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EXHIBIT 1.1
XXXXXXXXXXX.XXX VEHICLE RECEIVABLES OWNER TRUSTS
XxxxxxXxxxx.xxx Vehicle Receivable Asset-Backed Notes
ML ASSET BACKED CORPORATION
Depositor
UNDERWRITING AGREEMENT
December 8, 2000
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
ML Asset Backed Corporation, a Delaware corporation (the "Depositor"),
proposes, from time to time, to form one or more special purpose entities (each,
a "Trust") which will issue securities in one or more Series (each, a "Series")
under the terms and conditions contained herein and in the applicable Terms
Agreement (as hereinafter defined). Each Terms Agreement shall set forth the
title of such Series and the aggregate principal amount of securities offered
thereunder. The property of each Trust will consist primarily of the ownership
of or a security interest in, among other things, (i) a pool of motor vehicle
installment loans (the "Loans") for the purchase of new and used automobiles,
minivans, sport utility vehicles, light-duty trucks, motorcycles or commercial
vehicles financed thereby (the "Financed Vehicles"), (ii) certain monies due
under the Loans, (iii) security interests in the Financed Vehicles, (iv) amounts
on deposit in certain accounts, (v) certain rights under a sale and servicing
agreement (the "Sale and Servicing Agreement"), among PeopleFirst Finance, LLC
("PF" or the "Sponsor"), as originator (in such capacity, the "Originator"), the
Trust, the Depositor, PF Funding II, LLC (the "Transferor"), PF, as servicer (in
such capacity, the "Servicer") and Xxxxx Fargo Bank Minnesota, National
Association, as indenture trustee (the "Indenture Trustee"), pursuant to which
the Loans and other property of the Depositor will be transferred to the Trust
and the Loans will be serviced by the Servicer and (vi) all proceeds of the
foregoing.
Each offering of such securities (the "Notes" or the "Offered
Securities") will be made through Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and other underwriters (collectively, the
"Underwriters") for whom Xxxxxxx Xxxxx is acting as representative (the
"Representative"). Whenever the Depositor determines to form a Trust and to make
an offering of Offered Securities, it will enter into an agreement (each, a
"Terms Agreement") providing for the sale of such Offered Securities to, and the
purchase and offering thereof by, the Underwriters who execute the Terms
Agreement, or have authorized the Representative to enter into such Terms
Agreement on their behalf, and agree thereby to become obligated to purchase
such Offered Securities from the Depositor. Such Terms Agreement shall specify,
among other things, principal balance, notional amount or stated principal
balance of each related class or subclass to be issued and their terms not
otherwise specified in the Sale and Servicing Agreement, the price at which such
Offered Securities are to be purchased by the Underwriters from the Depositor,
the aggregate amount of Offered Securities to be purchased by each Underwriter
that is a party to such Terms Agreement, and the initial public offering price
or the method by which the price at which such Offered Securities are to be sold
will be determined. The Terms Agreement, which shall be substantially in the
form of Exhibit A hereto, may take the form of an exchange of any standard form
of written telecommunication between the Representative and the Depositor.
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Each offering of Offered Securities will be governed by this Agreement,
as supplemented by the applicable Terms Agreement, and this Agreement and such
Terms Agreement shall inure to the benefit of and be binding upon the related
Underwriters. Except as otherwise required by the context, all references herein
to a Terms Agreement, Closing Time, Indenture, Trust Agreement, Sale and
Servicing Agreement, Trust, Underwriter or Underwriters and Loans shall refer to
the Terms Agreement, Closing Time, Indenture, Trust Agreement, Sale and
Servicing Agreement, Trust, Underwriter or Underwriters and Loans, as the case
may be, relating to the related offering of Offered Securities.
Each Series of Notes will be issued pursuant to an indenture (each, an
"Indenture"), between the Trust and the Indenture Trustee. Each Note will
represent an obligation of the Trust. Pursuant to the Indenture, the Trust
property will be held by the Indenture Trustee on behalf of the holders of the
Notes. Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Indenture or the Sale and Servicing
Agreement, as the case may be.
PF will act as custodian (the "Custodian") for the Receivables Files
pursuant to a Custodial Agreement (the "Custodial Agreement") among the
Originator, the Servicer, the Transferor, the Owner Trustee, the Indenture
Trustee and the Custodian.
The Offered Securities will have the benefit of a note guaranty
insurance policy (the "Policy") issued by Financial Security Assurance Inc. (the
"Insurer") pursuant to the terms of an Insurance and Indemnity Agreement (the
"Insurance Agreement") among the Insurer, PF, the Transferor and the Issuer.
The Insurer, the Seller and the Representative will enter into an
indemnification agreement (the "Insurer Indemnification Agreement") pursuant to
which the Insurer will agree to indemnify the PF Entities, the Depositor and the
Underwriters against certain losses, claims, damages or liabilities arising in
connection with certain matters and the Underwriters agree to indemnify the
Insurer with respect to certain matters.
The Transferor, the Insurer and Xxxxx Fargo Bank Minnesota, National
Association, as indenture collateral agent (the "Collateral Agent") will enter
into the Series 2000-2 Supplement (the "Series 2000-2 Supplement") to the Master
Reserve Account Agreement dated as of November 1, 1999 (the "Master Agreement")
governing the reserve account (the Series 2000-2 Supplement, the Master
Agreement and the Series 2000-1 Supplement to the Master Agreement dated as of
June 1, 2000, collectively, the "Reserve Account Agreement").
The Depositor, the Underwriters, XxxxxxXxxxx.xxx Inc. (the "Parent"),
PF and the Transferor will enter into an indemnification agreement (the
"Depositor Indemnification Agreement") pursuant to which the Parent, PF and the
Transferor will agree to indemnify the Depositor and the Underwriters against
certain losses, claims, damages or liabilities arising in connection with the
Transaction Documents, the Seller Information and the Offered Securities.
The Indenture, the Sale and Servicing Agreement, the Trust Agreement,
the Custodial Agreement, the Depositor Indemnification Agreement, the Policy,
the Insurance Agreement and the Reserve Account Agreement are collectively
referred to herein as the "Basic Documents." The Parent, PF and the Transferor
are collectively referred to herein as the "PF Entities."
Simultaneously with the issuance of each Series of the Notes, the
Depositor will, if specified in the Terms Agreement, cause the Trust to issue
Certificates in an aggregate principal amount set forth in the Terms Agreement.
Each Trust will be created and the related Certificates will be issued pursuant
to a trust agreement (each, a "Trust Agreement"), among the Depositor and
Wilmington Trust Company, a Delaware banking corporation, as trustee (the "Owner
Trustee"). Each Certificate will evidence a
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fractional undivided interest in the Trust and will be subordinated to the Notes
to the extent described in the Indenture and Trust Agreement.
The Depositor has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-45336) covering
the registration of the Offered Securities under the Securities Act of 1933, as
amended (the "Securities Act"), which Registration Statement, as amended at the
date hereof, has become effective and the offering thereof from time to time in
accordance with Rule 415 under rules and regulations of the Commission under the
Securities Act (the "Securities Act Regulations"). Such registration statement,
as amended, and the prospectus and the related prospectus supplement that the
Depositor has filed with the Commission pursuant to Rule 424(b) of the
Securities Act Regulations relating to the sale of the Offered Securities
offered thereby constituting a part thereof, as from time to time amended or
supplemented, including all documents incorporated therein by reference, are
respectively referred to as the "Registration Statement" and the "Prospectus";
provided, however, that a supplement to the Prospectus prepared pursuant to
Section 3(a) shall be deemed to have supplemented the Prospectus only with
respect to the offering of the Offered Securities to which it relates. Any
information included in the prospectus that is omitted from such registration
statement at the time it becomes effective but that is deemed to be part of such
registration statement at the time it becomes effective pursuant to paragraph
(a) of Rule 430A of the Securities Act Regulations is referred to as the "Rule
430A Information". Any preliminary prospectus used in connection with the
Offered Securities prior to the execution and delivery of the Terms Agreement,
is herein called a "preliminary prospectus". For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained", "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which is incorporated by reference in the Registration
Statement, such preliminary prospectus or the Prospectus, as the case may be.
Section 1. Representations and Warranties.
(a) Representations and Warranties by the Depositor. The Depositor
represents and warrants to the Underwriters as of the date hereof, as of the
date of the Terms Agreement and as of the Closing Time referred to in the Terms
Agreement, and agrees with the Underwriters, as follows:
(i) Compliance with Registration Requirements. The Depositor
meets the requirements for use of Form S-3 under the Securities Act.
The Registration Statement, including a prospectus and such amendments
thereto as may have been required to the date hereof, relating to the
Offered Securities and the offering of each Series thereof from time to
time in accordance with Rule 415 under the Securities Act, has been
filed with the Commission. The Registration Statement has become
effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Securities Act and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Depositor, are contemplated
by the Commission, and any request on the part of the Commission for
additional information has been complied with. The Indenture has been
duly qualified under the Trust Indenture Act of 1939, as amended (the
"1939 Act").
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At the respective times the Registration Statement and any
post-effective amendments thereto became effective and at Closing Time,
the Registration Statement and any amendments thereto complied and will
comply in all material respects with the requirements of the Securities
Act and the Securities Act Regulations and the 1939 Act and the rules
and regulations of the Commission under the 1939 Act (the "1939 Act
Regulations") and did not and will not 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. At
the date of the Prospectus and at the Closing Time, neither the
Prospectus nor any amendments and supplements thereto included or will
include an untrue statement of a material fact or omitted or will 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. Notwithstanding the foregoing, the representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished to the
Depositor in writing by any Underwriter through the Representative
expressly for use in the Registration Statement or the Prospectus (the
"Underwriter Information"), the Insurer Information or the Seller
Information (each as defined herein).
