EXHIBIT 1.2
$25,000,000
MELLON BANK PREMIUM FINANCE LOAN MASTER TRUST
CLASS B FLOATING RATE ASSET BACKED
CERTIFICATES, SERIES 1996-1
CLASS B UNDERWRITING AGREEMENT
December 12, 1996
CS FIRST BOSTON CORPORATION
as Representative of the
Several Underwriters
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Section 1. Introductory. AFCO Credit Corporation, a New York
corporation ("AFCO Credit"), and AFCO Acceptance Corporation, a California
corporation ("AFCO Acceptance" and together with AFCO Credit, the "Originators"
and in their capacity as servicer, the "Servicer") propose to convey commercial
insurance premium finance loans (the "Receivables") from time to time to Mellon
Bank, N.A., a national banking association organized under the laws of the
United States of America (the "Transferor"). The Transferor proposes to convey
such Receivables to the Mellon Bank Premium Finance Loan Master Trust (the
"Trust"), and proposes to cause the Trust to sell to the Underwriters named in
Schedule I hereto (the "Underwriters"), for whom you are acting as
representative (the "Representative"), $25,000,000 aggregate initial principal
amount of Class B Floating Rate Asset Backed Certificates, Series 1996-1 (the
"Class B Certificates"), in the Trust, the terms of which are described in the
Prospectus (as defined below). It is understood that Transferor is currently
entering into a Class A Underwriting Agreement dated the date hereof (the "Class
A Underwriting Agreement") among the Transferor and the Underwriters named on
Schedule I thereto (the "Class A Underwriters") providing for the sale of
$440,000,000 aggregate initial principal amount of Class A Floating Rate Asset
Backed Certificates, Series 1996-1 (the "Class A Certificates"). The Class B
Certificates and the Class A Certificates are referred to herein collectively as
the "Certificates." This Agreement and the Class A Underwriting Agreement are
referred to herein collectively as the "Underwriting Agreements."
The Receivables will be conveyed by the Originators to the Transferor
pursuant to the Receivables Purchase Agreement dated as of December 1, 1996 (the
"Receivables Purchase Agreement") between the Originators and the Transferor.
The Receivables will be conveyed by the Transferor to the Trust in exchange for
the Certificates pursuant to a Pooling and Servicing Agreement, dated as of
December 1, 1996 (the "P&S") and the Series 1996-1 Supplement thereto (the
"Series Supplement") and together with the P&S, (the "Pooling and Servicing
Agreement") dated as of December 1, 1996, each among the Transferor, the
Servicer, Premium Financing Specialists, Inc., a Missouri corporation ("PFSI"),
as back-up servicer and Premium Financing Specialists of California, Inc., a
California corporation ("PFSIC"), as back-up servicer (PFSI and PFSIC are
collectively referred to as the "Back-up Servicer") and The First National Bank
of Chicago, a national banking association, as trustee (the "Trustee"). In
addition, the Transferor, Servicer, Trustee, Alpine Securitization Corp., a
Delaware Corporation ("Alpine") (the "Collateral Interest Holder") and Credit
Suisse as Agent (the "Agent") will enter into a Loan Agreement to be dated as of
the Closing Date (the "Loan Agreement") pursuant to which the Collateral
Interest Holder will acquire $35,000,000 aggregate initial principal amount of
the Collateral Interest (the "Collateral Interest"), which will act as Credit
Enhancement for the Certificates.
Capitalized terms used herein (including in the Introductory hereto)
that are not otherwise defined shall have the meanings ascribed thereto in the
Pooling and Servicing Agreement.
Section 2. Representations and Warranties of Transferor. (a)
Transferor represents and warrants to, and agrees with, each Underwriter as set
forth in this Section 2. Certain terms used in this Section 2 are defined in
paragraph (i) below.
(i) Transferor meets the requirements for use of Form S-3
under the Securities Act and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (Registration
No. 333-11961) including a related preliminary prospectus, on such Form
for the registration under the Securities Act, of the Certificates.
Transferor may have filed one or more amendments thereto, including the
related preliminary prospectus, each of which has previously been
furnished to the Representative. Transferor will next file with the
Commission (A) prior to the effectiveness of such registration
statement, a further amendment thereto (including the form of final
prospectus relating to the Class B Certificates) or (B) after
effectiveness of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b)(1) or 424(b)(4) under the
Securities Act. In the case of clause (B), Transferor has included in
such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the
Securities Act and the rules thereunder to be included in the
Prospectus with respect to the Class B Certificates and the offering
thereof. As filed, such amendment and form of final prospectus shall
include all Rule 430A Information, together with all other such
required information, with respect to the Class B Certificates and the
offering thereof and, except to the extent the Underwriters shall agree
in writing to a modification, shall be in all substantive respects in
the form furnished to the Representative prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond
that contained in the latest preliminary prospectus which has
previously been furnished to the Representative) as Transferor has
advised the Representative, prior to the Execution Time, will be
included or made therein. If the Registration Statement contains the
undertakings specified by item 512(a) of Regulation S-K, the
Registration Statement, at the Execution Time, meets the requirements
set forth in Rule 415(a)(1)(x).
The terms that follow, when used in this Agreement, have the
meanings indicated. The term "Effective Date" means each date that the
Registration Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" means the date and
time that this Agreement is executed and delivered by the parties
hereto. "Preliminary Prospectus" means any preliminary prospectus
referred to in the preceding paragraph and any preliminary prospectus
included in the Registration Statement which, at the Effective Date,
omits Rule 430A Information. "Prospectus" means the form of prospectus
relating to the Class B Certificates that is first filed with the
Commission pursuant to Rule 424(b) or, if no filing pursuant to Rule
424(b) is required, means the prospectus relating to the Class B
Certificates included in the Registration Statement at the Effective
Date. "Registration Statement" means the registration statement
referred to in the preceding paragraph and any registration statement
required to be filed under the Securities Act or rules thereunder,
including incorporated documents, exhibits and financial statements, in
the form in which it has or shall become effective and, in the event
any post-effective amendment thereto becomes effective prior to the
Closing Date, shall also mean such registration statement as so
amended. Such term shall include Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule 430A. "Rule
424," "Rule 430A," "Rule 415" and "Regulation S-K" refer to such rules
or regulations under the Securities Act. "Rule 430A Information" means
information with respect to the Class B Certificates and the offering
thereof permitted to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A. Any reference herein to the
Registration Statement, or the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), on or before the Effective
Date of the Registration Statement or the issue date of the Prospectus,
as the case may be; and any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement
or Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the
Registration Statement, or the issue date of the Prospectus, as the
case may be, deemed to be incorporated therein by reference.
