EXECUTION COPY
COPELCO CAPITAL FUNDING CORP. X
5.809% CLASS A-1 LEASE-BACKED NOTES, SERIES 1997-A
6.05% CLASS A-2 LEASE-BACKED NOTES, SERIES 1997-A
6.27% CLASS A-3 LEASE-BACKED NOTES, SERIES 1997-A
6.47% CLASS A-4 LEASE-BACKED NOTES, SERIES 1997-A
6.50% CLASS B LEASE-BACKED NOTES, SERIES 1997-A
UNDERWRITING AGREEMENT
June 13, 1997
XXXXXX BROTHERS INC.
Three World Financial Center
New York, New York 10285
FIRST UNION CAPITAL MARKETS CORP.
000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
XXXXXX XXXXXXX & CO. INCORPORATED
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Copelco Capital Funding Corp. X, a corporation organized and
existing under the laws of Delaware (the "Issuer") and Copelco Capital, Inc., a
corporation organized and existing under the laws of Delaware ("Copelco"),
hereby agree with you as follows:
Section 1. Issuance and Sale of Notes. The Issuer has
authorized the issuance of $142,197,000 the "Class A-1 Initial Principal
Amount") of 5.809% Class A-1 Lease-Backed Notes, Series 1997-A (the "Class A-1
Notes"); 54,18,000 (the "Class A-2 Initial Principal Amount") of 6.05% Class
A-2 Lease-Backed Notes, Series 1997-A (the "Class A-2 Notes"); $211,495,000 (the
"Class A-3 Initial Principal Amount") of 6.27% Class A-3 Lease-Backed Notes,
Series 1997-A (the "Class A-3 Notes"); $126,667,000 (the "Class A-4 Initial
Principal Amount"; together with the Class A-1 Initial Principal Amount, Class
A-2 Initial Principal Amount and Class A-3 Initial Principal Amount, the "Class
A Initial Principal Amount") of
6.47% Class A-4 Lease-Backed Notes, Series 1997-A (the "Class A-4 Notes";
together with the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes, the
"Class A Notes"); $22,746,000 (the "Class B Initial Principal Amount") of 6.50%
Class B Lease-Backed Notes, Series 1997-A (the "Class B Notes"; together with
the Class A Notes, the "Offered Notes") and $11,373,720 (the "Class C Initial
Principal Amount"; together with the Class A Initial Principal Amount and the
Class B Initial Principal Amount, the "Initial Principal Amount") of 6.78% Class
C Lease-Backed Notes, Series 1997-A (the "Class C Notes"; together with the
Offered Notes, the "Notes"). The Notes will be issued pursuant to an Indenture,
dated as of June 1, 1997 (the "Indenture"), between the Issuer and Manufacturers
and Traders Trust Company (the "Trustee"). The Notes are more fully described in
the Final Prospectus (as defined below), a copy of which the Issuer is
furnishing to you. The Notes will evidence secured debt obligations of the
Issuer. The assets of the Issuer will include a pool of primarily business
equipment and medical equipment lease contracts, including all payments due
thereunder (the "Leases") and certain interests in the underlying equipment (the
"Equipment"). Capitalized terms used and not defined herein shall have the
meanings specified in the Indenture.
The Class A Notes will be sold by the Issuer to all of you as
underwriters (the "Class A Underwriters"). Class B Notes will be sold by the
Issuer to Xxxxxx Brothers Inc. and First Union Capital Markets Corp. only (the
"Class B Underwriters").
The terms which follow, when used in this Agreement, shall
have the meanings indicated:
"Effective Date" means each date that the
Registration Statement and any post-effective amendment or amendments
thereto became or become effective under the Securities Act.
"Execution Time" means the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" means any prospectus delivered to
purchasers of the Offered Notes at or before the time of confirmation
of their purchases.
"Preliminary Prospectus" means any preliminary
prospectus included in the Registration Statement, and which, as of
the Effective Date, omits Rule 430A Information.
"Registration Statement" means the registration
statement referred to in the preceding paragraph and any registration
statement required to be filed under the Securities Act or rules
thereunder, including amendments, incorporated documents, exhibits and
financial statements, in the form in which it has or shall become
effective and, in the event that any post-effective amendment thereto
becomes effective prior to the Issuance Date, shall also mean such
registration statement as so amended. Such term shall include Rule 430A
Information deemed to be included therein at the Effective Date as
provided by Rule 430A.
"Rule 424" and "Rule 430A" refers to such rules
under the Securities Act.
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"Rule 430A Information" means information with
respect to the Offered Notes and the offering thereof permitted,
pursuant to Rule 430A, to be omitted from the Registration Statement
when it becomes effective.
