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Exhibit 1.1
PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER TRUST 2000-1
ASSET-BACKED NOTES
SERIES 2000-1
UNDERWRITING AGREEMENT
<PAGE>
UNDERWRITING AGREEMENT
PRUDENTIAL SECURITIES INCORPORATED
As Representative of the several Underwriters
One New York Plaza
New York, New York 10292
June 21, 2000
Ladies and Gentlemen:
Prudential Securities Secured Financing Corporation (the "Depositor")
---------
proposes, subject to the terms and conditions stated herein and in the attached
Underwriting Agreement Standard Provisions, dated June 21, 2000 (the "Standard
--------
Provisions"), among the Depositor, PeopleFirst Finance, LLC ("PF"),
---------- --
PeopleFirst.com Inc. (the "Parent"), PF Funding II, LLC (the "Transferor") and
------ ----------
Prudential Securities Incorporated, to cause PeopleFirst.com Vehicle Receivables
Owner Trust 2000-1 (the "Issuer" or the "Trust") to issue and sell to the
------ -----
Underwriters specified in Schedule I hereto (the "Underwriters") the Securities
---------- ------------
described in Schedule II hereto (the "Offered Securities"). The Depositor, the
----------- ------------------
Parent, PF and the Transferor agree that each of the provisions of the Standard
Provisions is incorporated herein by reference in its entirety, and shall be
deemed to be a part of this Underwriting Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations
and warranties set forth therein shall be deemed to have been made at and as of
the date of this Underwriting Agreement. Each reference to the "Representative"
herein and in the provisions of the Standard Provisions so incorporated by
reference shall be deemed to refer to Prudential Securities Incorporated, as
Representative of the several Underwriters. Unless otherwise defined herein,
terms defined in the Standard Provisions are used herein as therein defined.
The Prospectus Supplement and the accompanying Base Prospectus relating to the
Offered Securities (together, the "Prospectus") are incorporated by reference
herein.
Subject to the terms and conditions set forth herein and in the
Standard Provisions incorporated herein by reference, the Depositor agrees to
cause the Issuer to issue and sell to the Underwriter, and each Underwriter
agrees to purchase, severally and not jointly, from the Issuer, the respective
aggregate principal amount of the Offered Securities set forth opposite such
Underwriter's name in Schedule I hereto, at the time and place and at the
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purchase price to the Underwriters and in the manner set forth in Schedule II
-----------
hereto.
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If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon acceptance hereof by you,
this letter and such acceptance hereof, including the provisions of the Standard
Provisions incorporated herein by reference, shall constitute a binding
agreement between the Underwriters, PF, the Parent, the Transferor and the
Depositor.
Yours truly,
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By: /s/ Evan J. Mitnick
----------------------------------
Name: Evan J. Mitnick
Title: Vice President
PEOPLEFIRST FINANCE, LLC
By: /s/ Justin Tisler
----------------------------------
Name: Justin Tisler
Title: Attorney-in-Fact
PEOPLEFIRST.COM INC.
By: /s/ Justin Tisler
----------------------------------
Name: Justin Tisler
Title:
PF FUNDING II, LLC
By: /s/ Justin Tisler
----------------------------------
Name: Justin Tisler
Title: Assistant Treasurer
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Accepted as of the date hereof:
PRUDENTIAL SECURITIES INCORPORATED,
As Representative of the Several Underwriters
By: /s/ Robert M. DiOno
-----------------------------
Name: Robert M. DiOno
Title: Managing Director
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SCHEDULE I
----------
<TABLE>
<CAPTION>
Class A-1 Class A-2 Class A-3 Class A-4
Underwriters Notes Notes Notes Notes
------------ --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Prudential Securities $23,250,000 $ 8,175,000 $25,500,000 $53,250,000
Incorporated
Barclays Capital Inc. 7,750,000 27,250,000 8,500,000 17,750,000
----------- ------------ ----------- -----------
Total $31,000,000 $109,000,000 $34,000,000 $71,000,000
</TABLE>
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SCHEDULE II
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Title of Offered Securities: PeopleFirst.com Vehicle Receivables Owner Trust
2000-1, Asset Backed Notes, Series 2000-1, Class
A-1, Class A-2, Class A-3 and Class A-4.
Terms of Offered Securities: The Offered Securities shall have the terms set
forth in the Prospectus and shall conform in all
material respects to the descriptions thereof
contained therein, and shall be issued pursuant
to an Indenture, to be dated as of June 1, 2000,
between PeopleFirst.com Vehicle Receivables
Owner Trust 2000-1, as issuer, and Norwest Bank
Minnesota, National Association, as indenture
trustee.
Purchase Price: The purchase price for the Offered Securities
shall be 100%, 100%, 100% and 100% of the
aggregate note principal balance of the Class A-
1 Notes, Class A-2 Notes, Class A-3 Notes and
Class A-4, respectively, as of the Closing Date,
plus accrued interest at the rate of 6.713% per
annum, 7.275% per annum and 7.365% per annum and
7.405% per annum, on the aggregate note
principal balance of the Class A-1 Notes, Class
A-2 Notes and Class A-3 Notes, respectively,
from and including, June 15, 2000 to, but not
including, the Closing Date.
Specified funds for payment Federal Funds (immediately available funds).
of Purchase Price:
Required Ratings: For the Class A-1 Notes, P-1 by Moody's
Investors Service, Inc. and A-1+ by Standard &
Poor's, a division of the McGraw-Hill Companies.
For the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes, Aaa by Moody's Investors
Service, Inc. and AAA by Standard & Poor's, a
division of the McGraw-Hill Companies.
Closing Date: On or about June 30, 2000 at 10:00 A.M. eastern
standard time or at such other time as the
Depositor and the Representative shall agree.
Closing Location: Clifford Chance Rogers & Wells, LLP, 200 Park
Avenue, New York, NY 10166-0153.
Name and address of Designated Representative: Prudential
Representative: Securities Incorporated.
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Address for Notices, etc.: One New York Plaza, 14th Floor
New York, New York 10292
Attn: Asset-Backed Group
STANDARD PROVISIONS TO UNDERWRITING AGREEMENT
June 21, 2000
From time to time, Prudential Securities Secured Financing
Corporation, a Delaware corporation (the "Depositor"), PeopleFirst Finance,
---------
LLC, a California limited liability company ("PF"), PeopleFirst.com Inc. (the
--
"Parent"), a Delaware corporation, and PF Funding II, LLC, a Delaware limited
-------
liability company (the "Transferor"), may enter into one or more underwriting
----------
agreements (each, an "Underwriting Agreement") that provide for the sale of
----------------------
designated securities to the several underwriters named therein (such
underwriters constituting the "Underwriters" with respect to such Underwriting
------------
Agreement and the securities specified therein). The several underwriters named
in an Underwriting Agreement will be represented by one or more representatives
as named in such Underwriting Agreement (collectively, the "Representative").
--------------
The term "Representative" also refers to a single firm acting as sole
representative of the Underwriters and to Underwriters who act without any firm
being designated as their representative. The standard provisions set forth
herein (the "Standard Provisions") may be incorporated by reference in any
-------------------
Underwriting Agreement. These Standard Provisions shall not be construed as an
obligation of the Depositor to sell any securities or as an obligation of any of
the Underwriters to purchase such securities. The obligation of the Depositor
to sell any securities and the obligation of any of the Underwriters to purchase
any of the securities shall be evidenced by the Underwriting Agreement with
respect to the securities specified therein. An Underwriting Agreement shall be
in the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of the communications
transmitted. The obligations of the underwriters under these Standard
Provisions and each Underwriting Agreement shall be several and not joint.
Unless otherwise defined herein, the terms defined in the Underwriting Agreement
are used herein as defined in the Prospectus referred to below.
1. The Offered Securities. The Depositor proposes to sell pursuant
to the applicable Underwriting Agreement to the several Underwriters named
therein motor vehicle loan backed notes (the "Notes") representing indebtedness
-----
secured primarily by the property of a trust which consists of a pool of motor
vehicle loans secured by new or used automobiles, light duty trucks, vans and
motorcycles (the "Receivables") and certain related property. The Securities
-----------
will be issued pursuant to an Indenture (the "Indenture") by and between
---------
PeopleFirst.com Vehicle Receivables Owner Trust 2000-1, as issuer (the "Issuer")
------
and Norwest Bank Minnesota, National Association, as indenture trustee (the
"Indenture Trustee"). The Issuer will be formed at the direction of the
-----------------
Depositor, pursuant to the terms of a Trust Agreement (the "Trust Agreement")
---------------
among the Depositor and Wilmington Trust Company, as owner trustee (the "Owner
-----
Trustee"). The Receivables will be sold and contributed by PF to the
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Transferor, transferred, assigned, set over and otherwise conveyed by the
Transferor to the Depositor and further transferred, assigned, set over and
otherwise conveyed by the Depositor to the Issuer pursuant to a Sale and
Servicing Agreement
<PAGE>
(the "Sale and Servicing Agreement") by and among PF, as a seller and servicer
----------------------------
(in such capacity, the "Servicer"), the Depositor, the Transferor, the Issuer,
--------
the Indenture Trustee and Norwest Bank Minnesota, National Association, as back-
up servicer and The Bank of New York, as custodian. The Issuer will pledge the
Receivables to the Indenture Trustee pursuant to the terms of the Indenture.
The Bank of New York has agreed to act as custodian (the "Custodian")
---------
for the Receivables Files pursuant to a Custodial Agreement (the "Custodial
---------
Agreement") among PF, the Servicer, the Transferor, the Owner Trustee, the
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Indenture Trustee and the Custodian.
The Offered Securities will have the benefit of a note guaranty
insurance policy (the "Policy") issued by Financial Security Assurance Inc. (the
------
"Insurer") pursuant to the terms of an Insurance and Indemnity Agreement (the
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"Insurance Agreement") among the Insurer, PF, the Transferor and the Issuer.
-------------------
The Transferor, the Insurer and Norwest Bank Minnesota, National
Association, as indenture collateral agent (the "Collateral Agent") will enter
----------------
into the Series 2000-1 Supplement to the Master Reserve Account Agreement
governing the reserve account (the "Reserve Account Agreement").
-------------------------
The Depositor, the Parent, PF and the Transferor will enter into an
indemnification agreement (the "Depositor Indemnification Agreement") pursuant
-----------------------------------
to which the Parent, PF and the Transferor will agree to indemnify the Depositor
against certain losses, claims, damages or liabilities arising in connection
with the Transaction Documents and the Offered Securities.
