1
COPELCO CAPITAL FUNDING TRUST 1999-A
_____% CLASS E LEASE-BACKED NOTES
____% CLASS R-1 LEASE RESIDUAL BACKED NOTES
____% CLASS R-2 LEASE RESIDUAL BACKED NOTES
SERIES 1999-A
PLACEMENT AGENT AGREEMENT
February __, 1999
PRUDENTIAL SECURITIES INCORPORATED
One New York Plaza, 14th Floor
New York, New York 10292-2014
Ladies and Gentlemen:
Copelco Capital Funding LLC 99-1, a limited liability company organized
and existing under the laws of Delaware (the "Issuer") and Copelco Capital,
Inc., a corporation organized and existing under the laws of Delaware
("Copelco"), hereby agree with you as follows:
Section 1. Issuance and Sale of Notes. The Issuer has authorized the
issuance of $___________ of ____% Class E Lease-Backed Notes, $___________ of
____% Class R-1 Lease Residual Backed Notes and $___________ of ____% Class R-2
Lease Residual Backed Notes (collectively, the "Class R Notes") Series 1998-A
(the "Notes"). The Notes will be issued on __________, 1999 or such other date
as we shall mutually agree upon (the "Closing Date") pursuant to an Indenture,
dated as of March 1, 1999 (the "Indenture"), between the Issuer, Manufacturers
and Traders Trust Company (the "Trustee") and Copelco, as servicer. The Notes
are more fully described in the Private Placement Memorandum (as defined below),
a copy of which the Issuer is furnishing to you. The Notes will evidence secured
debt obligations of the Issuer. The assets of the Issuer will include a pool of
business, manufacturing and healthcare equipment lease contracts, including all
payments due thereunder (the "Leases") and certain interests in the underlying
equipment (the "Equipment"). The Issuer has also authorized the issuance of
$___________ aggregate principal amount of the Issuer's _____% Class A-1
Lease-Backed Notes, Series 1999-A (the "Class A-1 Notes"), $__________ aggregate
principal amount of the Issuer's ____% Class A-2 Lease-Backed Notes, Series
1999-A (the "Class A-2 Notes"), $___________ aggregate principal amount of the
Issuer's ____% Class A-3 Lease-Backed Notes, Series 1999-A (the "Class A-3
Notes"), $___________ aggregate principal amount of the Issuer's ____% Class A-4
Lease-Backed Notes, Series 1999-A (the "Class A-4 Notes"; together with the
Class A-1 Notes, Class A-2 Notes and Class A-3 Notes, the "Class A Notes")
$___________ of the ____% Class B
2
Lease-Backed Notes, Series 1999-A (the "Class B Notes") $___________ of the
____% Class C Lease-Backed Notes, Series 1999-A (the "Class C Notes") and
$___________ of the ____% Class D Leased-Backed Notes Series 1999-A (the "Class
D Notes"). The Class A Notes, the Class B Notes, the Class C Notes and the Class
D Notes are being sold in a public offering and are not included in this private
placement. A copy of the Prospectus dated ___________ (the "Prospectus")
relating to such public offering is included in the Private Placement Memorandum
(as defined below). Capitalized terms used and not defined herein shall have the
meanings specified in the Indenture.
Section 2. Appointment of Placement Agent; Placement of Notes.
(a) The Issuer hereby appoints you as exclusive Placement Agent in
connection with the placement of all of the Notes (the "Placement Agent") for
the period (the "Offering Period") from the date hereof until such date as may
be agreed between us (the "Offering Termination Date"). Subject to the
performance in all material respects by the Issuer of its obligations to be
performed hereunder, and to the completeness and accuracy in all material
respects of all of the representations and warranties of the Issuer and Copelco
contained herein, you hereby accept such agency and agree on the terms and
conditions herein set forth to purchase, or to find qualified purchasers
("Purchasers") for, all of the Notes on the Closing Date. Your agency hereunder
is not terminable, except as provided herein, by the Issuer or Copelco without
your permission and shall continue until the close of business on the Offering
Termination Date.
(b) In the event the offering is commenced but no Notes shall have
been subscribed for prior to the Offering Termination Date, your agency and this
Private Placement Agreement (the "Agreement") shall terminate without obligation
on your part or on the part of the Issuer except as provided in Section 7 hereof
and except that the indemnification and contribution referred to in Section 8
hereof shall continue after such termination of this Agreement.
