documents as the Underwriter may reasonably have
requested not fewer than three (3) full business days prior to the Closing
Date.
N. The Policies relating to the Class A Certificates
shall have been duly executed and issued at or prior to the Closing Date and
shall conform in all material respects to the description thereof in the
Prospectus.
O. The Underwriter shall have received a favorable
opinion of Xxxxx Xxxx, counsel to the Insurer, dated the Closing Date and in
form and substance satisfactory to counsel for the Underwriter, to the effect
that:
1. the Insurer is a stock insurance corporation, duly
incorporated and validly existing under the laws of the State of New
York. The Insurer is validly licensed and authorized to issue the
Policies and perform its obligations under the Policies in accordance
with the terms thereof, under the laws of the State of New York;
2. the execution and delivery by the Insurer of the
Policies, the Insurance Agreement and the Indemnification Agreement
are within the corporate power of the Insurer and have been authorized
by all necessary corporate action on the part of the Insurer; the
Policies have been duly executed and are the valid and binding
obligations of the Insurer enforceable in accordance with its terms
except that the enforcement of the Policies may be limited by laws
relating to bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting creditors' rights
generally and by general principles of equity;
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3. the Insurer is authorized to deliver the Insurance
Agreement and the Indemnification Agreement, and the Insurance
Agreement and the Indemnification Agreement have been duly executed
and are the valid and binding obligations of the Insurer enforceable
in accordance with its terms except that the enforcement of the
Insurance Agreement and the Indemnification Agreement may be limited
by laws relating to bankruptcy, insolvency, reorganization,
moratorium, receivership and other similar laws affecting creditors'
rights generally and by general principles of equity and by public
policy considerations relating to indemnification for securities law
violations;
4. no consent, approval, authorization or order of any
state or federal court or governmental agency or body is required on
the part of the Insurer, the lack of which would adversely affect the
validity or enforceability of the Policies; to the extent required by
applicable legal requirements that would adversely affect validity or
enforceability of the Policies, the form of each Policy has been filed
with, and approved by, all governmental authorities having
jurisdiction over the Insurer in connection with such Policy;
5. to the extent the Policies constitute certificates
within the meaning of Section 2(1) of the Securities Act of 1933, as
amended (the "Act"), they are certificates that are exempt from the
registration requirements of the Act; and
6. the information set forth under the caption "THE
CERTIFICATE INSURANCE POLICY AND THE CERTIFICATE INSURER" in the
Prospectus forming a part of the Registration Statement Form S-3 (No.
33-98822) filed by the Company with the Securities and Exchange
Commission and declared effective on April 18, 1996, insofar as such
statements constitute a description of the Policies, accurately
summarizes the Policies.
In rendering this opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the Company, the
Trustee, the Certificate Insurer and public officials. Such opinion may assume
the due authorization, execution and delivery of the instruments and documents
referred to therein by the parties thereto other than the Insurer.
P. On or prior to the Closing Date there shall not have
occurred any downgrading, nor shall any notice have been given of (A) any
intended or potential downgrading or (B) any review or possible change in
rating the direction of which has not been indicated, in the rating accorded
the Insurer's
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claims paying ability by any "nationally recognized statistical
rating organization," as such term is defined for purposes of the Act.
Q. The Underwriter shall have received from the Insurer
a certificate, signed by the President, a senior vice president or a vice
president of the Insurer, dated the Closing Date, to the effect that the signer
of such certificate has carefully examined the Policies, the Insurance
Agreement, the Indemnification Agreement and the related documents and that, to
the best of his or her knowledge based on reasonable investigation:
1. there are no actions, suits or proceedings pending or
threatened against or affecting the Insurer which, if adversely
determined, individually or in the aggregate, would adversely affect
the Insurer's performance under the Policies, the Insurance Agreement
or the Indemnification Agreement;
2. each person who as an officer or representative of
the Insurer, signed or signs the Policies, the Insurance Agreement,
the Indemnification Agreement or any other document delivered pursuant
hereto, on the date thereof, or on the Closing Date, in connection
with the transactions described in this Agreement was, at the
respective times of such signing and delivery, and is now, duly elected
or appointed, qualified and acting as such officer or representative,
and the signatures of such persons appearing on such documents are
their genuine signatures;
3. the information contained in the Prospectus under the
caption "THE CERTIFICATE INSURANCE POLICY AND THE CERTIFICATE INSURER"
is true and correct in all material respects and does not omit to
state a material fact with respect to the description of the Policies
or the ability of the Insurer to meet its payment obligations under
the Policies;
4. the tables regarding the Insurer's capitalization set
forth in the Prospectus under the heading "THE CERTIFICATE INSURANCE
POLICY AND THE CERTIFICATE INSURER" presents fairly the capitalization
of the Insurer as of December 31, 1995 and June 30, 1996,
respectively;
5. on or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating accorded
the claims paying ability of the Insurer by any "nationally recognized
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statistical rating organization," as such term is defined for purposes
of the Act;
6. the consolidated financial statements of the
Insurer, a wholly owned subsidiary of MBIA Inc., and its subsidiaries
as of December 31, 1995 and December 31, 1994 and for the three years
ended December 31, 1995, included in the Annual Report on Form 10-K of
MBIA Inc., for the year ended December 31, 1995, and the consolidated
financial statements of the Insurer and its subsidiaries for the six
months ended June 30, 1996 and for the periods ended June 30, 1996 and
June 30, 1995 included in the Quarterly Report on Form 10-Q of MBIA
Inc., for the period ending June 30, 1996, incorporated by referenced
into the Prospectus, fairly present in all material respects the
financial condition of the Insurer as of such date and for the period
covered by such statements in accordance with generally accepted
accounting principles consistently applied; and
7. to the best knowledge of such officer, since June 30,
1996, no material adverse change has occurred in the financial
position of the Insurer other than as set forth in the Prospectus.