(ii) On the Effective Date, the Registration Statement did or
will comply in all material respects with the applicable requirements
of the Securities Act and the rules thereunder; on the Effective Date
and when the Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date, the Prospectus (as amended
and together with any supplements thereto) did or will comply in all
material respects with the applicable requirements of the Securities
Act and the rules thereunder; on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any
filing pursuant to Rule 424(b) and on the Closing Date, the Prospectus
(as amended and together with any supplements thereto) will not,
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that Transferor makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplements thereto)
in reliance upon and in conformity with information furnished in
writing to Transferor by any Underwriter specifically for use in
connection with the preparation of the Registration Statement or the
Prospectus (or any supplements thereto).
(iii) Transferor is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States, and has all requisite power, authority and legal right
to own its properties and conduct its business as described in the
Registration Statement and the Prospectus and to execute, deliver and
perform the transactions contemplated by the Underwriting Agreements,
the Pooling and Servicing Agreement, the Receivables Purchase
Agreement and the Loan Agreement (collectively the "Specified
Agreements"), and to authorize the authentication, execution and
issuance of the Certificates and the issuance of the Collateral
Interest.
(iv) Transferor is duly qualified to do business and is in
good standing (or is exempt from such requirement) in any state
required in order to conduct its business, and has obtained all
necessary licenses and approvals with respect to Transferor required
under Federal and Pennsylvania law, except where failure to obtain
such qualification or such license would not materially adversely
affect the conduct of its business.
(v) The execution, delivery and performance by Transferor of
the Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized
by all necessary action or proceedings.
(vi) Transferor has duly and validly authorized the
conveyance of the Receivables to the Trust.
(vii) The execution, delivery and performance by Transferor
of the Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the fulfillment of the terms hereof and
thereof will not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time or both) a default under, or (other than the Lien of the
Pooling and Servicing Agreement) result in the creation or imposition
of any Lien under any material indenture, contract, agreement,
mortgage, deed of trust or other instrument to which Transferor is a
party or by which it or any of its properties are bound.
(viii) The execution, delivery and performance by Transferor
of the Specified Agreements, the issuance of the Certificates and the
Collateral Interest and the fulfillment of the terms hereof and
thereof, will not conflict with or violate any Requirements of Law
applicable to Transferor.
(ix) There are no proceedings or investigations pending or,
to the best knowledge of Transferor, threatened against Transferor
before any court, regulatory body, administrative agency, arbitrator
or other tribunal or governmental instrumentality (A) asserting the
invalidity of any Specified Agreement or the Certificates or the
Collateral Interest, (B) seeking to prevent the issuance of the
Certificates or the Collateral Interest or the consummation of any of
the transactions contemplated by the Specified Agreements, (C) seeking
any determination or ruling that, in the reasonable judgment of
Transferor, would materially and adversely affect the performance by
Transferor of its obligations under any Specified Agreement, (D)
seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of any Specified
Agreements or the Certificates or the Collateral Interest, or (E)
seeking to affect adversely the income tax attributes of the Trust, as
described in the Prospectus under the heading "U.S. Federal Income Tax
Consequences"; and there are no contracts or documents of Transferor
that are required to be filed as exhibits to the Registration
Statement by the Securities Act or by the rules and regulations of the
Commissioner promulgated under the Securities Act (the "Rules and
Regulations") that have not been so filed.
(x) All approvals, authorizations, consents, orders and other
actions of any Person or of any governmental body or official required
in connection with the execution and delivery of the Specified
Agreements, the issuance of the Certificates and the Collateral
Interest and the performance of the transactions contemplated hereby
and thereby and the fulfillment of the terms hereof and thereof, have
been obtained.
(xi) Transferor has delivered to the Representative complete
and correct copies of (A) publicly available portions of the
Consolidated Reports of Condition and Income of Transferor for the
years ended December 31, 1993, 1994 and 1995, as submitted to the
Comptroller of the Currency; and (B) the December 31, 1993, 1994 and
1995, audited consolidated balance sheets of Mellon Bank Corporation
which are included in respectively Mellon Bank Corporation's 1993,
1994 and 1995 Annual Reports to Stockholders. Except as otherwise set
forth therein, or in other subsequent filings with the Commission, (x)
there has been no material adverse change in the condition (financial
or otherwise) of Transferor and (y) there have been no transactions
entered into by Transferor, other than those in the ordinary course of
its business, that are material with respect to Transferor.
(xii) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance of the
Specified Agreements and the Certificates and the Collateral Interest
shall have been paid by Transferor or will be paid by Transferor at or
prior to the Closing Date to the extent then due.
(xiii) The Certificates, when validly authenticated, issued
and delivered in accordance with the Pooling and Servicing Agreement
and sold to the Underwriters as provided herein and to the Class A
Underwriters pursuant to the Class A Underwriting Agreement, will be
duly and validly issued and outstanding and entitled to the benefits
of the Pooling and Servicing Agreement, and, together with the Pooling
and Servicing Agreement, the Loan Agreement and the Collateral
Interest will conform in all material respects to the descriptions
thereof and the statements in relation thereto contained in the
Prospectus.
(xiv) Assuming the due authorization, execution and delivery
thereof by the other parties thereto, the Specified Agreements
constitute the legal, valid and binding agreement of Transferor
enforceable against the Transferor in accordance with its respective
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting enforcement of creditors' rights generally and by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(xv) On the Closing Date, Transferor will have good and
marketable title to the Receivables and other property transferred by
it to the Trust pursuant to the Pooling and Servicing Agreement, free
and clear of Liens (other than the Lien of the Pooling and Servicing
Agreement), and will not have assigned to any Person (other than the
Trustee) any of its right, title or interest in any of such
Receivables or such other property or in the Pooling and Servicing
Agreement, and the Underwriters and the Class A Underwriters will have
good and marketable title to Certificates, free and clear of all Liens
when validly authenticated, issued and delivered in accordance with
the Pooling and Servicing Agreement and sold to the Underwriters as
provided herein and to the Class A Underwriters pursuant to the Class
A Underwriting Agreement.
(xvi) At the time of each transfer of Receivables by
Transferor to the Trust after the Closing Date, Transferor will have
good and marketable title to all Receivables and the other property
being transferred by it to the Trust on such day, free and clear of
Liens (other than the Lien of the Pooling and Servicing Agreement),
and will not have sold to any Person (other than the Trustee) any of
its right, title or interest in any of such Receivables or such other
property.