Section 3. Delivery. Delivery of the Notes to the purchasers thereof
(the "Purchasers") shall be made at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 A.M., New York time, on the
Closing Date. The denominations of the Notes to be delivered and the name in
which each such Note is to be registered will be set forth in a notice to be
delivered by you on behalf of the Purchasers to the Trustee. The Issuer agrees
to have the Notes available for inspection, checking and packaging by the
Placement Agent in New York, New York, not later than 1:00 P.M., New York City
time, on the Business Day prior to the Closing Date.
Section 4. Representations and Warranties.
(a) The Issuer hereby represents and warrants to, and agrees with you,
as follows:
(i) The Issuer, with your assistance, will prepare and furnish
to you by the Closing Date a copy of a Private Placement Memorandum dated
_______, 1999 relating to the Class E Notes and a copy of a Private
Placement Memorandum dated _______, 1999 related to the Class R Notes
(collectively, as supplemented and amended, the "Private Placement
Memorandum") relating to the Notes. The Private Placement Memorandum
2
3
does not, as of its date, and as of the date hereof will not, contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Issuer makes no representations or warranties as to the
Underwriting Information (as defined in Section 8(b) hereof).
(ii) This Agreement has been duly authorized, executed and
delivered by the Issuer and constitutes a legal, valid and binding agreement
of the Issuer enforceable in accordance with its terms, except that the
provisions hereof relating to indemnification of the Placement Agent may be
subject to limitations of public policy.
(iii) Each of the Indenture and the Assignment and Servicing
Agreement have been duly authorized by the Issuer, and, when executed and
delivered by the Issuer, will constitute the legal, valid and binding
obligation of the Issuer, enforceable in accordance with its terms.
(iv) The issuance of the Notes has been duly authorized by the
Issuer and, when duly and validly executed, authenticated and delivered in
accordance with the Indenture, will be the legal, valid and binding
obligations of the Issuer, enforceable in accordance with their terms, and
entitled to the benefits of the Indenture.
(v) The issuance and sale of the Notes and the performance of
this Agreement, the Indenture and the Assignment and Servicing Agreement by
the Issuer will not (A) not conflict with or result in a breach of, and will
not constitute a default under any of the provisions of, its certificate of
incorporation or any law, governmental rule or regulation, or any judgment,
decree or order binding on the Issuer or its properties, or any of the
provisions of any indenture, mortgage, deed of trust, contract or other
agreement or instrument to which the Issuer is a party or by which it is
bound or (B) result in the creation or imposition of any Adverse Claim and
no consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
issue and sale of the Notes or the consummation by the Issuer of the
transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase of the Notes by the Purchasers. As used herein, "Adverse Claim"
means a lien, pledge, security interest or other charge or encumbrance.
(vi) The Issuer is not, and will not, as of the Closing Date, be
an "investment company" under the Investment Company Act of 1940, as amended
(the "1940 Act").
(b) Copelco hereby represents and warrants to and agrees with the
Placement Agent as follows:
(i) This Agreement has been duly authorized, executed and
delivered, the Assignment and Servicing Agreement has been duly authorized,
executed and delivered, and this Agreement constitutes, and when executed
and delivered, the Assignment and
3
4
Servicing Agreement will constitute, legal, valid and binding obligations of
Copelco, enforceable in accordance with their respective terms, except that
the provisions hereof relating to indemnification of the Placement Agent may
be subject to limitations of public policy.
(ii) The performance of this Agreement by Copelco, and the
consummation by Copelco of the transactions herein contemplated, will not
(A) conflict with or result in a breach of, and will not constitute a
default under any of the provisions of its certificate of incorporation or
by-laws or any law, governmental rule or regulation, or any judgment, decree
or order binding on Copelco or its properties, or any of the provisions of
any indenture, mortgage, deed of trust, contract or other agreement or
instrument to which Copelco is a party or by which it is bound or (B) result
in the creation or imposition of any Adverse Claim and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the consummation by
Copelco of the transactions contemplated by this Agreement, except such
consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase of the Notes by the Purchasers.
(iii) Copelco hereby makes and repeats the representations and
warranties set forth in Section 2 of the Assignment and Servicing Agreement.
Such representations and warranties are incorporated by reference in this
Section 4(b), and the Placement Agent and the Purchasers may rely thereon as
if such representations and warranties were fully set forth herein.
(iv) Copelco represents and warrants it has delivered to the
Placement Agent complete and correct copies of its balance sheet and
statements of income and retained earnings reported by Copelco Capital Inc.
and Copelco Financial Services Group, Inc. (the "Copelco Entities") for the
year ended December 31, 1997 and the period ended September 30, 1998. Except
as set forth in or contemplated in the Private Placement Memorandum, there
has been no material adverse change in the condition (financial or
otherwise) of the Copelco Entities since September 30, 1998.
