Exhibit 1.1
XXXXXX FUNDING CORPORATION (Trust Depositor)
XXXXXX FINANCIAL, INC. (Servicer)
UNDERWRITING AGREEMENT
_________, 1997
First Union Capital Markets Corp.
000 Xxxxx Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
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Ladies and Gentlemen:
Xxxxxx Funding Corporation, a Delaware corporation (the "Trust
Depositor"), proposes to cause the Xxxxxx Equipment Receivables Trust 1997-1
(the "Trust") to issue the asset backed notes identified in Schedule I hereto
(the "Notes"). The Notes will be issued pursuant to and secured by an indenture
(the "Indenture") to be entered into between the Trust and ____________ as
trustee (the "Indenture Trustee"), the form of which has been filed as an
exhibit to the Registration Statement (as defined below). The Notes identified
in Schedule I hereto will be sold in a public offering through the underwriters
listed in Schedule II hereto, one or more of which may act as representative of
such underwriters (any underwriter through which Notes are sold shall be
referred to herein as an "Underwriter" or, collectively, all such Underwriters
may be referred to as the "Underwriters"; any representatives thereof may be
referred to herein as a "Representative"). To the extent not defined herein,
capitalized terms used herein have the meanings assigned to such terms in the
Sale and Servicing Agreement among the Trust Depositor, the Trust, the Indenture
Trustee and Xxxxxx Financial, Inc. as Servicer (the "Servicer") dated _____,
1997.
Section 1. Representations and Warranties. The Trust Depositor and
the Servicer, represent and warrant to each Underwriter that:
(a) The Trust Depositor has prepared and filed with the Securities
and Exchange Commission (the "Commission") in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Securities
Act"), a registration statement on Form S-1 (registration number 333-
30207), including a form of prospectus, relating to the Notes. The
registration statement, and any post-effective amendment thereto, each in
the form heretofore delivered to you and, excluding exhibits thereto, have
been declared
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effective by the Commission. As used in this Agreement, "Effective Time"
means the date and the time as of which such registration statement, or the
most recent post-effective amendment thereto, if any, was declared
effective by the Commission and "Effective Date" means the date of the
Effective Time. The Trust Depositor has furnished to you, for use by the
Underwriters, copies of one or more preliminary prospectuses (each, a
"Preliminary Prospectus"), relating to the Notes. Except where the context
otherwise requires, the registration statement, as amended at the Effective
Time, including all documents filed as a part thereof, and including any
information contained in a prospectus subsequently filed with the
Commission pursuant to Rule 424(b) under the Act and deemed to be part of
the registration statement as of the Effective Time pursuant to Rule 430A
under the Act, is herein called the "Registration Statement", and the
prospectus, in the form filed by the Trust Depositor with the Commission
pursuant to Rule 424(b) under the Act or, if no such filed is required, the
form of final prospectus included in the Registration Statement at the time
it became effective, is hereinafter called the "Prospectus";
(b) The Registration Statement relating to the Notes, has been filed
with the Commission and such Registration Statement has become effective.
No stop order suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose has been instituted or,
to the knowledge of the Trust Depositor or the Servicer, threatened by the
Commission;
(c) The Registration Statement conforms, and any amendments or
supplements thereto and the Prospectus will conform, in all material
respects to the requirements of the Securities Act and the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), and do not and will
not, as of the applicable effective date as to the Registration Statement
and any amendment thereto, as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, and as of the Closing
Date, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to (i) that part of the
Registration Statement which shall constitute the Statement of Eligibility
and Qualification (Form T-1) of the Indenture Trustee under the Trust
Indenture Act or (ii) any Underwriters' Information (as defined in Section
10(b) hereof) contained therein. The Indenture conforms in all respects to
the requirements of the Trust Indenture Act and the rules and regulations
of the Commission thereunder.
(d) The representations and warranties of the Trust Depositor in
Sections ____________ of the Sale and Servicing Agreement will be true and
correct as of the Closing Date.
(e) The representations and warranties of the Servicer in Section
_____ of the Sale and Servicing Agreement will be true and correct as of
the Closing Date.