(xvii) Neither Transferor nor the Trust is an "investment
company" or "controlled" by an "investment company" as such terms are
defined in the Investment Company Act.
(xviii) As of the Closing Date each of the representations
and warranties of Transferor deemed made pursuant to the Pooling and
Servicing Agreement will be true and correct, and, as of each other
date on which Transferor is deemed, pursuant to the terms of the
Pooling and Servicing Agreement, to make any of the representations
and warranties set forth therein, and in Officer's Certificates of
Transferor delivered on each such date pursuant to the Pooling and
Servicing Agreement, will be true and correct and the Underwriters may
rely on such representations and warranties as if they were set forth
herein in full.
(b) Any Officer's Certificate signed by any officer of Transferor and
delivered to the Representative or its counsel shall be deemed a representation
and warranty of Transferor to the Underwriters as to the matters covered
thereby.
Section 3. Purchase and Sale. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, Transferor agrees to cause the Trust to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, except
as set forth in Section 9 below, to purchase the respective initial principal
amount of Class B Certificates set forth opposite such Underwriter's name in
Schedule I hereto, at a purchase price of 99.650000% of the aggregate principal
amount thereof.
The Class B Certificates will initially be represented by one or more
certificates representing $25,000,000 aggregate initial principal amount, each
of which will be registered in the name of Cede & Co., the nominee of The
Depository Trust Company ("DTC") (such certificates, the "DTC Certificates").
The interests of beneficial owners of the DTC Certificates will be represented
by book entries on the records of DTC and participating members thereof.
Definitive certificates evidencing the Class B Certificates will be available
only under the limited circumstances specified in the Pooling and Servicing
Agreement.
Delivery of the DTC Certificates shall be made to the accounts of the
several Underwriters at the office of DTC, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, against payment by the several Underwriters of the
purchase price therefor to or upon the order of Transferor in immediately
available funds at the office of Stroock & Stroock & ▇▇▇▇▇, New York, New York
at 10:00 a.m., New York time, on December 19, 1996, or at such other time not
later than seven full business days thereafter as Transferor and the
Underwriters determine, such time being herein referred to as the "Closing
Date". The certificates evidencing the DTC Certificates will be made available
for checking at the office of Stroock & Stroock & ▇▇▇▇▇ at Seven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at least 24 hours prior to the Closing Date.
Section 4. Offering by the Underwriters. (a) It is understood that the
Underwriters propose to offer the Class B Certificates for sale to the public as
set forth in the Prospectus.
(b) Each Underwriter agrees that if it is a foreign broker dealer not
eligible for membership in the National Association of Securities Dealers, Inc.
(the "NASD"), it will not effect any transaction in the Class B Certificates
within the United States or induce or attempt to induce the purchase of or sale
of the Class B Certificates within the United States, except that it shall be
permitted to make sales to other Underwriters or to its United States
affiliates; provided that such sales are made in compliance with an exemption of
certain foreign brokers or dealers under Rule 15a-6 under the Exchange Act and
in conformity with the Rules of Fair Practice of the NASD as such Rules apply to
non-NASD brokers or dealers.
(c) Each Underwriter represents and agrees that (i) it has not offered
or sold and, prior to the expiry of the period of six months from the Closing
Date, will not offer or sell any Class B Certificates to Persons in the United
Kingdom except to Persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which do not
constitute an offer to the public in the United Kingdom for the purposes of the
Public Offers of Securities Regulations 1995; (ii) it has complied and will
comply with all applicable provisions of the Financial Services ▇▇▇ ▇▇▇▇ of the
United Kingdom with respect to anything done by it in relation to the Class B
Certificates in, from or otherwise involving the United Kingdom; (iii) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issue of the Class B
Certificates to a Person who is of a kind described in Article 11(3) of the
Financial Services ▇▇▇ ▇▇▇▇ (Investment Advertisements) (Exemptions) Order 1995
of the United Kingdom or is a Person to whom the document may otherwise lawfully
be issued or passed on.
Section 5. Certain Agreements of Transferor. Transferor covenants and
agrees with the several Underwriters that:
(a) Transferor will use its best efforts to cause the Registration
Statement, and any amendment thereto, if not effective at the Execution Time, to
become effective. If the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Prospectus is otherwise required under
Rule 424(b), Transferor will file the Prospectus, properly completed, pursuant
to Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to the Underwriters of such timely filing. Transferor will promptly
advise the Underwriters (i) when the Registration Statement, and any amendment
thereto, shall have become effective, (ii) when the Prospectus, and any
supplement thereto, shall have been filed with the Commission pursuant to Rule
424(b), (iii) of any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or threat of
any proceeding for that purpose and (v) of the receipt by Transferor of any
notification with respect to the suspension of the qualification of the Class B
Certificates for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. Transferor will not file any amendment of the
Registration Statement or supplement to the Prospectus unless a copy has been
furnished to the Representative for its review prior to such filing. Transferor
will use its best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the lifting thereof.
(b) If, at any time when a Prospectus relating to the Class B
Certificates is required to be delivered under the Securities Act, any event
occurs as a result of which such Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, or if it shall be
necessary at any time to amend or supplement such Prospectus to comply with the
Securities Act or the Exchange Act or the Rules and Regulations thereunder,
Transferor promptly will prepare and file with the Commission an amendment or
supplement that will effect such compliance. Neither the consent of any
Underwriter to, nor the delivery by any Underwriter of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in
Section 6 hereof.
(c) As soon as practicable, but not later than the Availability Date
(as defined below), Transferor will cause the Trustee to make generally
available to the Holders of the Class B Certificates and to the Representative
an earnings statement with respect to the Trust covering a period of at least 12
months beginning after the Effective Date that will satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 under the Securities Act. For
the purpose of the preceding sentence, "Availability Date" means the 45th day
after the end of the fourth fiscal quarter following the fiscal quarter that
includes the Effective Date, except that, if such fourth fiscal quarter is the
last quarter of Transferor's fiscal year, "Availability Date" means the 90th day
after the end of such fourth fiscal quarter.
(d) Transferor will furnish to the Underwriters copies of the
Registration Statement as originally filed and each amendment thereto (in each
case at least three of which will be signed and will include all exhibits), each
related Preliminary Prospectus, the Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in such
quantities as the Underwriters may reasonably request. Transferor will furnish
or cause to be furnished to the Representative copies of all reports on Form SR
required by Rule 463 under the Securities Act.