(v) Any taxes, fees and other governmental charges arising from
the execution and delivery of this Agreement, the Assignment and Servicing
Agreement and the Indenture and in connection with the execution, delivery
and issuance of the Notes and with the transfer of the Leases and the
Equipment, have been paid or will be paid by Copelco.
(c) Each of the Issuer and Copelco represents and warrants to you that
there is no pending or threatened action, suit or proceeding against or
affecting it in any court or tribunal or before any arbitrator of any kind or
before or by any governmental authority (i) asserting the invalidity of this
Agreement, the Assignment and Servicing Agreement, the Indenture or the Notes,
(ii) seeking to prevent the issuance of the Notes or the consummation of any of
the transactions contemplated by this Agreement, the Assignment and Servicing
Agreement or the Indenture or (iii) seeking any determination or ruling that
might materially and adversely affect (A) its performance of its obligations
under this Agreement, the Assignment and Servicing Agreement or the Indenture
4
5
(as applicable) or (B) the validity or enforceability of this Agreement, the
Assignment and Servicing Agreement, the Indenture or the Notes.
(d) The Placement Agent represents and warrants to, and agrees with
Copelco and the Issuer that:
(i) It understands that the Notes have not been registered under
the Securities Act of 1933 (the "1933 Act"), in reliance upon the exemption
provided in Section 4(2) of the 1933 Act, and it hereby covenants and agrees
that it will not offer or sell the Notes in a manner that would cause such
exemption to be inapplicable. Such Placement Agent has not utilized and will
not utilize any form of general solicitation or general advertising in
connection with the placement of the Notes, including any advertisement,
article, notice or other communication published in any newspaper, magazine
or similar medium or broadcast over television or radio, or conduct any
seminar or meeting with respect to the Notes whose attendees have been
invited by general solicitation or advertising.
(ii) The Notes will only be offered and sold by the Placement
Agent to Purchasers to whom the Placement Agent have delivered a Private
Placement Memorandum.
(iii) It is understood that Copelco and the Issuer have only
authorized the Placement Agent to distribute the Private Placement
Memorandum, the information specifically referred to therein and any other
documents authorized by Copelco or the Issuer and the Placement Agent agrees
and covenants to Copelco and the Issuer that it shall offer and sell the
Notes only pursuant to delivery of such materials.
(iv) The Placement Agent shall advise Copelco and the Issuer of
the jurisdictions in which it desires to sell the Notes.
Section 5. Covenants of the Issuer and Copelco. The Issuer and
Copelco, jointly and severally, hereby covenant and agree with you as follows:
(a) Each of the Issuer and Copelco will promptly advise the Placement
Agent of the receipt by any of them of any notification with respect to the
suspension of the qualification of the Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Issuer will
not prepare any amendment or supplement to the Private Placement Memorandum to
which the Placement Agent reasonably objects.
(b) If, at any time when a Private Placement Memorandum relating to
the Notes is to be delivered to a potential Purchaser, any event occurs as a
result of which the Private Placement Memorandum as then supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary, in the
opinion of the Placement Agent, to supplement such Private Placement Memorandum,
the Issuer promptly will prepare and deliver to the Placement Agent or any such
potential Purchaser, subject to paragraph (a) of this Section 5, a supplement
which will correct such statement or omission.
5
6
(c) Each of the Issuer and Copelco understands that pursuant to this
Agreement each potential Purchaser may request documents or information in
addition to those referred to in Section 5(b) relating to Copelco, the Issuer,
and the Leases. Each of the Issuer and Copelco will provide to you and such
Purchaser all such documents and opportunities to meet with officials of Copelco
or the Issuer as such potential Purchasers shall reasonably request or have
requested; it being understood that all such documents and disclosures may be
subject to appropriate confidentiality agreements. Upon request, Copelco and the
Issuer will make available to Noteholders and to you such information as will
satisfy the provisions of Rule 144A under the 1933 Act in order to effect
resales of the Notes pursuant thereto.
(d) Copelco and the Issuer will furnish to you, so long as delivery of
a placement memorandum is desired by you, as many copies of the Private
Placement Memorandum relating to the Notes and any supplement thereto as you may
reasonably request.