The Indenture, the Sale and Servicing Agreement, the Trust Agreement,
the Custodial Agreement, the Depositor Indemnification Agreement, the Policy,
the Insurance Agreement and the Reserve Account Agreement are collectively
referred to herein as the "Transaction Documents." The Parent, PF and the
---------------------
Transferor are collectively referred to herein as the "PF Entities."
-----------
The terms and rights of any particular issuance of Securities shall be
as specified in the Underwriting Agreement relating thereto and in or pursuant
to the Indenture identified in such Underwriting Agreement. The Securities
which are the subject of any particular Underwriting Agreement into which these
Standard Provisions are incorporated are herein referred to as the "Offered
-------
Securities."
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The Depositor has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File No. 333-52021),
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including a prospectus relating to the Securities under the Securities Act of
1933, as amended (the "1933 Act"). The term "Registration Statement" means such
--------
registration statement as amended to the date of the Underwriting Agreement.
The Depositor proposes to file with the Commission pursuant to Rule 424(b)
("Rule 424(b)") under the 1933 Act a supplement (the "Prospectus Supplement") to
------------ ---------------------
the prospectus included in the Registration Statement (such prospectus, in the
form it appears in the Registration Statement or in the form most recently
revised and filed with the Commission pursuant to Rule 424(b) is hereunder
referred to as the "Base Prospectus") specifically relating to the Offered
---------------
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Securities. The Base Prospectus and the Prospectus Supplement, together with
any amendment thereof or supplement thereto, is hereunder referred to as the
"Prospectus."
----------
2. Offering by the Underwriters. Upon the execution of the
Underwriting Agreement applicable to any Offered Securities and the
authorization by the Representative of the release of such Offered Securities,
the several Underwriters propose to offer for sale to the public the Offered
Securities at the prices and upon the terms set forth in the Prospectus.
3. Purchase, Sale and Delivery of the Offered Securities. Unless
otherwise specified in the Underwriting Agreement, payment for the Offered
Securities shall be made by wire transfer to an account designed by the
Depositor in immediately available funds, at the time and place set forth in the
Underwriting Agreement, upon delivery to the Representative of the Offered
Securities in definitive form (which delivery shall be made through the
facilities of The Depository Trust Company ("DTC")). The time and date of such
---
payment and delivery with respect to the Offered Securities are herein referred
to as the "Closing Date".
------------
4. Conditions of the Underwriters' Obligations. The respective
obligations of the several Underwriters pursuant to the Underwriting Agreement
shall be subject, in the discretion of the Representative, to the accuracy in
all material respects of the representations and warranties of the Depositor and
the PF Entities contained herein as of the date of the Underwriting Agreement
and as of the Closing Date as if made on and as of the Closing Date, to the
accuracy in all material respects of the statements of the officers of the
Issuer, the Depositor and the PF Entities made in any certificates pursuant to
the provisions hereof and of the Underwriting Agreement, to the performance by
each of the Depositor and the PF Entities of their respective covenants and
agreements contained herein and to the following additional conditions
precedent:
(a) All actions required to be taken and all filings required to be
made by or on behalf of the Depositor under the 1933 Act and the Securities
Exchange Act of 1934, as amended (the "1934 Act") prior to the sale of the
--------
Offered Securities shall have been duly taken or made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall be in effect; (ii) no proceedings for such
purpose shall be pending before or threatened by the Commission, or by any
authority administering any state securities or "Blue Sky" laws; (iii) any
requests for additional information on the part of the Commission shall
have been complied with to the Representative's reasonable satisfaction;
(iv) since the respective dates as of which information is given in the
Registration Statement and the Prospectus except as otherwise stated
therein, there shall have been no material adverse change in the condition,
financial or otherwise, earnings, affairs, regulatory situation or business
prospects of the Depositor or any PF Entity; (v) there are no material
actions, suits or proceedings pending before any court or governmental
agency, authority or body or threatened, affecting the Depositor or any PF
Entity or the transactions contemplated by the Underwriting Agreement; (vi)
neither the Depositor nor any PF Entity is in violation of its charter,
operating agreement or its by-laws, as applicable, or in default in the
performance or
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observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its properties may be
bound, which violations or defaults separately or in the aggregate would
have a material adverse effect on the Depositor or such PF Entity, as the
case may be; and (vii) the Representative shall have received, on the
Closing Date a certificate, dated the Closing Date and signed by an
executive officer of the Depositor and each PF Entity, to the foregoing
effect.
(c) Subsequent to the execution of the Underwriting Agreement, there
shall not have occurred any of the following: (i) if at or prior to the
Closing Date, trading in securities on the New York Stock Exchange shall
have been suspended or any material limitation in trading in securities
generally shall have been established on such exchange, or a banking
moratorium shall have been declared by New York State or federal
authorities; (ii) if at or prior to the Closing Date, there shall have been
an outbreak or escalation of hostilities between the United States and any
foreign power, or of any other insurrection or armed conflict involving the
United States which results in the declaration of a national emergency or
war, and, in the reasonable opinion of the Representative, makes it
impracticable or inadvisable to offer or sell the Offered Securities; or
(iii) if at or prior to the Closing Date, a general moratorium on
commercial banking activities in the State of New York shall have been
declared by either federal or New York State authorities.
(d) The Representative shall have received, on the Closing Date, true
and correct copies of the letter from each nationally recognized
statistical rating organization (as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the 1933 Act) that rated the Offered
Securities and confirming that, unless otherwise specified in the
Underwriting Agreement, the Offered Securities have been rated in the
highest rating categories by each such organization and that each such
rating has not been rescinded since the date of the applicable letter.
(e) The Representative shall have received, on the Closing Date, from
Clifford Chance Rogers & Wells LLP, special counsel for the PF Entities, a
favorable opinion, dated the Closing Date and reasonably satisfactory in
form and substance to the Representative and containing opinions
substantially to the effect set forth in Exhibit A.
---------
(f) The Representative shall have received, on the Closing Date, from
Clifford Chance Rogers & Wells LLP, special counsel to the PF Entities a
favorable opinion, dated the Closing Date, with respect to (i) the
characterization of the transfer of the Receivables from PF to the
Transferor as a true sale and (ii) nonconsolidation under the Bankruptcy
Code of the assets and liabilities of the Transferor on the one hand, and
those of either Parent, PF or any other Affiliate subject to the Bankruptcy
Code on the other, in the event the Parent, PF or any such Affiliate were
to become subject of a case under the Bankruptcy Code, and such opinions
shall be in substantially the form previously agreed with the
Representative and its counsel and in any event satisfactory in form and in
substance to the Representative and its counsel.
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(g) The Representative shall have received, on the Closing Date, from
Saxon, Barry, Gardner & Kincannon, special California counsel for the PF
Entities, a favorable opinion, dated the Closing Date and reasonably
satisfactory in form and substance to the Representative and containing
opinions substantially to the effect set forth in Exhibit B.
---------
(h) The Representative shall have received, on the Closing Date, from
Mayer, Brown & Platt, its special counsel, a favorable opinion, dated the
Closing Date and reasonably satisfactory in form and substance to the
Representative, and PF, the Transferor, the Depositor and the Issuer shall
have furnished to the Representative's special counsel such documents as it
may request for the purpose of enabling them to pass on certain matters.
(i) The Representative shall have received, on the Closing Date, an
opinion of counsel for the Indenture Trustee, dated the Closing Date, in
form and substance satisfactory to the Representative and counsel for the
Underwriters and containing opinions substantially to the effect set forth
in Exhibit C.
---------
(j) The Representative shall have received, on the Closing Date, an
opinion of counsel for the Issuer and the Owner Trustee, dated the Closing
Date, in form and substance satisfactory to the Representative and counsel
for the Underwriters and containing opinions substantially to the effect
set forth in Exhibit D.
---------
(k) The Representative shall have received, on the Closing Date, an
opinion of Fred Robustelli, Esq., Associate General Counsel for the
Depositor, dated the Closing Date, in form and substance satisfactory to
the Representative and counsel for the Underwriters and containing
opinion's substantially to the effect set forth in Exhibit E.
---------
(l) The Representative shall have received, on the Closing Date, an
opinion of the Associate General Counsel or General Counsel of the Insurer,
dated the Closing Date, in form and substance satisfactory to the
Representative and counsel for the Underwriters.
(m) The Representative shall have received, on or prior to the date
of first use of the Prospectus Supplement, and on the Closing Date if
requested by the Representative, letters of independent accountants of the
PF Entities in the form and reflecting the performance of the procedures
previously requested by the Representative.
(n) Each of the PF Entities and the Depositor shall have furnished or
caused to be furnished to the Representative on the Closing Date a
certificate of an executive officer of such entity satisfactory to the
Representative as to the accuracy of the representations and warranties of
such entity herein at and as of such Closing Date as if made as of such
date, as to the performance by such entity of all of its obligations
hereunder to be performed at or prior to such Closing Date, and as to such
other matters as the Representative may reasonably request;
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(o) The Insurance Policy shall have been duly executed and issued at
or prior to the Closing Date and shall conform in all material respects to
the description thereof in the Prospectus Supplement.
(p) On or prior to the Closing Date there shall not have occurred any
downgrading, nor shall any notice have been given of (i) any intended or
potential downgrading or (ii) any review or possible change in rating the
direction of which has not been indicated, in the rating accorded the
Insurer's claims paying ability by any "nationally recognized statistical
rating organization," as such term is defined for purposes of the 1933 Act.
(q) There has not occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations, since March 31, 2000, of the Insurer,
that is in the Representative's judgment material and adverse and that
makes it in the Representative's judgment impracticable to market the
Offered Securities on the terms and in the manner contemplated in the
Prospectus.
(r) The PF Entities shall have executed and delivered the Depositor
Indemnification Agreement at or prior to the Closing Date, and such
Depositor Indemnification Agreement shall be in form acceptable to the
Representative and the Depositor.
(s) The Representative shall have been furnished such further
information, certificates, documents and opinions as the Representative may
reasonably request.