The officer of the Insurer certifying to items 5 through 7 shall be an officer
in charge of a principal financial function.
The Insurer shall attach to such certificate a true and
correct copy of its certificate or articles of incorporation, as appropriate,
and its bylaws, all of which are in full force and effect on the date of such
certificate.
R. The Underwriter shall have received from Xxxxx
Xxxxxxxxxx, special counsel to the Company, a survey in form and substance
satisfactory to the Underwriter, indicating the requirements of applicable
local law which must be complied with in order to transfer and service the
Receivables pursuant to the Pooling and Servicing Agreement and the Company
shall have complied with all such requirements.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all respects when and as provided in this Agreement, if
the Company is in breach of any covenants or agreements contained herein or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriter and counsel to the Underwriter, this Agreement
and all obligations of the Underwriter hereunder, may be canceled on, or at any
time prior to, the Closing Date by the Underwriter. Notice of
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such cancellation shall be given to the Company in writing, or by telephone or
telegraph confirmed in writing.
7. Expenses. If the sale of the Class A Certificates
provided for herein is not consummated by reason of a default by the Company in
its obligations hereunder, then the Company will reimburse the Underwriter,
upon demand, for all reasonable out-of-pocket expenses (including, but not
limited to, the reasonable fees and expenses of counsel for the Underwriter)
that shall have been incurred by it in connection with its investigation with
regard to the Company and the Class A Certificates and the proposed purchase
and sale of the Class A Certificates.
8. Indemnification and Contribution.
A. Regardless of whether any Class A Certificates are sold,
the Company and First Sierra will, jointly and severally, indemnify and hold
harmless the Underwriter, each of their respective officers and directors and
each person who controls the Underwriter within the meaning of the Act
or the Securities Exchange Act of 1934 (the "1934 Act"), against any and all
losses, claims, damages, or liabilities (including the cost of any
investigation, legal and other expenses incurred in connection with and amounts
paid in settlement of any action, suit, proceeding or claim asserted), joint or
several, to which they may become subject, under the Act, the 1934 Act or other
federal or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained (i) in the Registration Statement, or any amendment
thereof or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact necessary to make the
statements therein, not misleading or (ii) in the Base Prospectus or the
Prospectus Supplement or any amendment thereto or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will reimburse
each such indemnified party for any legal or other expenses reasonably incurred
by it in connection with investigating or defending against such loss, claim,
damage, liability or action; provided, however, that neither the Company nor
First Sierra shall be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information relating to the
Underwriter furnished to the
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Company by the Underwriter specifically for use in connection with the
preparation thereof.
B. Regardless of whether any Class A Certificates are
sold, the Underwriter will indemnify and hold harmless the Company, each of its
officers and directors and each person, if any, who controls the Company within
the meaning of the Act or the 1934 Act against any losses, claims, damages or
liabilities to which they become subject under the Act, the 1934 Act or other
federal or state law or regulation, at common law or otherwise, to the same
extent as the foregoing indemnity, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
(i) the Registration Statement (other than any Derived Information, which is
subject to the indemnification provision of subsection (E) below), or any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary to make
the statements therein not misleading or in (ii) the Base Prospectus or the
Prospectus Supplement or any amendment thereto or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made therein in reliance upon and
in conformity with written information relating to the Underwriter furnished to
the Company by the Underwriter specifically for use in the preparation thereof
and so acknowledged in writing, and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending against such loss, claim, damage, liability or
action.