(f) The Servicer and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective
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_____________, 1997
jurisdictions of incorporation, are duly qualified to do business and are
in good standing as foreign corporations in each jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure
to so qualify or have such power or authority could not have, individually
or in the aggregate, a material adverse effect on the condition (financial
or otherwise), results of operations, business or prospects of the Servicer
and its subsidiaries taken as a whole.
(g) All the outstanding shares of capital stock of the Trust
Depositor have been duly authorized and validly issued, are fully paid and
nonassessable and, except to the extent set forth in the Registration
Statement, are owned by the Servicer directly or indirectly through one or
more wholly-owned subsidiaries, free and clear of any claim, lien,
encumbrance, security interest, restriction upon voting or transfer or any
other claim of any third party.
(h) (i) the Sale and Servicing Agreement, when duly executed by the
Trust Depositor and the Servicer and delivered by such parties, will
constitute a valid and binding agreement of the Trust Depositor and the
Servicer enforceable against them in accordance with its terms; (ii) the
Indenture, when duly executed by the Indenture Trustee and delivered by the
Indenture Trustee, will constitute a valid and binding agreement of the
Trust enforceable against the Trust in accordance with its terms; (iii) the
Notes, when duly executed, authenticated, issued and delivered as provided
in the Indenture, will be duly and validly issued and outstanding and will
constitute valid and binding obligations of the Trust entitled to the
benefits of the Indenture and enforceable in accordance with its terms; and
(iv) the Indenture, the Sale and Servicing Agreement, the Trust Agreement
between the Trust Depositor and ________, as Owner Trustee and the Transfer
and Sale Agreement among Xxxxxx Financial Inc. as the Servicer and a
Seller, Xxxxxx Financial Leasing, Inc., as a Seller, and together with
Xxxxxx Financial Inc, the "Sellers", and the Trust Depositor (collectively,
the "Transaction Agreements") and the Notes conform to the descriptions
thereof contained in the Prospectus.
(i) The execution, delivery and performance of this Agreement, the
Transaction Agreements to which the Servicer or its subsidiary, as the case
may be, is a party and the issuance and sale of the Notes, the consummation
of the transactions contemplated hereby and thereby will not conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Servicer or any of
its subsidiaries is a party or by which the Servicer or any of its
subsidiaries is bound or to which any of the property or assets of the
Servicer or any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the charter or by-laws of the
Servicer or any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Servicer or any of its subsidiaries or any of their
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properties or assets; and except for the registration of the Notes under
the Securities Act, the qualification of the Indenture under the Trust
Indenture Act, such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution of
the Notes by the Underwriters and the filing of any financing statements
required to perfect the Trust's interest in the Trust Assets, no consent,
approval, authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement or the Transaction Agreements,
the issuance and sale of the Notes and the consummation of the transactions
contemplated hereby and thereby.
(j) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act and which have not been so described or
filed.
(k) There are no legal or governmental proceedings pending to which
the Servicer or any of its subsidiaries is a party or of which any property
or assets of the Servicer or any of its subsidiaries is the subject which,
individually or in the aggregate, if determined adversely to the Servicer
or any of its subsidiaries, are reasonably likely to have a material
adverse effect on the condition (financial or otherwise), results of
operations, business or prospects of the Servicer and its subsidiaries
taken as a whole; and to the best of the Servicer's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(l) Neither the Servicer nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its property
or assets is subject or (iii) is in violation in any respect of any law,
ordinance, governmental rule, regulation or court decree to which it or its
property or assets may be subject, except any violation or default that
could not have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Servicer
and its subsidiaries taken as a whole.
(m) This Agreement has been duly authorized, executed and delivered
by each of the Trust Depositor and the Servicer; and
(n) Neither the Trust nor the Trust Depositor is required to be
registered under the Investment Company Act of 1940, as amended.
Section 2. Purchase and Sale. Subject to the terms and conditions
and in reliance upon the covenants, representations and warranties herein set
forth, the Trust Depositor agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not
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_______________, 1997
jointly, to purchase from the Trust Depositor, the principal amount of Notes set
forth opposite such Underwriter's name in Schedule II hereto. The purchase
price for the Notes shall be as set forth in Schedule I hereto.