(e) Copelco and the Issuer will take all reasonable actions requested
by you to arrange for the qualification of the Notes for sale under the laws of
the jurisdictions within the United States as you may designate and will
maintain such qualifications in effect as long as required for the completion of
the placement of the Notes; provided, that the Issuer shall not be required to
register the Notes under the 1933 Act in connection therewith if the Issuer
shall be required to qualify as a foreign corporation doing business in any such
jurisdiction.
(f) For so long as the Notes are outstanding, the Issuer and Copelco
shall deliver to you by first-class mail as soon as practicable a copy of all
reports and notices delivered to the Trustee or the Noteholders under the
Indenture.
(g) For so long as the Notes are outstanding, the Issuer and Copelco
will furnish to you as soon as practicable after filing any other information
concerning the Issuer or Copelco filed with any government or regulatory
authority which is otherwise publicly available.
(h) To the extent, if any, that any rating provided with respect to
the Notes set forth in Section 6(e) hereof is conditional upon the furnishing of
documents reasonably available to the Issuer or Copelco, the Issuer and Copelco
shall furnish such documents.
Section 6. Conditions of Placement Agent' Obligation. The obligations
of the Placement Agent to act as Placement Agent for the Notes on the Closing
Date shall be subject to the accuracy in all material respects of the
representations and warranties of the Issuer and Copelco herein, in the
Assignment and Servicing Agreement and in the Indenture, to the performance by
the Issuer and Copelco in all material respects of their obligations hereunder
and to the following additional conditions:
(a) The Issuer and Copelco shall each have delivered a certificate (an
"Officer's Certificate"), dated the Closing Date, signed by its Vice President
and its Chief Financial Officer to the effect that:
(i) the representations and warranties made by the Issuer or
Copelco (as the case may be) in this Agreement, the Indenture and the
Assignment and Servicing Agreement are true and correct in all material
respects at and as of the date of such Officer's
6
7
Certificate as if made on and as of such date (except to the extent they
expressly relate to an earlier date);
(ii) the Issuer or Copelco (as the case may be) has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied under this Agreement, the Indenture and the
Assignment and Servicing Agreement at or prior to the date of such Officer's
Certificate;
(iii) nothing has come to such officer's attention that would lead
him to believe that the Private Placement Memorandum contains any untrue
statement of a material fact or omits to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and
(iv) such officer is not aware of any notification with respect
to the suspension of the qualification of the Notes for sale in any
jurisdiction or the envision or threatening of any proceeding for that
purpose.
(b) You shall have received from ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., a favorable
opinion (subject to customary and usual qualifications) with respect to Copelco
and the Issuer, dated the Closing Date and reasonably satisfactory in form and
substance to the Placement Agent and their counsel with respect to, or to the
effect that: (i) the due formation and qualification of each of the Issuer and
Copelco and that the Issuer and Copelco, as applicable, have the corporate power
and authority to perform this Agreement, the Assignment and Servicing Agreement
and the Indenture and the transactions contemplated herein and therein; (ii) the
due authorization, execution, delivery and enforceability of this Agreement, the
Assignment and Servicing Agreement and the Indenture, as applicable, by the
Issuer and Copelco; (iii) each of this Agreement, the Assignment and Servicing
Agreement and the Indenture are the legal, valid and binding obligation of the
Issuer and Copelco, as applicable, enforceable against each of them in
accordance with its terms (subject to customary exceptions relating to
bankruptcy and laws affecting creditors' rights); (iv) the Notes have been duly
authorized, executed and delivered by the Issuer and constitute the legal, valid
and binding obligations of the Issuer, enforceable in accordance with their
terms (subject to customary exceptions as to bankruptcy and laws affecting
creditors' rights) and are entitled to the benefits of the Indenture; (v) the
issuance and sale of the Notes by the Issuer, the performance of this Agreement
by the Issuer and Copelco and the compliance by the Issuer and Copelco with the
terms of the Indenture and the Assignment and Servicing Agreement, as
applicable, and the consummation of the transactions contemplated herein and
therein will not conflict with the organizational documents of the Issuer or
Copelco, or to the best of such counsel's knowledge, any other contracts to
which the Issuer or Copelco is party or by which either of them is bound; (vi)
to the best of such counsel's knowledge, there is no legal or governmental
proceeding threatened or pending against the Issuer or Copelco which would have
a material adverse effect on the issuance of the Notes; (vii) (other than with
respect to financial data, as to which such counsel need not express an opinion)
nothing has come to such counsel's attention that leads such counsel to believe
that the Private Placement Memorandum (as of its date or the Closing Date)
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (viii) in the event a court disregarded the intent of the
parties and characterized the transfers of the Leases and the Equipment (or
interests therein) by
7
8
Copelco to the Issuer as a pledge of collateral rather than as a sale or
absolute assignment, the Assignment and Servicing Agreement and accompanying
documentation creates a valid security interest in the Leases and the Equipment
(or interests therein) under applicable law; and (ix) assuming no prior
financing statements covering the Leases are in effect, that financing
statements covering the Leases and naming (A) the Issuer as secured party and
Copelco as debtor and (B) the Issuer as debtor and the Trustee as secured party
are being filed in the appropriate filing offices of the State of New Jersey,
and that the Trustee has taken possession of the Leases and the Trustee has a
first priority perfected security interest in all right, title and interest of
Copelco and the Issuer in the Leases. In rendering such opinion, counsel may
rely, to the extent deemed proper and as stated therein, as to matters of fact
on certificates of responsible officers of the Issuer or Copelco and public
officials and as to matters of state law of jurisdictions other than the
jurisdictions in which such counsel is admitted to practice, on opinions of
local counsel satisfactory to the Placement Agent.