"Underwriter" means any of Xxxxxx Brothers Inc.,
First Union Capital Markets Corp. or Xxxxxx Xxxxxxx & Co. Incorporated.
"Underwriting Information" has the meaning given to
such term in Section 8(b) hereof.
Section 2. Purchase and Sale of Offered Notes.
(a) Subject to the terms and conditions and in reliance
upon the covenants, representations and warranties set forth herein, the Class A
Underwriters agree to purchase from the Issuer the Class A Initial Principal
Amount of the Class A Notes and the Class B Underwriters agree to purchase from
the Issuer the Class B Initial Principal Amount of the Class Notes pursuant to
the terms of this Agreement on the Issuance Date at the purchase price or prices
(the "Purchase Price") set forth on Schedule A attached hereto.
(b) The obligations of each of the Underwriters
hereunder to purchase the respective Offered Notes of each Class shall be
several and not joint. Each Underwriter's obligation shall be to purchase the
aggregate principal amount of Offered Notes of the related Class as is indicated
with respect to each Underwriter on Schedule A attached hereto. The rights of
the Issuer, Copelco and the non-defaulting Underwriter shall be as set forth in
Section 13 hereof.
(c) It is understood that the Underwriters propose to
offer the Offered Notes for sale to the public in the manner set forth in the
Final Prospectus.
Section 3. Delivery and Payment. (a) Delivery of and
payment for the Offered Notes to be purchased by the Underwriters shall be made
at the offices of Xxxxx Xxxxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx, at 10:00 A.M., New York time, on June 19, 1997 (the "Issuance Date"). The
Offered Notes shall be registered in the names of the Underwriters against
payment by the Underwriters of the Purchase Price therefor, to or upon the order
of the Issuer by one or more wire transfers in immediately available funds.
Following the Effective Date, at the request of the Underwriters, delivery of
one or more global notes (the "Global Notes") representing the Offered Notes
shall be made to the respective accounts of the Underwriters against delivery to
the Trustee of the originally issued Offered Notes (the date of such delivery
being hereinafter referred to as the "Exchange Date"). The Global Notes to be so
delivered shall be registered in the name of Cede & Co., as nominee for The
Depository Trust Company ("DTC"). The interests of beneficial owners of the
Offered Notes will be represented by book entries on the records of DTC and
participating members thereof. Definitive Notes representing the Offered Notes
will be available under the circumstances described in the Indenture.
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The Issuer agrees to have the Global Notes available for
inspection, checking and packaging by the Underwriters in New York, New York,
not later than 1:00 p.m., New York City time, on the Business Day prior to the
Exchange Date.
Section 4. Representations and Warranties. (a) The Issuer
hereby represents and warrants to, and agrees with, the Underwriters as follows:
(i) The Issuer meets the requirements for use of
Form S-1 under the Securities Act of 1933, as amended (the "Securities
Act") and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (Registration No. 333-23679),
including the Preliminary Prospectus relating to the Offered Notes, on
such Form S-1 for the registration under the Securities Act of the
Offered Notes. The Issuer may have filed one or more amendments
thereto, including the related Preliminary Prospectus, each of which
has previously been furnished to you. The Issuer will file with the
Commission either, (A) prior to the effectiveness of such Registration
Statement, a further amendment thereto (including the form of Final
Prospectus) or, (B) after effectiveness of such Registration Statement,
a Final Prospectus in accordance with Rules 43OA and 424(b)(1) or (4).
In the case of clause (B), the Issuer will include in such Registration
Statement, as amended at the Effective Date, all information (other
than Rule 430A Information) required by the Securities Act and the
rules thereunder to be included with respect to the Offered Notes and
the offering thereof. As filed, such amendment and form of Final
Prospectus, or such Final Prospectus, shall include all Rule 430A
Information and, except to the extent you shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus which has previously been furnished to
you) as the Issuer has advised you, prior to the Execution Time, will
be included or made therein.
(ii) On the Effective Date, the Registration
Statement did or will comply in all material respects with the
applicable requirements of the Securities Act and the rules thereunder;
on the Effective Date and when the Final Prospectus is first filed (if
required) in accordance with Rule 424(b) and on the Issuance Date, the
Final Prospectus will comply in all material respects with the
applicable requirements of the Securities Act and the rules thereunder;
on the Effective Date, the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and the Final Prospectus,
as of its date and on the Issuance Date, did not or will not include
any 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 under which they were made, not misleading; provided,
however, that the Issuer makes no representations or warranties as to
the Underwriting Information.