5. Covenants of the Depositor and the PF Entities.
(a) In further consideration of the agreements of the Underwriters
contained in the Underwriting Agreement, the Depositor covenants as
follows:
i. To furnish the Representative, without charge, copies of the
Registration Statement and any amendments thereto including exhibits
and as many copies of the Prospectus and any supplements and
amendments thereto as the Representative may from time to time
reasonably request.
ii. Immediately following the execution of the Underwriting
Agreement, the Depositor will prepare a prospectus supplement setting
forth the principal amount, notional amount or stated amount, as
applicable, of Offered Securities covered thereby, the price at which
the Offered Securities are to be purchased by the Underwriters from
the Issuer, either the initial public offering price or prices or the
method by which the price or prices at which the Offered Securities
are to be sold will be determined, the selling concessions and
reallowances, if any, any delayed
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delivery arrangements, and such other information as the
Representative, PF and the Depositor deem appropriate in connection
with the offering of the Offered Securities, but the Depositor will
not file any amendment to the Registration Statement or any supplement
to the Prospectus of which the Representative shall not previously
have been advised and furnished with a copy a reasonable time prior to
the proposed filing or to which the Representative shall have
reasonably objected. The Depositor will cause any amendment to the
Registration Statement to become effective as soon as is reasonably
possible after filing. During the time when a Prospectus is required
to be delivered under the 1933 Act, the Depositor will comply so far
as it is able with all requirements imposed upon it by the 1933 Act
and the rules and regulations thereunder to the extent necessary to
permit the continuance of sales or of dealings in the Offered
Securities in accordance with the provisions hereof and of the
Prospectus, and the Depositor will file with the Commission, promptly
upon request by the Representative, any amendments to the Registration
Statement or supplements to the Prospectus which may be necessary or
advisable in connection with the distribution of the Offered
Securities by the Underwriters, and will cause the same to become
effective as soon as is reasonably possible. The Depositor will advise
the Representative, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement or any amended
Registration Statement has become effective or any supplement to the
Prospectus or any amended Prospectus has been filed. The Depositor
will advise the Representative, promptly after it receives notice or
obtains knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or any order preventing or suspending the use of the Prospectus, or
the suspension of the qualification of the Offered Securities for
offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose, or of any request
made by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional
information, and the Depositor will use reasonable efforts to prevent
the issuance of any such stop order or any order suspending any such
qualification, and if any such order is issued, to obtain the lifting
thereof as promptly as possible.
iii. During the period when a prospectus is required by law to
be delivered in connection with the sale of the Offered Securities
pursuant to the Underwriting Agreement, the Depositor will file, on a
timely and complete basis, all documents that are required to be filed
by the Depositor with the Commission pursuant to Sections 13, 14, or
15(d) of the 1934 Act.
iv. To qualify the Offered Securities for offer and sale under
the securities or "Blue Sky" laws of such jurisdictions as the
Representative shall reasonably request; provided that the PF Entities
shall pay all expenses (including fees and disbursements of counsel)
in connection with such qualification of the eligibility of the
Offered Securities for investment under the laws of such jurisdictions
as the Representative may designate; and provided, further, that in
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<PAGE>
connection therewith the Depositor shall not be required to qualify to
do business or to file a general consent to service of process in any
jurisdiction.
v. To make generally available to the Depositor's security
holders, as soon as practicable, but in any event not later than
eighteen months after the date on which the filing of the Prospectus,
as amended or supplemented, pursuant to Rule 424 under the 1933 Act
first occurs, an earnings statement of the Depositor covering a
twelve-month period beginning after the date of the Underwriting
Agreement, which shall satisfy the provisions of Section 11(a) of the
1933 Act and the applicable rules and regulations of the Commission
thereunder (including, at the option of the Depositor, Rule 158).
vi. The Depositor will cause any Computational Materials and
any Structural Term Sheets with respect to the Offered Securities that
are delivered by an Underwriter to the Depositor pursuant to Section 8
to be filed with the Commission on a Current Report on Form 8-K (a
"Current Report") pursuant to Rule 13a-11 under the Exchange Act in
--------------
accordance with Section 10 on the business day immediately following
the date on which this Agreement is executed and delivered. The
Depositor will cause any Collateral Term Sheet with respect to the
Offered Securities that is delivered by the Underwriters to the
Depositor in accordance with the provisions of Sections 9 to be filed
with the Commission on a Current Report pursuant to Rule 13a-11 under
the Exchange Act in accordance with Section 10 on the business day
immediately following the day on which such Collateral Term Sheet is
delivered to counsel for the Depositor by an Underwriter. In
addition, if at any time prior to the availability of the related
Prospectus, an Underwriter has delivered to any prospective investor a
subsequent Collateral Term Sheet that reflects, in the reasonable
judgment of the Representative and the Depositor, a material change in
the characteristics of the Receivables from those on which a
Collateral Term Sheet with respect to the Offered Securities
previously filed with the Commission was based, the Depositor will
cause any such Collateral Term Sheet that is delivered by a
Underwriter to the Depositor in accordance with the provisions of
Section 9 hereof to be filed with the Commission on a Current Report
in accordance with Section 10. Each such Current Report shall be
incorporated by reference in the related Prospectus and the related
Registration Statement.
(b) In further consideration of the agreements of the Underwriters
contained in the Underwriting Agreement, each of the PF Entities covenants
as follows:
i. To furnish the Representative, without charge, as many
copies of the Prospectus and any supplements and amendments thereto as
the Representative may from time to time reasonably request.
ii. Immediately following the execution of the Underwriting
Agreement, the PF Entities will prepare a prospectus supplement
setting forth the principal
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amount, notional amount or stated amount, as applicable, of Offered
Securities covered thereby, the price at which the Offered Securities
are to be purchased by the Underwriters from the Depositor, either the
initial public offering price or prices or the method by which the
price or prices at which the Offered Securities are to be sold will be
determined, the selling concessions and reallowances, if any, any
delayed delivery arrangements, and such other information as the
Representative, the PF Entities and the Depositor deem appropriate in
connection with the offering of the Offered Securities. During the
time when a Prospectus is required to be delivered under the 1933 Act,
the PF Entities will prepare, so that the Depositor may file with the
Commission, promptly upon request by the Representative, any
supplements to the Prospectus which may be necessary or advisable in
connection with the distribution of the Offered Securities by the
Underwriters
iii. If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the 1933 Act, any event
occurs as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact, or
omit to state any 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, or if it is
necessary for any other reason to amend or supplement the Prospectus
to comply with the 1933 Act, to promptly notify the Representative
thereof and upon their request to prepare and file with the
Commission, at the expense of the PF Entities, an amendment or
supplement which will correct such statement or omission or any
amendment which will effect such compliance.
iv. For so long as any of the Offered Securities remain
outstanding, the PF Entities will furnish to the Representative, as
soon as available, a copy of (i) the annual statement of compliance
delivered by the Servicer to the Indenture Trustee under the
applicable Sale and Servicing Agreement, (ii) the annual independent
public accountants' servicing report furnished to the Indenture
Trustee pursuant to the applicable Sale and Servicing Agreement, (iii)
each report regarding the Offered Securities mailed to the holders of
such Securities, and (iv) from time to time, such other information
concerning such Securities as the Representative may reasonably
request.
v. PF agrees, for so long as any of the Offered Securities
remain outstanding, to furnish to the Representative upon request in
writing copies of such financial statements and other periodic and
special reports as any PF Entity may from time to time distribute
generally to its creditors or the holders of the Offered Securities
and to furnish to the Representative copies of each annual or other
report that any PF Entity shall be required to file with the
Commission.
6. Representations and Warranties of the Depositor and the PF
Entities.
9
<PAGE>
(a) The Depositor represents and warrants to, and agrees with, each
Underwriter, as of the date of the Underwriting Agreement, as follows:
i. The Registration Statement including a prospectus relating
to the Securities and the offering thereof from time to time in
accordance with Rule 415 under the 1933 Act has been filed with the
Commission and such Registration Statement, as amended to the date of
the Underwriting Agreement, has become effective. No stop order
suspending the effectiveness of such Registration Statement has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission. A prospectus supplement prepared by PF
specifically relating to the Offered Securities will be filed with the
Commission pursuant to Rule 424 under the 1933 Act; provided, however,
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that a supplement to the Prospectus prepared pursuant to Section 5(b)
hereof shall be deemed to have supplemented the Base Prospectus only
with respect to the Offered Securities to which it relates. The
conditions to the use of a registration statement on Form S-3 under
the 1933 Act, as set forth in the General Instructions on Form S-3,
and the conditions of Rule 415 under the 1933 Act, have been satisfied
with respect to the Depositor and the Registration Statement. There
are no contracts or documents of the Depositor that are required to be
filed as exhibits to the Registration Statement pursuant to the 1933
Act or the rules and regulations thereunder that have not been so
filed.
ii. On the effective date of the Registration Statement, the
Registration Statement conformed in all material respects to the
requirements of the 1933 Act and the rules and regulations thereunder,
and did not include any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading; on the date of the
Underwriting Agreement and as of the Closing Date, the Registration
Statement conforms, and as amended or supplemented, if applicable,
will conform in all material respects to the requirements of the 1933
Act and the rules and regulations thereunder, and on the date of the
Underwriting Agreement and as of the Closing Date, the Registration
Statement does not include any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Registration Statement as amended or supplemented, if applicable, will
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading.
iii. The Depositor has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware.
iv. The Depositor has all requisite power and authority
(corporate and other) and all requisite authorizations, approvals,
orders, licenses, certificates and permits of and from all government
or regulatory officials and bodies to own its properties, to conduct
its business as described in the Registration Statement and the
10
<PAGE>
Prospectus and to execute, deliver and perform these Standard
Provisions, the Underwriting Agreement, and each Transaction Document
to which it is a party, except such as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution by the Underwriter of the Offered Securities; all such
authorizations, approvals, orders, licenses, certificates are in full
force and effect and contain no unduly burdensome provisions; and,
except as set forth or contemplated in the Registration Statement or
the Prospectus, there are no legal or governmental proceedings pending
or, to the best knowledge of the Depositor, threatened that would
result in a material modification, suspension or revocation thereof.
v. The execution and delivery by the Depositor of these
Standard Provisions, the Underwriting Agreement, and each Transaction
Document to which it is a party are within the corporate power of the
Depositor and none of the execution and delivery by the Depositor of
these Standard Provisions, the Underwriting Agreement, and each
Transaction Document to which it is a party, the consummation by the
Depositor of the transactions therein contemplated, or the compliance
by the Depositor with the provisions thereof, will conflict with or
result in a breach of, or constitute a default under, the charter or
the by-laws of the Depositor or any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on
the Depositor or its properties, or any of the provisions of any
indenture, mortgage, contract or other instrument to which the
Depositor is a party or by which it is bound, or will result in the
creation or imposition of a lien, charge or encumbrance upon any of
its property pursuant to the terms of any such indenture, mortgage,
contract or other instrument, except such as have been obtained under
the 1933 Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Offered Securities by the Underwriters.
vi. The Underwriting Agreement has been, and at the Closing
Date each Transaction Document to which it is a party will have been,
duly authorized, executed and delivered by the Depositor.
vii. At the Closing Date, each of the Underwriting Agreement,
and each Transaction Document to which it is a party will constitute a
legal, valid and binding obligation of the Depositor, enforceable
against the Depositor, in accordance with its terms, subject, as to
the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting the rights of
creditors generally, and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
11
<PAGE>
viii. The Depositor owns or possesses or has obtained all
material governmental licenses, permits, consents, orders, approvals
and other authorizations necessary to lease, own or license, as the
case may be, and to operate, its properties and to carry on its
business as presently conducted and has received no notice of
proceedings relating to the revocation of any such license, permit,
consent, order or approval, which singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would
materially adversely affect the conduct of the business, results of
operations, net worth or condition (financial or otherwise) of the
Depositor.
ix. There are no legal or governmental proceedings pending to
which the Depositor is a party or of which any property of the
Depositor is the subject which, if determined adversely to the
Depositor would individually or in the aggregate have a material
adverse effect on the condition (financial or otherwise), earnings,
affairs, or business or business prospects of the Depositor and, to
the best of the Depositor's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others.
x. Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of the
Underwriting Agreement, these Standard Provisions, the Transaction
Documents and the Offered Securities have been or will be paid at or
prior to the Closing Date.