Section 3. Delivery and Payment. Payment for the Notes shall be made
to the Trust Depositor or to its order by wire transfer of same day funds at the
office of Xxxxxxx Xxxxxxx & Xxxxxxxx in New York, New York at 10:00 A.M., New
York City time, on the Closing Date (as hereinafter defined), or at such other
time on the same or such other date as the Representative and the Trust
Depositor may agree upon. The time and date of such payment for the Notes as
specified in Schedule I hereto are referred to herein as the "Closing Date." As
used herein, the term "Business Day" means any day other than a day on which
banks are permitted or required to be closed in New York City.
Payment for the Notes shall be made against delivery to the
Representative for the respective accounts of the several Underwriters of the
Notes registered in the name of Cede & Co. as nominee of The Depository Trust
Company and in such denominations as the Representative shall request in writing
not later than two full Business Days prior to the Closing Date. The Trust
Depositor shall make the Notes available for inspection by the Representative in
New York, New York not later than one full Business Day prior to the Closing
Date.
Section 4. Offering by Underwriters. It is understood that the
several Underwriters propose to offer the Notes for sale to the public, which
may include selected dealers, as set forth in the Prospectus.
Section 5. Covenants of the Trust Depositor. The Trust Depositor
covenants and agrees with the Underwriters:
(a) To prepare the Prospectus in a form approved by the
Representative and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act.
(b) During the period that a prospectus relating to the Notes is
required to be delivered under the Securities Act in connection with sales
of such Notes (such period being hereinafter sometimes referred to as the
"prospectus delivery period"), before filing any amendment or supplement to
the Registration Statement or the Prospectus, the Trust Depositor will
furnish to the Representative a copy of the proposed amendment or
supplement for review and will not file any such proposed amendment or
supplement to which the Representative reasonable objects.
(c) During the prospectus delivery period, the Trust Depositor will
advise the Representative promptly after it receives notice thereof, (i)
when any amendment to the Registration Statement shall have become
effective; (ii) of any request by the Commission for any amendment or
supplement to the Registration Statement or the
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Prospectus or for any additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threatening of any proceeding
for that purpose, (iv) of the issuance by the Commission of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or the initiation or threatening of any proceedings for that
purpose and (v) of any notification with respect to any suspension of the
qualification of the Notes for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and will use
its best efforts to prevent the issuance of any such stop order or
suspension and, if any is issued, will promptly use its best efforts to
obtain the withdrawal thereof.
(d) If, at any time during the prospectus delivery period, any event
occurs as a result of which the Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall be
necessary to amend or supplement the Prospectus to comply with the
Securities Act, the Trust Depositor promptly will prepare and file with the
Commission, an amendment or a supplement which will correct such statement
or omission or effect such compliance.
(e) The Trust Depositor will endeavor to qualify the Notes for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Representative shall reasonably request and will continue such
qualification in effect so long as reasonably required for distribution of
the Notes; provided, however, that the Trust Depositor shall not be
obligated to qualify to do business in any jurisdiction in which it is not
currently so qualified; and provided, further, that the Trust Depositor
shall not be required to file a general consent to service of process in
any jurisdiction.
(f) The Trust Depositor will furnish to the Representative, without
charge, two copies of the Registration Statement (including exhibits
thereto), one of which will be signed, and to each Underwriter conformed
copies of the Registration Statement (without exhibits thereto) and, during
the prospectus delivery period, as many copies of any Preliminary
Prospectus and the Prospectus and any supplement thereto as the
Underwriters may reasonably request.
(g) For a period from the date of this Agreement until the retirement
of the Notes, or until such time as the Underwriters shall cease to
maintain a secondary market in the Notes, whichever first occurs, the Trust
Depositor will deliver to the Underwriters (i) the annual statements of
compliance, (ii) the annual independent certified public accountants'
reports furnished to the Indenture Trustee, (iii) all documents required to
be distributed to Noteholders of the Trust and (iv) all documents filed
with the Commission pursuant to the Exchange Act or any order of the
Commission thereunder, in each case as provided to the Indenture Trustee or
filed with the Commission, as soon as such statements and reports are
furnished to the Indenture Trustee or filed or as soon thereafter as
practicable.