(iii) This Agreement has been duly authorized,
executed and delivered by the Issuer and constitutes a legal, valid and
binding agreement of the Issuer enforceable
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in accordance with its terms, except that the provisions hereof
relating to indemnification of the Underwriters may be subject to
limitations of public policy.
(iv) Each of the Indenture and the Sales and
Servicing Agreement have been duly authorized by the Issuer and, when
executed and delivered by the Issuer, will constitute the legal, valid
and binding obligation of the Issuer, enforceable in accordance with
its terms.
(v) The issuance of the Offered Notes has been
duly authorized by the Issuer and, when duly and validly executed,
authenticated and delivered in accordance with the Indenture and this
Agreement, will be the legal, valid and binding obligations of the
Issuer, enforceable in accordance with their terms, and entitled to the
benefits of the Indenture.
(vi) The issue and sale of the Offered Notes and
the performance of this Agreement, the Indenture and the Sales and
Servicing Agreement by the Issuer will (A) not conflict with or result
in a breach of, and will not constitute a default under any of the
provisions of, its certificate of incorporation or any law,
governmental rule or regulation, or any judgment, decree or order
binding on the Issuer or its properties, or any of the provisions of
any indenture, mortgage, deed of trust, contract or other agreement or
instrument to which the Issuer is a party or by which it is bound or
(B) not result in the creation or imposition of any adverse claim and
no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Offered Notes or the
consummation by the Issuer of the transactions contemplated by this
Agreement, except such consents, approvals, authorizations,
registrations or qualifications as may be required under the Securities
Act and under state securities or Blue Sky laws in connection with the
purchase and distribution of the Offered Notes by the Underwriters.
(vii) The Issuer is not, and will not, as of the
Issuance Date, be an "investment company" under the Investment Company
Act of 1940, as amended (the "1940 Act").
(viii) The Issuer hereby makes and repeats each of
the representations and warranties set forth in Article Eleven of the
Indenture. Such representations and warranties are incorporated by
reference in this Section 4(a) and the Underwriters may rely thereon as
if such representations and warranties were fully set forth herein.
(b) Copelco hereby represents and warrants to and agrees
with the Underwriters as follows:
(i) This Agreement has been duly authorized,
executed and delivered, the Sales and Servicing Agreement has been duly
authorized, and this Agreement constitutes, and when executed and
delivered, the Sales and Servicing Agreement will constitute the legal,
valid and binding obligations of Copelco, enforceable in accordance
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with their respective terms, except that the provisions hereof
relating to indemnification of the Underwriters may be subject to
limitations of public policy.
(ii) The performance of this Agreement by Copelco,
and the consummation by Copelco of the transactions herein
contemplated, will (A) not conflict with or result in a breach of, and
will not constitute a default under any of the provisions of its
certificate of incorporation or by-laws or any law, governmental rule
or regulation, or any judgment, decree or order binding on Copelco or
its properties, or any of the provisions of any indenture, mortgage,
deed of trust, contract or other agreement or instrument to which
Copelco is a party or by which it is bound or (B) not result in the
creation or imposition of any adverse claim and no consent, approval,
authorization, order, registration or qualification of or with any
court or governmental agency or body is required for the consummation
by Copelco of the transactions contemplated by this Agreement, except
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Act and under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Offered Notes by the Underwriters.
(iii) Copelco hereby makes and repeats the
representations and warranties set forth in Section 2 of the Sales and
Servicing Agreement. Such representations and warranties are
incorporated by reference in this Section 4(b), and the Underwriters
may rely thereon as if such representations and warranties were fully
set forth herein.
(iv) Copelco represents and warrants it has
delivered to the Underwriters complete and correct copies of its
balance sheet and statements of income and retained earnings reported
by Copelco Capital Inc. and Copelco Financial Services Group, Inc. (the
"Copelco Entities") for the year ended December 31, 1996. Except as set
forth in or contemplated in the Registration Statement and the Final
Prospectus, there has been no material adverse change in the condition
(financial or otherwise) of the Copelco Entities since December 31,
1996.
(v) Any taxes, fees and other governmental
charges arising from the execution and delivery of this Agreement, the
Sales and Servicing Agreement and the Indenture and in connection with
the execution, delivery and issuance of the Offered Notes and with the
transfer of the Leases and the Equipment, have been paid or will be
paid by the Issuer.
(c) Each of the Issuer and Copelco represents and warrants
to you, jointly and severally, that:
(i) There is no pending or threatened action,
suit or proceeding against or affecting it in any court or tribunal or
before any arbitrator of any kind or before or by any governmental
authority (A) asserting the invalidity of this Agreement, the Sales and
Servicing Agreement, the Indenture or the Offered Notes, (B) seeking to
prevent the issuance of the Offered Notes or the consummation of any of
the transactions contemplated by this Agreement, the Sales and
Servicing Agreement or the Indenture or (C) seeking any determination
or ruling that might materially and adversely affect (x) its
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performance of its obligations under this Agreement, the Sales and
Servicing Agreement or the Indenture (as applicable) or (y) the
validity or enforceability of this Agreement, the Sales and Servicing
Agreement, the Indenture or the Offered Notes.