(c) The Placement Agent shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
special counsel for the Placement Agent, such opinion or opinions, dated the
Closing Date, with respect to the validity of the Notes, the Private Placement
Memorandum, true sale, nonconsolidation and other related matters as the
Placement Agent may require.
(d) On the date hereof and at the Closing Date, KMPG Peat Marwick shall
have furnished to the Placement Agent a letter or letters, dated the date of
this Agreement and the Closing Date, respectively, in form and substance
satisfactory to the Placement Agent.
(e) The Class E Notes shall have been rated at least BB by ▇▇▇▇ &
▇▇▇▇▇▇ Credit Rating Co. ("DCR") and Fitch IBCA, Inc. ("Fitch"), respectively,
which rating shall not have been reduced or withdrawn as evidenced by the
Officer's Certificate referred to in Section 6(b). The Class R-1 Notes shall
have been rated at least AAA by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"),
DCR, and Fitch, respectively, which rating shall not have been reduced or
withdrawn as evidenced by the Officer's Certificate referred to in Section 6(b).
The Class R-2 Notes shall have been rated at least BBB by DCR and Fitch,
respectively, which ratings shall not have been reduced or withdrawn as
evidenced by the Officer's Certificate referred to in Section 6(b).
(f) Counsel to the Trustee shall have delivered a favorable opinion
(subject to customary and usual exceptions), dated the Closing Date, as the case
may be, and satisfactory in form and substance to the Placement Agent and
counsel for the Placement Agent and to the Issuer and Copelco and their counsel
with respect to, or to the effect that: (i) the due incorporation and valid
existence of the Trustee, (ii) the due authorization, execution and delivery by
the Trustee of the Indenture, (iii) the Indenture is the legal, valid and
binding obligation of the Trustee, enforceable against the Trustee in accordance
with its terms (subject to customary and usual exceptions) and (iv) the
execution, delivery and performance of the Indenture will not conflict with the
Trustee's organizational documents.
(g) All proceedings in connection with the transactions contemplated by
this Agreement and all documents incident hereto shall be reasonably
satisfactory in form and substance to you, and you and your special counsel
shall have received such other information, certificates and documents as you or
they may reasonably request.
8
9
(h) The issuance and sale of the Class A Notes, the Class B Notes, the
Class C Notes and the Class D Notes shall have occurred.
Section 7. Fees and Expenses. In consideration of the Placement Agent
services in acting as exclusive Placement Agent for the placement of the Notes
on a firm commitment basis, the Company hereby agrees to pay to the Placement
Agent a fee in an amount equal to ____% of the initial principal amount of the
Class E Notes, ____% of the initial principal amount of the Class R-1 Notes, and
____% of the initial principal amount of the Class R-2 Notes. In the event that
(x) no closing of the sale of the Notes occurs by the Closing Date through no
fault of the Issuer or Copelco or (y) the Placement Agent terminate the
engagement pursuant to Section 10 or because any conditions precedent in Section
6 (other than Section 6(d)) have not been fulfilled, then the Issuer and
Copelco's liability to the Placement Agent shall be limited to the reimbursement
of the Placement Agent' expenses incurred through the date of termination for
its reasonable out-of-pocket and incidental expenses. In addition, whether or
not the Notes are issued or sold:
(a) Copelco shall pay the reasonable fees and expenses associated with
the transactions contemplated hereby not paid by the Placement Agent in
accordance with the provisions of Section 7(b), including, without limitation,
the following fees and expenses:
(i) Rating Agency fees payable to DCR, Fitch and Moody's with
respect to each of their ratings of the Notes;
(ii) Fees charged by the firm of independent public accountants
referred to in Section 6(d);
(iii) Filing fees in connection with the transactions
contemplated hereby;
(iv) Fees and expenses of counsel to the Placement Agent;
(v) Trustee's fees and fees of counsel to the Trustee;
(vi) the costs and expenses of printing any Private Placement
Memorandum;
(vii) the costs of printing or reproducing this Agreement, the
Blue Sky Survey and any other documents in connection with the offer, sale
and delivery of the Notes;
(viii) all expenses in connection with the qualification of the
Notes under state securities laws as provided in Section 4(a)(v), including
the fees and disbursements of counsel in connection with the Blue Sky
Survey;
(ix) the filing fees incident to securing any required review
with the National Association of Securities Dealers, Inc.;
(x) the cost of preparing the Notes;
9
10
(xi) the cost or expenses of any transfer agent or registrar;
and
(xii) all other costs and expenses incident to the performance of
their obligations hereunder which are not otherwise specifically provided
for in this Section 7; provided, however, that Copelco does not hereby waive
any rights to reimbursement from the Placement Agent in the event of the
Placement Agent' failure to perform in accordance with this Agreement.