(b) Each PF Entity represents and warrants to, and agrees with, each
Underwriter and the Depositor, as of the date of the Underwriting
Agreement, as follows:
i. Such PF Entity is either a corporation or a limited
liability company that has been duly organized and is validly existing
in good standing under the laws of its jurisdiction of organization.
ii. Each of the PF Entities has all requisite power and
authority (corporate and other) and all requisite authorizations,
approvals, orders, licenses, certificates and permits of and from all
government or regulatory officials and bodies to own its properties,
to conduct its business as described in the Prospectus and to execute,
deliver and perform these Standard Provisions, the Underwriting
Agreement, and the Transaction Documents to which it is a party,
except such as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution by the Underwriters
of the Offered Securities; all such authorizations, approvals, orders,
licenses, certificates are in full force and effect and contain no
unduly burdensome provisions; and, except as set forth or contemplated
in the Prospectus, there are no legal or governmental proceedings
pending or, to the best knowledge of the PF Entities, threatened that
would result in a material modification, suspension or revocation
thereof.
12
<PAGE>
iii. The Offered Securities have been duly authorized, and when
the Offered Securities are issued and delivered pursuant to the
Underwriting Agreement, the Offered Securities will have been duly
executed, issued and delivered and will be entitled to the benefits
provided by the applicable Indenture, subject, as to the enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting the rights of creditors generally,
and to general principles of equity (regardless of whether the
entitlement to such benefits is considered in a proceeding in equity
or at law), and will conform in substance to the description thereof
contained in the Registration Statement and the Prospectus, and will
in all material respects be in the form contemplated by the Indenture.
iv. The execution and delivery by each of the PF Entities of
these Standard Provisions, the Underwriting Agreement and the
Transaction Documents to which it is a party are within the corporate
power of such PF Entity and none of the execution and delivery by such
PF Entity of these Standard Provisions, the Underwriting Agreement,
and the Transaction Documents to which it is a party, the consummation
by such PF Entity of the transactions therein contemplated, or the
compliance by such PF Entity with the provisions thereof, will
conflict with or result in a breach of, or constitute a default under,
the charter, or the by-laws, operating agreement or other
organizational documents, as applicable of such PF Entity or any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on such PF Entity or its properties, or any of
the provisions of any indenture, mortgage, contract or other
instrument to which such PF Entity is a party or by which it is bound,
or will result in the creation or imposition of a lien, charge or
encumbrance upon any of its property pursuant to the terms of any such
indenture, mortgage, contract or other instrument, except such as have
been obtained under the 1933 Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Offered Securities by the
Underwriters.
v. The Underwriting Agreement has been, and at the Closing
Date the Transaction Documents to which it is a party will have been,
duly authorized, executed and delivered by such PF Entity.
vi. At the Closing Date, each of the Underwriting Agreement
and the Transaction Documents to which it is a party will constitute a
legal, valid and binding obligation of such PF Entity, enforceable
against such PF Entity, in accordance with its terms, subject, as to
the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting the rights of
creditors generally, and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
13
<PAGE>
vii. No filing or registration with, notice to, or consent,
approval, non-disapproval, authorization or order or other action of,
any court or governmental authority or agency is required for the
consummation by such PF Entity of the transactions contemplated by the
Underwriting Agreement and the Transaction Documents, except such as
have been obtained and except such as may be required under the 1933
Act, the rules and regulations thereunder, or state securities or
"Blue Sky" laws, in connection with the purchase and distribution of
the Offered Securities by the Underwriters.
viii. Such PF Entity owns or possesses or has obtained all
material governmental licenses, permits, consents, orders, approvals
and other authorizations necessary to lease, own or license, as the
case may be, and to operate, its properties and to carry on its
business as presently conducted and has received no notice of
proceedings relating to the revocation of any such license, permit,
consent, order or approval, which singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would
materially adversely affect the conduct of the business, results of
operations, net worth or condition (financial or otherwise) of such PF
Entity.
ix. Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which such
PF Entity is a party or of which any property of such PF Entity is the
subject which, if determined adversely to such PF Entity would
individually or in the aggregate have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, or business or
business prospects of such PF Entity and, to the best of such PF
Entity's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
x. At the Closing Date, each of the Receivables which is a
subject of the Transaction Documents, and all such Receivables in the
aggregate will meet the criteria for selection described in the
Prospectus, and at the Closing Date, the representations and
warranties made by such PF Entity in the Transaction Documents will be
true and correct as of such date.
xi. At the time of execution and delivery of the Sale and
Servicing Agreement, such PF Entity will have good and marketable
title to the Receivables being transferred to the Transferor and then
assigned from the Transferor to the Depositor and then from the
Depositor to the Issuer pursuant thereto, free and clear of any lien,
mortgage, pledge, charge, encumbrance, adverse claim or other security
interest (collectively, "Liens"), and neither PF nor the Transferor
-----
will have assigned to any person (other than, the Transferor, the
Issuer and the Indenture Trustee) any of its right, title or interest
in such Receivables or in such Transaction Documents. Each of PF and
the Transferor will have the power and authority to transfer such
Receivables, and upon execution and delivery of the Sale and Servicing
Agreement
14
<PAGE>
and delivery of the Receivables to, or on behalf of, the Issuer, the
Issuer will have good and marketable title to the Receivables free and
clear of any Liens.
xii. Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of the
Underwriting Agreement and the Transaction Documents and the Offered
Securities have been or will be paid at or prior to the Closing Date.
xiii. On the date of the Underwriting Agreement and as of the
Closing Date, the Prospectus conforms, and as amended or supplemented,
if applicable, will conform in all material respects to the
requirements of the 1933 Act and the rules and regulations thereunder,
and on the date of the Underwriting Agreement and as of the Closing
Date, neither the Prospectus nor any ABS Term Sheets or Computational
Materials furnished to prospective investors includes any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and each such document, as amended or
supplemented, if applicable, will not include any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that the foregoing does not apply to
-------- -------
statements or omissions in any of such documents based upon the
Underwriter Information (as defined herein) or the Depositor
Information (as defined herein)
7. Indemnification and Contribution.
(a) the Depositor and the Underwriters:
i. The Depositor agrees to indemnify and hold harmless each
Underwriter (including Prudential Securities Incorporated acting in
its capacity as Representative and as one of the Underwriters), and
each of its directors and each person or entity who controls any
Underwriter within the meaning of the 1933 Act or the 1934 Act,
against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter or such director, officer or controlling
person may become subject under the 1933 Act, the 1934 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, or any amendment or supplement thereto,
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 such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or
such director or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action.
15
<PAGE>
ii. Each Underwriter will indemnify and hold harmless the
Depositor, each of the Depositor's directors, each of the Depositor's
officers who signed the Registration Statement and each person, if
any, who controls the Depositor, within the meaning of the 1933 Act or
the 1934 Act, against any losses, claims, damages or liabilities to
which the Depositor, or any such director, officer or controlling
person may become subject, under the 1933 Act, the 1934 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 other prospectus relating to the Offered
Securities, 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
statements or alleged untrue statements or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Depositor by any Underwriter through the
Representative specifically for use therein; and each Underwriter will
reimburse any legal or other expenses reasonably incurred by the
Depositor or any such director, officer or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action. This indemnity agreement will be in
addition to any liability which such Underwriter may otherwise have.
The Depositor acknowledges that the statements set forth in the second
paragraph and the clause after the comma in the first sentence in the
third paragraph under the caption "UNDERWRITING" in the Prospectus
Supplement (the "Underwriter Information") constitute the only
-----------------------
information furnished to the Depositor by or on behalf of any
Underwriter for use in the Registration Statement, any Preliminary
Prospectus or the Prospectus, and each of the several Underwriters
represents and warrants that such statements are correct as to it.
iii. Promptly after receipt by an indemnified party under this
Section 7(a) of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7(a), notify the
indemnifying party in writing of the commencement thereof, but the
omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability which the indemnifying party may
have to any indemnified party hereunder except to the extent such
indemnifying party has been prejudiced thereby. 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
elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to
such indemnified party. After notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section 7(a) for any legal or other expenses subsequently
incurred by such indemnified party
16
<PAGE>
in connection with the defense thereof other than reasonable costs of
investigation; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be
legal defenses available to it that are different from or additional
to those available to the indemnifying party, the indemnified party or
parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. The
indemnifying party shall not be liable for the expenses of more than
one separate counsel.
iv. In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding parts of this Section 7(a) is for any reason held to be
unavailable to or insufficient to hold harmless an indemnified party
under subsection (i) or (ii) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof);
provided, however, that no person guilty of fraudulent
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misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. In determining the
amount of contribution to which the respective parties are entitled,
there shall be considered the relative benefits received by the
Depositor on the one hand, and the Underwriters on the other, from the
offering of the Offered Securities (taking into account the portion of
the proceeds of the offering realized by each), the Depositor's and
the Underwriters' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission, and
any other equitable considerations appropriate in the circumstances.
The Depositor and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro
rata or per capita allocation (even if the Underwriters were treated
as one entity for such purpose). No Underwriter or person controlling
such Underwriter shall be obligated to make contribution hereunder
which in the aggregate exceeds the total underwriting fee of the
Offered Securities purchased by such Underwriter under the
Underwriting Agreement, less the aggregate amount of any damages which
such Underwriter and its controlling persons have otherwise been
required to pay in respect of the same or any substantially similar
claim. The Underwriters' obligation to contribute hereunder are
several in proportion to their respective underwriting obligations and
not joint. For purposes of this Section 7(a), each officer or
director and each person, who controls an Underwriter within the
meaning of the 1933 Act shall have the same rights to contribution as
such Underwriter, and each director of the Depositor, each officer of
the Depositor who signed the Registration Statement, and each person,
if any, who controls the Depositor within the meaning of Section 15 of
the 1933 Act, shall have the same rights to contribution as the
Depositor.