(ii) KMPG-Peat Marwick is an independent public
accountant with respect to the Copelco Entities and the Issuer within
the meaning of the Securities Act and the rules and regulations
promulgated thereunder.
Section 5. Covenants of the Issuer and Copelco. The Issuer
and Copelco, jointly and severally, hereby covenant and agree with you as
follows:
(a) To use best efforts to cause the Registration Statement,
and any amendment thereto, if not effective as of the date hereof, to become
effective. If the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Final Prospectus is otherwise required
under Rule 424(b), the Issuer will file the Final Prospectus, properly
completed, pursuant to Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Underwriters of such timely filing. The
Issuer will promptly advise the Underwriters (i) when the Registration Statement
shall have become effective, (ii) when any amendment thereof shall have become
effective, (iii) of any request by the Commission for any amendment or
supplement of the Registration Statement or the Final Prospectus or for any
additional information, (iv) 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 (v) of the receipt by the
Issuer of any notification with respect to the suspension of the qualification
of the Offered Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Issuer will not file any
amendment of the Registration Statement or supplement to the Final Prospectus to
which the Underwriters reasonably object. The Issuer and Copelco will use best
efforts to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(b) If, at any time when a Final Prospectus relating to the
Offered Notes is required to be delivered under the Securities Act, any event
occurs as a result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading or, if it shall be necessary to
supplement such Final Prospectus to comply with the Securities Act or the rules
thereunder, the Issuer promptly will prepare and file with the Commission,
subject to paragraph (a) of this Section 5, a supplement which will correct such
statement or omission or an amendment which will effect such compliance.
(c) As soon as practicable, the Issuer will make generally
available to Offered Noteholders and to the Underwriters an earnings statement
or statements of the Issuer which will satisfy the provisions of Section 11(a)
of the Securities Act and Rule 158 under the Securities Act.
(d) The Issuer will furnish to the Underwriters and counsel
for the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and, so
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long as delivery of a prospectus by any of the Underwriters or any dealer may be
required by the Securities Act, as many copies of each Final Prospectus relating
to the Offered Notes and any supplement thereto as the Underwriters may
reasonably request.
(e) Copelco and the Issuer will take all reasonable actions
requested by the Underwriters to arrange for the qualification of the Offered
Notes for sale under the laws of such jurisdictions within the United States or
as necessary to qualify for DTC and as the Underwriters may designate, will
maintain such qualifications in effect so long as required for the completion of
the distribution of the Offered Notes, provided, in connection therewith the
Issuer shall not be required to qualify as a foreign corporation doing business
in any jurisdiction.
(f) For so long as the Offered Notes are outstanding, the
Issuer and Copelco shall deliver to the Underwriters by first-class mail and as
soon as practicable a copy of all reports and notices delivered to the Trustee
or the Offered Noteholders under the Indenture.
(g) For so long as the Offered Notes are outstanding, the
Issuer and Copelco will furnish to the Underwriters as soon as practicable after
filing any other information concerning the Issuer or Copelco filed with any
government or regulatory authority which is otherwise publicly available.
(h) To the extent, if any, that any rating provided with
respect to the Notes set forth in Section 6(g) hereof is conditional upon the
furnishing of documents reasonably available to the Issuer or Copelco, the
Issuer and Copelco shall furnish such documents.
Section 6. Conditions of Underwriters' Obligation. The
obligations of the Underwriters to purchase and pay for the Offered Notes on the
Issuance Date shall be subject to the accuracy in all material respects of the
representations and warranties of the Issuer and Copelco herein, in the Sales
and Servicing Agreement and in the Indenture, to the performance by the Issuer
and Copelco in all material respects of their obligations hereunder and to the
following additional conditions:
(a) The Issuer and Copelco shall each have delivered a
certificate (an "Officer's Certificate"), dated the Issuance Date, signed by its
President and its Chief Financial Officer, to the effect that:
(i) the representations and warranties made by
the Issuer or Copelco (as the case may be) in this Agreement, the
Indenture and the Sales and Servicing Agreement are true and correct in
all material respects at and as of the date of such Officer's
Certificate as if made on and as of such date (except to the extent
they expressly relate to an earlier date);
(ii) the Issuer or Copelco (as the case may be)
has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied under this Agreement, the
Indenture and the Sales and Servicing Agreement at or prior to the date
of such Officer's Certificate;
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(iii) nothing has come to such officer's attention
that would lead him to believe that the Final Prospectus contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(iv) such officer is not aware of (A) any request
of the Commission for further amendment of the Registration Statement
or the Final Prospectus for any additional information, (B) the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation or
threatening of any proceeding for that purpose or (C) any notification
with respect to the suspension of the qualification of the Offered
Notes for sale in any jurisdiction or the threatening of any proceeding
for that purpose.