(e) Transferor will arrange for the qualification of the Class B
Certificates for sale under the laws of such jurisdictions in the United States
as the Underwriters may reasonably designate and will continue such
qualifications in effect so long as required for the distribution of the Class B
Certificates, provided that Transferor shall not be obligated to qualify to do
business nor become subject to service of process generally, but only to the
extent required for such qualification, in any jurisdiction in which it is not
currently so qualified, and will arrange for the determination of the legality
of the Class B Certificates for purchase by institutional investors.
(f) So long as any of the Class B Certificates are outstanding,
Transferor will deliver or cause to be delivered to the Underwriters (i) copies
of each report mailed to the Trustee or the Series 1996-1 Holders, as soon as
such report is mailed to the Trustee or such Holders, (ii) the annual statement
as to compliance and the annual statement of a firm of independent public
accountants furnished to the Trustee pursuant to Sections 3.5 and 3.6 of the
Pooling and Servicing Agreement, as soon as such statements are furnished to the
Trustee, (iii) copies of all documents required to be filed with the Commission
pursuant to the Exchange Act or any order of the Commission thereunder, and (iv)
such other information concerning Transferor, the Certificates or the Trust as
the Underwriters may reasonably request from time to time.
(g) Transferor will pay all expenses incident to the performance of
its obligations under this Agreement, including without limitation, (i) expenses
of preparing, printing, reproducing and distributing the Registration Statement
and each amendment thereto, the preliminary prospectuses, the Prospectus
(including any amendments and supplements thereto), the Receivables Purchase
Agreement, the Pooling and Servicing Agreement, the Loan Agreement and the Class
B Certificates, (ii) the fees and disbursements of the Trustee and its counsel,
(iii) the fees and disbursements of the independent public accountants of
Transferor and, to the extent previously agreed, fees and disbursements of
counsel to Transferor, (iv) the fees charged by ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's") and Standard & Poor's Ratings Service, a division of The McGraw Hill
Companies, Inc. ("Standard & Poor's" and together with Moody's, the "Rating
Agencies") in connection with the rating of the Class B Certificates and the
Collateral Interest, as applicable, (v) the fees of DTC in connection with the
book-entry registration of the DTC Certificate, (vi) to the extent previously
agreed, the fees and expenses of Stroock & Stroock & ▇▇▇▇▇ in its roles as
underwriters' counsel and special counsel to Transferor and (vii) expenses
incurred in distributing preliminary prospectuses and the Prospectus (including
any amendments and supplements thereto) to the Underwriters, and will reimburse
the Underwriters for any expenses (including reasonable fees and disbursements
of counsel) incurred by the Underwriters pursuant to Section 5(e) hereof in
connection with the qualification of the Class B Certificates for sale and
determination of their eligibility for investment under the laws of such
jurisdictions in the United States as the Underwriters may designate.
(h) On or before the Closing Date, Transferor shall cause the
Originators' books and records (including any computer records) to be marked
relating to the Receivables to be transferred to the Trust, to show the transfer
to the Trust of such Receivables, and from and after the Closing Date Transferor
shall not take any action inconsistent with the transfer to the Trust of such
Receivables, other than as permitted by the Pooling and Servicing Agreement.
(i) For a period of 30 days from the date hereof, none of Transferor
or any of its affiliates or any trust formed by it or any of its affiliates
will, without the prior written consent of the Underwriters, directly or
indirectly, offer, sell or contract to sell or announce the offering of, in a
public or private transaction, any other collateralized securities similar to
the Class B Certificates (other than the Class A Certificates and the Collateral
Interest) representing interests in insurance premium finance loans.
(j) So long as any Class B Certificates are outstanding, Transferor
will cause to be delivered to the Underwriters a reliance letter relating to
each Opinion of Counsel delivered to the Trustee or any Rating Agency by counsel
to Transferor pursuant to the Pooling and Servicing Agreement at the time such
opinion is delivered.
(k) To the extent, if any, that the rating provided with respect to
the Class B Certificates by any Rating Agency is conditional upon the furnishing
of documents or the taking of any other actions by Transferor, Transferor shall
furnish such documents and take any such other actions as may be required.
Section 6. Conditions of the Obligations of the Underwriters. The
obligation of the Underwriters to purchase and pay for the Class B Certificates
will be subject to the accuracy of the representations and warranties on the
part of Transferor herein as of the Execution Time and the Closing Date, to the
accuracy of the statements of the officers of the Originators and Transferor
made pursuant to the provisions hereof, to the performance by the Transferor of
their respective obligations hereunder and to the following additional
conditions precedent:
(a) (i) On the date of this Agreement, the Underwriters and Transferor
shall have received a letter, dated the date of delivery thereof (which, if the
Effective Time is prior to the execution and delivery of this Agreement, shall
be on or prior to the date of this Agreement or, if the Effective Time is
subsequent to the execution and delivery of this Agreement, shall be prior to
the filing of the amendment or post-effective amendment to the registration
statement to be filed shortly prior to the Effective Time), of KPMG Peat Marwick
("Peat Marwick") confirming that they are independent public accountants within
the meaning of the Securities Act and the Rules and Regulations, substantially
in the form of the draft to which the Underwriters have previously agreed and
otherwise in form and substance satisfactory to the Underwriters and counsel for
the Underwriters, and (ii) on the Closing Date, the Underwriters and Transferor
shall have received a letter, dated as of the Closing Date, from Peat Marwick
updating the letter referred to in clause (i) above, in form and substance
satisfactory to the Underwriters and counsel for the Underwriters.
(b) If the Registration Statement has not become effective prior to
the Execution Time, unless the Underwriters agree in writing to a later time,
the Registration Statement shall have become effective not later than 10:00 a.m.
New York time on the date of this Agreement (or the next day, if this Agreement
is executed after the close of business on the date hereof); if filing of the
Prospectus, or any supplements thereto, is required pursuant to Rule 424(b), the
Prospectus shall have been filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
any of the Originators or Transferor which, in the judgment of the Underwriters
materially impairs the investment quality of the Class B Certificates; (ii) any
downgrading in the rating of any debt securities of Mellon Bank Corporation or
any of its direct or indirect subsidiaries by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Securities Act), or any public announcement that any such organization has
under surveillance or review its rating of any such debt securities (other than
an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any suspension or
limitation of trading in securities generally on the New York Stock Exchange or
any setting of minimum prices for trading on such exchange, or any suspension of
trading of any securities of Transferor on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by Federal, New
York or Pennsylvania authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity or
emergency if, in the judgment of the Underwriters, the effect of and such
outbreak, escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the sale of and payment for the Class
B Certificates.