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<PAGE>
(b) The PF Entities and the Underwriters.
i. Each of the PF Entities agrees (severally and not jointly)
(A) to indemnify and hold harmless each Underwriter (including
Prudential Securities Incorporated acting in its capacity as
Representative and as one of the Underwriters), and each of its
directors and each person or entity who controls any Underwriter or
any such person, within the meaning of the 1933 Act or the 1934 Act,
against any losses, claims, damages or liabilities, joint and several,
to which such Underwriter or such person or entity 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 or alleged untrue statement of
any material fact contained in any ABS Term Sheets or Computational
Materials furnished to prospective investors or any Current Report or
any amendment or supplement thereof, the Prospectus, any amendment or
supplement to the Prospectus or the omission or the alleged omission
to state therein 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, but only to
the extent that such untrue statement or alleged untrue statement or
omission or alleged omission does not relate to (x) the Underwriter
Information and (y) the information under the headings "Summary of
Terms -- Depositor" and "The Depositor" in the Prospectus Supplement;
this indemnity agreement will be in addition to any liability which
the PF Entities may otherwise have; and (B) to indemnify and to hold
each Underwriter harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that such
Underwriter may sustain in any way related to the failure of any of
the PF Entities to perform its duties in compliance with the terms of
the Transaction Documents.
ii. Each Underwriter will indemnify and hold harmless each of
the PF Entities, each of its directors, and each person or entity who
controls any PF Entity, within the meaning of the 1933 Act or the 1934
Act, against any losses, claims, damages or liabilities to which such
PF Entity, or any such director or 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 are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or any other prospectus relating to
the Offered Securities, 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 light
of the circumstances under which they were made, not misleading, and
in each case to the extent, but only to the extent, that such untrue
statements or alleged untrue statements or omission or alleged
omission was made in reliance upon and in conformity with the
Underwriter Information; and each
18
<PAGE>
Underwriter will reimburse any legal or other expenses reasonably
incurred by the PF Entities or any such director, officer or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which such Underwriter
may otherwise have. Each of the PF Entities acknowledges that the
Underwriter Information constitutes the only information furnished by
or on behalf of any Underwriter for use in the Registration Statement,
any preliminary Prospectus or the Prospectus, and each of the several
Underwriters represents and warrants that such statements are correct
as to it.
iii. Promptly after receipt by an indemnified party under this
Section 7(b) of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7(b), notify the
indemnifying party in writing of the commencement thereof, but the
omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability which the indemnifying party may
have to any indemnified party hereunder except to the extent such
indemnifying party has been prejudiced thereby. 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
elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to
such indemnified party. After notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section 7(b) for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided,
however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it that are different from or additional to those
available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. The indemnifying party
shall not be liable for the expenses of more than one separate
counsel.
iv. In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding parts of this Section 7(b) is for any reason held to be
unavailable to or insufficient to hold harmless an indemnified party
under subsection (i) or (ii) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof);
provided, however, that no person guilty of fraudulent
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19
<PAGE>
misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. In determining the
amount of contribution to which the respective parties are entitled,
there shall be considered the relative benefits received by the PF
Entities on the one hand, and the Underwriters on the other, from the
offering of the Offered Securities (taking into account the portion of
the proceeds of the offering realized by each), the PF Entities' and
the Underwriters' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission, and
any other equitable considerations appropriate in the circumstances.
The PF Entities and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro
rata or per capita allocation (even if the Underwriters were treated
as one entity for such purpose). No Underwriter or person controlling
such Underwriter shall be obligated to make contribution hereunder
which in the aggregate exceeds the total underwriting fee of the
Offered Securities purchased by such Underwriter under the
Underwriting Agreement, less the aggregate amount of any damages which
such Underwriter and its controlling persons have otherwise been
required to pay in respect of the same or any substantially similar
claim. The Underwriters' obligation to contribute hereunder are
several in proportion to their respective underwriting obligations and
not joint. For purposes of this Section 7(b), each officer, each
director and each person who controls an Underwriter within the
meaning of the 1933 Act shall have the same rights to contribution as
such Underwriter, and each officer, each director, and each person who
controls any PF Entity within the meaning of the 1933 Act, shall have
the same rights to contribution as such PF Entity.
(c) The parties hereto agree that the first sentence of Section 5 of
the Indemnification Agreement dated as of the Closing Date among the Note
Insurer, the Issuer, the Depositor and the Underwriters shall not be
construed as limiting the Depositor's right to enforce its rights under
Section 7(a) of these Standard Provisions. The parties further agree that,
as between the parties hereto, to the extent that the provisions of Section
5 of the Indemnification Agreement conflict with Section 7(a) hereof, the
provisions of Section 7(a) hereof shall govern. The indemnification
provided in this Underwriting Agreement will be in addition to any
liability which the parties may otherwise have and shall in no way limit
any obligations of the parties to the Depositor Indemnification Agreement.
8. Computational Materials and Structural Term Sheets.
(a) Each Underwriter agrees to provide to the Depositor no less than
one business day prior to the date on which the Prospectus is proposed to
be filed pursuant to Rule 424(b) under the Act, for the purpose of
permitting the Depositor to comply with the filing requirement set forth in
Section 7(i), all information (in such written or electronic format as
required by the Depositor) with respect to the Offered Securities which
constitutes "Computational Materials", as defined in the Commission's No-
Action Letter, dated May
20
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20, 1994, addressed to Kidder, Peabody Acceptance Corporation I, Kidder,
Peabody & Co. Incorporated and Kidder Structured Asset Corporation, and the
no-action letter dated May 27, 1994 issued by the Division of Corporation
Finance of the Commission to the Public Securities Association (together,
the "Kidder Letters"), the filing of which material is a condition of the
--------------
relief granted in such letters (such materials being the "Computational
-------------
Materials"), and (ii) "Structural Term Sheets" within the meaning of the
--------- ----------------------
no-action letter dated February 17, 1995 issued by the Division of
Corporation Finance of the Commission to the Public Securities Association
(the "PSA Letter") and the filing of such material is a condition of the
----------
relief granted in such letter (such materials being the "Structural Term
---------------
Sheets"), such delivery to be made not later than 10:30 a.m. New York on
------
the business day immediately following the date on which such Computational
Materials or Structural Term Sheets was first delivered to a prospective
investors in the Offered Securities. Each delivery of Computational
Materials and Structural Terms Sheets to the Depositor pursuant to this
paragraph (a) shall be effected in accordance with Section 10.
(b) Each Underwriter represents and warrants to and agrees with the
Depositor, as of the date hereof and as of the Closing Date, that:
i. the Computational Materials furnished to the Depositor by
such Underwriter pursuant to Section 8(a) constitute (either in
original, aggregated or consolidated form) all of the materials
furnished to prospective investors by such Underwriter prior to the
time of delivery thereof to the Depositor that are required to be
filed with the Commission with respect to the Offered Securities in
accordance with the Kidder Letters, and such Computational Materials
comply with the requirements of the Kidder Letters; and
ii. the Structural Term Sheets furnished to the Depositor by
such Underwriter pursuant to Section 8(a) constitute all of the
materials furnished to prospective investors by such Underwriter prior
to the time of delivery thereof to the Depositor that are required to
be filed with the Commission as "Structural Term Sheets" with respect
to the Offered Securities in accordance with the PSA Letter, and such
Structural Term Sheets comply with the requirements of the PSA Letter.
9. Collateral Term Sheets.
(a) Prior to the delivery of any "Collateral Term Sheet" within the
meaning of the PSA Letter, the filing of which material is a condition of
the relief granted in such letter (such material being the "Collateral Term
---------------
Sheets"), to a prospective investor in the Offered Securities, the
------
Underwriters shall notify the Depositor and its counsel by telephone of
their intention to deliver such materials and the approximate date on which
the first such delivery of such materials is expected to occur. On the
business day immediately following the date on which any Collateral Term
Sheet was first delivered to a prospective investor in the Offered
Securities, the Underwriters shall deliver to the Depositor one complete
copy of all materials provided by the Underwriters to prospective investors
in such Offered Securities
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<PAGE>
which constitute "Collateral Term Sheets." Each delivery of a Collateral
Term Sheet to the Depositor pursuant to this paragraph (a) shall be
effected in accordance with Section 10. (Collateral Term Sheets and
Structural Term Sheets are, together, referred to herein as "ABS Term
---------
Sheets.") At the time of each such delivery, the Underwriter
------
making such delivery shall indicate in writing that the materials being
delivered constitute Collateral Term Sheets, and, if there has been any
prior such delivery with respect to the Offered Securities, shall indicate
whether such materials differ in any material respect from any Collateral
Term Sheets previously delivered to the Depositor with respect to the
Offered Securities pursuant to this Section 9(a) as a result of the
occurrence of the material change in the characteristics of the related
Receivables.
(b) Each Underwriter represents and warrants to and agrees with the
Depositor as of the date of this Agreement and as of the Closing Date, that
the Collateral Term Sheets furnished to the Depositor by such Underwriter
pursuant to Section 9(a) constitute all of the materials furnished to
prospective investors by such Underwriter prior to time of delivery thereof
to the Depositor that are required to be filed with the Commission as
"Collateral Term Sheets" with respect to the Offered Securities in
accordance with the PSA Letter, and such Collateral Term Sheets comply with
the requirements of the PSA Letter.
(c) If, at any time when a Prospectus relating to the Offered
Securities is required to be delivered under the Act, it shall be necessary
to amend or supplement the related Prospectus as a result of an untrue
statement of a material fact contained in any Collateral Term Sheets
provided by any Underwriter pursuant to this Section 9 or the omission to
state therein a material fact required, when considered in conjunction with
the related Prospectus, to be stated therein or necessary to make the
statements therein, when read in conjunction with the related Prospectus,
not misleading, or if it shall be necessary to amend or supplement any
Current Report relating to any Collateral Term Sheets to comply with the
Act or the rules thereunder, such Underwriter and PF promptly will prepare
and furnish to the Depositor for filing with the Commission an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance.
10. Delivery and Filing of Current Reports, Collateral Term Sheets,
Structural Term Sheets.
(a) Any Current Report, Collateral Term Sheet or Structural Term
Sheet that is required to be delivered by the Underwriter to the Depositor
hereunder shall be effected by the delivery of one copy to counsel for the
Depositor and, if requested, one copy in computer readable format to a
financial printer specified by the Depositor on or prior to the date so
specified herein.