(b) You shall have received from Xxxxxxx X. Xxxxxxx, Esq., a
favorable opinion (subject to customary and usual qualifications), dated the
Issuance Date and reasonably satisfactory in form and substance to the
Underwriters and their counsel with respect to, or to the effect that: (i) the
due formation and qualification of each of the Issuer and Copelco and that the
Issuer and Copelco, as applicable, have the corporate power and authority to
perform this Agreement, the Sales and Servicing Agreement, the Indenture and the
Placement Agreement (the "Transaction Documents") and the transactions
contemplated herein and therein; (ii) the due authorization, execution, delivery
and enforceability of this Agreement and the other Transaction Documents as
applicable, by the Issuer and Copelco; (iii) each of this Agreement and the
other Transaction Documents are the legal, valid and binding obligation of the
Issuer and Copelco, as applicable, enforceable against each of them in
accordance with its terms (subject to customary exceptions relating to
bankruptcy and laws affecting creditors' rights); (iv) the Notes have been duly
authorized, executed and delivered by the Issuer and constitute the legal, valid
and binding obligations of the Issuer, enforceable in accordance with their
terms (subject to customary exceptions as to bankruptcy and laws affecting
creditors' rights) and are entitled to the benefits of the Indenture; (v) the
issuance and sale of the Notes by the Issuer, the performance of this Agreement
by the Issuer and Copelco and the compliance by the Issuer and Copelco with the
terms of the Transaction Documents, as applicable, and the consummation of the
transactions contemplated herein and therein will not conflict with the
organizational documents of the Issuer or Copelco, or to the best of such
counsel's knowledge, any other contracts to which the Issuer or Copelco is a
party or by which either of them is bound; (vi) to the best of such counsel's
knowledge, there is no legal or governmental proceeding threatened or pending
against the Issuer or Copelco which would have a material adverse effect on the
issuance of the Notes; (vii) in the event a court disregarded the intent of the
parties and characterized the transfers as a pledge of collateral, the Sales and
Servicing Agreement and accompanying documentation creates a valid security
interest in the Leases and the Equipment (or interests therein) under New Jersey
law; (viii) assuming no prior financing statements covering the Leases are in
effect based on a review of certain UCC searches, that financing statements
covering the Leases and naming (A) the Issuer as secured party and Copelco as
debtor and (B) the Issuer as debtor and the Trustee as secured party are being
filed in the appropriate filing offices of the State of New Jersey, and assuming
that the Trustee has taken possession of the Leases, the Trustee has a first
priority perfected security interest in all right, title and interest of Copelco
and the Issuer in the Leases; and (ix) on the Issuance Date the Registration
Statement is effective, and, that to the best of such
9
counsel's knowledge no stop order suspending the effectiveness of the
Registration Statement has been issued or is threatened, and that although such
counsel is not passing on the factual accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus, nothing
came to such counsel's attention that leads such counsel to believe that either
the Registration Statement or the Prospectus (as of the Effective Date or the
date of the Prospectus) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made not misleading. In rendering such opinion, counsel may rely, to the extent
deemed proper and as stated therein, as to matters of fact on certificates of
responsible officers of the Issuer or Copelco and public officials and as to
matters of state law of jurisdictions other than the jurisdictions in which such
counsel is admitted to practice, on opinions of local counsel satisfactory to
the Underwriters.
(c) The Underwriters shall have received from Xxxxx
Xxxxxxxxxx, special counsel for the Underwriters, such opinion or opinions,
dated the Issuance Date, with respect to the validity of the Offered Notes, the
Registration Statement, the Final Prospectus, true sale, nonconsolidation and
other related matters as the Underwriters may require.
(d) At the Execution Time and at the Issuance Date,
KMPG-Peat Marwick shall have furnished to the Underwriters a letter or letters,
dated the date of this Agreement and the Issuance Date, respectively, in form
and substance satisfactory to the Underwriters.