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the Securities
Act, complied when so filed in all material respects with the
Securities Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with the
offering of Offered Securities will, at the time of such delivery, be
identical to any electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(ii) Incorporated Documents. Other than any documents of the
Insurer, the documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, at the time
they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the Exchange
Act and the rules and regulations of the Commission thereunder (the
"Exchange Act Regulations") and, when read together with the other
information in the Prospectus, at the time the Registration Statement
became effective, at the date of the Prospectus and at the Closing
Time, did not and will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, no representation or
warranty is made as to documents deemed to be incorporated by reference
in the Registration Statement as the result of filing any Additional
Materials 8-K (as defined in Section 3(l)) at the request of the
Underwriters except to the extent such documents accurately reflect or
are accurately based upon information furnished by or on behalf of the
Depositor to the Underwriters for the purpose of preparing such
documents.
(iii) No Material Adverse Change. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise set forth therein, (A) there has been
no material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the
Depositor, whether or not arising in the ordinary course of business (a
"Material Adverse Change"), (B) there have been no transactions entered
into by the Depositor, other than those in the ordinary course of
business, which are material with respect to such entity and (C) there
has been no material adverse change in the Financial Statements.
(iv) Due Organization of the Depositor. The Depositor has been
duly formed and is validly existing as a corporation under the laws of
the State of Delaware; the Depositor has all requisite power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus
and to enter into and to perform its
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obligations under this Agreement, each Basic Document to which it is a
party; and the Depositor is duly qualified to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or to
be in good standing would not result in a Material Adverse Change or
have a material adverse effect on its ability to perform its
obligations under the Basic Documents to which it is a party.
(v) Authorization of Agreement. This Agreement has been, and
each Terms Agreement as of the date thereof will have been, duly
authorized, executed and delivered by the Depositor.
(vi) Authorization of Basic Documents. As of the Closing Time,
each of the Basic Documents to which the Depositor is a party has been,
or will have been, duly authorized, executed and delivered by such
entity, and, assuming the due authorization, execution and delivery
thereof by the other parties thereto, will constitute a valid and
binding agreement of the Depositor, enforceable against such entity in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law).
(vii) Issuance of the Notes. The Notes have been duly
authorized and, at the Closing Time, will have been duly executed,
issued and delivered and, when authenticated in the manner provided for
in the Indenture and delivered against payment of the purchase price
therefor as provided herein and in the Terms Agreement, will constitute
valid and binding obligations of the Trust, enforceable against the
Trust in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law), and will be in the form contemplated by, and
entitled to the benefits of, the Indenture.
(viii) Issuance of the Certificates. The Certificates have
been duly and validly authorized and, when executed, authenticated and
delivered in accordance with the Trust Agreement, will be validly
issued and outstanding and entitled to the benefits of the Trust
Agreement.
(ix) Description of the Offered Securities and Basic
Documents. The Offered Securities and each of the Basic Documents
conform in all material respects to the descriptions thereof and the
statements relating thereto contained in the Registration Statement and
the Prospectus.
(x) Absence of Defaults and Conflicts. The Depositor is not in
violation of its organizational or charter documents or bylaws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which it is a party or by which it may be bound, or to
which any of its properties or assets is subject (collectively,
"Agreements and Instruments"), except for defaults that would not
result in a Material Adverse Change and would not have a material
adverse effect on its ability to perform its obligations under the
Basic Documents to which it is a party; and the execution, delivery and
performance by the Depositor of this Agreement, each Basic Document to
which it is a party, the consummation of the transactions contemplated
herein and therein, in the Registration Statement or in the Prospectus
and compliance with its obligations hereunder and thereunder have been
duly and validly authorized by all necessary corporate action and do
not and will not, whether with or
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without the giving of notice or passage of time or both, conflict with
or constitute a breach of, a default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
mortgage, pledge, charge, encumbrance, adverse claim or other security
interest (collectively, "Liens") upon any of its property or assets
pursuant to the Agreements and Instruments except for Liens permitted
by the Basic Documents and conflicts, breaches or defaults that,
individually or in the aggregate, will not result in a Material Adverse
Change and would not have a material adverse effect on its ability to
perform its obligations under the Basic Documents to which it is a
party, nor will such action result in any violation of the provisions
of its charter or organizational documents or bylaws or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Depositor or any of its assets, properties
or operations, except for violations that would not result in a
Material Adverse Change and would not have a material adverse effect on
its ability to perform its obligations under the Basic Documents to
which it is a party. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Depositor.
(xi) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending or, to
the knowledge of the Depositor, threatened, against or affecting the
Depositor which is required to be disclosed in the Registration
Statement and the Prospectus (other than as stated therein), or which
might reasonably be to expected to result in a Material Adverse Change,
or which might reasonably be expected to materially and adversely
affect its properties or assets or the consummation of the transactions
contemplated by this Agreement or any Basic Document to which it is a
party or the performance of its obligations hereunder and thereunder;
the aggregate of all pending legal or governmental proceedings to which
the Depositor is a party or of which any of their respective properties
or assets is the subject which are not described in the Registration
Statement and the Prospectus, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Change.
(xii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court, governmental authority or agency
or any other person is necessary in connection with (A) the issuance or
the offering and sale of the Offered Securities, (B) the execution,
delivery and performance by the Depositor of this Agreement or any
Basic Document to which it is a party or (C) the consummation by the
Depositor of the transactions contemplated hereby or thereby, except
such as have been obtained and are in full force and effect as of the
Closing Time.
(xiv) Possession of Licenses and Permits. The Depositor
possesses such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Depositor is in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Change; all of the
Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not
have a Material
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Adverse Change or would render a material portion of the Loans
unenforceable; and the Depositor has not received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Change, would have a material adverse effect on its
ability to perform its obligations under each Basic Document to which
it is a party or would render a material portion of the Loans
unenforceable.
(xv) Title to Loans; Payment of Fees. As of the Closing Time,
the Trust will have good and marketable title to, and will be the sole
owner of each Loan free and clear of Liens other than the Lien in favor
of the Indenture Trustee under the Indenture or will be the holder of a
first priority security interest in each Loan; all taxes, fees and
other governmental charges arising in connection with the transactions
contemplated by this Agreement and the Basic Documents and with the
execution and delivery of the Loans, including any amendments thereto
and assignments and/or endorsements thereof, have been paid by the
Depositor or the Sponsor.
(xvi) Investment Company Act. The Depositor is not required to
be registered as an "investment company" under the Investment Company
Act of 1940, as amended (the "1940 Act").
(xvii) Incorporation of Representations and Warranties. The
representations and warranties of the Depositor in each Basic Document
to which it is a party are true and correct in all material respects
and are hereby restated for the benefit of the Underwriters and
incorporated by reference herein with the same effect as if set forth
in full herein.
(b) Officer's Certificates. Any certificate signed by any officer of
the Depositor or any of its respective Affiliates (as defined below) and
delivered at the Closing Time to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by the Depositor or
such Affiliate, as the case may be, to the Underwriters as to the matters
covered thereby. When used in this Agreement, the term "Affiliate" or
"Affiliates" shall have the meaning assigned by Rule 501(b) under the Securities
Act Regulations.
Section 2. Sale and Delivery to the Underwriters; Closing.
(a) Purchase of the Offered Securities. The several commitments of the
Underwriters to purchase the Offered Securities pursuant to the applicable Terms
Agreement shall be deemed to have been made on the basis of the representations
and warranties herein contained and shall be subject to the terms and conditions
herein set forth.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for the Offered Securities shall be made at the offices of Xxxxx,
Xxxxx & Xxxxx, or at such other place as shall be agreed upon by the
Representative and the Depositor, at 10:00 A.M. (New York time) on the date set
forth in the applicable Terms Agreement, or such other time not later than five
business days after such date as shall be agreed upon by the Representative and
the Depositor (such date and time of payment and delivery being called the
"Closing Time"). Pursuant to Rule 15c6-1(d) under the Exchange Act, the parties
hereto have agreed that the Closing Date will be not less than five business
days following the date of the related Terms Agreement.
The Offered Securities will initially be represented by one or more
certificates registered in the name of Cede & Co., as nominee of The Depository
Trust Company ("DTC"). The interests of beneficial owners of the Offered
Securities will be represented by book entries on the records of DTC and
participating members thereof. Certificates for the Offered Securities shall be
made available for examination by the Representative in The City of New York not
later than 10:00 A.M. (New York time) on the business day prior to the Closing
Time.
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Delivery of the Offered Securities shall be made against payment of the
purchase price by wire transfer of immediately available funds to a bank account
designated by the Depositor.
Section 3. Covenants of the Depositor. The Depositor covenants with
each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Depositor, subject to Section 3(b), will comply with the requirements of Rule
430A of the Securities Act Regulations, if and as applicable, and will notify
the Representative immediately, and confirm the notice in writing, of (i) the
effectiveness of any post-effective amendment to the Registration Statement or
the filing of any supplement or amendment to the Prospectus, (ii) the receipt of
any comments from the Commission, (iii) any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (iv) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Offered Securities
for offering or sale in any jurisdiction, or of the initiation or threatening of
any proceedings for any of such purposes. The Depositor will promptly effect the
filings necessary pursuant to Rule 424 and will take such steps as it deems
necessary to ascertain promptly whether the Prospectus transmitted for filing
under Rule 424 was received for filing by the Commission and, in the event that
it was not, it will promptly file the Prospectus.