(b) It is understood and agreed that, except as provided in Sections 8
and 9, the Placement Agent will pay securities transfer taxes on the resale of
any of the Notes by them, and any expenses connected with any placements they
may make.
Section 8. Indemnification and Contribution.
(a) The Issuer and Copelco, jointly and severally, will indemnify and
hold harmless the Placement Agent, each of the Placement Agent's officers and
directors, and each person, if any, who controls the Placement Agent within the
meaning of Section 15 of the 1933 Act from and against any and all losses,
claims, damages or liabilities, joint or several, to which the Placement Agent
or any such controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or is based upon (i) an untrue statement or
alleged untrue statement of a material fact contained in any Private Placement
Memorandum, or any amendment or supplement thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in the light of the circumstances under
which they were made, not misleading, and will promptly reimburse the Placement
Agent and each such controlling person for any legal or other expenses
reasonably incurred by such Placement Agent or such controlling person in
connection with investigating, preparing to defend or defending, or appearing as
a third party witness in connection with, any such loss, action, damage,
liability or claim as such expenses are incurred; provided, however, that the
Issuer and Copelco shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Private Placement Memorandum or any such amendment or supplement in reliance
upon and in conformity with the Underwriting Information. The foregoing
indemnity agreement is in addition to any liability which each of the Issuer and
Copelco may otherwise have to you or any person who controls you.
(b) The Placement Agent agrees to indemnify and hold harmless the
Issuer and Copelco against any losses, claims, damages or liabilities to which
the Issuer or Copelco may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) an untrue statement or alleged
untrue statement of a material fact contained in the Private Placement
Memorandum, or any amendment or supplement thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in the light of the circumstances under
which they were made, not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Private Placement Memorandum or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Issuer or Copelco by or
10
11
on behalf of such Placement Agent expressly for use therein and provided that
such written information was not based upon Company-Provided Information (as
defined herein); and will reimburse the Issuer or Copelco for any legal or other
expenses reasonably incurred by the Issuer or Copelco in connection with the
investigating, preparing to defend or defending, or appearing as a third party
witness in connection with, any such loss, claim, damage, liability or action as
such expenses are incurred. The Issuer and Copelco acknowledge that the
statements set forth in the last paragraph of the cover page and under the
heading "Underwriting" in the Prospectus, which is included with the Private
Placement Memorandum, constitute the only information furnished in writing by or
on behalf of the Placement Agent for inclusion in the Private Placement
Memorandum (the "Underwriting Information"), and each of you confirm that such
statements are correct. The foregoing indemnity agreement is in addition to any
liability which you may otherwise have to each of the Issuer and Copelco.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the claim of commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have been advised by
counsel that representation of such indemnified party and the indemnifying party
may be inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them, the indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. It is understood that the
indemnifying party shall, in connection with any such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys together with appropriate
local counsel at any time from all indemnified parties not having actual or
potential differing interests with any other indemnified party. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to appoint counsel to defend such action and approval by the indemnified party
of such counsel, the indemnifying party will not be liable for any settlement
entered into without its consent and will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence, (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). Notwithstanding the immediately preceding sentence and the first
sentence of this paragraph, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, the indemnifying party agrees
11
12
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement.
(d) You agree to deliver to the Issuer or Copelco no later than the
date on which the Prospectus Supplement is required to be filed pursuant to Rule
424 with a copy of its Derived Information (defined below).