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(h) To the extent, if any, that the rating provided with respect to
the Notes by the rating agency or agencies that initially rate the Notes is
conditional upon the furnishing of documents or the taking of any other
actions by the Trust Depositor, the Trust Depositor shall furnish such
documents and take any such other actions.
(i) The Trust Depositor will cause the Trust to make generally
available to Noteholders and to the Representative as soon as practicable
an earnings statement covering a period of at least twelve months beginning
with the first fiscal quarter of the Trust occurring after the Effective
Date of the Registration Statement, which shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder.
(j) For a period of 90 days from the date hereof, the Trust Depositor
will not offer for sale, sell, contract to sell or otherwise dispose of,
directly or indirectly, or file a registration statement for, or announce
any offering of, any securities collateralized by, or evidencing an
ownership interest in, any asset-backed securities of the Trust Depositor
or the Trust (other than the Notes purchased hereunder) without the prior
written consent of the Underwriters.
Section 6. Conditions to the Obligations of the Underwriters. The
respective obligations of the several Underwriters hereunder are subject to the
accuracy, when made and on the Closing Date, of the representations and
warranties of the Trust Depositor and the Servicer contained herein, to the
accuracy of the statements of the Trust Depositor and the Servicer made in any
certificates pursuant to the provisions hereof, to the performance by the Trust
Depositor and the Servicer of their respective obligations hereunder and to each
of the following additional terms and conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424 in the manner and within the applicable time period prescribed
for such filing by the rules and regulations of the Commission under the
Securities Act and in accordance with Section 5(a) of this Agreement; and,
prior to the Closing Date, no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceedings for such purpose shall have been initiated or threatened by
the Commission; and all requests for additional information from the
Commission with respect to the Registration Statement shall have been
complied with to the reasonable satisfaction of the Representative.
(b) (i) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Transaction
Agreements, the Notes, the Registration Statement, the Preliminary
Prospectus and the Prospectus, and all other legal matters relating to such
agreements and the transactions contemplated hereby and thereby shall be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Trust Depositor shall have furnished to such counsel
all documents and information that they may reasonably request to enable
them to pass upon such matters and (ii) prior to or contemporaneously with
the purchase of Notes hereunder, all transactions contemplated to be
consummated under such Transaction
First Union Capital Markets Corp. 8
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Documents on the Closing Date (including, without limitation, the issuance
and placement of any subordinated, privately-placed securities) shall have
been so consummated to the reasonable satisfaction of the Underwriters.
(c) Winston & Xxxxxx shall have furnished to the Representative their
written opinion, as U.S. counsel to the Trust Depositor and the Servicer,
addressed to the Underwriters and dated the Closing Date, in form and
substance reasonably satisfactory to the Underwriters.
(d) ________________ shall have furnished to the Representative his
written opinion, as _______________ to the Servicer, addressed to the
Underwriters and dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriters.
(e) Winston & Xxxxxx shall have furnished to the Representative their
written opinion, as U.S. counsel to the Trust Depositor and the Servicer,
addressed to the Underwriters and dated the Closing Date, in form and
substance reasonably satisfactory to the Underwriters, with respect to the
characterization of the transfer of the Assets by the Sellers to the Trust
Depositor pursuant to the Transfer and Sale Agreement as a sale and the
non-consolidation of the Trust Depositor and the Servicer.
(f) The Representative shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to such matters as the Underwriters may require,
and the Trust Depositor shall have furnished to such counsel such documents
as they reasonably request for enabling them to pass upon such matters.
(g) (i) ___________________ shall have furnished to the
Representative their written opinion, as counsel to the Indenture Trustee,
addressed to the Underwriters and dated the Closing Date, in form and
substance reasonably satisfactory to the Underwriters and (ii)
___________________ shall have furnished to the Representative their
written opinion, as counsel to the Owner Trustee, addressed to the
Underwriters and dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriters.