(d) The Representative shall have received:
(1) The favorable opinion or opinions of internal counsel of
Transferor and/or of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, counsel to Transferor,
dated the Closing Date and satisfactory in form and substance to the
Representative and its counsel, and in the aggregate substantially to
the effect that:
(i) Transferor has been duly organized as an
association licensed as a national banking association and
is validly existing and in good standing under the laws of
the United States, is duly qualified to do business and is
in good standing under the laws of each jurisdiction other
than where the failure to be so qualified would not have a
material adverse effect on Transferor's business, and has
full corporate power and authority to own its properties, to
conduct its business as described in the Registration
Statement and the Prospectus, to enter into and perform its
obligations under the Specified Agreements, to execute the
Certificates and to consummate the transactions contemplated
hereby and thereby;
(ii) each of the Specified Agreements and the
Certificates have each been duly authorized, executed and
delivered by Transferor;
(iii) neither the execution and delivery of the
Specified Agreements, nor the issuance or delivery of the
Certificates, nor the consummation of any of the
transactions contemplated herein or therein, nor the
fulfillment of the terms of the Certificates or the
Specified Agreements, will conflict with or violate, result
in a material breach of or constitute a default under (A)
any Requirements of Law applicable to Transferor or any
statute or regulation currently applicable to the Trust, (B)
any term or provision of any order known to such counsel to
be currently applicable to Transferor or the Trust of any
court, regulatory body, administrative agency or
governmental body having jurisdiction over Transferor or the
Trust, as the case may be, or (C) any term or provision of
any indenture or other agreement or instrument known to such
counsel to which Transferor or the Trust is a party or by
which either of them or any of their properties are bound
(provided that the opinion provided pursuant to this
paragraph may exclude the indemnification and contribution
provisions of the Underwriting Agreements);
(iv) except as otherwise disclosed in the Prospectus
(and any supplements thereto) or the Registration Statement,
there is no pending or, to the best knowledge of such
counsel, threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator with respect to the Trust, the Certificates, the
Specified Agreements or any of the transactions contemplated
therein or with respect to Transferor which, taking into
account the likelihood of the outcome, the damages or other
relief sought and other relevant factors, would have a
material adverse effect on the holders of the Certificates
or upon the ability of Transferor to perform its obligations
under the Specified Agreements; and any statements included
in the Registration Statement and the Prospectus (and any
amendments or supplements thereto) describing (A) legal
proceedings relating to Transferor and (B) the Premium
Finance Agreements in each case fairly summarize the matters
therein described;
(v) such counsel has no reason to believe that at
the Effective Date the Registration Statement contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the
Prospectus (and any amendments or supplements thereto as of
the Closing Date) includes any untrue statement of a
material fact or omits to state a material fact necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading (other than, in
both cases, financial and statistical information contained
or required to be contained therein as to which such counsel
need express no belief) (such belief may be limited to the
sections of the Prospectus under the headings "Prospectus
Summary--Transferor," "Prospectus Summary--Servicer,"
"Maturity Assumptions (limited to the penultimate paragraph
thereof)," "Business of the Originators," and "The
Receivables" and the parallel sections of the Registration
Statement; and
(vi) no approval, authorization, consent, order,
registration, filing, qualification, license or permit of or
with any court or governmental agency or body is required
for the consummation by Transferor or the Trust of the
transactions contemplated in or the performance of any of
its duties and obligations under the Specified Agreements,
except such as have been obtained under the Securities Act
and such as may be required under the blue sky laws of any
jurisdiction inside the United States in connection with the
purchase and distribution of the Class B Certificates by the
Underwriters and such as may be required under insurance
premium finance or similar laws.
In rendering such opinion counsel may rely as to matters of
fact, to the extent deemed proper and as stated therein, on
certificates of responsible officers of the Trust, Transferor and
public officials. References to the Prospectus in this paragraph (d)
include any supplements thereto.
(2) The favorable opinion of Stroock & Stroock & ▇▇▇▇▇,
counsel for the Underwriters and special counsel to Transferor, dated
the Closing Date and to the effect that:
(i) the Certificates, when executed, authenticated
and delivered as specified in the Pooling and Servicing
Agreement, and delivered against payment of the
consideration specified herein, will be duly and validly
issued and outstanding and entitled to the benefits of the
Pooling and Servicing Agreement;
(ii) the Receivables Purchase Agreement constitutes
the legal, valid and binding agreement of each of the
Originators and the Transferor, enforceable in accordance
with its terms, subject (a) to the effect of bankruptcy,
insolvency, reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally and
court decisions with respect thereto, (b) to the
understanding that no opinion is expressed as to the
application of equitable principles in any proceeding,
whether at law or in equity, and (c) to limitations of
public policy under applicable securities laws as to rights
of indemnity and contribution thereunder;
(iii) each of the Pooling and Servicing Agreement
and the Loan Agreement constitutes the legal, valid and
binding agreement of Transferor, enforceable in accordance
with its terms, subject (a) to the effect of bankruptcy,
insolvency, reorganization, moratorium and similar laws
relating to or affecting creditors' rights generally and
court decisions with respect thereto, (b) to the
understanding that no opinion is expressed as to the
application of equitable principles in any proceeding,
whether at law or in equity, and (c) to limitations of
public policy under applicable securities laws as to rights
of indemnity and contribution thereunder;
(iv) the Registration Statement has become effective
under the Securities Act, and, to the best of their
knowledge and information, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
are pending or contemplated under the Securities Act, and
the Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective
effective or issue dates, complied as to form in all
material respects with the requirements of the Securities
Act and the Rules and Regulations.
(v) Such counsel has participated in conferences
with representatives of the Transferor, the Originators and
the Representative, at which the contents of the
Registration Statement, the Prospectus and related matters
were discussed and, although such counsel is not passing
upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except to the
extent set forth in paragraph (ix) below), on the basis of
the foregoing (relying as to materiality to a large extent
upon the opinions of officers and other representatives of
the Transferor and the Originators), no facts have come to
such counsel's attention which would lead such counsel to
believe that the Registration Statement at the time it
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 no misleading or that the Prospectus, on the date
hereof, includes an untrue statement of a material fact 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 (other than, in
the case of both the Registration Statement and the
Prospectus, the financial statements and other financial and
statistical information contained therein or incorporated by
reference therein, as to which, in each case, no view shall
be expressed);
(vi) the Certificates, the Receivables Purchase
Agreement and the Pooling and Servicing Agreement each
conform in all material respects with the description
thereof contained in the Registration Statement and the
Prospectus;
(vii) the Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of
1939, as amended;
(viii) the Trust is not an "investment company"
within the meaning of the Investment Company Act;
(ix) the statements in the Registration Statement
under the heading "Certain Legal Aspects of the
Receivables-Transfer of Receivables", "U.S. Federal Income
Tax Consequences" and "ERISA Considerations" to the extent
that they constitute statements 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;
(x) the Receivables constitute "general intangibles"
as defined in the Uniform Commercial Code in the State of
New York;
(xi) (x) the Certificates will properly be treated
as indebtedness for federal income tax purposes and (y) the
Trust will not be classified as an association or a publicly
traded partnership taxable as a corporation for federal
income tax purposes; and
(xii) such other opinions as the Rating Agencies may
require.