(b) Filing of Amendments. The Depositor will give the Representative
notice of its intention to file or prepare (i) any amendment to the Registration
Statement, (ii) any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the Securities Act, the Exchange Act or
otherwise or (iii) any Computational Materials, ABS Term Sheets or Collateral
Term Sheets (each as defined in Section 6), will furnish the Representative with
copies of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to
which the Representative or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Depositor has furnished or
will deliver to the Representative and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representative, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The
Registration Statement and each amendment thereto furnished to the Underwriters
will be identical to any electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(d) Delivery of Prospectuses. The Depositor will deliver to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter may reasonably request, and the Depositor hereby consents to
the use of such copies for purposes permitted by the Securities Act. The
Depositor will furnish to each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the Securities Act or the
Exchange Act, such number of copies of the Prospectus as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to any electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Depositor will
comply with the Securities Act and the Securities Act Regulations, the Exchange
Act and the Exchange Act Regulations and the 1939 Act and the 1939 Act
Regulations so as to permit the completion of the distribution of the Offered
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Securities as contemplated in this Agreement and the Basic Documents and in the
Registration Statement and the Prospectus. If at any time when the Prospectus is
required by the Securities Act or the Exchange Act to be delivered in connection
with sales of the Offered Securities, any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Depositor, to amend the Registration Statement in order
that the Registration Statement will not 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 or to amend or
supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the Securities Act or the Securities Act
Regulations, the Depositor will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Depositor will furnish to the
Underwriters, without charge, such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Depositor will use its best efforts,
in cooperation with the Underwriters, to qualify the Offered Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions as the Underwriters may designate and to maintain such
qualifications in effect for a period of not less than one year from the date of
the Terms Agreement; provided, however, that the Depositor shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Offered Securities have been so qualified, the
Depositor will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification in effect for a period of
not less than one year from the date of the Terms Agreement. The Depositor will
also supply the Underwriters with such information as is necessary for the
determination of the legality of the offering and sale of the Offered Securities
for investment under the laws of such jurisdictions as the Underwriters may
reasonably request.
(g) [INTENTIONALLY OMITTED.]
(h) Use of Proceeds. The Depositor shall cause the Trust to use the net
proceeds received by it from the sale of the Offered Securities in the manner
specified in the Prospectus under "Use of Proceeds."
(i) Reports, Statements and Certificates. So long as any Offered
Securities are outstanding, the Depositor shall deliver or cause to be delivered
to the Underwriters associated therewith, upon request, copies of (i) each
payment date certificate delivered to the Indenture Trustee pursuant to the
Indenture, (ii) the annual statements of compliance, annual independent
certified public accountants' reports and annual opinions of counsel furnished
to the Indenture Trustee or the Owner Trustee pursuant to the Basic Documents,
as soon as such statements, reports and opinions are furnished to the Indenture
Trustee or the Owner Trustee and (iii) such other information concerning the
Depositor, the Trust or the Offered Securities as the Underwriters may
reasonably request from time to time.
(j) Reporting Requirements. The Depositor, during the period when the
Prospectus is required to be delivered under the Securities Act or the Exchange
Act, will file all documents required to be filed with the Commission pursuant
to the Exchange Act within the time periods required by the Exchange Act and the
Exchange Act Regulations.
(k) Computational Materials. The Depositor will file with the
Commission a current report on Form 8-K (an "Additional Materials 8-K") setting
forth all Computational Materials, ABS Term Sheets
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and Collateral Term Sheets provided to the Depositor by any Underwriter within
the applicable time periods allotted for such filing pursuant to the No-Action
Letters (as defined in Section 6).
(l) Corrected Items. In the event that an Underwriter must prepare
corrected Computational Materials, ABS Term Sheets or Collateral Term Sheets
pursuant to Section 6(d), the Depositor shall file any corrected Computational
Materials, ABS Term Sheets or Collateral Term Sheets no later than two Business
Days following receipt thereof.
Section 4. Payment of Expenses.
(a) Expenses. The Depositor shall pay all of its own expenses incident
to the performance of its obligations under this Agreement and the Terms
Agreement, including without limitation (i) the preparation, printing and filing
of the Registration Statement, the preliminary prospectus, the Prospectus and
each amendment or supplement thereto, (ii) the preparation, reproduction and
delivery to the Underwriters of this Agreement, the Terms Agreement, any
agreement among the Underwriters, each Basic Document and such other documents
as may be required in connection with the issuance, offering, purchase, sale or
delivery of the Offered Securities, (iii) the preparation, issuance and delivery
of the certificates for the Offered Securities to the Underwriters, (iv) the
fees and expenses of the counsel, accountants and other advisors of the
Depositor and any of its Affiliates in connection with the transactions
contemplated by this Agreement, (v) the qualification of the Offered Securities
under state securities laws in accordance with the provisions of Section 3(f),
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheet, the
Prospectus and any amendments on supplements thereto, (vii) the fees and
expenses of the Owner Trustee and the Indenture Trustee, including the
reasonable fees and disbursements of their respective counsel in connection with
the transactions contemplated by this Agreement, and (viii) any fees payable to
Xxxxx'x Investors Service, Inc. ("Moody's") and Standard & Poor's, a division of
The XxXxxx-Xxxx Companies, Inc. ("Standard & Poor's, and together with Moody's,
the "Rating Agencies") in connection with the rating of the Offered Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 10(a),
the Depositor shall reimburse the Underwriters for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. Conditions of the Obligations of the Underwriters. The
obligations of the Underwriters are subject to the accuracy of the
representations and warranties of the Depositor contained in Section 1 or in
certificates of any officer of the Depositor or any of its Affiliates delivered
pursuant to a Terms Agreement or the provisions hereof, to the performance by
the Depositor of its covenants and other obligations hereunder and to the
following additional conditions:
(a) Effectiveness of Registration Statement. The Registration Statement
has become effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
Securities Act and no proceedings for that purpose shall have been instituted or
be pending or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel for the Underwriters. A prospectus containing
information relating to the description of the Offered Securities, the specific
method of distribution and similar matters shall have been filed with the
Commission in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as
applicable (or any required post-effective amendment providing such information
shall have been filed and declared effective in accordance with the requirements
of Rule 430A).
(b) Accountants' Comfort Letter. At the Closing Time, the Underwriters
and the Depositor shall have received from KPMG (i) a letter or letters dated as
of the Closing Time, in form and substance as
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previously agreed to by the Underwriters and otherwise satisfactory in form and
substance to the Underwriters and counsel for the Underwriters, and (ii) a
letter dated the date of the Computational Materials, ABS Term Sheets or
Collateral Term Sheets, in form and substance as previously agreed to by the
Representative and otherwise satisfactory in form and substance to the
Underwriters and counsel for the Underwriters, to the effect that such
accountants have performed certain specified procedures, all of which have been
agreed to by the Representative, as a result of which they have determined that
the information included in the Computational Materials, ABS Term Sheets or
Collateral Term Sheets (if any), provided by the Underwriters to the Depositor
for filing on an Additional Materials 8-K, is accurate.
(c) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any Material Adverse Change with respect
to the Depositor, whether or not arising in the ordinary course of business, and
the Underwriters shall have received certificates of authorized officers of the
Depositor, dated as of the Closing Time, to the effect that (i) there has been
no such Material Adverse Change, (ii) the representations and warranties in
Section 1 are true and correct with the same force and effect as though
expressly made at and as of such Closing Time and (iii) the Depositor has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time.
(d) Opinion of Counsel for the Depositor. At the Closing Time, the
Underwriters shall have received the favorable opinion, dated as of the Closing
Time, of Xxxxx, Xxxxx & Xxxxx, counsel for the Depositor or internal counsel of
Merrill, Lynch, Xxxxxx, Xxxxxx and Xxxxx Incorporated, in form and substance
satisfactory to counsel for the Underwriters, substantially to the effect that:
(i) The Depositor has been duly formed and is validly existing
as a corporation in good standing under the laws of the State of
Delaware.
(ii) This Agreement and the Terms Agreement have been duly
authorized, executed and delivered by the Depositor.
(iii) The Depositor has duly authorized, executed and
delivered each Basic Document to which it is a party, and assuming due
authorization, execution and delivery by the other parties thereto,
each such Basic Document constitutes a valid and binding agreement,
enforceable against the Depositor, in accordance with its terms, except
as the enforcement thereof may be subject to or limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws relating
to or affecting the enforcement of creditors' rights generally and
except as enforcement thereof is subject to general equitable
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(iv) Upon the due authorization, execution and issuance of the
Notes by the Trust, and authentication pursuant to the Indenture and
delivery against payment of the consideration specified in the Terms
Agreement, the Notes will be enforceable against the Trust in
accordance with their terms and the terms of the Indenture, except as
the enforcement thereof may be subject to or limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws relating
to or affecting the enforcement of creditors' rights generally and
except as enforcement thereof is subject to general equitable
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(v) To such counsel's knowledge, the Depositor possesses such
necessary Governmental licenses and approvals in each jurisdiction in
which failure to so qualify or to obtain such licenses or approvals
would render any Loan unenforceable by the Depositor, the Trust, the
Owner Trustee or the Indenture Trustee.
