7/6/99
CHARTER EQUIPMENT LEASE 1999-1 LLC
$ [_____] - [___]% Class A-1 Lease-Backed Notes
$ [_____] - [___]% Class A-2 Lease-Backed Notes
$ [_____] - [___]% Class A-3 Lease-Backed Notes
$ [_____] - [___]% Class A-4 Lease-Backed Notes
$ [_____] - [___ ]% Class B Lease-Backed Notes
July __, 1999
FORM OF UNDERWRITING AGREEMENT
FIRST UNION CAPITAL MARKETS CORP.
One First Union Center
Charlotte, North Carolina 28288
Ladies and Gentlemen:
Charter Equipment Lease 1999-1 LLC, a limited liability company organized
and existing under the laws of Delaware (the "Issuer") and Charter Financial,
Inc., a corporation organized and existing under the laws of New York
("Charter"), hereby agree with you as follows:
Section 1. Issuance and Sale of Notes. The Issuer has authorized the
issuance of $[____] (the "Class A-1 Initial Principal Amount") of [_____]% Class
A-1 Lease-Backed Notes (the "Class A-1 Notes"); $[ ] (the "Class A-2 Initial
Principal Amount") of [_____]% Class A-2 Lease-Backed Notes (the "Class A-2
Notes"); $[_____] (the "Class A-3 Initial Principal Amount" of [_____]% Class
A-3 Lease-Backed Notes (the "Class A-3 Notes"); $[_____] (the "Class A-4 Initial
Principal Amount" together with the Class A-1 Initial Principal Amount, Class
A-2 Initial Principal Amount, Class A-3 Initial Principal Amount, the "Class A
Initial Principal Amount") of [_____]% Class A-4 Lease-Backed Notes (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"); $[_____] (the "Class B Initial Principal Amount")
of [_____]% Class B Lease-Backed Notes (the "Class B Notes"); $[_____] (the
"Class C Initial Principal Amount") of [_____]% Class C Lease-Backed Notes A
(the "Class C Notes"); $[_____] (the "Class D Initial Principal Amount" together
with the Class A Initial Principal Amount, the Class B Initial Principal Amount,
the Class C Initial Principal Amount, the Class D Initial Principal Amount, the
"Initial Principal Amount") of [_____]% Class D Lease-Backed Notes (the "Class D
Notes"; together with the Class A Notes, and the Class B, the "Offered Notes" or
the "Notes"). The Notes will be issued
pursuant to an Indenture, dated as of July 1, 1999 (the "Indenture"), among the
Issuer, Charter and LaSalle Bank National Association (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 Notes will be sold by the Issuer to you as Underwriter in the amounts
set forth on Schedule A hereto.
The terms which follow, when used in this Underwriting Agreement (the
"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" refer to such rules under the Securities
Act.
"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 First Union Capital Markets Corp.
"Underwriting Information" has the meaning given to such term in
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Section 8(b) hereof.
To the extent capitalized terms are used herein which are not otherwise
defined, such terms shall have meanings defined in the Servicing Agreement.
Section 2. Purchase and Sale of Notes.
(a) Subject to the terms and conditions and in reliance upon the covenants,
representations and warranties set forth herein, the Underwriter agree to
purchase from the Issuer the Class A Initial Principal Amount of the Class A
Notes, Class B Initial Principal Amount of the Class B Notes, pursuant to the
terms of this Agreement on the Date at the purchase price or prices (the
"Purchase Price") set forth on Schedule A attached hereto.
(b) It is understood that the Underwriter proposes 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 Notes to be purchased by the
Underwriter shall be made at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 A.M., New York time, on July __, 1999
(the "Issuance Date"). The Offered Notes shall be registered in the name of the
Underwriter against payment by the Underwriter 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
Underwriter, delivery of one or more global notes (the "Global Notes")
representing the Offered Notes shall be made to the account of the Underwriter
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.
Section 4. Representations and Warranties.