(b) The Depositor shall cause its counsel or the financial printer to
file with the Commission any such Current Report, Collateral Term Sheet or
Structural Term Sheet within one business day immediately following the
delivery thereof pursuant to the preceding subsection.
22
<PAGE>
11. Survival of Certain Representations and Obligations. The
respective representations, warranties, agreements, covenants, indemnities and
other statements of the Depositor and the PF Entities, their officers and the
several Underwriters set forth in, or made pursuant to, the Underwriting
Agreement shall remain in full force and effect, regardless of any
investigation, or statement as to the result thereof, made by or on behalf of
any Underwriter, the Depositor, the PF Entities or any of the officers or
directors or any controlling person of any of the foregoing, and shall survive
the delivery of and payment for the Offered Securities.
12. Termination.
(a) The Underwriting Agreement may be terminated by the Depositor by
notice to the Representative in the event that a stop order suspending the
effectiveness of the Registration Statement shall have been issued or
proceedings for that purpose shall have been instituted or threatened.
(b) The Underwriting Agreement may be terminated by the
Representative by notice to the Depositor in the event that the Depositor shall
have failed, refused or been unable to perform all obligations and satisfy all
conditions to be performed or satisfied hereunder by the Depositor at or prior
to the Closing Date.
(c) Termination of the Underwriting Agreement pursuant to this
Section 12 shall be without liability of any party to any other party other than
as provided in Sections 7 and 14 hereof.
13. Default of Underwriters. If any Underwriter or Underwriters
defaults or default in their obligation to purchase Offered Securities which it
or they have agreed to purchase under the Underwriting Agreement and the
aggregate principal amount of the Offered Securities which such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent (10%)
or less of the aggregate principal amount, notional amount or stated amount, as
applicable, of the Offered Securities to be sold under the Underwriting
Agreement, as the case may be, the other Underwriters shall be obligated
severally in proportion to their respective commitments under the Underwriting
Agreement to purchase the Offered Securities which such defaulting Underwriter
or Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters so defaults or default and the aggregate principal amount of the
Offered Securities with respect to which such default or defaults occurs or
occur is more than ten percent (10%) of the aggregate principal amount, notional
amount or stated amount, as applicable, of Offered Securities to be sold under
the Underwriting Agreement, as the case may be, and arrangements satisfactory to
the Representative and the Depositor for the purchase of such Offered Securities
by other persons (who may include one or more of the non-defaulting Underwriters
including the Representative) are not made within 36 hours after any such
default, the Underwriting Agreement will terminate without liability on the part
of any non-defaulting Underwriters or the Depositor except for the expenses to
be paid or reimbursed by the Depositor pursuant to Section 11 hereof. As used
in the Underwriting Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10. Nothing herein shall
relieve a defaulting Underwriter from liability for its default.
23
<PAGE>
14. EXPENSES.
(a) PF agrees with the several Underwriters that:
i. whether or not the transactions contemplated in the
Underwriting Agreement are consummated or the Underwriting Agreement
is terminated, PF will pay all fees and expenses incident to the
performance of its obligations under the Underwriting Agreement,
including, but not limited to, (i) the expenses of printing and
distributing the Underwriting Agreement and any related underwriting
documents, any Preliminary Prospectus, the Prospectus, any amendments
or supplements to the Registration Statement or the Prospectus, any
ABS Term Sheets and Computational Materials (including in each case
all exhibits, amendments and supplements thereto) and any Blue Sky
memorandum or legal investment survey and any supplements thereto and
(ii) fees and expenses of rating agencies, accountants and counsel for
the Depositor.
ii. all out-of-pocket expenses, including counsel fees,
disbursements and expenses, reasonably incurred by the Underwriters in
connection with investigating, preparing to market and marketing the
Offered Securities and proposing to purchase and purchasing the
Offered Securities under the Underwriting Agreement will be borne and
paid by PF if the Underwriting Agreement is terminated by the
Depositor pursuant to Section 12(a) hereof or by the Representative on
account of the failure, refusal or inability on the part of the
Depositor to perform all obligations and satisfy all conditions on the
part of the Depositor to be performed or satisfied hereunder; and
iii PF will pay the cost of preparing the certificates for the
Offered Securities.
(b) In connection with the transactions contemplated under this
Underwriting Agreement and the Transaction Documents, PF shall promptly pay
(or shall promptly reimburse the Depositor to the extent that the Depositor
shall have paid or otherwise incurred): (i) the fees and disbursements of
the Depositor's and the PF Entities' counsel; (ii) the fees of S&P and
Moody's; (iii) any of the fees of the Indenture Trustee and the fees and
disbursements of the Indenture Trustee's counsel; (iv) any of the fees of
the Owner Trustee and the fees and disbursements of the Owner Trustee's
counsel; (v) expenses incurred in connection with printing the Prospectus,
the Prospectus Supplement, any ABS Term Sheets and Computational Materials
and any amendment or supplement thereto, any Preliminary Prospectus and the
Offered Securities; (vi) fees and expenses relating to the filing of
documents with the Commission (including without limitation periodic
reports under the Exchange Act); (vii) the shelf registration fee of 0.05%
of the principal balance of the Offered Securities on the Closing Date,
paid in connection with the issuance of Offered Securities; (viii) the fees
and disbursements for KPMG, accountants for the PF Entities; and (ix) all
of the initial expenses of the Insurer including, without limitation, legal
fees and
24
<PAGE>
expenses, accountant fees and expenses and expenses in connection with due
diligence conducted on the Receivables Files but not including the initial
premium paid to the Insurer. For the avoidance of doubt, the parties hereto
acknowledge that it is the intention of the parties that the Depositor
shall not pay any of the Indenture Trustee's or Owner Trustee's fees and
expenses in connection with the transactions contemplated by this
Underwriting Agreement and the Transaction Documents. All other costs and
expenses in connection with the transactions contemplated hereunder shall
be borne by the party incurring such expenses.
(c) Except as otherwise provided in this Section 14, the Underwriters
agree to pay all of their expenses (excluding the fees and expenses of
their counsel, which shall be paid by PF) in connection with investigating,
preparing to market and marketing the Offered Securities and proposing to
purchase and purchasing the Offered Securities under the Underwriting
Agreement, including any advertising expenses incurred by them in making
offers and sales of the Offered Securities.
15. Notices. All communications under the Underwriting Agreement
shall be in writing and, (i) if sent to the Underwriters, shall be mailed,
delivered or telegraphed and confirmed to the Representative at the address and
to the attention of the person specified in the Underwriting Agreement, (ii) if
sent to the Depositor, shall be mailed, delivered or telegraphed and confirmed
to Prudential Securities Secured Financing Corporation, One New York Plaza, New
York, New York 10292, Attention: Managing Director-Asset Backed Finance Group;
and (iii) if sent to the PF Entities, shall be mailed, delivered or telegraphed
and confirmed to PeopleFirst Finance, LLC, 401 West A Street, Suite 1000, San
Diego, California 92101, Attention: W. Randolph Ellspermann; provided, however,
-------- -------
that any notice to any Underwriter pursuant to the Underwriting Agreement shall
be mailed, delivered or telegraphed and confirmed to such Underwriter at the
address furnished by it.
16. Representative of underwriters. Any Representative identified in
the Underwriting Agreement will act for the Underwriters of the Offered
Securities and any action taken by the Representative under the Underwriting
Agreement will be binding upon all of such Underwriters.
17. Successors. The Underwriting Agreement shall inure to the
benefit of and shall be binding upon the several Underwriters, the Depositor and
the PF Entities and their respective successors and legal representatives, and
nothing expressed or mentioned herein or in the Underwriting Agreement is
intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of the Underwriting Agreement, or any
provisions herein contained, the Underwriting Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the representations and warranties of the Depositor and the PF Entities
contained herein or in the Underwriting Agreement shall also be for the benefit
of any person or persons who controls or control any Underwriter within the
meaning of Section 15 of the 1933 Act, and (ii) the indemnities by the several
Underwriters shall also be for the benefit of the directors of the Depositor,
the officers of the Depositor who have signed the Registration Statement
25
<PAGE>
and any person or persons who control the Depositor within the meaning of
Section 15 of the 1933 Act. No purchaser of the Offered Securities from any
Underwriter shall be deemed a successor because of such purchase. These Standard
Provisions and each Underwriting Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18. Time of the Essence. Time shall be of the essence of each
Underwriting Agreement.
19. Governing Law. These Standard Provisions and each Underwriting
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
[Signature Page Follows]
26
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return two counterparts hereof.
Yours truly,
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By: Evan J. Mitnick
-------------------------------
Name: Evan J. Mitnick
Title: Vice President
PEOPLEFIRST FINANCE, LLC
By: /s/ Justin Tisler
-------------------------------
Name: Justin Tisler
Title: Treasurer
PEOPLEFIRST.COM INC.
By: /s/ Justin Tisler
-------------------------------
Name: Justin Tisler
Title:
PF FUNDING II, LLC
By: /s/ Justin Tisler
-------------------------------
Name: Justin Tisler
Title: Assistant Treasurer
27
<PAGE>
Accepted as of the date hereof:
PRUDENTIAL SECURITIES INCORPORATED,
As Representative of the Several Underwriters
By: /s/ Robert M. DiOrio
------------------------------------------
Name: Robert M. DiOrio
Title: Managing Director
28
<PAGE>
EXHIBIT A
Form of Opinion of Clifford Chance Rogers & Wells LLP
(1) Each of Parent and the Transferor has been duly organized and is
validly existing and in good standing under the laws of its jurisdiction of
organization. Each of Parent and the Transferor has power and authority (a) to
own its properties and conduct its business as now conducted by it; (b) to own,
sell and assign the Receivables and the other Owner Trust Estate; and (c) to
execute and deliver each of the Underwriting Agreement, the Standard Provisions
and the Transaction Documents (collectively, the "Basic Documents") to which it
is a party and to carry out their respective terms.
(2) The execution, delivery, and performance by the Parent and the
Transferor of the Basic Documents to which it is a party and the consummation of
the transactions contemplated thereby have been duly authorized by the Parent
and the Transferor, respectively, by all necessary corporate action. The Basic
Documents to which each of the Parent and the Transferor is a party have been
duly executed and delivered by, and each constitutes a legal, valid and binding
obligation of, the Parent and the Transferor, respectively, enforceable against
the Parent and the Transferor, respectively, in accordance with its respective
terms.