In rendering such opinion, Stroock & Stroock & ▇▇▇▇▇ may rely on the
opinions of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ and internal counsel to Transferor and
Originators, as to the matters dealt with in such opinions.
(3) The favorable opinion of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, counsel
to Transferor, dated the Closing Date and satisfactory in form and
substance to the Representative and its counsel, and substantially to
the effect that:
(i) the Receivables constitute "general intangibles"
as defined in the Uniform Commercial Code in effect in the
State of Pennsylvania;
(ii) Uniform Commercial Code financing statements
with respect to the Investor Interest in the Receivables and
the proceeds thereof have been filed in the office of the
Secretary of the Commonwealth of Pennsylvania. No other
filings or other actions, with respect to the Trustee's
interest in the Receivables transferred and to be
transferred by Transferor to the Trust, are necessary to
perfect the interest of the Trustee in the Receivables, and
the proceeds thereof, against third parties, except that
appropriate continuation statements must be filed at
five-year intervals; and
(iii) in the event that a court were to conclude
that the assignment of the Receivables, all documents and
instruments relating thereto and all proceeds thereof to the
Trustee pursuant to the Pooling and Servicing Agreement was
not a sale, the Pooling and Servicing Agreement, together
with the filing of the financing statements referred to in
paragraph (ii) above, create a first priority perfected
security interest in the Receivables transferred and to be
transferred by Transferor to the Trust, all documents and
instruments relating thereto and all proceeds thereof, prior
to any security interests which may be perfected under
Pennsylvania law by the filing of financing statements (in
rendering such opinion counsel may take such exceptions as
are appropriate and reasonably acceptable under the
circumstances).
(4) The favorable opinion or opinions of internal counsel of
each of the Originators and/or of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, counsel to
Originators, dated the Closing Date and satisfactory in form and
substance to the Representative and its counsel, and in the aggregate
substantially to the effect that:
(i) each of the Originators has been duly organized
and licensed as a corporation and is validly existing and in
good standing under the laws of New York and California,
respectively, is duly qualified to do business and is in
good standing under the laws of each jurisdiction where it
conducts its business other than where the failure to be so
qualified would not have a material adverse effect on
Originator's business, and has full corporate power and
authority to own its properties, to conduct its business as
described in the Registration Statement and the Prospectus,
to enter into and perform its obligations under the
Specified Agreements to which it is a party and to
consummate the transactions contemplated hereby and thereby;
(ii) each of the Specified Agreements to which it is
a party has been duly authorized, executed and delivered by
each Originator, as the case may be;
(iii) neither the execution and delivery of the
Specified Agreements to which it is a party, nor the
consummation of any of the transactions contemplated herein
or therein, nor the fulfillment of the terms of the
Specified Agreements, will conflict with or violate, result
in a material breach of or constitute a default under (A)
any Requirements of Law applicable to either of the
Originators or any statute or regulation currently
applicable, (B) any term or provision of any order known to
such counsel to be currently applicable to either of the
Originators of any court, regulatory body, administrative
agency or governmental body having jurisdiction over either
of the Originators, as the case may be, or (C) any term or
provision of any indenture or other agreement or instrument
known to such counsel to which either of the Originators is
a party or by which either of them or any of their
properties are bound;
(iv) except as otherwise disclosed in the Prospectus
(and any supplements thereto) or the Registration Statement,
there is no pending or, to the best knowledge of such
counsel, threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator with respect to the Specified Agreements to which
the Originators are a party or any of the transactions
contemplated herein or therein or with respect to the
Originators which would have a material adverse effect on
the Certificates or the Trust or upon the ability of either
of the Originators to perform its obligations under the
Specified Agreements; and the statements included in the
Registration Statement, and the Prospectus (and any
supplements thereto) describing (A) legal proceedings
relating to the Originators and (B) the insurance premium
finance loan agreements, regulation of premium finance
companies and state insurance guaranty funds in each case
fairly summarize the matters therein described;
(v) such counsel has no reason to believe that at
the Effective Date the Registration Statement contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the
Prospectus (and any supplements thereto as of the Closing
Date) includes any untrue statement of a material fact or
omits to state a material fact necessary to make the
statements therein, in light of the circumstances under
which they were made, not misleading (other than, in both
cases, financial and statistical information contained or
required to be contained therein as to which such counsel
need express no belief) (such belief may be limited to the
sections of the Prospectus under the headings "Prospectus
Summary -- Trust Assets," "Business of the Originators," and
"The Receivables");
(vi) no approval, authorization, consent, order,
registration, filing, qualification, license or permit of or
with any court or governmental agency or body is required
for the consummation or performance by the Originators, the
Transferor, the Trustee or the Trust of the transactions
contemplated by, or performance of their respective
obligations under any of the Specified Agreements, except
such as have been obtained under the Securities Act and such
as may be required under the blue sky laws of any
jurisdiction inside the United States in connection with the
purchase and distribution of the Class B Certificates by the
Underwriters and such filings or other approvals (specified
in such opinion) as have been made or obtained; and
(vii) such counsel has been advised of the
Originators' standard operating procedures relating to the
Originators' acquisition of a perfected first priority
security interest in the unearned premiums securing the
obligations of the borrowers under insurance premium finance
agreements originated by Originators in the ordinary course
of the Originators' business. Assuming that the Originators'
standard operating procedures are followed with respect to
the perfection of security interests in the unearned
premiums relating to the Receivables (such counsel having no
reason to believe that the Originators has not or will not
continue to follow its standard operating procedures in
connection with the perfection of security interests in
unearned premiums), the Originator has acquired or will
acquire a perfected first priority security interest in the
unearned premiums relating to the Receivables.
In rendering such opinion counsel may rely as to matters of
fact, to the extent deemed proper and as stated therein, on
certificates of responsible officers of the Trust, Transferor and
public officials. References to the Prospectus in this paragraph (d)
include any supplements thereto.