(a) The Issuer hereby represents and warrants to, and agrees with, the
Underwriter 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. 333-64045), 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. Such
Registration Statement has been declared effective. The Issuer may have
filed one or more amendments thereto, including the related Preliminary
Prospectus, each of which has previously been
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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 430A 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 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; the statements in
"Description of the Notes" in the Final Prospectus, to the extent they
constitute a summary of the Notes, the Indenture, the Seller Contribution
and Sale Agreement, the Transferor Contribution and Sale Agreement, and the
Servicing Agreement, constitute a fair and accurate summary thereof;
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 in accordance with its terms, except that the provisions
hereof relating to indemnification of the Underwriter may be subject to
limitations of public policy.
(iv) Each of the Indenture, the Servicing Agreement and the Transferor
Contribution and Sale Agreement has 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.
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(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, the Transferor Contribution and Sale
Agreement and the 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
Underwriter.
(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 Indenture, when executed and delivered, will have been duly
qualified under the Trust Indenture Act of 1939.
(b) Charter hereby represents and warrants to and agrees with the
Underwriter as follows:
(i) This Agreement has been duly authorized, executed and delivered,
the Indenture, the Servicing Agreement and the Seller Contribution and Sale
Agreement have been duly authorized, and this Agreement constitutes, and
when executed and delivered, the Indenture, the Servicing Agreement and the
Seller Contribution and Sale Agreement will constitute the legal, valid and
binding obligations of Charter, enforceable in accordance with their
respective terms, except that the provisions hereof relating to
indemnification of the Underwriter may be subject to limitations of public
policy and each of the Indenture, the Servicing Agreement and the Seller
Contribution and Sale Agreement conforms in all material respects to the
description thereof contained in the Prospectus.
(ii) The performance of this Agreement by Charter, and the
consummation by Charter of the transactions herein contemplated, will (A)
not
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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 Charter or its properties, or any of the
provisions of any indenture, mortgage, deed of trust, contract or other
agreement or instrument to which Charter 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 Charter 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 Underwriter. As used herein,
"Adverse Claim" means a lien, pledge, security interest or other charge or
encumbrance.
(iii) Charter hereby makes and repeats the representations and
warranties set forth in Article 2 of the Servicing Agreement. Such
representations and warranties are incorporated by reference in this
Section 4(b), and the Underwriter may rely thereon as if such
representations and warranties were fully set forth herein.
(iv) Charter represents and warrants it has delivered to the
Underwriter complete and correct copies of its balance sheet and statements
of income and retained earnings reported by it for the year ended December
31, 1998 and the period ended March 31, 1999. 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 Charter since March 31, 1999.
(v) Any taxes, fees and other governmental charges arising from the
execution and delivery of this Agreement, the Servicing Agreement, the
Transferor Contribution and Sale Agreement, the Seller Contribution and
Sale 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
prior to the Closing Date.
(vi) Ernst & ▇▇▇▇▇ is an independent public accountant with respect to
the Charter and the Issuer within the meaning of the Securities Act and the
rules and regulations promulgated thereunder.
(vii) Each of the Issuer and Charter represents and warrants to you
that 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 (i) asserting the
invalidity of this Agreement, the Servicing Agreement, the Transferor
Contribution and Sale Agreement, the Seller Contribution and Sale
Agreement, the Indenture or the Offered Notes, (ii) seeking to prevent the
issuance of the Offered Notes or the consummation of any
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of the transactions contemplated by this Agreement, the Servicing
Agreement, the Transferor Contribution and Sale Agreement, the Seller
Contribution and Sale Agreement or the Indenture or (iii) seeking any
determination or ruling that might materially and adversely affect (A) its
performance of its obligations under this Agreement, the Servicing
Agreement, the Transferor Contribution and Sale Agreement, the Seller
Contribution and Sale Agreement or the Indenture (as applicable) or (B) the
validity or enforceability of this Agreement, the Servicing Agreement, the
Transferor Contribution and Sale Agreement, the Seller Contribution and
Sale Agreement, the Indenture or the Offered Notes.