(e) The Class A-1 Notes shall have been rated at least
"A-1+", "D-1", "P-1" and "F-1+/AAA" and that the Class A-2, A-3 and A-4 notes be
rated at least "AAA", "AAA", "Aaa" and "AAA" and that the Class B Notes be rated
at least "A", "A+", "A" and "A+" by Standard & Poor's Ratings Group ("S&P"),
Duff & Xxxxxx Credit Ratings Co. ("DCR"), Xxxxx'x Investors Service, Inc.
("Xxxxx'x") and Fitch Investors Service, L.P. ("Fitch"), respectively, and that
the Class C Notes be rated at least "BBB+" and "BBB+" by DCR and Fitch
respectively, which ratings shall not have been reduced or withdrawn as
evidenced by the Officer's Certificate referred to in Section 6(b).
(f) Counsel to the Trustee shall have delivered a favorable
opinion (subject to customary and usual exceptions), dated the Issuance Date, as
the case may be, and satisfactory in form and substance to the Underwriters and
counsel for the Underwriters and to the Issuer and Copelco and their counsel
with respect to, or to the effect that: (i) the due incorporation and valid
existence of the Trustee, (ii) the due authorization, execution and delivery by
the Trustee of the Indenture, (iii) the Indenture is the legal, valid and
bending obligation of the Trustee, enforceable against the Trustee in accordance
with its terms (subject to customary and usual exceptions), (iv) no approvals or
filings with any Governmental Authority required in connection with the
execution, delivery or performance by the Trustee of the Indenture and (v) the
execution, delivery and performance of the Indenture will not cause any default
under the Trustee's organizational documents or other contracts to which it is a
party or by which it is bound.
(g) The Underwriters shall have received the approval
of each of their respective investment committees with respect to the execution,
delivery and performance of this Agreement.
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(h) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall be
reasonably satisfactory in form and substance to you, and you and your special
counsel shall have received such other information, certificates and documents
as you or they may reasonably request.
Section 7. Reimbursement of Expenses. In the event that (x)
no closing of the sale of the Offered Notes occurs by the Issuance Date through
no fault of the Issuer or Copelco or because the conditions set forth in
Sections 6(c), 6(d), 6(e), 6(f) and 6(g) have not been met, or (y) the
Underwriters terminate the engagement pursuant to Section 10 or because any
conditions precedent in Section 6 (other than Section 6(d)) have not been
fulfilled, then the Issuer and Copelco's liability to the Underwriters shall be
limited to the reimbursement of the Underwriters' expenses incurred through the
date of termination for its reasonable out-of-pocket and incidental expenses. In
addition, whether or not the Offered Notes are issued or sold:
(a) The Issuer or Copelco shall pay the reasonable fees and
expenses associated with the transactions contemplated hereby not paid by the
Underwriters in accordance with the provisions of Section 7(b) including,
without limitation, the following fees and expenses:
(i) Rating Agency fees payable with respect to
their ratings of the Notes;
(ii) fees charged by the firm of independent
public accountants referred to in Section 6(e);
(iii) filing fees in connection with the
transactions contemplated hereby including, but not limited to, the
Commission;
(iv) fees and expenses of counsel to the
Underwriters;
(v) Trustee's fees and fees of counsel to the
Trustee;
(vi) the costs and expenses of printing the
Registration Statement and the Prospectus;
(vii) the costs of printing or reproducing this
Agreement, the Blue Sky Survey and any other documents in connection
with the offer, sale and delivery of the Offered Notes;
(viii) all expenses in connection with the
qualification of the Offered Notes under state securities laws as
provided in section 4(a)(vi), including the fees and disbursements of
counsel in connection with the Blue Sky Survey;
(ix) the cost of preparing the Offered Notes;
(x) the cost or expenses of any transfer agent
or registrar; and
11
(xi) all other costs and expenses incident to the
performance of their obligations hereunder which are not otherwise
specifically provided for in this Section 7; provided, however, that
Copelco does not hereby waive any rights to reimbursement from the
Underwriters in the event of any of the Underwriters' failure to
perform in accordance with this Agreement.
(b) It is understood and agreed that, except as
provided in Section 8 and 9, the Underwriters will pay securities transfer taxes
on resale of any of the Offered Notes by them, and any advertising expenses
connected with any offers they may make.
Section 8. Indemnification and Contribution. (a) The Issuer
and Copelco, jointly and severally, will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter 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 an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Final Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will promptly reimburse such Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating, preparing to defend or defending, or appearing as
a third-party witness in connection with, any such action or claim; provided,
however, that the Issuer and Copelco shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement or the Final Prospectus or any such
amendment or supplement, in reliance upon and in conformity with the
Underwriting Information (defined below).