(3) The execution, delivery and performance by each of the Parent and the
Transferor of the Basic Documents to which it is a party, the consummation of
the transactions contemplated thereby and the compliance with the terms and
provisions thereof will not materially conflict with or result in a material
breach of any of the terms or provisions of, or constitute (with or without
notice or lapse of time or both) a material default under or result in the
creation or imposition of any Lien (other than as contemplated by the Basic
Documents) upon any of its properties pursuant to the terms of, (A) its
certificate of incorporation, articles of association or bylaws, (B) to the
actual knowledge of such counsel, any material indenture, contract, lease,
mortgage, deed of trust or other instrument or agreement to which it is a party
or by which it is bound, which breach or default would reasonably be expected to
have a material adverse impact on the Parent or the Transferor, as applicable,
or the transactions contemplated by the Basic Documents, (C) any order, writ,
judgment, award, injunction or decree binding on the Parent or the Transferor,
as applicable, or (D) any law, rule or regulation applicable to the Parent or
the Transferor, as applicable.
(4) No consent, approval, authorization, license or other order or action
of, or filing or registration with, any court or governmental authority, bureau
or agency is required in connection with the execution, delivery or performance
by either of the Parent or the Transferor of the Basic Documents to which it is
a party, or the consummation of the transactions contemplated thereby, except as
may be required under the Act and the Rules and Regulations and state securities
laws and any filings of UCC financing statements.
(5) When the Receivables have been transferred to the Trust, the Basic
Documents have been executed, the Securities have been authenticated by the
Trustee and Indenture Trustee, as applicable in accordance with the Basic
Documents, and the Notes and Certificates have been
29
<PAGE>
delivered and paid for pursuant to the Underwriting Agreement and the
Certificate Purchase Agreement, the Securities will be validly issued and
outstanding and entitled to the benefits provided by the Basic Documents, and
the Indenture and the Notes will constitute legal, valid and binding obligations
of the Trust, enforceable in accordance with their respective terms.
(6) There are no proceedings or investigations pending or, to such
counsel's actual knowledge, after due inquiry, threatened to which either the
Parent or the Transferor is a party before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over the Parent or the Transferor, (A) that are required to be
disclosed in the Registration Statement or the Prospectus, other than those
disclosed therein, (B) asserting the invalidity of any of the Basic Documents,
(C) seeking to prevent the issuance of the Securities or the consummation of any
of the transactions contemplated by any of the Basic Documents, (D) seeking any
determination or ruling that could materially and adversely affect the
performance of the Parent's or the Transferor's obligations under, or the
validity or enforceability of, any of the Basic Documents to which it is a
party, (E) that may affect materially and adversely the federal or state income,
excise, franchise or similar tax attributes of any of the Securities, or (F)
that would reasonably be expected to materially adversely affect the interests
of the holders of any of the Securities.
(7) Such counsel is generally familiar with the standard operating
procedures relating to the PF's acquisition of a perfected security interest in
the vehicles financed by PF pursuant to motor vehicle loans in the ordinary
course of PF's business. Assuming that PF's standard procedures are followed
with respect to the perfection of security interests in the Financed Vehicles,
PF has acquired or will acquire a perfected security interest in the Financed
Vehicles.
(8) To such counsel's actual knowledge, there are no contracts or other
documents to which the Parent or the Transferor is a party of a character
required to be filed as an exhibit to the Registration Statement or required to
be described in the Registration Statement or the Prospectus which are not filed
or described as required.
(9) The statements in the Prospectus Supplement under the headings
"Description of the Notes," "Description of the Certificates," and "Description
of the Trust Agreements" and in the Base Prospectus under the headings
"Description of the Securities" and "Description of the Trust Agreements" to
the extent they purport to summarize the provisions of the Offered Securities
and Basic Documents, constitute a fair summary of the Offered Securities and the
Basic Documents. The statements in the Prospectus under the headings "Summary
of Terms -Tax Status," "Summary of Terms - ERISA Considerations," "Federal
Income Tax Consequences" and "ERISA Considerations" accurately describe the
material Federal income tax and ERISA consequences to Noteholders and Note
Owners and, to the extent they constitute descriptions of matters of law or
legal conclusions with respect thereto, have been prepared or reviewed by such
counsel and are correct in all material respects.
30
<PAGE>
(10) The Trust will be classified for federal income tax purposes as a
partnership and not as an association taxable as a corporation, and the Notes
will be characterized as debt for federal income tax purposes.
(11) The Trust Agreement is not required to be qualified and the Indenture
has been duly qualified under the Trust Indenture Act of 1939, as amended, and
the Trust is not required to be registered as an "investment company" under the
Investment Company Act of 1940, as amended.
(12) The Securities and the Basic Documents each conforms in all material
respects with the descriptions thereof contained in the Registration Statement
and the Prospectus.
(13) The provisions of Section 2.1 the Sale and Servicing Agreement are
effective to create either an ownership interest or a valid and enforceable
security interest in the Receivables and the other Transferor Property and the
proceeds thereof, which security interest has attached. To the extent, if any,
that the transfer of the Receivables and the other Transferor Property pursuant
to the Sale and Servicing Agreement from PF to the Transferor does not
constitute a valid sale, transfer and assignment of the Receivables and the
other Transferor Property from PF to the Transferor, PF would be deemed to have
granted to the Transferor a valid and enforceable security interest in the
Receivables and the other Transferor Property and the proceeds thereof.
(14) The provisions of Section 2.3 the Sale and Servicing Agreement are
effective to create a valid and enforceable security interest in favor of the
Depositor in the Receivables and the other Transferor Property and the proceeds
thereof, which security interest has attached.
(15) The provisions of Section 2.4 the Sale and Servicing Agreement are
effective to create a valid and enforceable security interest in favor of the
Trust in the Receivables and the other Depositor Property and the proceeds
thereof, which security interest has attached.
(16) The provisions of the Granting Clause of the Indenture are effective
to a create a valid and enforceable security interest in favor of the Indenture
Trustee in the Receivables and the other Collateral and the proceeds thereof to
secure the Issuer Secured Obligations, which security interest has attached.
(17) The provisions of Section 2.03 of the Reserve Account Agreement are
effective to create a valid and enforceable security interest in favor of the
Collateral Agent in the Collateral (as defined in the Reserve Account
Agreement), which security interest has attached.
(18) Nothing has come to such counsel's attention that would cause it to
believe that as of the date of the Prospectus and at the Closing Date (x) the
Registration Statement, the Prospectus and any amendments and supplements
thereto (other than the financial statements and other accounting, statistical
and financial information contained therein or omitted therefrom, as to which
such counsel need express no belief) contained or contain any untrue statement
of a material fact or omitted or omit to state any material fact required to be
stated
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<PAGE>
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and (y) the
descriptions therein of laws, rules, regulations, governmental proceedings,
legal matters, contracts and documents are not accurate in all material respects
or do not fairly present the information required to be shown therein.
(19) The standard form of Note and Security Agreement creates a legal,
valid, binding and enforceable obligation of the Obligor in accordance with its
terms.
(20) The Receivables constitute "chattel paper" as defined in Section 9-
105(b) of the Uniform Commercial Code as in effect in the State of New York (the
"NY UCC"). Pursuant to Section 9-103 of the NY UCC, (i) perfection of a
possessory security interest in the chattel paper is governed by the law of the
jurisdiction where the chattel paper is located "when the last event occurs on
which is based the assertion that the security interest is perfected or
unperfected" and (ii) perfection of a non-possessory security interest in
chattel paper is governed by the law (including the conflict of law rules) of
the jurisdiction in which the debtor has its place of business, if it has only
one place of business, or at its chief executive office, if it has more than one
place of business.
(21) All filings necessary under applicable law to perfect the transfer of
the Receivables and the other Depositor Property by the Depositor to the Trust
have been made and, provided that the Depositor does not relocate its principal
places of business, no other filings (other than the filing of continuation
statements) need be made to maintain such perfection, and the interest of the
Trust, will constitute a perfected security or ownership interest prior to any
other security or ownership interest that may be perfected by the filing of a
financing statement under the UCC.
Such opinion may be made subject to the qualifications that the
enforceability of the terms of the Basic Documents may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of the rights of creditors of national banks
generally and to equitable limitations on the availability of specific
remedies.
32
<PAGE>
EXHIBIT B
Form of Opinion of Saxon, Barry, Gardner & Kincannon, special
California counsel to PeopleFirst Finance, LLC
(1) PF is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of California. PF has power and
authority (a) to own its properties and conduct its business as now conducted by
it; (b) to own, contribute, sell, assign and, in its capacity as Servicer,
service the Receivables and the other Owner Trust Estate; and (c) to execute and
deliver each of the Underwriting Agreement, the Standard Provisions and the
Transaction Documents (collectively, the "Basic Documents") to which it is a
party and to carry out their respective terms.
(2) The execution, delivery, and performance by PF of the Basic Documents
to which it is a party and the consummation of the transactions contemplated
thereby have been duly authorized by PF by all necessary action. The Basic
Documents to which PF is a party have been duly executed and delivered by, and
each constitutes a legal, valid and binding obligation of, PF, enforceable
against PF in accordance with its respective terms.
(3) The execution, delivery and performance by PF of the Basic Documents to
which it is a party, the consummation of the transactions contemplated thereby
and the compliance with the terms and provisions thereof will not materially
conflict with or result in a material breach of any of the terms or provisions
of, or constitute (with or without notice or lapse of time or both) a material
default under or result in the creation or imposition of any Lien (other than as
contemplated by the Basic Documents) upon any of its properties pursuant to the
terms of, (A) its articles of organization or operating agreement, (B) to the
actual knowledge of such counsel, any material indenture, contract, lease,
mortgage, deed of trust or other instrument or agreement to which it is a party
or by which it is bound, which breach or default would reasonably be expected to
have a material adverse impact on PF or the transactions contemplated by the
Basic Documents, (C) any order, writ, judgment, award, injunction or decree
binding on PF or (D) any law, rule or regulation applicable to PF.
(4) No consent, approval, authorization, license or other order or action
of, or filing or registration with, any federal or California governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance by PF of the Basic Documents to which it is a party, or
the consummation of the transactions contemplated thereby, except as may be
required under the 1933 Act and the Rules and Regulations and state securities
laws and any filings of UCC financing statements.
(5) There are no proceedings or investigations pending or, to such
counsel's actual knowledge, after due inquiry of PF's officers, threatened to
which PF is a party before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality having
33
<PAGE>
jurisdiction over PF, (A) that are required to be disclosed in the Registration
Statement or the Prospectus, other than those disclosed therein, (B) asserting
the invalidity of any of the Basic Documents, (C) seeking to prevent the
issuance of the Securities or the consummation of any of the transactions
contemplated by any of the Basic Documents, (D) seeking any determination or
ruling that could materially and adversely affect the performance of PF of its
obligations under, or the validity or enforceability of, any of the Basic
Documents to which it is a party, (E) that may affect materially and adversely
the federal or state income, excise, franchise or similar tax attributes of any
of the Securities, or (F) that would reasonably be expected to materially
adversely affect the interests of the holders of any of the Securities.