(5) The favorable opinion or opinions of internal counsel of
Back-up Servicer and/or of ▇▇▇▇▇▇▇ & ▇▇▇▇, ▇.▇., counsel to Back-up
Servicer, dated the Closing Date and satisfactory in form and substance
to the Representative and its counsel, and in the aggregate
substantially to the effect that:
(i) Each of PFSI and PFSIC has been duly organized
and licensed as a corporation and is validly existing and in
good standing under the laws of its incorporation, is duly
qualified to do business and is in good standing under the
laws of its incorporation and has full corporate power and
authority to enter into and perform its obligations under
the Pooling and Servicing Agreement, and to consummate the
transactions contemplated thereby;
(ii) each of the Specified Agreements as to which it
is a party to have been duly authorized, executed and
delivered by the Back-up Servicer;
(iii) neither the execution of the Pooling and
Servicing Agreement nor the performance by the Back-up
Servicer of its obligations as a successor Servicer will
conflict with or violate, result in a material breach of or
constitute a default under (A) any Requirements of Law
applicable to Back-up Servicer, (B) any term or provision of
any order known to such counsel to be currently applicable
to Back-up Servicer of any court, regulatory body,
administrative agency or governmental body having
jurisdiction over Back-up Servicer, as the case may be, or
(C) any term or provision of any indenture or other
agreement or instrument known to such counsel to which
Back-up Servicer is a party or by which any of the Back-up
Servicer's properties are bound;
(iv) assuming the laws of the State of New York are
the same as the laws of the State of Missouri with respect
to PFSI, and California with respect to PFSIC, the Pooling
and Servicing Agreement constitutes the legal, valid and
binding obligation of PFSI and PFSIC, respectively,
enforceable in accordance with its respective terms, except
that (y) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to
creditors' rights and (z) the remedy of specific performance
and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought;
and
(v) no approval, authorization, consent, order,
registration, filing, qualification, license or permit of or
with any court or governmental agency or body is required
for the consummation or performance by the Back-up Servicer
of the transactions contemplated by, or performance of its
obligations under the Pooling and Servicing Agreement
(including the performance of the Back-up Servicer of the
obligations of the Servicer under the Pooling and Servicing
Agreement), except such as have been made or obtained (as
specified in such opinion).
(6) Reliance letters relating to each opinion rendered to the
Trustee or any Rating Agency by Reed, Smith, ▇▇▇▇ & ▇▇▇▇▇▇ or any other
counsel to Transferor in connection with the rating of the
Certificates.
(7) The favorable opinion of internal counsel to the Trustee,
dated the Closing Date and satisfactory in form and substance to the
Representative and its counsel to the effect that:
(i) The Trustee has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the United States of America with full power and
authority (corporate and other) to own its properties and
conduct its business, as presently conducted by it, and to
enter into and perform its obligations under the Specified
Agreements to which it is a party and to issue the
Certificates and the Collateral Interest;
(ii) each of the Specified Agreements to which it is
a party has been duly authorized, executed and delivered by
the Trustee;
(iii) assuming the laws of the State of Illinois are
the same as the laws of the State of New York, the Specified
Agreements to which it is a party constitute the legal,
valid and binding obligation of the Trustee, enforceable in
accordance with their respective terms, except that (y) the
enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and
(z) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(iv) the Certificates have been duly executed,
authenticated and delivered by the Trustee;
(v) neither the execution and delivery by the
Trustee of the Specified Agreements to which it is a party
nor the consummation of any of the transactions by the
Trustee contemplated thereby required the consent or
approval of, the giving of notice to, the registration with
or the taking of any other action with respect to, any
governmental authority or agency under any existing federal
or state law governing the banking or trust powers of the
Trustee; and
(vi) the execution and delivery of the Specified
Agreements to which it is a party by the Trustee and the
performance by the Trustee of their respective terms do not
conflict with or result in a violation of (A) any law or
regulation of the United States of America or the State of
Illinois governing trust powers of the Trustee, (B) the
Articles of Association or By-Laws of the Trustee, or (C) to
the best of their knowledge, any indenture, lease, or other
material agreement to which the Trustee is a party or to
which its assets are subject.
(e) The Representative shall have received a certificate dated the
Closing Date of the President, any Vice President, the Treasurer or any
Assistant Treasurer, of Transferor in which such officer shall state that the
representations and warranties of Transferor in this Agreement are true and
correct, and that Transferor has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission, and subsequent to the date of
the most recent financial statements of Transferor delivered to the
Representative hereunder, there has been no material adverse change in the
condition, financial or otherwise, whether or not arising from transactions in
the ordinary course of business, of Transferor except as set forth in or
contemplated by the Registration Statement and the Prospectus.
(f) The Representative shall have received a certificate dated the
Closing Date of the President, any Vice President, the Treasurer or any
Assistant Treasurer, of each of the Originators in which such officer shall
state that the representations and warranties of each of the Originators in
Specified Agreements to which it is a party are true and correct, and that each
of the Originators has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to the Closing
Date.
(g) The Class B Certificates shall be rated at least "A2" by ▇▇▇▇▇'▇
and "A" by Standard & Poor's and the Class A Certificates shall be rated "Aaa"
by ▇▇▇▇▇'▇ and "AAA" by Standard & Poor's.
(h) The Representative shall have received evidence satisfactory to it
and its counsel that, on or before the Closing Date, UCC-1 financing statements
have been filed in the office of the Secretary of State of the State of New York
and the office of the Secretary of State of the State of California reflecting
the interest of the Transferor in the Receivables and the proceeds thereof and
the office of the Secretary of the Commonwealth of Pennsylvania reflecting the
interest of the Trust in the Receivables and the proceeds thereof.
(i) The Representative and Transferor shall have received from counsel
for the Collateral Interest Holder reasonably acceptable to the Representative
and Transferor, the favorable opinion or opinions, dated the Closing Date and
satisfactory in form and substance to the Representative, its counsel,
Transferor and its counsel, and in the aggregate substantially to the effect
that:
(1) The Collateral Interest Holder is a corporation duly
organized and validly existing under the laws of the State of Delaware
and has the corporate power and authority under the laws of the State
of Delaware to execute, deliver and perform its obligations under the
Loan Agreement;
(2) the Loan Agreement has been duly and validly authorized,
executed and delivered by the Collateral Interest Holder and
constitutes the legal, valid and legally binding obligation of the
Collateral Interest Holder enforceable against the Collateral Interest
Holder in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
liquidation, moratorium, readjustment of debt or other similar laws
affecting the enforcement of creditors' rights generally, as such laws
may be applied in the event of a bankruptcy, insolvency,
reorganization, liquidation, moratorium, readjustment of debt of, or
the appointment of a receiver with respect to the property of, or a
similar event applicable to the Collateral Interest Holder; and
(3) all consents, approvals, authorizations, licenses, rulings
or orders of or actions by any Delaware or federal governmental
authority and all filings, recordings or publications, if any, required
on the part of the Collateral Interest Holder in connection with the
execution, delivery or performance by the Collateral Interest Holder of
the Loan Agreement have been obtained or made and are in full force and
effect.