Section 5. Covenants of the Issuer and Charter. The Issuer and Charter,
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 Underwriter of such timely filing. The Issuer will promptly advise the
Underwriter (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 Underwriter reasonably object.
The Issuer and Charter will use their 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 the
holders of the Offered Notes (the "Offered Noteholders") and to the Underwriter
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.
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(d) The Issuer will furnish to the Underwriter and counsel for the
Underwriter, without charge, a signed copy of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus by any of
the Underwriter 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 Underwriter may reasonably request.
(e) Charter and the Issuer will take all reasonable actions requested by
the Underwriter 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 Underwriter 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
Charter shall deliver to the Underwriter by first-class mail and as soon as
practicable a copy of all reports and notices delivered to the Rating Agencies,
the Trustee or the Offered Noteholders under the Indenture.
(g) To the extent, if any, that any rating provided with respect to the
Notes set forth in Section 6(f) hereof is conditional upon the furnishing of
documents reasonably available to the Issuer or Charter, the Issuer and Charter
shall furnish such documents within any required time period.
Section 6. Conditions of Underwriter's Obligation. The obligations of the
Underwriter 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 Charter herein, in the Servicing Agreement, the
Seller Contribution and Sale Agreement, the Transferor Contribution and Sale
Agreement and in the Indenture, to the performance by the Issuer and Charter in
all material respects of their obligations hereunder and to the following
additional conditions:
(a) The Issuer and Charter shall each have delivered a certificate (an
"Officer's Certificate"), dated the Issuance Date, signed by its Vice President
and its Chief Financial Officer, to the effect that:
(i) the representations and warranties made by the Issuer or Charter
(as the case may be) in this Agreement, the Indenture, the Seller
Contribution and Sale Agreement, the Transferor Contribution and Sale
Agreement and the 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 Charter (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, the Seller Contribution
and Sale
8
Agreement, the Transferor Contribution and Sale Agreement and the Servicing
Agreement at or prior to the date of such Officer's Certificate;
(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 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, general counsel of
Charter, a favorable opinion (subject to customary and usual qualifications)
with respect to Charter, the Transferor and the Issuer, dated the Issuance Date
and reasonably satisfactory in form and substance to the Underwriter and their
counsel with respect to, or to the effect that: (i) the due formation and
qualification of each of the Issuer, the Transferor and Charter and that the
Issuer, the Transferor, and Charter, as applicable, have the requisite power and
authority to perform this Agreement, the Seller Contribution and Sale Agreement,
the Transferor Contribution and Sale Agreement, the 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, the Transferor and Charter;
(iii) each of this Agreement and the other Transactions Documents are legal,
valid and binding obligation of the Issuer, the Transferor and Charter, as
applicable, enforceable against each of them in accordance with its terms
(subject to customary exceptions relating to bankruptcy and laws affecting
creditors' rights); and (iv) the issuance and sale of the Offered Notes by the
Issuer, the performance of this Agreement by the Issuer, the Transferor and
Charter and the compliance by the Issuer, the Transferor and Charter with the
terms of the Transactions Documents, as applicable, and the consummation of the
transactions contemplated herein and therein will not conflict with the
organizational documents of the Issuer, the Transferor or Charter, or any other
contracts to which the Issuer, the Transferor or Charter is a party or by which
either of them is bound.