(h) Each of the Trust Depositor and the Servicer shall have furnished
to the Representative a certificate, dated the Closing Date, of any of its
Chairman of the Board, President or Vice President and its chief financial
officer stating that (i) such officers have carefully examined the
Registration Statement and the Prospectus, (ii) the Prospectus does not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, (iii) the representations and warranties of the
Servicer or the Trust Depositor, as the case may be, contained in this
Agreement and the Transaction Agreements are true and correct in all
material respects on and as of the Closing Date, (iv) the Servicer or the
Trust Depositor, as the case may be, has complied in all material respects
with all agreements and satisfied in all material respects all conditions
on its part to be
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performed or satisfied hereunder and under such agreements at or prior to
the Closing Date, (v) no stop order suspending the effectiveness of the
Registration Statement has been issued and is outstanding and no
proceedings for that purpose have been instituted and not terminated or, to
the best of his or her knowledge, are contemplated by the Commission, and
(vi) since the date of its most recent financial statements, there has been
no material adverse change in the financial position or results of
operations of the Servicer or the Trust Depositor, as applicable, or the
Trust or any change, or any development including a prospective change, in
or affecting the condition (financial or otherwise), results of operations
or business of the Servicer, the Trust Depositor or the Trust except as set
forth in or contemplated by the Registration Statement and the Prospectus.
(i) Subsequent to the date of this Agreement, there shall not have
occurred (i) any change, or any development involving a prospective change,
in or affecting particularly the business or properties of the Trust
Depositor or the Servicer which materially impairs the investment quality
of the Notes; (ii) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the over-the-counter market shall
have been suspended or limited, or minimum prices shall have been
established on either of such exchanges or such market by the Commission,
by such exchange or by any other regulatory body or governmental authority
having jurisdiction, or trading in securities of the Trust Depositor or the
Servicer on any exchange or in the over-the-counter market shall have been
suspended or (iii) a general moratorium on commercial banking activities
shall have been declared by Federal or New York State authorities or (iv)
an outbreak or escalation of hostilities or a declaration by the United
States of a national emergency or war or such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of the Representative,
impracticable or inadvisable to proceed with the public offering or the
delivery of the Notes on the terms and in the manner contemplated in the
Prospectus.
(j) With respect to the letter of __________________, delivered to
the Underwriters concurrently with the execution of this Agreement (the
"initial letter"), the Trust Depositor shall have furnished to the
Underwriters a letter (the "bring-down letter") of such accountants,
addressed to the Underwriters and dated the Closing Date (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualifications of accountants under Rule 2-01 of Regulation
S-X of the Commission, (ii) stating, as of the date of the bring-down
letter (or with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the date
of such bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by its
initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in its initial letter.
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(k) The Underwriters shall receive evidence satisfactory to them
that, on or before the Closing Date, UCC-1 financing statements have been
or are being filed in each office in each jurisdiction in which such
financing statements are required to perfect the first priority security
interests created by the Sale and Servicing Agreement reflecting the
interest of the Trust Depositor in the Receivables and the proceeds
thereof.
(l) Subsequent to the execution and delivery of this Agreement, (i)
no downgrading shall have occurred in the rating accorded the Notes or any
of the Trust Depositor's other debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) of the Securities Act and (ii) no
such organization shall have publicly announced that it has under
surveillance or review (other than an announcement with positive
implications of a possible upgrading), its rating of the Notes or any of
the Trust Depositor's other debt securities.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
Section 7. Termination. The obligations of the Underwriters
hereunder may be terminated by the Representative, in its absolute discretion,
by notice given to and received by the Trust Depositor and the Servicer prior to
delivery of and payment for the Notes if, prior to that time, any of the events
described in Section 6(i) or Section 6(m) shall have occurred.