(e) You agree, assuming all Company-Provided Information (defined
below) is accurate and complete in all material respects, to indemnify and hold
harmless the Issuer and Copelco against any and all losses, claims, damages or
liabilities, joint or several, to which they may become subject under the 1933
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
of a material fact contained in the Derived Information provided by you, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party for
any legal or other expenses reasonably incurred by him, her or it in connection
with investigating or defending or preparing to defend any such loss, claim,
damage, liability or action as such expenses are incurred. Your obligations
under this Section 8(e) shall be in addition to any liability which you may
otherwise have.
(f) Each of the Issuer and Copelco agrees to indemnify and hold
harmless the Placement Agent, each of the Placement Agent's officers and
directors and each person who controls the Placement Agent within the meaning of
Section 15 of the 1933 Act against any and all losses, claims, damages or
liabilities, joint or several, to which they may become subject under the 1933
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
of a material fact contained in the Company-Provided Information provided by the
Issuer or Copelco, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by him,
her or it in connection with investigating or defending or preparing to defend
any such loss, claim, damage, liability or action as such expenses are incurred.
Your obligation under this Section 8(f) shall be in addition to any liability
which you may otherwise have.
The procedures set forth in Section 8(c) shall be equally applicable to
Sections 8(e) and 8(f).
(g) For purposes of this Section 8, the term Derived Information means
such portion, if any, of the information delivered to the Issuer or Copelco by
the Placement Agent pursuant to Section 8(d) as:
(i) is not contained in the Private Placement Memorandum without
taking into account information incorporated therein by reference;
12
13
(ii) does not constitute Company-Provided Information; and
(iii) is of the type of information defined as Collateral Term
Sheets, Structural Term Sheets or Computational Materials (as such terms are
interpreted in the No-Action Letters).
"Company-Provided Information" means any computer tape furnished to the
Placement Agent by the Company concerning the Leases or any other information
furnished by the Company to the Placement Agent that is relied on or is
reasonably anticipated by the parties hereto to be relied on by the Placement
Agent in the course of the Placement Agent's preparation of its Derived
Information or the written information to be included in the Private Placement
Memorandum by the Placement Agent as set forth in Section 8(b) herein.
The terms "Collateral Term Sheet" and "Structural Term Sheet" shall
have the respective meanings assigned to them in the February 13, 1995 letter
(the "PSA Letter") of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ on behalf of the Public
Securities Association (which letter, and the SEC staff's response thereto, were
publicly available February 17, 1995). The term "Collateral Term Sheet" as used
herein includes any subsequent Collateral Term Sheet that reflects a substantive
change in the information presented. The term "Computational Materials" has the
meaning assigned to it in the May 17, 1994 letter (the "▇▇▇▇▇▇ letter" and
together with the PSA Letter, the "No-Action Letters") of Brown & ▇▇▇▇ on behalf
of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co., Inc. (which letter, and the SEC staff's response
thereto, were publicly available May 20, 1994).
(h) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Issuer and Copelco on the one hand and the Placement
Agent on the other from the offering of the Notes. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Issuer or Copelco on the one hand and the Placement Agent on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Issuer or Copelco on the one hand and the Placement
Agent on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Issuer
and Copelco bear to the total commissions received by the Placement Agent. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Issuer or Copelco or the Placement Agent on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Issuer, Copelco and the Placement Agent agree
that it would not be just and equitable if contributions pursuant to this
13
14
subsection (h) were determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this subsection (h). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to above in this subsection
(h) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating, preparing to defend
or defending, or appearing as a third party witness in connection with, any such
action or claim. Notwithstanding the provisions of this subsection (h), the
Placement Agent shall not be required to contribute any amount in excess of the
fee paid to the Placement Agent pursuant to Section 7 hereof. No person guilty
of fraudulent misrepresentation (within the meaning of Section 10(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(i) The obligations of the Issuer and Copelco under this Section 8
shall be in addition to any liability which the Issuer or Copelco may otherwise
have and shall extend, upon the same terms and conditions, to each person, if
any, who controls the Placement Agent within the meaning of the 1933 Act; and
the obligations of the Placement Agent under this Section 8 shall be in addition
to any liability which the Placement Agent may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Issuer
and Copelco and to each person, if any, who controls the Issuer or Copelco
within the meaning of the 1933 Act.