(c) You shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, a favorable opinion
(subject to customary and usual qualifications) with respect to Charter and the
Issuer, dated the Issuance Date and reasonably satisfactory in form and
substance to the Underwriter and their counsel with respect to, or to the effect
that: (i) the Offered 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)
9
and are entitled to the benefits of the Indenture; (ii) there is no legal or
governmental proceeding pending or, to the best of my knowledge, threatened
against the Issuer or Charter which would have a material adverse effect on the
issuance of the Offered Notes; (iii) in the event a court disregarded the intent
of the parties and characterized the transfers as a pledge of collateral, the
Seller Contribution and Sale Agreement and the Transferor Contribution and Sale
Agreement and accompanying documentation creates a valid security interest in
the Leases and the Equipment (or interests therein) under applicable law; (iv)
assuming no prior financing statements covering the Leases are in effect based
on a review of certain UCC searches, that financing statements covering the
Leases and naming (A) the Seller as debtor and the Transferor as secured party,
(B) the Issuer as secured party and Transferor as debtor and (C) the Issuer as
debtor and the Trustee as secured party are being filed in the appropriate
filing offices of the State of New York, and assuming that the Trustee has taken
possession of the Leases, the Trustee has a first priority perfected security
interest in all right, title and interest of Charter, the Transferor and the
Issuer in the Leases; and (v) on the Issuance Date the Registration Statement is
effective, and, that to the best of such counsel's knowledge no stop order
suspending the effectiveness of the Registration Statement has been issued or is
threatened, and that although such counsel is not passing on the factual
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus, nothing came to such counsel's
attention that leads such counsel to believe that either the Registration
Statement or the Prospectus (as of the Effective Date or the date of the
Prospectus) contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. In rendering such opinion, counsel may rely, to the extent
deemed proper and as stated therein, as to matters of fact on certificates of
responsible officers of the Issuer or Charter and public officials and as to
matters of state law of jurisdictions other than the jurisdictions in which such
counsel is admitted to practice, on opinions of local counsel satisfactory to
the Underwriter.
(d) The Underwriter shall have received from Cadwalader ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
special counsel for the Underwriter, such opinion or opinions, dated the
Issuance Date, with respect to the validity of the Offered Notes, the
Registration Statement, the Final Prospectus, and other related matters as the
Underwriter may require.
(e) At the Execution Time and at the Issuance Date, ▇▇▇▇▇ & ▇▇▇▇▇ shall
have furnished to the Underwriter a letter or letters, dated the date of this
Agreement and the Issuance Date, respectively, in form and substance
satisfactory to the Underwriter.
(f) The Class A-1 Notes shall have been rated at least "[ ]", and "[ ]",
that the Class A-2, A-3, and A-4 notes be rated at least "[ ]" and "[ ]", that
the Class B Notes be rated at least "[ ]" and "[ ]", that the Class C Notes be
rated at least "[ ]", and "[ ]", and that the Class D Notes be rated at least "[
]" and "[ ]" by [ ], and [ ], respectively, which ratings shall not have been
reduced or withdrawn as evidenced by the Officer's Certificate referred to in
Section 6(a).
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(g) 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 Underwriter and
counsel for the Underwriter and to the Issuer and Charter 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 binding
obligation of the Trustee, enforceable against the Trustee in accordance with
its terms (subject to customary and usual exceptions) and (iv) the execution,
delivery and performance of the Indenture will not conflict with the Trustee's
organizational documents.
(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 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 Charter or because the conditions set forth in Section 6 have not
been met, or (y) the Underwriter terminate the engagement pursuant to Section 10
or because any conditions precedent in Section 6 have not been fulfilled, then
the Issuer and Charter's liability to the Underwriter shall be limited to the
reimbursement of the Underwriter's 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 Charter shall pay the reasonable fees and expenses
associated with the transactions contemplated hereby not paid by the Underwriter
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) reasonable fees and expenses of Cadwalader ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇;
(v) Trustee's fees and fees of counsel to the Trustee;
(vi) the costs and expenses of printing the Registration Statement and
the Prospectus;
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(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
(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 Charter does not hereby waive any
rights to reimbursement from the Underwriter in the event of any of the
Underwriter's failure to perform in accordance with this Agreement.
(b) It is understood and agreed that, except as provided in Sections 8 and
9, the Underwriter will pay securities transfer taxes on the 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 Charter, jointly and severally, will indemnify and hold
harmless the Underwriter, the officer's and directors of the Underwriter, and
each person, if any, who controls the Underwriter within the meaning of Section
15 of the Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which the Underwriter or any such controlling
person 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 (i) 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 (ii) the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, and will promptly
reimburse the Underwriter and each such controlling person for any legal or
other expenses reasonably incurred by the Underwriter or such controlling person
in connection with investigating, preparing to defend or defending, or appearing
as a third-party witness in connection with, any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Issuer and Charter shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement 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). The
12
foregoing indemnity agreement is in addition to any liability which each of the
Issuer and Charter may otherwise have to you or any person who controls you.