Section 8. Defaulting Underwriters. (a) If, on the Closing Date,
any Underwriter or Underwriters default in the performance of its or their
obligations under this Agreement, the Representative may make arrangements for
the purchase of such Notes by other persons satisfactory to the Trust Depositor
and the Representative, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, then each remaining non-defaulting
Underwriter shall be severally obligated to purchase the Notes which the
defaulting Underwriter or Underwriters agreed but failed to purchase on the
Closing Date in the respective proportions which the principal amount of Notes
set forth opposite the name of each remaining non-defaulting Underwriter in
Schedule I hereto bears to the aggregate principal amount of Notes set forth
opposite the names of all the remaining non-defaulting Underwriters in Schedule
I hereto; provided, however, that the remaining non-defaulting Underwriters
shall not be obligated to purchase any of the Notes on the Closing Date if the
aggregate principal amount of Notes which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds one-eleventh of
the aggregate principal amount of the Notes to be purchased on the Closing Date,
and any remaining non-defaulting Underwriter shall not be obligated to purchase
in total more than 110% of the principal amount of the Notes which it agreed to
purchase on the Closing Date pursuant to the terms of Section 2. If the
foregoing maximums are exceeded and the remaining Underwriters or other
underwriters satisfactory to the Representative and the Trust Depositor do not
elect to purchase the Notes which the defaulting Underwriter or Underwriters
agreed but failed to purchase, this
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Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Trust Depositor, except that the provisions of Sections 9 and
13 shall not terminate and shall remain in effect. As used in this Agreement,
the term "Underwriter" includes, for all purposes of this Agreement unless the
context otherwise requires, any party not listed in Schedule I hereto who,
pursuant to this Section 8, purchases Notes which a defaulting Underwriter
agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Underwriter
of any liability it may have for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Notes of a defaulting
Underwriter, either the Representative or the Trust Depositor may postpone the
Closing Date for up to seven full business days in order to effect any changes
that in the opinion of counsel for the Trust Depositor or counsel for the Under
writers may be necessary in the Registration Statement, the Prospectus or in any
other document or arrangement, and the Trust Depositor agrees to file promptly
any amendment or supplement to the Registration Statement or the Prospectus that
effects any such changes.
Section 9. Reimbursement of Underwriters' Expenses. If (i) the Trust
Depositor shall fail to tender the Notes for delivery to the Underwriters for
any reason permitted under this Agreement or (ii) the Underwriters shall decline
to purchase the Notes for any reason permitted under this Agreement, the Trust
Depositor shall reimburse the Underwriters for the fees and expenses of their
counsel and for such other out-of-pocket expenses as shall have been reasonably
incurred by them in connection with this Agreement and the proposed purchase of
the Notes, and upon demand the Trust Depositor shall pay the full amount thereof
to the Representative. If this Agreement is terminated pursuant to Section 8 by
reason of the default of one or more Underwriters, the Trust Depositor shall not
be obligated to reimburse any defaulting Underwriter on account of those
expenses.
Section 10. Indemnification. (a) The Servicer and the Trust
Depositor shall, jointly and severally, indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Securities Act (collectively referred to for the purposes of this
Section 10 as the Underwriter) against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which that Underwriter
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment thereof or
supplement thereto, or in any Preliminary Prospectus or the Prospectus or in any
amendment thereof or supplement thereto or (ii) the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse each Underwriter
for any legal or other expenses reasonably incurred by that Underwriter directly
in connection with investigating or preparing to defend or defending against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that neither the Servicer nor the Trust Depositor shall be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any Registration Statement as originally filed
or in any amendment thereof or supplement thereto,
First Union Capital Markets Corp. 12
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or in any Preliminary Prospectus or the Prospectus or in any amendment thereof
or supplement thereto in reliance upon and in conformity with the Underwriters'
Information.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Trust Depositor, each of its directors, each officer of the
Trust Depositor who signed the Registration Statement and each person, if any,
who controls the Trust Depositor within the meaning of the Securities Act
(collectively referred to for the purposes of this Section 10 as the Trust
Depositor), against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Trust Depositor may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement as originally filed or in any amendment thereof or supplement thereto,
or in any Preliminary Prospectus or the Prospectus or in any amendment thereof
or supplement thereto or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with the written information furnished
to the Trust Depositor through the Representative by or on behalf of such
Underwriter specifically for use therein (the "Underwriters' Information"), and
shall reimburse the Trust Depositor for any legal or other expenses reasonably
incurred by the Trust Depositor in connection with investigating or preparing to
defend or defending against or appearing as third party witness in connection
with any such loss, claim, damage or liability (or any action in respect
thereof) as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure; and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representative shall have the right to employ counsel to represent jointly
the Representative and the other Underwriters (and their respective controlling
persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought under this Section 10) if, in the reasonable
judgment of the Representative, it is
First Union Capital Markets Corp. 13
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advisable for the Representative and the other Underwriters and controlling
persons to be jointly represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the Trust Depositor
and the Servicer. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 10(a) and 10(b), shall use all reasonable
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall be liable for any settlement of
any such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
The obligations of the Servicer, the Trust Depositor and the
Underwriters in this Section 10 are in addition to any other liability which the
Servicer, the Trust Depositor or the Underwriters, as the case may be, may
otherwise have.