(b) Each Underwriter agrees severally, and not jointly, to
indemnify and hold harmless the Issuer and Copelco against any losses, claims,
damages or liabilities to which the Issuer or Copelco 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 an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Final Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, 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 in the Registration Statement or the Final
Prospectus or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Issuer or Copelco by or on
behalf of such Underwriter expressly for use therein; and will reimburse the
Issuer or Copelco for any legal or other expenses reasonably incurred by the
Issuer or Copelco in connection with the investigating, preparing to defend or
defending, or appearing as a third-party witness in connection with, any such
action or claim. The Issuer and Copelco acknowledge that the statements set
forth in the last paragraph of the cover page and under the heading
"Underwriting" in the Registration Statement, the Preliminary Prospectus and the
Final Prospectus constitute the only information furnished in writing by or on
behalf of the
12
Underwriters for inclusion in the Registration Statement or the Final Prospectus
(the "Underwriting Information"), and each of you confirm that such statements
are correct.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party, and the indemnified party shall have been advised by
counsel that representation of such indemnified party and the indemnifying party
may be inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them, the indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. It is understood that the
indemnifying party shall, in connection with any such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys together with appropriate
local counsel at any time from all indemnified parties not having actual or
potential differing interests with any other indemnified party. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to appoint counsel to defend such action and approval by the indemnified party
of such counsel, the indemnifying party will not be liable for any settlement
entered into without its consent and will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence, (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). Notwithstanding the immediately preceding sentence and the first
sentence of this paragraph, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, 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.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred
13
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Issuer and
Copelco on the one hand and the Underwriters on the other from the offering of
the Offered Notes. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Issuer or Copelco on the
one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Issuer or
Copelco on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion that the total net proceeds from the offering (before
deducting expenses) received by the Issuer and Copelco bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Final Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Issuer or Copelco on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Issuer, Copelco and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation or by any
other method of allocation which does not take into account the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating,
preparing to defend or defending, or appearing as a third-party witness in
connection with, any such action or claim. Notwithstanding the provisions of
this subsection (d), the Underwriters shall not be required to contribute any
amount in excess of the total underwriting discount as set forth on the cover
page of the Prospectus. 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.
(e) The obligations of the Issuer and Copelco under this
Section 8 shall be in addition to any liability which the Issuer or Copelco may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any of the Underwriters within the meaning of the
Securities Act; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Issuer and Copelco and to each person, if any, who controls the
Issuer or Copelco within the meaning of the Securities Act.
Section 9. Survival. The respective representations,
warranties and agreements of the Issuer, Copelco and the Underwriters set forth
in or made pursuant to this Agreement will
14
remain in full force and effect, notwithstanding any investigation heretofore or
hereafter made by or on behalf of the Issuer, Copelco or the Underwriters, and
such representations, warranties and agreements made by the Issuer and Copelco
shall survive the delivery and payment for the Offered Notes. The provisions of
Section 7 and 8 shall survive the termination or cancellation of this Agreement.
Section 10. Termination. (a) This Agreement may be
terminated by you at any time upon the giving of notice at any time prior to the
Issuance Date: (i) if there has been, since December 31, 1996, any material
adverse change in the condition, financial or otherwise, of Copelco or the
Issuer, or in the earnings, business affairs or business prospects of Copelco or
the Issuer, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any outbreak or escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the United
States is such as to make it, in your reasonable judgment, impracticable to
market the Offered Notes or enforce contracts for the sale of the Offered Notes,
or (iii) if trading generally on either the American Stock Exchange or the New
York Stock Exchange has been suspended, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices for securities have been required,
by either of said exchanges or by order of the Commission or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either federal or New York authorities. In the event of any such termination, no
party will have any liability to any other party hereto, except as otherwise
provided in Section 7 or 8 hereof.
(b) This Agreement may not be terminated by the Issuer or
Copelco, except in accordance with law, without the written consent of the
Underwriters.
(c) Notwithstanding anything herein to the contrary, in the
event the Issuer or Copelco does not perform any obligation under this Agreement
or any representation and warranty hereunder is incomplete or inaccurate in any
material respect, this Agreement and all of the Underwriters' obligations
hereunder may be immediately cancelled by the Underwriters by notice thereof to
the Issuer or Copelco. Any such cancellation shall be without liability of any
party to any other party except that the provisions of Sections 8 and 9 hereof
shall survive any such cancellation.
Section 11. Notices. All communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered to or mailed by certified or registered mail,
postage prepaid, or transmitted by telex or telegraph and confirmed by a similar
mailed writing, if to you, addressed to you, at the addresses first stated in
this Agreement, or to such other address as you may designate in writing to the
Issuer and Copelco; if to Copelco, addressed to Copelco at East Gate Center, 000
Xxxx Xxxx Xxxxx, Xxxxx Xxxxxx, Xxx Xxxxxx 00000-0000, if to the Issuer,
addressed to Copelco at East Gate Center, 000 Xxxx Xxxx Xxxxx, Xxxxx Xxxxxx, Xxx
Xxxxxx 00000-5400, or such other address as Copelco or the Issuer may have
designated in writing to you.