(b) The Underwriter agrees to indemnify and hold harmless the Issuer and
Charter against any losses, claims, damages or liabilities to which the Issuer
or Charter 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 (i) 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 (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, 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 Charter by or on
behalf of the Underwriter expressly for use therein and provided that such
written information was not based upon Company-Provided Information (as defined
herein); and will reimburse the Issuer or Charter for any legal or other
expenses reasonably incurred by the Issuer or Charter in connection with the
investigating, preparing to defend or defending, or appearing as a third-party
witness in connection with, any such loss, claim, damage, liability or action as
such expenses are incurred. The Issuer and Charter acknowledge that the
statements set forth in the last paragraph of the cover page, the first
paragraph of the inside cover page, and in the first, second and third
paragraphs under the heading "Plan of Distribution" in the Registration
Statement, the Preliminary Prospectus and the Final Prospectus constitute the
only information furnished in writing by or on behalf of the Underwriter for
inclusion in the Registration Statement, the Preliminary Prospectus or the Final
Prospectus (the "Underwriting Information"), and each of you confirm that such
statements are correct. The foregoing indemnity agreement is in addition to any
liability which you may otherwise have to each of the Issuer and Charter.
(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
claim or 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
13
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 (x) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (y)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement.
(d) You agree to deliver to the Issuer or Charter no later than the date on
which the Prospectus is required to be filed pursuant to Rule 424 with a copy of
its Derived Information (defined below) for filing with the Commission.
(e) You agree, assuming all Company-Provided Information (defined below) is
accurate and complete in all material respects, to indemnify and hold harmless
the Issuer and Charter against any and all losses, claims, damages or
liabilities, joint or several, to which they may become subject under the 1933
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
of a material fact contained in the Derived Information provided by you, 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, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party for
any legal or other expenses reasonably incurred by him, her or it in connection
with investigating or defending or preparing to defend any such loss, claim,
damage, liability or action as such expenses are incurred. Your obligations
under this Section 8(e) shall be in addition to any liability which you may
otherwise have.
14
(f) Each of the Issuer and Charter agrees to indemnify and hold harmless
the Underwriter, the Underwriter's officers and directors and each person who
controls the Underwriter within the meaning of Section 15 of the 1933 Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they may become subject under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement of a material fact contained in the
Company-Provided Information provided by the Issuer or Charter, 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,
in the light of the circumstances under which they were made, not misleading,
and agrees to reimburse each such indemnified party for any legal or other
expenses reasonably incurred by him, her or it in connection with investigating
or defending or preparing to defend any such loss, claim, damage, liability or
action as such expenses are incurred. Your obligation under this Section 8(f)
shall be in addition to any liability which you may otherwise have.
The procedures set forth in Section 8(c) shall be equally applicable to
Sections 8(e) and 8(f).
(g) For purposes of this Section 8, the term "Derived Information" means
such portion, if any, of the information delivered to the Issuer or Charter by
the Underwriter pursuant to Section 8(d) for filing with the Commission as:
(i) is not contained in the Final Prospectus without taking into
account information incorporated therein by reference;
(ii) does not constitute Company-Provided Information; and
(iii) is of the type of information defined as Collateral Term Sheets,
Structural Term Sheets or Computational Materials (as such terms are
interpreted in the No-Action Letters).
"Company-Provided Information" means any computer tape furnished to the
Underwriter by the Company concerning the Leases or any other information
furnished by the Company to the Underwriter that is relied on or is reasonably
anticipated by the parties hereto to be relied on by the Underwriter in the
course of the Underwriter's preparation of its Derived Information or the
written information to be included in the Final Prospectus or Preliminary
Prospectus by the Underwriter as set forth in Section 8(b) herein.