Section 11. Contribution. If the indemnification provided for in
this Section 11 is unavailable or insufficient to hold harmless an indemnified
party under Section 10(a) or (b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
any action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Servicer and the Trust Depositor
on the one hand and the Underwriters on the other from the offering of the Notes
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Servicer and the Trust Depositor on the one hand and the Underwriters on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or any action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Servicer and the Trust Depositor on the one hand and the Underwriters on the
other with respect to such offering shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Notes purchased hereunder
(before deducting expenses) received by the Trust Depositor bear to the total
underwriting discounts and commissions received by the Underwriters with respect
to the Notes purchased hereunder, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Servicer or the Trust Depositor on the
one hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Servicer, the Trust Depositor and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 11 were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability referred to above in
this Section 11 shall be deemed to include, for purposes of this Section 11, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such
First Union Capital Markets Corp. 14
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claim or any action. Notwithstanding the provisions of this Section 11, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Notes underwritten by it and distributed
to the public were offered to the public less the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to indemnify and contribute as provided in this Section 11 are several in
proportion to their respective underwriting obligations and not joint.
Section 12. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Trust
Depositor, the Servicer, and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters, the Trust Depositor
and the Servicer and their respective successors and the controlling persons and
officers and directors referred to in Sections 10 and 11 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
Section 13. Expenses. The Trust Depositor and the Servicer, jointly
and severally, agrees with the Underwriters to pay (i) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Notes and any
taxes payable in that connection; (ii) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement and
any amendments and exhibits thereto; (iii) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus and the Prospectus, all as provided in this Agreement;
(iv) the costs of reproducing and distributing this Agreement and any other
underwriting and selling group documents by mail, telex or other means of
communications; (v) the fees and expenses of qualifying the Notes under the
securities laws of the several jurisdictions as provided in Section 5(e) and of
preparing, printing and distributing Blue Sky Memoranda and Legal Investment
Surveys (including the related reasonable and documented fees and expenses of
counsel to the Underwriters); (vi) any fees charged by rating agencies for
rating the Notes; (vii) all fees and expenses of the Indenture Trustee and its
counsel; (viii) any transfer taxes payable in connection with its sale of the
Notes pursuant to this Agreement; and (ix) all other costs and expenses incident
to the performance of the obligations of the Trust Depositor and the Servicer
under this Agreement; provided that, except as otherwise provided in this
Section 13, the Underwriters shall pay their own costs and expenses, including,
the costs and expenses of their counsel and the expenses of advertising any
offering of the Notes made by the Underwriters.
Section 14. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Trust Depositor,
the Servicer and the Under writers contained in this Agreement or made by or on
their behalf, respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Notes and shall remain in
First Union Capital Markets Corp. 15
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full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any of them or any person
controlling any of them.