(j) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not have
been any change, or any development involving a prospective change, in or
affecting the business or properties of the Trust any Originator or Transferor
the effect of which, in any case referred to above, is, in the judgment of the
Underwriters, so material and adverse as to make it impractical or inadvisable
to proceed with the offering or the delivery of the Class B Certificates as
contemplated by the Registration Statement and the Prospectus (and any
supplements thereto).
(k) Each of the representations and warranties of the Originators,
Servicer, Back-up Servicer and Transferor contained in the Specified Agreements
are true and correct as of the Closing Date.
(l) Simultaneously with or prior to the Closing Date, $440,000,000
aggregate initial principal amount of the Class A Certificates shall have been
sold to the Class A Underwriters.
Transferor will provide or cause to be provided to the Underwriters
such conformed copies of such opinions, certificates, letters and documents as
the Underwriters may reasonably request.
Section 7. Indemnification and Contribution. (a) Transferor will
indemnify and hold harmless each Underwriter and each Person who controls any
Underwriter within the meaning of the Securities Act against any losses, claims,
damages or liabilities, joint or several, to which the Underwriters or any of
them may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus or any
amendment or supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter and each Person who
controls any Underwriter within the meaning of the Securities Act for any actual
legal or other expenses reasonably incurred by the Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that Transferor will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from any of such documents
in reliance upon and in conformity with written information furnished to
Transferor by any Underwriter specifically for use therein.
(b) Each Underwriter, severally, agrees to indemnify and hold harmless
Transferor against any losses, claims, damages or liabilities to which
Transferor may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, the Prospectus or
any amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to Transferor by such Underwriter specifically for use
therein, and will reimburse any actual legal or other expenses reasonably
incurred by Transferor in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action or the assertion by a third party of
a claim, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under subsection (a) or (b) above, notify
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party except and to the extent of any prejudice to
such indemnifying party arising from such failure to provide such notice. In
case any such action is brought against any indemnified party and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by Transferor on the
one hand and the Underwriters on the other from the offering of the Class B
Certificates or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of Transferor on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by Transferor on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Class B Certificates (before
deducting expenses) received by Transferor bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by Transferor or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required tocontribute
any amount in excess of the underwriting discount applicable to the Class B
Certificates purchased by such Underwriter hereunder. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
(e) The obligations of Transferor under this Section shall be in
addition to any liability that Transferor may otherwise have and shall extend,
upon the same terms and conditions, to each Person, if any, who controls any
Underwriter within the meaning of the Securities Act; and the obligations of any
Underwriter under this Section shall be in addition to any liability that such
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each director of Transferor, to each officer of Transferor who
signed the Registration Statement and to each Person, if any, who controls
Transferor within the meaning of the Securities Act.
Section 8. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of Transferor or its officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation or statement as to the results thereof, made by or on
behalf of the Underwriters, Transferor or any of their respective
representatives, officers or directors or any controlling Person, and will
survive delivery of and payment for the Class B Certificates. If for any reason
the purchase of the Class B Certificates by the Underwriters is not consummated,
Transferor shall remain responsible for the expenses to be paid or reimbursed by
Transferor pursuant to Section 5(g) hereof and the respective obligations of
Transferor and the Underwriters pursuant to Section 7 hereof shall remain in
effect. If the purchase of the Class B Certificates by the Underwriters is not
consummated for any reason other than solely because of the occurrence of any
event specified in clause (iii), (iv) or (v) of Section 6(c) hereof, Transferor
will reimburse the Underwriters for all actual out-of-pocket expenses (including
fees and disbursements of counsel to the extent previously agreed) reasonably
incurred by them in connection with the offering of the Class B Certificates.
Section 9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Class B Certificates agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the amount
of Class B Certificates set forth opposite their names in Schedule I hereto
bears to the aggregate amount of Class B Certificates set forth opposite the
names of all the remaining Underwriters) the Class B Certificates which the
defaulting Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Class B Certificates
which the defaulting Underwriter or Underwriters agreed but failed to purchase
shall exceed 10% of the aggregate principal amount of Class B Certificates set
forth in Schedule I hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Class B Certificates, and if such nondefaulting Underwriters do not purchase all
the Class B Certificates, this Agreement will terminate without liability to any
non-defaulting Underwriter, the Trust or Transferor. In the event of a default
by any Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding seven days, as the Underwriters shall
determine in order that the required changes in the Registration Statement and
the Prospectus (and any supplements thereto) or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to Transferor and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
Section 10. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to them c/o CS First Boston Corporation, 55 East 52nd Street, Park
Avenue Plaza, New York, New York 10055, Attention: Investment Banking
Department--Transactions Advisory Group; or if sent to Transferor will be
mailed, delivered or telegraphed and confirmed to it at Mellon Bank, N.A., ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Secretarial Services Department.
Section 11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling Persons referred to in Section 7 hereof,
and no other Person will have any right or obligation hereunder.
Section 12. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
Section 13. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to any otherwise applicable principles of conflicts of laws.
Section 14. Miscellaneous. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
Section 15. Representative. The Representative will act for the
several Underwriters in connection with this Agreement and the transactions
contemplated hereby and any action under this Agreement taken by the
Representative will be binding upon all the Underwriters.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us one of the counterparts duplicate
hereof, whereupon it will become a binding agreement between Transferor and the
several Underwriters in accordance with its terms.
Very truly yours,
MELLON BANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: _______________
Title: ________________
The foregoing Underwriting Agreement is hereby confirmed and accepted, as of the
date first above written:
CS FIRST BOSTON CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name:
Title:
For itself and the other Underwriters named in Schedule I to the foregoing
Underwriting Agreement.
SCHEDULE I
Principal Amount of
CLASS B UNDERWRITERS CLASS B CERTIFICATES
CS First Boston.................................................$12,500,000
Mellon Financial Markets, Inc...................................$12,500,000
Principal Amount of
CLASS A UNDERWRITERS CLASS A CERTIFICATES
CS First Boston Corporation.....................................$110,000,000
Mellon Financial Markets, Inc...................................$110,000,000
Chase Securities Inc............................................$110,000,000
▇.▇. ▇▇▇▇▇▇ Securities & Co.....................................$110,000,000