The terms "Collateral Term Sheet" and "Structural Term Sheet" shall have
the respective meanings assigned to them in the February 13, 1995 letter (the
"PSA Letter") of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ on behalf of the Public
Securities Association (which letter, and the SEC staff's response thereto, were
publicly available February 17, 1995). The term "Collateral Term Sheet" as used
herein includes any subsequent Collateral Term Sheet that reflects a substantive
change in the information presented. The term "Computational Materials" has the
meaning assigned to it in the
15
May 17, 1994 letter (the "▇▇▇▇▇▇ letter" and together with the PSA Letter, the
"No-Action Letters") of ▇▇▇▇▇ & ▇▇▇▇ on behalf of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co., Inc.
(which letter, and the SEC staff's response thereto, were publicly available May
20, 1994).
(h) 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 to therein, 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 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 Charter on the one hand and the Underwriter 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 Charter on
the one hand and the Underwriter 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
Charter on the one hand and the Underwriter 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 Charter bear to the total
underwriting discounts and commissions received by the Underwriter, 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 Charter on the one hand or the Underwriter on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Issuer, Charter and the
Underwriter agree that it would not be just and equitable if contributions
pursuant to this subsection (h) 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 (h). 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 (h) 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. 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.
(i) The obligations of the Issuer and Charter under this Section 8 shall be
in addition to any liability which the Issuer or Charter may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls the Underwriter within the meaning of the Securities Act; and the
obligations of the
16
Underwriter under this Section 8 shall be in addition to any liability which the
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Issuer and Charter and to each
person, if any, who controls the Issuer or Charter within the meaning of the
Securities Act.
Section 9. Survival. The respective representations, warranties and
agreements of the Issuer, Charter and the Underwriter set forth in or made
pursuant to this Agreement will remain in full force and effect, notwithstanding
any investigation heretofore or hereafter made by or on behalf of the Issuer,
Charter or the Underwriter, and such representations, warranties and agreements
made by the Issuer and Charter shall survive the delivery and payment for the
Offered Notes. The provisions of Sections 7 and 8 shall survive the termination
or cancellation of this Agreement.
Section 10. Termination.
(a) This Agreement may be terminated by you in your absolute discretion at
any time upon the giving of notice at any time prior to the Issuance Date: (i)
if there has been any material adverse change in the condition, financial or
otherwise, of Charter or the Issuer, or in the earnings, business affairs or
business prospects of Charter 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 Charter without
the written consent of the Underwriter, except in accordance with law.
(c) Notwithstanding anything herein to the contrary, in the event the
Issuer or Charter 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 Underwriter's obligations
hereunder may be immediately cancelled by the Underwriter by notice thereof to
the Issuer or Charter. 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,
17
at the addresses first stated in this Agreement, or to such other address as you
may designate in writing to the Issuer and Charter; if to Charter, addressed to
Charter at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, if to the Issuer,
addressed to Charter at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such
other address as Charter 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 Charter and their successors and assigns and the
Underwriter and its successors and assigns.
Section 13. 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 14. Governing Law.
(a) THIS AGREEMENT IS TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK,WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
(b) THE ISSUER AND CHARTER 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 CHARTER 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 CHARTER
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 CHARTER 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 TO, OR IN CONNECTION WITH THIS
18
AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY.
Section 15. 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 16. 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 Charter, whereupon this Agreement
shall become a binding agreement between the Underwriter, and the Issuer and
Charter.
19
Very truly yours,
CHARTER FINANCIAL, INC.
By:____________________________________
Name:
Title:
CHARTER EQUIPMENT LEASE 1999-1 LLC
By: Charter Financial Corporation V,
as initial member
By:____________________________________
Name:
Title:
The foregoing Agreement is
hereby accepted and entered
into as of the date
hereof.
FIRST UNION CAPITAL MARKETS CORP.
as the Underwriter
By:______________________________
Name:
Title:
[Signature Page to the Underwriting Agreement]