(vi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency or any other person (other than those
which have already been made, obtained or rendered under the Securities
Act,
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the Securities Act Regulations, the 1939 Act, the 1939 Act Regulations
or as may be required under the securities or blue sky laws of the
various states and except those which if not made or obtained, will
not, in the aggregate, have a material adverse effect on the Depositor)
is necessary or required by the Depositor in connection with the
authorization, execution, delivery and performance of this Agreement or
the Basic Documents to which it is a party or for the issuance,
offering, sale or delivery of the Offered Securities.
(vii) The execution, delivery and performance by the Depositor
of this Agreement, the Basic Documents to which it is a party and the
Offered Securities and the consummation of the transactions
contemplated in this Agreement, the Basic Documents, and compliance
with its obligations hereunder or thereunder do not and will not,
whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event
under or result in the creation or imposition of any Lien upon any
property or assets of the Depositor pursuant to any Agreement or
Instrument, known to such counsel, to which the Depositor (except for
Liens permitted by the Basic Documents) is a party or by which it may
be bound, or to which any of the property or assets of the Depositor is
subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a Material Adverse Change
or would not have a material adverse effect on its ability to perform
its obligations under the Basic Documents to which it is a party), nor
will such action result in any violation of the provisions of the
charter or by-laws of the Depositor, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to such
counsel, of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Depositor or
properties, assets or operations.
(viii) To such counsel's knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Depositor is a party or to which any of their respective
properties or assets is subject, before or brought by any court or
governmental agency or body, (i) asserting the invalidity of this
Agreement, any Basic Document or any Offered Securities, (ii) seeking
to prevent the issuance of the Offered Securities or the consummation
of any of the transactions contemplated by this Agreement or any Basic
Document or (iii) that would, if determined adversely to the Depositor,
result in a Material Adverse Change or would materially and adversely
affect the performance by the Depositor of its respective obligations
under any Basic Document to which it is a party or the Offered
Securities.
(ix) The statements in the Prospectus Supplement under the
captions "Summary of the Terms ", "Description of the Notes",
"Description of the Certificates", "Description of the Receivables
Transfer and Servicing Agreements" and "Certain Legal Aspects of the
Receivables", to the extent that they constitute matters of law,
summaries of legal matters, documents or proceedings or legal
conclusions relating to U.S. federal law or the laws of the States of
Delaware or New York have been reviewed by such counsel and provide a
fair summary in all material respects.
(x) The Registration Statement and the Prospectus, excluding
the documents incorporated by reference therein, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein or omitted therefrom and each
Trustee's Statement of Eligibility on Form T-1 (the "Form T-1s"), as to
which such counsel expresses no opinion) complied as to form in all
material respects with the requirements of the Securities Act and the
Securities Act Regulations.
(xi) To the best of such counsel's knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be
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described or referred to in the Registration Statement or to be filed
as exhibits thereto other than those described or referred to therein
or filed or incorporated by reference as exhibits thereto.
(xii) The Depositor has granted a valid security interest in
the Trust Property and that the security interest of the Trust in the
Trust Property is duly perfected, such security interest will be prior
to the security interest created under the Uniform Commercial Code as
in effect in the State of New York of any other creditor of the
Depositor that can be perfected by filing a UCC-1 financing statement.
(xiii) The Sale and Servicing Agreement creates the ownership
or security interest of the Trust in the Loans, as the case may be; a
financing statement with respect to the Loans has been filed with the
Secretary of State of the State of Delaware pursuant to the Delaware
Uniform Commercial Code, as amended, and with the Secretary of State of
the State of New York, pursuant to the New York Uniform Commercial
Code, as amended; and no other filings in any jurisdiction or any other
actions are necessary to perfect the ownership interest of either
Trustee in the Loans against any third parties.
(xiv) Pursuant to the New York Uniform Commercial Code, the
Indenture constitutes a grant by the Trust to the Indenture Trustee of
a valid first priority security interest in the Loans, the security
interests in the Financed Vehicles securing the Loans and the proceeds
of each of the foregoing.
(e) Opinion of California Counsel to the PF Entities. At the Closing
Time, the Underwriters shall have received the favorable opinion, dated as of
the Closing Time, of Xxxxx, Xxxxx, Xxxxxxx & Xxxxxxxxx, special counsel for the
PF Entities, in form and substance satisfactory to the Underwriters,
substantially to the effect that:
(i) PF is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of
California. PF has power and authority (a) to own its properties and
conduct its business as now conducted by it; (b) to own, contribute,
sell, assign and, in its capacity as Servicer, service the Loans and
the other Trust Property; and (c) to execute and deliver each Basic
Document to which it is a party and to carry out their respective
terms.
(ii) The execution, delivery, and performance by PF of the
Basic Documents to which it is a party and the consummation of the
transactions contemplated thereby have been duly authorized by PF by
all necessary action. The Basic Documents to which PF is a party have
been duly executed and delivered by, and each constitutes a legal,
valid and binding obligation of, PF, enforceable against PF in
accordance with its respective terms.
(iii) The execution, delivery and performance by PF of the
Basic Documents to which it is a party, the consummation of the
transactions contemplated thereby and the compliance with the terms and
provisions thereof will not materially conflict with or result in a
material breach of any of the terms or provisions of, or constitute
(with or without notice or lapse of time or both) a material default
under or result in the creation or imposition of any Lien (other than
as contemplated by the Basic Documents) upon any of its properties
pursuant to the terms of, (A) its articles of organization or operating
agreement, (B) to the actual knowledge of such counsel, any material
indenture, contract, lease, mortgage, deed of trust or other instrument
or agreement to which it is a party or by which it is bound, which
breach or default would reasonably be expected to have a material
adverse impact on PF or the transactions contemplated by the Basic
Documents, (C) any order, writ, judgment, award, injunction or decree
binding on PF or (D) any law, rule or regulation applicable to PF.
(iv) No consent, approval, authorization, license or other
order or action of, or filing or registration with, any federal or
California governmental authority, bureau or agency is required in
connection with the execution, delivery or performance by PF of the
Basic Documents
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to which it is a party, or the consummation of the transactions
contemplated thereby, except as may be required under the 1933 Act and
the Rules and Regulations and state securities laws and any filings of
UCC financing statements.
(v) There are no proceedings or investigations pending or, to
such counsel's actual knowledge, after due inquiry of PF's officers,
threatened to which PF is a party before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality
having jurisdiction over PF, (A) that are required to be disclosed in
the Registration Statement or the Prospectus, other than those
disclosed therein, (B) asserting the invalidity of any of the Basic
Documents, (C) seeking to prevent the issuance of the Securities or the
consummation of any of the transactions contemplated by any of the
Basic Documents, (D) seeking any determination or ruling that could
materially and adversely affect the performance of PF of its
obligations under, or the validity or enforceability of, any of the
Basic Documents to which it is a party, (E) that may affect materially
and adversely the federal or state income, excise, franchise or similar
tax attributes of any of the Securities, or (F) that would reasonably
be expected to materially adversely affect the interests of the holders
of any of the Securities.
(vi) PF has all licenses and qualifications necessary in
connection with the origination and servicing of the Loans in all
States in which Loans assigned to the Issuer were originated and the
Loans are in compliance with all requirements of applicable federal,
state and local laws in all material respects.
(vii) All filings necessary under applicable law to perfect
(A) the transfer of the Loans by PF to the Transferor and (B) the
assignment of the Loans by the Transferor to the Depositor have been
made and, provided that PF and the Transferor do not relocate their
respective principal places of business, no other filings (other than
the filing of continuation statements) need be made to maintain such
perfection, and the interest of the Transferor and the Depositor,
respectively, will constitute a perfected security or ownership
interest prior to any other security or ownership interest that may be
perfected by the filing of a financing statement under the UCC.
(viii) The statements in the Prospectus under the headings
"Summary of Terms -- Tax Status" and "State Tax Consequences"
accurately describe the material California corporation franchise tax
consequences to Noteholders and Note Owners and, to the extent they
constitute descriptions of matters of law or legal conclusions with
respect thereto, have been prepared or reviewed by such counsel and are
correct in all material respects.
(ix) Except as described in the Prospectus, the Trust will not
be subject to income or franchise taxation in California.
(x) Noteholders who are not residents of, or domiciled in, or
otherwise subject to taxation in California will not be subject to
California income or California franchise taxation in such state solely
by reason of being Noteholders.
(xi) The Notes will be characterized as debt for California
income and franchise tax purposes.
(xii) A court applying California law would hold that the
standard form of Contract used by PF with Obligors domiciled in the
State of California (the "California Contract"), upon negotiation of
the check attached thereto, creates a legal, valid, binding and
enforceable obligation of the Obligor thereunder in accordance with the
terms of the California Contract, and given the existence of such
enforceable obligation: (a) a court applying California law would hold
that the California Contract creates a valid security interest in the
rights of the related Obligor in the related Financed Vehicle (each a
"California Financed Vehicle") in favor of PF; and (b) a court applying
California law would hold that the California Contract constitutes
chattel paper under Article 9 of the UCC.
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(xiii) Following the assignment by PF to the Transferor of
PF's security interest in California Financed Vehicles, the assignment
by the Transferor to the Depositor of the Transferor's security
interest in the California Financed Vehicles, the assignment by the
Depositor to the Trust of the Depositor's security interest in the
California Financed Vehicles, and the assignment by the Trust to the
Indenture Trustee of the Trust's security interest in the California
Financed Vehicles, such security interests will be perfected security
interests of first priority in favor of the Transferor, the Depositor,
the Issuer and the Indenture Trustee, as applicable.