Section 9. Survival. The respective representations, warranties and
agreements of the Issuer, Copelco and the Placement Agent set forth or made
pursuant to this Agreement will remain in full force and effect, notwithstanding
any investigation heretofore or hereafter made by or on behalf of the Issuer,
Copelco or the Placement Agent, and such representations, warranties and
agreements made by the Issuer and Copelco shall survive the delivery and payment
for the Notes. The provisions of Section 7 and 8 shall survive the termination
or cancellation of this Agreement.
(a) No other person will have any right or obligation hereunder,
except that the provisions of this Agreement, including, without limitation, the
representations and warranties and the covenants and agreements of the Issuer
and Copelco contained herein are intended to be for the benefit of all
Purchasers and shall be enforceable against Copelco by any such Purchaser,
whether or not an express assignment to such Purchaser of rights under this
Agreement has been made by you, any intervening Purchaser or any of your or
their successors and assigns.
Section 10. Termination.
(a) This Agreement may be terminated by you in your absolute
discretion at any time upon the giving of notice at any time prior to the
Closing Date: (i) if there has been any material adverse change in the
condition, financial or otherwise, of Copelco or the Issuer, or in the earnings,
business affairs or business prospects of Copelco or the Issuer, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
outbreak or escalation of hostilities or other calamity or crisis the effect of
which on the financial markets of the United States is such as to make it, in
your reasonable judgment, impracticable to market the Notes or enforce contracts
for the sale of the Notes, or (iii) if trading generally on either the American
Stock Exchange or the New York Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said
14
15
exchanges or by order of the Commission or any other governmental authority, or
(iv) if a banking moratorium has been declared by either federal or New York
authorities. In the event of any such termination, no party will have any
liability to any other party hereto, except as otherwise provided in Section 7
or 8 hereof.
(b) This Agreement may not be terminated by the Issuer or Copelco
without the written consent of the Placement Agent, except in accordance with
law.
(c) Notwithstanding anything herein to the contrary, in the event the
Issuer or Copelco does not perform any obligation under this Agreement or any
representation and warranty hereunder is incomplete or inaccurate in any
material respect, this Agreement and all of the Placement Agent' obligations
hereunder may be immediately cancelled by the Placement Agent by notice thereof
to the Issuer or Copelco. Any such cancellation shall be without liability of
any party to any other party except that the provisions of Sections 8 and 9
hereof shall survive any such cancellation.
Section 11. Notices. All communications provided for or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by certified or registered mail, postage
prepaid, or transmitted by telex or telegraph and confirmed by a similar mailed
writing, if to you, addressed to you, at the address first stated in this
Agreement, or to such other address as you may designate in writing to the
Issuer and Copelco, if to Copelco or the Issuer addressed to Copelco or the
Issuer at East Gate Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇-5400 or to such other address as Copelco or the Issuer may have designated
in writing to you.
Section 12. Successors. This Agreement will inure to the benefit of and
be binding upon the Issuer and Copelco and their successors and assigns and the
Placement Agent and its successors and assigns.
Section 13. Entire Agreement. This Agreement and the documents referred
to herein and to be delivered pursuant hereto constitute the entire agreement
between the parties pertaining to the subject matter hereof and supersede all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties.
Section 14. Governing Law.
(a) THIS AGREEMENT IS TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK.
(b) THE ISSUER AND COPELCO HEREBY SUBMIT TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND EACH
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS SET
FORTH IN SECTION 11 HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
FIVE DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS,
15
16
POSTAGE PREPAID. THE ISSUER AND COPELCO HEREBY WAIVE ANY OBJECTION BASED ON
FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT
OF THE ISSUER OR COPELCO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR AFFECT EITHER'S RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF
ANY OTHER JURISDICTION.
(c) THE ISSUER AND COPELCO HEREBY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH THIS
AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY.
Section 15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute one and the same instrument.
Section 16. Miscellaneous. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof. If you are in agreement with the foregoing, please
sign a counterpart hereof and return the same to the Issuer or Copelco,
whereupon this Agreement shall become a binding agreement between you, and the
Issuer and Copelco.
Very truly yours,
COPELCO CAPITAL, INC.
By:_____________________________________
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: VICE PRESIDENT, CHIEF
FINANCIAL OFFICER AND
TREASURER
COPELCO CAPITAL FUNDING LLC 99-1
By:_____________________________________,
as Manager
By:_____________________________________
Name:
Title:
16
17
The foregoing Agreement is
hereby accepted and entered
into as of the date hereof.
PRUDENTIAL SECURITIES INCORPORATED,
By:______________________________
Name:
Title:
[SIGNATURE PAGE TO THE PLACEMENT AGENT AGREEMENT]
17