C. In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Paragraphs A and B above, such person
(hereinafter called the indemnified party) shall promptly notify the person
against whom such indemnity may be sought (hereinafter called the indemnifying
party) in writing thereof; but the omission to notify the indemnifying party
shall not relieve such indemnifying party from any liability which it may have
to any indemnified party otherwise than under such Paragraph. The indemnifying
party, upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and
any others the indemnifying party may designate in such proceeding and shall
pay the fees and disbursements of such counsel related to such proceeding. In
any such proceeding any
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indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the fees and expenses of more than one separate firm (in addition to any
local counsel) for all such indemnified parties, and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Underwriter in the case of parties indemnified
pursuant to Paragraph A and by the Company in the case of parties indemnified
pursuant to Paragraph B. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated above, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
D. The Underwriter agrees to provide the Company no
later than two Business Days after the day on which the Prospectus Supplement
in required to be filed pursuant to Rule 424 with a copy of its Derived
Information for filing with the Commission on Form 8-K.
E. The Underwriter severally agrees to indemnify and
hold harmless the Company, each of the Company's officers
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25
and directors and each person who controls the Company parties within the
meaning of Section 15 of the Securities Act against any and all losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement of a material fact contained in the Derived Information
provided by such Underwriter, or, when read in conjunction with the Prospectus,
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party for
any legal or other expenses reasonably incurred by him, her or it in connection
with investigating or defending or preparing to defend any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however, in
no event shall an Underwriter be liable to the Company parties under this
paragraph (E) in an amount in excess of the fees received by such Underwriter in
connection with the offering of the Offered Certificates. The obligations of an
Underwriter under this Section 8(E) shall be in addition to any liability which
such Underwriter may otherwise have.
The procedures set forth in Section 8(C) shall be equally
applicable to this Section 8(E).
For purposes of this Agreement, "Derived Information" means
such portion, if any, of the information delivered to the Company (comforted by
an independent public accounting firm) pursuant to Section 8(D) for filing with
the Commission on Form 8-K as:
(i) is not contained in the Prospectus without taking
into account information incorporated therein by reference; and
(ii) does not constitute Company-Provided Information
(as defined below).
"Company-Provided Information" means any computer tape or data furnished to the
Underwriter by the Company concerning the Mortgage Loans assigned to the Trust
on behalf of the Trust.
F. If the indemnification provided for in this Section 8
is unavailable to an indemnified party in respect of any losses, claims,
damages or liabilities referred to herein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the
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Company and the Underwriter from the sale of the Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only relative benefits referred
to in clause (i) above but also the relative fault of the Company and of the
Underwriter in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Underwriter shall be deemed to be in such proportion so that the Underwriter are
responsible for that portion determined by multiplying the total amount of such
losses, claims, damages and liabilities, including legal and other expenses, by
a fraction, the numerator of which is (x) the excess of the Aggregate Resale
Price (as defined below) of the Class A Certificates over the aggregate purchase
price of the Class A Certificates specified in the third paragraph of this
Agreement and the related Prospectus Supplement, and the denominator of which is
(y) the Aggregate Resale Price of the Class A Certificates, and the Company is
responsible for the balance, provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of the immediately preceding
sentence, the "Aggregate Resale Price" of the Class A Certificates at the time
of any determination shall be the weighted average of the purchase prices (in
each case expressed as a percentage of the aggregate principal amount of the
Class A Certificates so purchased), determined on the basis of such principal
amounts, paid to the Underwriter by all subsequent purchasers that purchased the
Class A Certificates on or prior to such date of determination. The relative
fault of the Company and the Underwriter shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
G. The Company and the Underwriter agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in Paragraph
D. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in Paragraph D shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
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Notwithstanding the provisions of this Section 8, the Underwriter shall not be
required to contribute any amount by which the Aggregate Resale Price exceeds
the amount of any damages that the Underwriter have otherwise been required to
pay by reason of any untrue or alleged untrue statement or omission or alleged
omission.
H. The Company and the Underwriter each expressly
waives, and agree not to assert, any defense to their respective
indemnification and contribution obligations under this Section 8 which they
might otherwise assert based upon any claim that such obligations are
unenforceable under federal or state securities laws or by reasons of public
policy.