(xiv) The Transferor is registered to transact business as a
limited liability company in the State of California.
(xv) (i) The blank forms of Loans have been reviewed by such
counsel and comply, or complied when in use, in all respects with all
applicable disclosure requirements under the Federal Consumer
Protection Act, 15 U.S.C. Section 1601 et seq., and Regulation Z issued
pursuant thereto, as interpreted in the Official Staff Commentary, and
applicable California disclosure laws and (ii) upon consummation of the
transactions contemplated by the Basic Documents, the Trust had a
perfected security interest in the Financial Vehicles financed under
Loans originated in the State of California.
(f) Opinion of Counsel for the PF Entities. At the Closing Time, the
Underwriters shall have received the favorable opinion, dated as of the Closing
Time, of Xxxxx & Xxxx, LLP, counsel for the PF Entities, in form and substance
satisfactory to counsel for the Underwriters, substantially to the effect that:
(i) The Parent is duly organized, validly existing and in good
standing as a Delaware corporation.
(ii) The Parent has the power and authority to execute each
Basic Document to which it is a party.
(iii) The Parent has duly authorized, executed and delivered
each Basic Document to which it is a party.
(iv) Assuming the due authorization, execution and delivery by
each party thereto (other than the Parent), each of the Basic Documents
to which a PF Entity is a party will constitute the legal, valid and
binding obligation of such PF Entity, enforceable against such PF
Entity in accordance with its terms.
(v) Assuming that the Notes have been duly executed and
authenticated in accordance with the Indenture and delivered pursuant
to the Depositor's instructions and paid for as contemplated by this
Agreement and the Terms Agreement, the Notes will constitute the legal,
valid and binding obligations of the Issuer, enforceable against the
Issuer in accordance with their terms and will be entitled to the
benefits of the Indenture.
(vi) No authorization, consent or approval of, or notice to or
filing with, any federal or State of New York governmental authority is
required for the execution, delivery and performance by any of the PF
Entities of each of the Basic Documents to which such PF Entity is
party or the issuance of the Notes or the Certificates, except as may
have been made or obtained and except those which, if not made or
obtained, will not, in the aggregate, have a material adverse effect on
such PF Entity.
(vii) The execution and delivery of the Basic Documents to
which the Parent or the Transferor is a party and the consummation of
the transactions contemplated thereby will not violate or conflict with
the provisions of the Certificate of Incorporation or by-laws of the
Parent. The execution and delivery of the Basic Documents to which any
PF Entity is a party and the consummation of the Transactions
contemplated thereby will not (A) result in the imposition of
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any lien (other than liens arising under the Sale and Servicing
Agreement) under, cause the acceleration of any obligation under, or
violate or conflict with the terms, conditions or provisions of, the
material contracts or agreements of such PF Entity, which an officer of
each such PF Entity, as applicable, has represented are all of the
material contracts and agreements, other than the Basic Documents, to
which any of each such PF Entity, respectively is a party, or by which
it is bound, (B) to the best of its knowledge, result in a breach by
any PF Entity of any of the terms, conditions or provisions of any
order, statute or regulation applicable to such PF Entity of any court,
regulatory body or governmental body having jurisdiction over or any of
their respective properties or (C) violate any Federal law of the
United States of America or law of the State of New York, which is
normally applicable to transactions of the type contemplated by the
Basic Documents.
(viii) To the best of its knowledge, there is no action, suit
or proceeding of or before any court or administrative body pending or
threatened against any PF Entity (a) asserting the invalidity any of
the Basic Documents, (b) seeking to prevent the consummation of the
transactions contemplated by the Basic Documents, (c) that would be
likely to impair the ability of any PF Entity to perform its
obligations under the Basic Documents or (d) that would reasonably be
expected to materially and adversely affect the interests of the
holders of any of the Notes.
(ix) Pursuant to Section 2.1 of the Sale and Servicing
Agreement, PeopleFirst has granted either (x) an ownership interest in
the Loans and the other Transferor Property and the proceeds thereof in
favor of the Transferor or (y) a valid security interest in favor of
the Transferor in the Loans, such other items of Transferor Property in
which a security interest may be perfected under the New York UCC
(collectively, "Transferor UCC Collateral") and the proceeds of the
foregoing. We note that pursuant to Section 1-201(37) of the New York
UCC, "security interest" includes "any interest of a buyer of accounts
or chattel paper which is subject to Article 9."
(x) Pursuant to Section 2.3 of the Sale and Servicing
Agreement, the Transferor has granted a valid security interest in
favor of the Depositor in the Transferor UCC Collateral, all right,
title and interest of the Transferor in the Sale and Servicing
Agreement and the Custodial Agreement, and the proceeds of the
foregoing (collectively, the "Depositor Collateral").
(xi) The statements in the Prospectus Supplement under the
headings "Description of the Notes," "Description of the Certificates"
and "Description of the Trust Agreements" and in the Base Prospectus
under the headings "Description of the Securities" and "Description of
the Trust Agreements," to the extent they purport to summarize the
provisions of the Notes and the Basic Documents, are accurate and
fairly summarize such provisions in all material respects.
(xii) The Notes and Certificates and each of the Basic
Documents conform in all material respects with descriptions thereof
contained in the Prospectus.
(xiii) The Prospectus (except for the financial statements and
other financial or statistical data included or incorporated by
reference therein, as to which we express no opinion) complies as to
form in all material respects with the requirements of the Securities
Act and the rules and regulations thereunder.
(xiv) Nothing has come to such counsel's attention that would
lead it to believe that the Registration Statement or any amendment
thereto, including the Rule 430A Information (other than the financial
statements and schedules and other financial data included therein, as
to which no opinion need be expressed), at the time such Registration
Statement or any such amendment became effective, 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 not misleading or
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that the Prospectus or any amendment or supplement thereto (other than
the financial statements and schedules and other financial data
included therein, as to which no opinion need be expressed), at the
time the Prospectus was issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits 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.
(xv) The Registration Statement has been declared effective
under the Securities Act. To the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement
has been issued under the Securities Act and no proceedings for that
purpose have been initiated or are pending or threatened by the
Commission.
(xvi) The form of Note and Security Agreement (the "Contract")
creates a legal, valid, binding and enforceable obligation of the
Obligor in accordance with its terms.
(xvii) The Contract creates a valid security interest in favor
of PeopleFirst in the rights of the Obligor in the Financed Vehicle.
(xviii) The Contract constitutes "chattel paper" under Article
9 of the Uniform Commercial Code in effect in the State of New York
(the "New York UCC"). Pursuant to Section 9-103 of the New York UCC,
(i) perfection of a possessory security interest in chattel paper is
governed by the law of the jurisdiction in which the chattel paper is
located "when the last event occurs on which is based the assertion
that the security interest is perfected or unperfected" and (ii)
perfection of a non-possessory security interest in chattel paper is
governed by the law of the jurisdiction in which the debtor is located.
(xix) The provisions of the Reserve Account Agreement are
effective to create under New York law, including the UCC, a valid
security interest in favor of the Collateral Agent in the Series 2000-1
Reserve Account and in the Transferor's rights in all Security
Entitlements credited thereto (including, without limitation, the
Transferor's rights in all Reserve Account Eligible Investments
Delivered in accordance with the Reserve Account Agreement and credited
to the Master Reserve Account).
(xx) The Collateral Agent's security interest in the
Transferor's interest in any Security Entitlements credited to the
Series 2000-1 Reserve Account will continue in the identifiable cash
proceeds thereof deposited in the Series 2000-1 Reserve Account and
other proceeds credited thereto, subject to the limitations of Section
9-306 of the UCC.
(xxi) Under the UCC, no other security interest of any other
creditor of the Transferor is or will be equal or prior to the security
of the Collateral Agent in the Security Entitlements credited to the
Series 2000-1 Reserve Account and proceeds referred to in paragraph (b)
above.
(xxii) Under the United States Bankruptcy Code, the transfer
of the Loans and the proceeds thereof by the Sponsor to the Transferor
constitutes a sale and a court would not treat the Loans or the
proceeds thereof as assets included in the estate of the Sponsor
pursuant to the applicable provisions of the Bankruptcy Code.
(g) Opinion of special Texas counsel for the Sponsor. At the Closing
Time, the Underwriters shall have received the favorable opinion, dated as of
the Closing Time, of Xxxxx & Xxxxxxx, special Texas counsel for the Sponsor, in
form and substance satisfactory to the Underwriters, substantially to the effect
that:
(i) Where a validly perfected security interest in a Financed
vehicle (i) located in Texas and (ii) subject to the Texas Certificate
of Title Act (such vehicles "Texas Financed Vehicles") for which
certificate of title has been issued by the county assessor-collector
and the note and security agreement relating to such Texas Financed
Vehicle are assigned, it is not
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necessary that the Assignee's name appear on the certificate of title
in order to continue the perfection of the security interest assigned
as against creditors of the Obligor named in the certificate of title
and transferees of the Obligor; and
(ii) Upon consummation of the transaction contemplated in the
Basic Documents, each of the Transferor, the Depositor, the Issuer, and
the Indenture Trustee, as applicable, will have acquired a perfected
first priority security interest in the Texas Financed vehicles.