(6) PF has all licenses and qualifications necessary in connection with
the origination and servicing of the Receivables in all States in which
Receivables assigned to the Issuer were originated and the Receivables are in
compliance with all requirements of applicable federal, state and local laws in
all material respects.
(7) All filings necessary under applicable law to perfect (A) the transfer
of the Receivables by PF to the Transferor and (B) the assignment of the
Receivables by the Transferor to the Depositor have been made and, provided that
PF and the Transferor do not relocate their respective principal places of
business, no other filings (other than the filing of continuation statements)
need be made to maintain such perfection, and the interest of the Transferor and
the Depositor, respectively, will constitute a perfected security or ownership
interest prior to any other security or ownership interest that may be perfected
by the filing of a financing statement under the UCC.
(8) The statements in the Prospectus under the headings "Summary of Terms
-- Tax Status" and "State Tax Consequences" accurately describe the material
California corporation franchise tax consequences to Noteholders and Note Owners
and, to the extent they constitute descriptions of matters of law or legal
conclusions with respect thereto, have been prepared or reviewed by such counsel
and are correct in all material respects.
(9) Except as described in the Prospectus, the Trust will not be subject
to income or franchise taxation in California.
(10) Noteholders who are not residents of, or domiciled in, or otherwise
subject to taxation in California will not be subject to California income or
California franchise taxation in such state solely by reason of being
Noteholders.
(11) The Notes will be characterized as debt for California income and
franchise tax purposes.
(12) A court applying California law would hold that the standard form of
Contract used by PF with Obligors domiciled in the State of California (the
"California Contract"), upon negotiation of the check attached thereto, creates
a legal, valid, binding and enforceable obligation of the Obligor thereunder in
accordance with the terms of the California Contract, and
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given the existence of such enforceable obligation: (a) a court applying
California law would hold that the California Contract creates a valid security
interest in the rights of the related Obligor in the related Financed Vehicle
(each a "California Financed Vehicle") in favor of PF; and (b) a court applying
California law would hold that the California Contract constitutes chattel paper
under Article 9 of the UCC.
(13) Following the assignment by PF to the Transferor of PF's security
interest in California Financed Vehicles, the assignment by the Transferor to
the Depositor of the Transferor's security interest in the California Financed
Vehicles, the assignment by the Depositor to the Issuer of the Depositor's
security interest in the California Financed Vehicles, and the assignment by the
Trust to the Indenture Trustee of the Trust's security interest in the
California Financed Vehicles, such security interests will be perfected security
interests of first priority in favor of the Transferor, the Depositor, the
Issuer and the Indenture Trustee, as applicable.
(14) The Transferor is registered to transact business as a limited
liability company in the State of California.
Such opinion may be made subject to the qualifications that the
enforceability of the terms of the Basic Documents may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of the rights of creditors of national banks
generally and to equitable limitations on the availability of specific
remedies.
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EXHIBIT C
Form of Opinion of Counsel to Indenture Trustee
(1) The Indenture Trustee is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. The Indenture
Trustee has full power, authority and legal right to execute, deliver and
perform the Basic Documents to which it is a party and carry out their
respective terms.
(2) The execution, delivery and performance by the Indenture Trustee of the
Basic Documents to which it is a party and the consummation of the transactions
contemplated thereby have been duly authorized by the Indenture Trustee by all
necessary action. The Basic Documents to which it is a party have been duly
executed and delivered by the Indenture Trustee, and when executed and delivered
by the other parties thereto, will constitute legal, valid and binding
obligations of the Indenture Trustee.
(3) The Notes have been duly authenticated and delivered by the Indenture
Trustee.
(4) No consent, approval, authorization, license or other order or action
of, or filing or registration with, any court or governmental authority, bureau
or agency is required in connection with the execution, delivery or performance
of the Basic Documents to which it is a party by the Indenture Trustee or the
consummation of the transactions contemplated thereby.
(5) The execution, delivery and performance of the Basic Documents to which
it is a party by the Indenture Trustee, the consummation of the transactions
contemplated thereby and compliance with the terms and provisions thereof will
not conflict with or result in a breach or violation of any of the terms and
provisions of, constitute (with or without notice or lapse of time or both) a
default under or result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of, (A) the charter, articles of
association or bylaws of the Indenture Trustee, (B) any indenture, contract,
lease, mortgage, deed of trust or other instrument or agreement to which the
Indenture Trustee is a party or by which the Indenture Trustee is bound or any
of its properties are subject, or (C) any law, order, rule or regulation
applicable to the Indenture Trustee or its properties, of any regulatory body,
any court, administrative agency or other governmental instrumentality having
jurisdiction over the Indenture Trustee or any of its properties.
(6) There are no actions, suits or proceedings pending or, to the best of
such counsel's knowledge, threatened against the Indenture Trustee before any
court, or by or before any federal, state, municipal or other governmental
department, commission, board, bureau or governmental agency or instrumentality,
or arbitrator which would, if adversely determined, affect in any material
respect the consummation, validity or enforceability against the Indenture
Trustee of the Indenture.
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(7) If the Indenture Trustee were acting as Servicer under the Basic
Documents as of the date of this Agreement, the Indenture Trustee would have the
corporate power and authority to perform the obligations of the Servicer as
provided in the Basic Documents.
Such opinion may be made subject to the qualifications that the
enforceability of the terms of the Basic Documents may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of the rights of creditors of national banks
generally and to equitable limitations on the availability of specific
remedies.
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EXHIBIT D
Form of Opinion of Counsel to Owner Trustee
(1) The Owner Trustee has been duly organized and is validly existing and
in good standing as a banking corporation under the laws of the State of
Delaware. The Owner Trustee has full power, authority and legal right to
execute, deliver and perform the Basic Documents to which it is a party and to
carry out their respective terms.
(2) The execution, delivery and performance by the Owner Trustee of each of
the Basic Documents to which the Owner Trustee or the Trust is a party and the
consummation of the transactions contemplated thereby, have been duly authorized
by the Owner Trustee by all necessary action. The Basic Documents to which the
Owner Trustee is a party have been duly executed and delivered by the Owner
Trustee, and, when executed and delivered by the other parties thereto, such
Basic Documents will constitute legal, valid and binding obligations of the
Owner Trustee enforceable against the Owner Trustee in accordance with their
respective terms. The Basic Documents to which the Trust is a party have been
duly executed and delivered by the Trust, and when executed and delivered by the
other parties thereto, such Basic Documents will constitute legal, valid and
binding obligations of the Trust enforceable against the Trust in accordance
with their respective terms.
(3) No consent, approval, authorization, license or other order or action
of, or filing or registration with, any court or governmental authority, bureau
or agency is required in connection with the execution, delivery or performance
by the Owner Trustee or the Trust of the Basic Documents to which it is a party
or the consummation of the transactions contemplated thereby except such as have
been obtained and made under the Act and the Rules and Regulations or state
securities laws and the filing of any UCC financing statements required to
perfect the Trust's interest in the Receivables.
(4) The execution, delivery and performance by the Owner Trustee of the
Basic Documents to which it is a party, the consummation of the transactions
contemplated thereby and the compliance with the terms and provisions thereof
will not conflict with or result in a breach or violation of any of the terms
and provisions of, constitute (with or without notice or lapse of time or both)
a default under or result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of, (A) the articles of association or
bylaws of the Owner Trustee, (B) any indenture, contract, lease, mortgage, deed
of trust or other instrument or agreement to which the Owner Trustee is a party
or by which the Owner Trustee is bound or any of its properties are subject, or
(C) any law, order, rule or regulation applicable to the Owner Trustee or its
properties, of any regulatory body, any court, administrative agency or other
governmental instrumentality having jurisdiction over the Owner Trustee or any
of its properties.
(5) The Certificates have been duly executed, authenticated and delivered
by the Owner Trustee.
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(6) When the Notes have been duly executed and delivered by the Owner
Trustee on behalf of the Trust and authenticated by the Indenture Trustee, all
in accordance with the Trust Agreement and the Indenture, and delivered to and
paid for by the purchasers thereof, the Notes will be valid and binding
obligations of the Trust, enforceable against the Trust, in accordance with
their terms and the terms of the Indenture.
(7) There are no actions, suits or proceedings pending or, to the best of
such counsel's knowledge, threatened against the Owner Trustee before any court,
or by or before any federal, state, municipal or other governmental department,
commission, board, bureau or governmental agency or instrumentality, or
arbitrator which would, if adversely determined, affect in any material respect
the consummation, validity or enforceability against the Owner Trustee of any of
the Basic Documents.
(8) The Trust has been duly formed and is validly existing as a statutory
business trust under the laws of the State of Delaware, with full power and
authority to execute, deliver and perform its obligations under the Basic
Documents to which it is a party.
(9) All filings necessary under applicable law to perfect the pledge of the
Receivables by the Issuer to the Indenture Trustee have been made and, provided
that the Issuer does not relocate its principal places of business, no other
filings (other than the filing of continuation statements) need be made to
maintain such perfection, and the interest of the Indenture Trustee will
constitute a perfected security or ownership interest prior to any other
security or ownership interest that may be perfected by the filing of a
financing statement under the UCC.
Such opinion may be made subject to the qualifications that the
enforceability of the terms of the Basic Documents may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of the rights of creditors of national banks
generally and to equitable limitations on the availability of specific
remedies.
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EXHIBIT E
Form of Opinion of Counsel to the Depositor
(1) The Depositor is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and is duly qualified
to do business as a foreign corporation in the State of New York.
(2) The Depositor has corporate power and authority to enter into the Basic
Documents to which it is a party.
(3) The execution, delivery and performance by the Depositor of the Basic
Documents to which it is a party do not conflict with the Certificate of
Incorporation or the Bylaws of the Depositor and to such counsel's knowledge,
(A) do not conflict with or violate or constitute a material breach of, or
constitute a default under, any material written contract, indenture,
undertaking or other agreement or instrument by which the Depositor is bound or
to which it is now a party, and (B) do not conflict with or violate any order,
writ, injunction or decree of any court or governmental authority against the
Depositor.
(4) The Basic Documents to which the Depositor is a party have been
authorized by all necessary action on the part of the Depositor and have been
duly executed and delivered by the Depositor.
Such opinion may be made subject to the qualifications that the
enforceability of the terms of the Basic Documents may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of the rights of creditors of national banks
generally and to equitable limitations on the availability of specific
remedies.
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