Section 12. Successors. This Agreement will inure to the
benefit of and be binding upon the Issuer and Copelco and their successors and
assigns and the Underwriters and their respective successors and assigns.
15
Section 13. Default by One of the Underwriters. If one of
the Underwriters shall fail on the Closing Date to purchase the Class A Notes or
Class B Notes, as the case may be, which it is obligated to purchase hereunder
(the "Defaulted Notes"), the remaining Underwriter(s) (the "Non-Defaulting
Underwriter(s)") shall have the right, but not the obligation, within one (1)
Business Day thereafter, to make arrangements to purchase all, but not less than
all, of the Defaulted Notes upon the terms herein set forth; if, however, the
Non-Defaulting Underwriter(s) shall not have completed such arrangements within
such one (1) Business Day period, then this Agreement shall terminate without
liability on the part of the Non-Defaulting Underwriter(s).
No action taken pursuant to this Section 13 shall relieve the
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, any of the Non-Defaulting Underwriters or the
Company shall have the right to postpone the Closing Date for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements.
Section 14. Entire Agreement. This Agreement and the
documents referred to herein and to be delivered pursuant hereto constitute the
entire agreement between the parties pertaining to the subject matter hereof and
supersede all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties.
Section 15. Governing Law. (a) THIS AGREEMENT IS TO BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO
CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
(b) THE ISSUER AND COPELCO HEREBY SUBMIT TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND EACH
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS SET
FORTH IN SECTION 11 HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
FIVE DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U. S. MAILS, POSTAGE
PREPAID. THE ISSUER AND COPELCO HEREBY WAIVE ANY OBJECTION BASED ON FORUM NON
CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE
ISSUER OR COPELCO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECT EITHER'S RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY
OTHER JURISDICTION.
(c) THE ISSUER AND COPELCO HEREBY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED
16
TO, OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 16. Counterparts. This Agreement may be executed
in two or more counterparts, each of which when so executed and delivered shall
be an original, but all of which together shall constitute one and the same
instrument.
Section 17. Miscellaneous. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
If you are in agreement with the foregoing, please sign a
counterpart hereof and return the same to the Issuer or Copelco, whereupon this
Agreement shall become a binding agreement between the Underwriters, and the
Issuer and Copelco.
17
Very truly yours,
COPELCO CAPITAL, INC.
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
Name: XXXXXXX X. XXXXXX
Title: SENIOR VICE PRESIDENT
AND TREASURER
COPELCO CAPITAL FUNDING CORP. X
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------
Name: XXXXXXX X. XXXXXXX
Title: VICE PRESIDENT
The foregoing Agreement is
hereby accepted and entered
into as of the date hereof.
XXXXXX BROTHERS INC.,
As Class A Underwriter and Class B Underwriter
By: /s/ XXXXXX XXXXXX
------------------------------------
Name: XXXXXX XXXXXX
Title: MANAGING DIRECTOR
FIRST UNION CAPITAL MARKETS CORP.,
As Class A Underwriter and Class B Underwriter
By: /s/ XXXX XXXXXXXX
------------------------------------
Name: XXXX XXXXXXXX
Title: MANAGING DIRECTOR
XXXXXX XXXXXXX & CO. INCORPORATED,
As Class A Underwriter
By: /s/ XXXXX XXXXXX
------------------------------------
Name: XXXXX XXXXXX
Title: MANAGING DIRECTOR
[UNDERWRITING AGREEMENT]
SCHEDULE A
Purchase Price
Underwriters of the Class A Notes Principal Principal Principal Principal
--------------------------------- Amount of Amount of Amount of Amount of
Class A-1 Notes Class A-2 Notes Class A-3 Notes Class A-4 Notes
--------------- --------------- --------------- ---------------
Xxxxxx Brothers Inc. $63,988,650 $24,381,900 $95,172,750 $57,000,150
First Union Capital Markets $63,988,650 $24,381,900 $95,172,750 $57,000,150
Corp.
Xxxxxx Xxxxxxx & Co. $14,219,700 $5,418,200 $21,149,500 $12,666,700
Incorporated
Underwriters of the Class B Notes Principal Amount of Class B Notes
--------------------------------- ---------------------------------
Xxxxxx Brothers Inc. $11,373,000
First Union Capital Markets $11,373,000
Corp.