I. The obligations of the Company under this Section 8
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls the Underwriter within the meaning of the Act or the 1934 Act; and the
obligations of the Underwriter under this Section 8 shall be in addition to any
liability that the Underwriter may otherwise have and shall extend, upon the
same terms and conditions, to each director of the Company and to each person,
if any, who controls the Company within the meaning of the Act or the 1934 Act;
provided, however, that in no event shall the Company or the Underwriter be
liable for double indemnification.
9. Information Supplied by Underwriter. The statements set
forth in the last paragraph on the front cover page of the Prospectus regarding
market-making and under the heading "Underwriting" in the Supplement (to the
extent such statements relate to the Underwriter) constitute the only
information furnished by the Underwriter to the Company for the purposes of
Sections 2(B) and 8(A) hereof. The Underwriter confirms that such statements
(to such extent) are correct.
10. Notices. All communications hereunder shall be in
writing and, if sent to the Underwriter, shall be mailed or delivered or
telecopied and confirmed in writing to the addresses set forth in Schedule I
hereto, and, if sent to the Company, shall be mailed, delivered or telegraphed
and confirmed in writing to the Company at First Sierra Receivables II, Inc.,
0000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx
Xxxxx.
11. Survival. All representations, warranties, covenants and
agreements of the Company contained herein or in
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agreements or certificates delivered pursuant hereto, the agreements of the
Underwriter and the Company contained in Section 8 hereof, and the
representations, warranties and agreements of the Underwriter contained in
Section 3 hereof, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of the Underwriter or any controlling
persons, or any subsequent purchaser or the Company or any of its officers,
directors or any controlling persons, and shall survive delivery of and payment
for the Certificates. The provisions of Sections 5, 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
12. Termination. The Underwriter shall have the right to
terminate this Agreement by giving notice as hereinafter specified at any time
at or prior to the Closing Date if (a) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (b) trading of any
certificates of the Company shall have been suspended on any exchange or in any
over-the-counter market, (c) a general moratorium on commercial banking
activities shall have been declared by either federal or New York State
authorities, (d) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis which,
in the Underwriter' reasonable judgment, is material and adverse, and, in the
case of any of the events specified in clauses (a) through (d), such event
singly or together with any other such event makes it in the Underwriter'
reasonable judgment impractical to market the Class A Certificates. Any such
termination shall be without liability of any other party except that the
provisions of Paragraph G of Section 5 (except with respect to expenses of the
Underwriter) and Sections 7 and 8 hereof shall at all times be effective. If
the Underwriter elects to terminate this Agreement as provided in this Section
12, the Company shall be notified promptly by the Underwriter by telephone,
telegram or facsimile transmission, in any case, confirmed by letter.
13. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns (which successors and assigns do not include any person purchasing a
Security from the Underwriter), and the officers and directors and controlling
persons referred to in Section 8 hereof and their respective successors and
assigns, and no other persons will have any right or obligations hereunder.
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14. Applicable Law; Venue. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York. ANY ACTION OR PROCEEDING BROUGHT TO ENFORCE OR ARISING OUT OF ANY
PROVISION OF THIS AGREEMENT SHALL BE BROUGHT ONLY IN A STATE OR FEDERAL COURT
LOCATED IN THE COUNTY OF NEW YORK, AND THE PARTIES HERETO EXPRESSLY CONSENT TO
THE JURISDICTION OF SUCH COURTS AND AGREE TO WAIVE ANY DEFENSE OR CLAIM OF
FORUM NON CONVENIENS THEY MAY HAVE WITH RESPECT TO ANY SUCH ACTION OR
PROCEEDING BROUGHT.
15. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall together constitute but one and the
same instrument.
16. Amendments and Waivers. This Agreement may be amended,
modified, altered or terminated, and any of its provisions waived, only in a
writing signed on behalf of the parties hereto.
17. No Petition. Each of First Sierra and the
Underwriter covenant and agree that they will not institute bankruptcy
proceedings against the Company until one year and one day following the
maturity of the latest maturing securities issued by the Company.
28
30
FIRST SIERRA RECEIVABLES II, INC.
By:__________________________
Name: Xxxxx X. Xx
Title: Senior Vice President
FIRST SIERRA FINANCIAL, INC.
By:__________________________
Name: Xxxxxx Xxxxxxx
Title: President
FIRST UNION CAPITAL MARKETS CORP.
By:__________________________
Name: X.X. Xxxxxxx
Title: Vice President
31
SCHEDULE I
FIRST SIERRA EQUIPMENT LEASE TRUST 1996-2
EQUIPMENT LEASE BACKED CERTIFICATES, CLASS A
Percentage of Certificates
Underwriter to be Purchased
----------- --------------------------
First Union Capital Markets Corp. 100%
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
----
Total 100%
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