(h) Opinion of Special Delaware Counsel to the Transferor. At the
Closing Time, the Underwriters shall have received the favorable opinion, dated
as of the Closing Time, of Xxxxxxxx, Xxxxxx & Finger, special Delaware counsel
to the Transferor, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Transferor has been duly formed and is validly
existing in good standing as a limited liability Transferor under the
laws of the State of Delaware.
(ii) The limited liability company agreement (the "LLC
Agreement") of the Transferor constitutes a legal, valid and binding
agreement of the Member, and is enforceable against the Member, in
accordance with its terms.
(iii) Under the Delaware Limited Liability Transferor Act, 6
Del. C. Section 18-101, et seq. (the "LLC Act") and the LLC Agreement,
the Transferor has all necessary limited liability Transferor power and
authority to execute and deliver each of the Basic Documents to which
it is a party, and to perform its obligations thereunder.
(iv) Under the LLC Act and the LLC Agreement, the execution
and delivery by the Transferor of each of the Basic Documents to which
it is a party, and the performance by the Transferor of its obligations
thereunder, have been duly authorized by all necessary limited
liability Transferor action on the part of the Transferor.
(v) As to certain bankruptcy matters.
(i) Opinion of Special Tax and ERISA Counsel to the Depositor. At the
Closing Time, the Underwriters shall have received the favorable opinion, dated
as of the Closing Time, of Xxxxx & Xxxx LLP, special tax counsel to the
Depositor, in form and substance satisfactory to counsel for the Underwriters,
substantially to the effect that (i) for federal income tax purposes, the Notes
will be considered debt and the Trust will not be an association taxable as a
corporation and (ii) the statements in the Prospectus under the caption
"Material Federal Income Tax Consequences," "Summary of Terms -- ERISA
Considerations," "ERISA Considerations," to the extent that they constitute
matters of law or legal conclusions with respect thereto, have been prepared or
reviewed by such counsel and are correct in all material respects.
(j) Opinion of Counsel for Indenture Trustee. At the Closing Time, the
Underwriters shall have received the favorable opinion, dated as of the Closing
Time, of Xxxxxxx X. Xxxxxx, counsel to the Indenture Trustee, in form and
substance satisfactory to counsel for the Underwriters, substantially to the
effect that:
(i) The Indenture Trustee has been duly incorporated and is
validly existing as a national banking association and is duly
qualified to do business and in good standing under the laws of each
jurisdiction in which the performance of its duties under the Indenture
would require such qualification and has full corporate power and
authority to enter into and perform its obligations under the
Indenture.
(ii) The Indenture Trustee, at the time of its execution and
delivery of the Indenture, had full power and authority to execute and
deliver the Indenture and has full power and authority to perform its
obligations thereunder.
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(iii) The Indenture has been duly and validly authorized,
executed and delivered by the Indenture Trustee and, assuming due
authorization, execution and delivery thereof by the Trustee,
constitutes the valid and binding obligation of the Indenture Trustee
enforceable against the Indenture Trustee in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
or other laws relating to or affecting creditors' rights or by general
principles of equity.
(iv) To the best of such counsel's knowledge, there are no
actions, proceedings or investigations pending or threatened against or
affecting the Indenture Trustee before or by any court, arbitrator,
administrative agency or other governmental authority (a) asserting the
invalidity of each Basic Document to which the Indenture Trustee is a
party and (b) which, if adversely decided, would materially and
adversely affect the ability of the Indenture Trustee to carry out the
transactions contemplated in the Basic Documents.
(v) No consent, approval or authorization of, or registration,
declaration or filing with, any court or governmental agency or body of
the United States of America or any state thereof was or is required
for the execution, delivery or performance by the Indenture Trustee of
the Basic Documents to which the Indenture Trustee is a party.
(vi) Each of the Basic Documents to which Indenture Trustee is
a party has been duly executed and delivered by the Indenture Trustee
and constitutes a legal, valid and binding obligation of Indenture
Trustee enforceable against the Indenture Trustee in accordance with
its respective terms, except that certain of such obligations may be
enforceable solely against the assets of the Trust and except that such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, liquidation or other similar laws affecting the enforcement
of creditors' rights generally, and by general principles of equity,
including without limitation, concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(vii) The consummation of the transactions contemplated by the
terms of the Basic Documents to which the Indenture Trustee is a party
do not conflict with or result in a breach or violation of any material
term or provision of, or constitute a default under, (i) the articles
of incorporation or bylaws of the Indenture Trustee, (ii) to my
knowledge, any indenture or other agreement or instrument to which the
Indenture Trustee is a party or by which it is bound, (iii) any
Minnesota or federal statute or regulation applicable to the Indenture
Trustee or (iv) any order known to me of any Minnesota or federal
court, regulatory body, administrative agency or governmental body
having jurisdiction over the Indenture Trustee.
(viii) The Notes have been duly authenticated and delivered by
the Indenture Trustee in accordance with the terms of the Indenture.
(k) Opinion of special counsel for the Collateral Agent. At the Closing
Time, the Underwriters shall have received a favorable opinion dated as of the
Closing Time, of Xxxxxx & Xxxxxxx, special counsel to the Collateral Agent, in
form and substance satisfactory to the Underwriters, substantially to the effect
that:
(i) Assuming that the Reserve Account Agreement constitutes a
valid grant of a security interest in the Depositary Collateral by the
Transferor to the Collateral Agent, the security interest created by
the Reserve Account Agreement in favor of the Collateral Agent in the
Series 2000-2 Reserve Account and the financial assets therein will be
perfected upon Delivery of the Reserve Account Eligible Investments in
accordance with Section 3.02(c) of the Reserve Account Agreement. Upon
such delivery and compliance, no security interest of any other
creditor of the Transferor will be equal or prior to the security
interest of the Collateral Agent in such Reserve Account Eligible
Investments and any proceeds thereof.
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(l) Opinion of Counsel for Owner Trustee. At the Closing Time, the
Underwriters shall have received the favorable opinion, dated as of the Closing
Time, of Xxxxxxxx, Xxxxxx & Finger, counsel to the Owner Trustee, in form and
substance satisfactory to counsel for the Underwriters, substantially to the
effect that:
(i) The Owner Trustee has been duly incorporated and is
validly existing as a banking corporation in good standing under the
laws of the State of Delaware and has full corporate trustee power and
authority to enter into and perform its obligations under the Trust
Agreement.
(ii) Neither the execution, delivery and performance by the
Owner Trustee of the Trust Agreement, nor the consummation of any of
the transactions by the Owner Trustee contemplated thereby, is in
violation of the charter or bylaws of the Owner Trustee or of any law,
governmental rule or regulation of the State of Delaware or of the
United States of America governing the banking or trust powers of the
Owner Trustee or, to such counsel's knowledge without independent
investigation, of any indenture, mortgage, bank credit agreement, note
or bond purchase agreement, long-term lease, license or other agreement
or instrument to which it is a party or by which it is bound or, to
such counsel's knowledge without independent investigation, of any
judgment or order applicable to the Owner Trustee.
(iii) To such counsel's knowledge without independent
investigation, there are no proceedings pending or threatened against
the Owner Trustee in any court or before any governmental authority,
agency or arbitration board or tribunal which, individually or in the
aggregate, would have a material adverse effect on the right, power and
authority of the Owner Trustee to enter into or perform its obligations
under the Trust Agreement..
(m) Opinion of special Delaware counsel to the Trust. At Closing Time,
the Underwriters shall have received, the favorable opinion, dated as of the
Closing Time, of special Delaware counsel for the Trust, in form and substance
satisfactory to the Underwriters, substantially to the effect that:
(i) The Trust has been duly formed and is validly existing and
in good standing as a business trust under the Delaware Business Trust
Act, 12 Del.C. Section 3801, et seq. (the "Act").
(ii) Under the Trust Agreement and the Act, the Trust has the
power and authority to execute and deliver the Basic Documents to which
it is a party, to issue the Notes and the Certificates, to grant the
Collateral (as defined in the Basic Documents) to the Indenture Trustee
as security for the Notes and to perform its obligations under the
Trust Documents.
(iii) The Trust has duly authorized, executed and delivered
the Basic Documents, the Certificates and the Notes.
(iv) When the Certificates are duly executed by the Trust and
duly authenticated and delivered to or upon the written order of the
Depositor in accordance with the Trust Agreement, the Certificates will
be validly issued and entitled to the benefits of the Trust Agreement.
(v) Neither the execution, delivery and performance by the
Trust of the Basic Documents, nor the consummation by the Trust of any
of the transactions contemplated thereby, requires the consent or
approval of, the withholding of objection on the part of, the giving of
notice to, the filing, registration or qualification with, or the
taking of any other action in respect of, any governmental authority or
agency of the State of Delaware, other than the filing of the
Certificate of Trust with the Secretary of State.
(vi) Neither the execution, delivery and performance by the
Trust of the Basic Documents, nor the consummation by the Trust of the
transactions contemplated thereby, is in violation of the Trust
Agreement or of any law, rule or regulation of the State of Delaware
applicable to the Trust.
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(vii) The Trust Agreement is a legal, valid and binding
obligation of the Owner Trustee and the Depositor, enforceable against
the Owner Trustee and the Depositor, in accordance with its terms.
(viii) To the extent that Article 9 of the Uniform Commercial
Code as in effect in the State of Delaware (the "Delaware UCC") is
applicable (without regard to conflicts of laws principles), and
assuming that the security interest created by the Indenture in the
collateral has been duly created and has attached, upon the filing of
the Financing Statement with the Secretary of State the Indenture
Trustee will have a perfected security interest in the Trust's rights
in that portion of the Collateral (as defined in the Sale and Servicing
Agreement) that constitutes "chattel paper", "general intangibles" or
"accounts" (as such terms are defined in the Delaware UCC) and the
proceeds thereof; and such security interest will be prior to any other
security interest granted by the Trust that is perfected solely by the
filing of financing statements under the Delaware UCC, excluding
purchase money security interests under Section 9-312 of the Delaware
UCC and temporarily perfected security interests in proceeds under
Section 9-306 of the Delaware UCC.
(ix) Under Section 3805(b) of the Act, no creditor of the
Certificateholder shall have any right to obtain possession of, or
otherwise exercise legal or equitable remedies with respect to, the
property of the Trust except in accordance with the terms of the Trust
Agreement.
(n) Opinion of Counsel for the Insurer. At the Closing Time, the
Underwriters shall have received the favorable opinion, dated as of the Closing
Time, of counsel for the Insurer, in form and substance satisfactory to the
Underwriters, substantially to the effect that:
(i) The Insurer is a stock insurance company duly organized,
validly existing, and authorized to transact financial guaranty
insurance business under the laws of the State of New York.
(ii) The Policy and each Basic Document to which the Insurer
is a party have been duly authorized, executed, and delivered by the
Insurer.
(iii) The Policy and each Basic Document to which the Insurer
is a party constitute valid and binding obligations of the Insurer,
enforceable against the Insurer in accordance with their terms,
subject, as to the enforcement of remedies, to bankruptcy, insolvency,
reorganization, rehabilitation, moratorium, and other similar laws
affecting the enforceability of creditors' rights generally applicable
in the event of the bankruptcy or insolvency of the Insurer and to the
application of general principles of equity and subject, in the case of
the Indemnification Agreement, to principles of public policy limiting
the right to enforce the indemnification provisions contained therein
insofar as such provisions relate to indemnification for liabilities
arising under the securities laws.
(iv) The Policy is exempt from registration under the
Securities Act of 1933, as amended (the "Act").
(v) Neither the execution nor delivery by the Insurer of the
Policy or any Basic Document to which the Insurer is a party, nor the
performance by the Insurer of its obligations thereunder, will conflict
with any provision of the certificate of incorporation or the by-laws
of the Insurer or, to the best of my knowledge, result in a breach of,
or constitute a default under, any agreement or other instrument to
which the Insurer is a party or by which it or any of its property is
bound or, to the best of my knowledge, violate any judgment, order, or
decree applicable to the Insurer of any governmental or regulatory
body, administrative agency, court, or arbitrator having jurisdiction
over the Insurer (except that, in the published opinion of the
Securities and Exchange Commission, the indemnification provisions of
the Indemnification Agreement, insofar as they relate to
indemnification for liabilities arising under the Act, are against
public policy as expressed in the Act and are therefore unenforceable).
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(o) Opinion of Counsel for the Underwriters. At the Closing Time, the
Underwriters shall have received the favorable opinion, dated as of the Closing
Time, of Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, counsel for the Underwriters, in
form and substance satisfactory to the Underwriters. In rendering such opinion,
such counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York and the federal law of the United
States, upon the opinions of counsel reasonably satisfactory to the
Underwriters.
(p) Reliance Letters. Counsel to each of the Depositor and the Sponsor
shall provide reliance letters to the Underwriters relating to each legal
opinion relating to the transaction contemplated hereby or in the Terms
Agreement rendered to either Trustee or either Rating Agency.
(q) Maintenance of Rating. At the Closing Time, the Class A-1 Notes
will be rated "P-1" by Xxxxx'x and "A-1+" by Standard & Poor's, the Class A-2
Notes, Class A-3 Notes and Class A-4 Notes shall each be rated "Aaa" by Xxxxx'x,
and "AAA" by Standard and Poor's and the Depositor shall have delivered to the
Underwriters a letter dated the Closing Time from each Rating Agency, or other
evidence satisfactory to the Underwriters, confirming that the Notes have such
ratings; and since the date of this Agreement, there shall not have occurred a
downgrading in the rating assigned to the Notes, or any other securities of the
Depositor, the Sponsor or any of their respective Affiliates by any "nationally
recognized statistical rating agency", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Securities Act, and no such rating
agency shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of the Notes or any other
securities of the Depositor, the Sponsor or any of their respective Affiliates.
(r) Additional Rating Agency Requirements. The Depositor will, to the
extent, if any, that the ratings provided with respect to the Offered Securities
by a Rating Agency are conditioned upon the furnishing or the taking of any
other actions by the Depositor or the Sponsor, furnish such documents and take
all such other actions.
(s) Depositor Indemnification Agreement. The Underwriters shall have
received the duly authorized, executed and delivered Depositor Indemnification
Agreement from the PF Entities and the Depositor in a form reasonably
satisfactory to the Underwriters.
(t) Insurer Agreements. The Underwriters shall have received the duly
authorized, executed and delivered Insurance Agreement, Policy and the Insurer
Indemnification Agreement.
(u) Additional Documents. At the Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as it
may reasonably require for the purpose of enabling it to pass upon the issuance
and sale of the Offered Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties or the
fulfillment of any of the conditions herein contained; and all proceedings taken
by the Depositor in connection with the foregoing shall be satisfactory in form
and substance to counsel for the Underwriters.
Section 6. Investor Information. Each Underwriter may prepare and
provide to prospective investors certain Computational Materials, ABS Term
Sheets or Collateral Term Sheets in connection with an offering of the Offered
Securities, subject to the following conditions:
(a) Such Underwriter shall comply with the requirements of the
No-Action Letter of May 20, 1994 issued by the Commission to Xxxxxx, Xxxxxxx
Acceptance Corporation I and certain affiliates, as made applicable to other
issuers and underwriters by the Commission in response to the request of the
Public Securities Association dated May 24, 1994 (collectively, the "Xxxxxx/PSA
Letter"), and the requirements of the No-Action Letter of February 17, 1995
issued by the Commission to the Public Securities Association (the "PSA Letter"
and, together with the Xxxxxx/PSA Letter, the "No-Action Letters").
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(b) For purposes hereof, "Computational Materials" shall have the
meaning given such term in the No-Action Letters, but shall include only those
Computational Materials that have been prepared or delivered to prospective
investors by any Underwriter. For purposes hereof, "ABS Term Sheets" and
"Collateral Term Sheets" shall have the meanings given such terms in the PSA
Letter but shall include only those ABS Term Sheets or Collateral Term Sheets
that have been prepared or delivered to prospective investors by any
Underwriter.
(c) Each Underwriter shall provide to the Depositor any Computational
Materials, ABS Term Sheets or Collateral Term Sheets which are provided to
investors no later than the Business Day preceding the date such Computational
Materials, ABS Term Sheets or Collateral Term Sheets are required to be filed
pursuant to the applicable No-Action Letters. Each Underwriter may provide
copies of the foregoing in a consolidated or aggregated form including all
information required to be filed.
(d) In the event that the Depositor or any Underwriter discovers an
error in the Computational Materials, ABS Term Sheets or Collateral Term Sheets,
the Underwriter that prepared such material shall prepare corrected
Computational Materials, ABS Term Sheets or Collateral Term Sheets and deliver
it to the Depositor for filing pursuant to Section 3(l).
Section 7. Indemnification.
(a) Indemnification of Underwriters. The Depositor agrees to indemnify
and hold harmless the Underwriters and each person, if any, who controls the
Underwriters within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary Prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Computational
Materials, ABS Term Sheets or Collateral Term Sheets distributed by any
Underwriter;
(iii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever, based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 7(d)) any such settlement is effected with the
written consent of the Depositor and the Sponsor; and
(iv) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Underwriters), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever, based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under clause (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue
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statement or omission made in reliance upon and in conformity with (a) the
Underwriter Information, the Insurer Information or the Seller Information
(defined below), or any (b) in the case of Computational Materials, ABS Term
Sheets or Collateral Term Sheets distributed by any Underwriter, any Seller
Information, any Insurer Information or Derived Information (as defined below)
provided by any Underwriter expressly for use in the Computational Materials,
the ABS Term Sheets or the Collateral Term Sheets.
(b) Indemnification of the Depositor. The Underwriters severally agree
to indemnify and hold harmless the Depositor and each person, if any, who
controls the Depositor within the meaning of Section 15 of the 1933 Act or
Section 20 of the Exchange Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 7(a)(i), as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made (i) in the Prospectus (or any amendment
thereto), or any preliminary prospectus or the Registration Statement (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Depositor by such Underwriter expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) or (ii) in
the Computational Materials, ABS Term Sheets or Collateral Term Sheets
distributed by any Underwriter to the extent that such untrue statement or
alleged untrue statement of a material fact was made in reliance upon and in
conformity with Derived Information provided by such Underwriter expressly for
use in the Computational Materials, the ABS Term Sheets or the Collateral Term
Sheets and the untrue statement or alleged untrue statement did not derive from
an inaccuracy in the Seller Information used in the preparation of such
Computational Materials, ABS Term Sheets or Collateral Term Sheets. The
Underwriters respective obligations to indemnify pursuant to this Section are
several in proportion to the principal amount of Offered Securities set forth
opposite their respective names in Schedule A and not joint.
For purposes of this Agreement, as to each Underwriter, "Derived
Information" means such portion, if any, of the information delivered to the
Depositor by such Underwriter pursuant to Section 6 for filing with the
Commission on an Additional Materials 8-K and:
(i) is not contained in the Prospectus without taking into
account information incorporated therein by reference; and
(ii) does not constitute Seller Information.
"Seller Information" shall mean the information in the preliminary
Prospectus Supplement or the Prospectus Supplement under the headings "Summary
of Terms-The Issuer," "-Originator," "-Transferor," "-Servicer," "-Custodian,"
the information concerning the Policy contained in "-Insurer and the Policy,"
"Risk Factors," "The Trust Fund," "The Receivables Pool," "The Transferor," "The
Originator, Servicer and Custodian," "Description of the Notes," "Description of
the Certificates," "The Policy," "Description of the Receivables Transfer and
Servicing Agreements," and "Certain Legal Aspects of the Receivables" and any
computer tape or other written or electronic information furnished to the
Depositor or any Underwriter by or on behalf of the Sponsor concerning the
assets of the Sponsor used in preparing such Computational Materials, ABS Term
Sheets or Collateral Term Sheets.
"Insurer Information" shall mean the information in the preliminary
Prospectus Supplement or the Prospectus Supplement under the headings "The
Insurer" and "Incorporation of Certain Documents by Reference," and the
information concerning the Insurer contained in "Summary of Terms-Insurer and
the Policy."
(c) Actions Against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a
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result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 7(a), counsel to the indemnified parties
shall be selected by the Underwriters, and, in the case of parties indemnified
pursuant to Section 7(b), counsel to the indemnified parties shall be selected
by the Depositor. An indemnifying party may participate at its own expense in
the defense of any such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the indemnified party)
also be counsel to the indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section or Section 8 (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(iii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
Section 8. Contribution. If the indemnification provided for in Section
7 is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative fault of the Depositor on the one hand and
of the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative fault of the Depositor on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Depositor or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Depositor and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever, based upon any such untrue or alleged
untrue statement or omission or alleged omission.
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Notwithstanding the provisions of this Section, no Underwriter shall be
required to contribute any amount in excess of the amount by which the Offered
Securities underwritten by it and distributed to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of any such 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.
For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act shall have the same rights to contribution as such
Underwriters, and each person, if any, who controls the Depositor within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Depositor. The Underwriters'
respective obligations to contribute pursuant to this Section are several in
proportion to the principal amount of Offered Securities set forth opposite
their respective names in Schedule A and not joint. The obligations of the
Depositor are in addition to any other liability it may otherwise have.
Section 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Depositor and its Affiliates
submitted pursuant hereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Underwriters or any
controlling person, or by or on behalf of the Depositor and its Affiliates, and
shall survive delivery of the Offered Securities to the Underwriters.
Section 10. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this
Agreement, by notice to the Depositor, at any time at or prior to the Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Prospectus,
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Sponsor, the Depositor
or the Insurer, its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Underwriters,
impracticable to market the Offered Securities or to enforce contracts for the
sale of the Offered Securities, (iii) if trading in any securities of the
Depositor or any of its Affiliates has been suspended or materially limited by
the Commission or if trading generally on the American Stock Exchange or the New
York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4, and provided further that Sections 1, 7,
8 and 9 shall survive such termination and remain in full force and effect.
Section 11. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time to purchase the Offered
Securities which it or they are obligated to purchase (the "Defaulted
Securities"), then the Representative shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and
26
27
upon the terms herein set forth; if, however, the Representative shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number or aggregate principal amount, as the case may be, of
Defaulted Securities does not exceed 10% of the number or aggregate principal
amount, as the case may be, of Offered Securities to be purchased on such date,
the non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their respective
underwriting obligations in Schedule A bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the number or aggregate principal amount, as the case may be, of
Defaulted Securities exceeds 10% of the number or aggregate principal amount, as
the case may be, of Offered Securities to be purchased on such date, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement either the Representative or the Depositor shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements.
Section 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at 000 Xxxxx Xxxxxx, World
Financial Center, New York, New York 10281-1310, attention Syndicate Department;
notices to the Depositor shall be directed to 000 Xxxxx Xxxxxx, World Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, attention President.
Section 13. Parties. This Agreement shall inure to the benefit of and
be binding upon each of the Underwriters, the Depositor and its 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 Depositor and its respective successors and the controlling
persons, directors and officers referred to in Sections 7 and 8 and their heirs
and legal Underwriters any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Depositor and its respective
successors, and the controlling persons, directors and officers referred to in
Sections 7 and 8 and their heirs and legal Underwriters and for the benefit of
no other person, firm or corporation. No purchaser of Offered Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
Section 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
ITS CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 15. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not effect the construction hereof.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Depositor a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters and the Depositor in accordance with its terms.
ML ASSET BACKED CORPORATION,
as Depositor
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
Title: President
CONFIRMED AND ACCEPTED,
as of the date first above written:
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
as Representative of the several Underwriters
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Authorized Signatory
29
SCHEDULE A
Principal Amount of
Name of Underwriter Notes
------------------- -------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated................................. $ 208,734,000
Barclays Capital Inc.............................. $ 108,133,000
Credit Suisse First Boston ....................... $ 208,133,000
Total.................................... $ 525,000,000
=============
A-1
30
EXHIBIT A
ML ASSET BACKED CORPORATION
(Depositor)
XxxxxxXxxxx.xxx Vehicle Receivable Asset-Backed Notes
Series 2000-2
TERMS AGREEMENT
December 8, 2000
To: ML Asset Backed Corporation, as Depositor under the Sale and Servicing
Agreement dated as of December 1, 2000 (the "Sale and Servicing
Agreement"). Capitalized terms used herein but not otherwise defined
shall have the meanings ascribed thereto in the Sale and Servicing
Agreement.
Re: Underwriting Agreement dated December 8, 2000.
Title: XxxxxxXxxxx.xxx Vehicle Receivable Asset-Backed Notes, Series
2000-2.
Principal Amount: $525,000,000 (approximate; subject to a variance of
plus or minus 5%)
Terms of the Notes:
Original Interest Rate
Class Principal Amount or Formula
----- ---------------- -------------
A-1 $ 73,899,000 6.54%
A-2 $200,000,000 6.37%
A-3 $107,000,000 6.34%
A-4 $144,101,000 6.43%
(approximate; subject to a
variance of plus or minus 5%)
Ratings:
Class Xxxxx'x Standard & Poor's
----- ------- -----------------
A-1 P-1 A-1+
A-2 Aaa AAA
A-3 Aaa AAA
A-4 Aaa AAA
Servicer: PeopleFirst Finance, LLC (the "Servicer").
Trustee: Xxxxx Fargo Bank, National Association (the "Trustee").
Terms of Sale: The purchase price payable by the Underwriters for the
Offered Securities is 99.86000%, 99.79637%, 99.72878% and 99.62866% of the
principal amount of the Class A-1 Notes,
A-1
31
Class A-2 Notes, Class A-3 Notes and Class A-4 Notes, respectively, plus accrued
interest at the related Interest Rate from the date of initial issuance.
Payment of the purchase price shall be in immediately available Federal
funds wired to such bank as may be designated by the Depositor.
The Class A Notes issued pursuant to the Indenture and the Class A
Certificates issued pursuant to the Trust Agreement are not subject to this
Agreement.
Underwriting Breakdown:
Class A-1 Class A-2 Class A-3 Class A-4
--------- --------- --------- ---------
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ........... $ 24,633,000 $100,000,000 $ 36,000,000 $ 48,101,000
Barclays Capital .................. $ 24,633,000 $ 0 $ 35,500,000 $ 48,000,000
Credit Suisse First Boston ........ $ 24,633,000 $100,000,000 $ 35,500,000 $ 48,000,000
Total .................... $ 73,899,000 $200,000,000 $107,000,000 $144,101,000
A-2
32
Underwriting Commissions:
Notwithstanding anything to the contrary in the Underwriting Agreement,
no additional underwriting commission shall be payable by the Depositor to the
Underwriters in connection with the purchase of the Notes.
The Underwriting discount for the Offered Securities is 0.14000%,
0.20000%, 0.27000% and 0.35000% of the principal amount of the Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes and Class A-4 Notes, respectively.
Public offering price and/or method of determining price at which the
Underwriters will sell the Notes:
Class A-1: 100.00000%
Class A-2: 99.99637%
Class A-3: 99.99878%
Class A-4: 99.97866%
Loans: The motor vehicle installment loans (the "Loans") sold by the
Sponsor to the Transferor, and an ownership or a security interest in such Loans
transferred by the Transferor to the Depositor and the Depositor to the Trust
pursuant to the Sale and Servicing Agreement, dated as of December 1, 2000,
among the Sponsor, the Transferor, and Depositor, the Trust and the Indenture
Trustee, are more fully described in Exhibit A to the Sale and Servicing
Agreement.
Distribution Dates: The 15th day (or, if such day is not a business
day, the next succeeding business day) of each month, commencing with January
16, 2001.
Delivery Date and Location: 10:00 a.m., New York time, on or about
December 15, 2000, or at such other time not later than seven full business days
thereafter as may be agreed upon, at the offices of Xxxxx, Xxxxx & Xxxxx, New
York, New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon, it will
become a binding agreement among the Depositor and the several Underwriters in
accordance with its terms.
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
as Representative of the several Underwriters
By:
------------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED
as of the date first written:
ML ASSET BACKED CORPORATION,
as Depositor
By:
-------------------------
Name:
Title:
X-0
00
XXXXXXX X
FORM OF INDEMNIFICATION AGREEMENT
Filed as EXHIBIT 4.7
B-1