Section 15. Notices. All communication hereunder shall be in writing
and, (i) if sent to the Underwriters will be mailed, delivered or telecopied and
confirmed to them at First Union Capital Markets Corp., Asset Securitization
Division, 000 Xxxxx Xxxxxxx Xxxxxx, XX-00, Xxxxxxxxx, North Carolina, 28288-
0610, Telecopy Number: (000) 000-0000; provided, however, that any notice to an
Underwriter pursuant to Section 9(c) shall be delivered or sent by mail,
delivery or telecopy to such Underwriter at its address set forth in its
acceptance telex to the Representative, which address will be supplied to any
other party hereto by the Representative upon request; if sent to the Trust
Depositor, will be mailed, delivered or telecopied and confirmed to them at the
address of the Trust Depositor set forth in the Registration Statement,
Attention: Chief Financial Officer; and (iii) if sent to the Servicer, will be
mailed, delivered or telecopied and confirmed to them at the address of the
Servicer set forth in the Registration Statement, Attention: Vice President and
Treasurer. Any such statements, requests, notices or agreements shall take
effect at the time of receipt thereof. The Trust Depositor and the Servicer
shall be entitled to act and rely upon any request, consent, notice or agreement
given or made on behalf of the Underwriters by the Representative.
Section 16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
Section 17. Submission to Jurisdiction; Appointment of Agent for
Service; Currency Indemnity. (a) To the fullest extent permitted by applicable
law, each of the Trust Depositor and the Servicer irrevocably submits to the
jurisdiction of any Federal or State court in the City, County and State of New
York, United States of America, in any suit or proceeding based on or arising
under this Agreement, and irrevocably agrees that all claims in respect of such
suit or proceeding may be determined in any such court. Each of the Trust
Depositor and the Servicer hereby irrevocably and fully waives the defense of an
inconvenient forum to the maintenance of such suit or proceeding. Each of the
Trust Depositor and the Servicer hereby irrevocably designates and appoints CT
Corporation (the "Process Agent"), as its authorized agent upon whom process may
be served in any such suit or proceeding, it being understood that the
designation and appointment of CT Corporation as such authorized agent shall
become effective immediately without any further action on the part of the Trust
Depositor or the Servicer. Each of the Trust Depositor and the Servicer
represents to each Underwriter that it has notified the Process Agent of such
designation and appointment and that the Process Agent has accepted the same in
writing. Each of the Trust Depositor and the Servicer hereby irrevocably
authorizes and directs the Process Agent to accept such service. Each of the
Trust Depositor and the Servicer further agrees that service of process upon the
Process Agent and written notice of said service to the Trust Depositor or the
Servicer, as the case may be, mailed by first class mail or delivered to the
Process Agent at its principal office, shall be deemed in every respect
effective service of process upon the Trust Depositor or the Servicer, as the
case may be, in any such suit or proceeding. Nothing herein shall affect the
right of any Underwriter or any person controlling any Underwriter to serve
process in any other manner permitted by law. Each of the Trust Depositor and
the Servicer agrees
First Union Capital Markets Corp. 16
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that a final action in any such suit or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
lawful manner.
(b) The obligation of the parties to make payments hereunder is in
U.S. dollars (U.S. dollars and such other currencies referred to above being
called the "Obligation Currency") and such obligation shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency or any other
realization in such other currency, whether as proceeds of set-off, security,
guarantee, distributions, or otherwise, except to the extent to which such
tender, recovery or realization shall result in the effective receipt by the
party which is to receive such payment of the full amount of the Obligation
Currency expressed to be payable hereunder, and the party liable to make such
payment agrees to indemnify the party which is to receive such payment (as an
additional, separate and independent cause of action) for the amount (if any) by
which such effective receipt shall fall short of the full amount of the
Obligation Currency expressed to be payable hereunder and such obligation to
indemnify shall not be affected by judgment being obtained for any other sums
due under this Agreement.
Section 18. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
Section 19. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
Section 20. Effectiveness. This Agreement shall become effective
upon execution and delivery.
17
If you are in agreement with the foregoing, please sign the
counterpart hereof and return it to the Trust Depositor, whereupon this letter
and your acceptance shall become a binding agreement among the Trust Depositor,
the Servicer and the several Underwriters.
Very truly yours,
XXXXXX FUNDING CORPORATION
By:
-------------------------------------
Name:
Title:
XXXXXX FINANCIAL, INC.
By:
-------------------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date hereof.
FIRST UNION CAPITAL MARKETS CORP.
By:
---------------------------------
Name:
Title:
