EXHIBIT 1.1
ACCESS FINANCIAL MORTGAGE LOAN TRUST 1997-1
$63,500,000 Class A-1 Group I Certificates, Variable Pass-Through Rate
$30,200,000 Class A-2 Group I Certificates, 6.600% Pass-Through Rate
$21,300,000 Class A-3 Group I Certificates, 6.925% Pass-Through Rate
$19,733,000 Class A-4 Group I Certificates, 7.275% Pass-Through Rate
$138,866,000 Class A-5 Group II Certificates, Variable Pass-Through Rate
UNDERWRITING AGREEMENT
PRUDENTIAL SECURITIES INCORPORATED
J.P. MORGAN SECURITIES INC.
February 25, 1997
Dear Sirs:
Access Financial Lending Corp., a corporation organized and existing under
the laws of Delaware (the "Company"), agrees with you (the "Underwriters") as
follows:
Section 1. Issuance and Sale of Certificates. The Company has authorized
the issuance and sale of Mortgage Loan Pass-Through Certificates, Series 1997-1,
Class A-1 Group I Certificates in an aggregate principal amount of $63,500,000,
Class A-2 Group I Certificates in an aggregate principal amount of $30,200,000,
Class A-3 Group I Certificates in an aggregate principal amount of $21,300,000,
Class A-4 Group I Certificates in an aggregate principal amount of $19,733,000
and Class A-5 Group II Certificates in an aggregate principal amount of
$138,866,000, (collectively, the "Offered Certificates"). The Offered
Certificates, Class B Certificates and the Residual Certificates (the Class B
Certificates and the Residual Certificates, collectively, the "Non-Offered
Certificates") (the Non-Offered Certificates and the Offered Certificates,
collectively, the "Certificates"), are to be issued by Access Financial Mortgage
Loan Trust 1997- 1 (the "Trust") pursuant to a Pooling and Servicing Agreement,
to be dated as of February 1, 1997 (the "Pooling and Servicing Agreement"),
among the Company, Access Financial Lending Corp., as master servicer (the
"Master Servicer"), Access Financial Receivables Corp., as the transferor (the
"Transferor") and The Chase Manhattan Bank, a New York banking corporation, as
trustee (the "Trustee"). The Non-Offered Certificates are not to be sold
hereunder. The Certificates evidence all of the beneficial ownership interests
in the
assets of the Trust consisting primarily of a pool of amortizing mortgage loans
which are secured by first or second liens on residential properties (the
"Mortgage Loans").
The Company will transfer all the Mortgage Loans to the Transferor pursuant
to a Purchase and Sale Agreement dated as of February 1, 1997 (the "Purchase
Agreement") between the Company and the Transferor.
The Offered Certificates will have the benefit of a certificate insurance
policy (the "Certificate Insurance Policy") issued by Financial Security
Assurance, Inc., a monoline insurance company organized under the laws of New
York (the "Certificate Insurer").
In connection with the issuance of the Certificate Insurance Policy, (i)
the Company and the Certificate Insurer will execute and deliver an Insurance
and Indemnity Agreement dated as of February 1, 1997 (the "Insurance Agreement")
and (ii) the Company, the Transferor, the Underwriters and the Certificate
Insurer will execute and deliver an Indemnification Agreement dated as of
February 25, 1997 (the "Indemnification Agreement").
As used herein, the term "Company Agreements" means the Pooling and
Servicing Agreement, the Sale Agreement, the Insurance Agreement, the
Indemnification Agreement, any Sub-Servicing Agreements and this Agreement.
As used herein, the term "Transferor Agreements" means the Pooling and
Servicing Agreement, the Sale Agreement and the Indemnification Agreement.
An election will be made to treat certain of the assets and Accounts of the
Trust as "real estate mortgage investment conduits" ("REMICs") as such term is
defined in the Internal Revenue Code of 1986, as it may be amended from time to
time (the "Code"). The Offered Certificates and the Class B Certificates will be
designated as "regular interests" in a REMIC, and the Residual Certificates will
be designated as "residual interests" in a REMIC.
The offering of the Offered Certificates will be made by you, and the
Company understands that you propose to make a public offering of the Offered
Certificates for settlement on February 28, 1997, as you deem advisable.
Defined terms used herein shall have their respective meanings as set forth
in the Pooling and Servicing Agreement.
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Section 2. Representations and Warranties. A. The Company represents and
warrants to, and agrees with each of the Underwriters, that:
(i) A Registration Statement on Form S-3 (No. 333- 07837) has (a) been
prepared by the Company on such Form in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act") and the rules and
regulations (the "Rules and Regulations") of the United States Securities and
Exchange Commission (the "Commission") thereunder, (b) been filed with the
Commission and (c) been declared effective by the Commission, and no stop order
suspending the effectiveness of the Registration Statement has been issued, and
no proceeding for that purpose has been initiated or threatened, by the
Commission. Copies of such Registration Statement have been delivered by the
Company to the Underwriters. There are no contracts or documents of the Company
which are required to be filed as exhibits to the Registration Statement
pursuant to the Securities Act or the Rules and Regulations which have not been
so filed or incorporated by reference therein on or prior to the Effective Date
of the Registration Statement other than such documents or materials, if any, as
the Underwriters deliver to the Company pursuant to Section 9D hereof for filing
on Form 8-K. The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
As used herein, the term "Effective Date" means the date on and time at
which the Registration Statement became effective, or the date on and the time
at which the most recent post-effective amendment to such Registration
Statement, if any, was declared effective by the Commission. The term
"Registration Statement" means (i) the registration statement referred to in the
preceding paragraph, including the exhibits thereto, (ii) all documents
incorporated by reference therein pursuant to Item 12 of Form S-3 and (iii) any
post-effective amendment filed and declared effective prior to the date of
issuance of the Certificates. The term "Base Prospectus" means the prospectus
included in the Registration Statement. The term "Prospectus Supplement " means
the prospectus supplement dated the date hereof and specifically relating to the
Offered Certificates (the "Prospectus Supplement"), as first filed with the
Commission pursuant to Rule 424 of the Rules and Regulations. The term "Company
Offering Materials" means, collectively, the Registration Statement, the Base
Prospectus and the Prospectus Supplement except for the Underwriter Information.
The term "Underwriter Information" means the information set forth under the
caption "Underwriting" in the Prospectus Supplement and any information in the
Prospectus Supplement relating to any potential market-making, over-allotment or
price stabilization activities of the Underwriters. The term
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"Prospectus" means, together, the Base Prospectus and the Prospectus Supplement.
(ii) The Registration Statement and the Prospectus conform, and any further
amendments or supplements to the Registration Statement or the Prospectus will,
when they become effective or are filed with the Commission, as the case may be,
conform in all respects to the requirements of the Securities Act and the Rules
and Regulations. The Company Offering Materials do not and will not, as of the
Effective Date or filing date thereof and of any amendment thereto, as
appropriate, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(iii) The documents incorporated by reference in the Company Offering
Materials, when they were filed with the Commission conformed in all material
respects to the requirements of the Securities Act or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as applicable, and the Rules and
Regulations of the Commission thereunder, and none of such documents contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; any further documents so filed and incorporated by reference in the
Company Offering Materials, when such documents are filed with the Commission
will conform in all material respects to the requirements of the Exchange Act
and the Rules and Regulations of the Commission thereunder and will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided that no representation is made as to documents deemed to be Derived
Information except to the extent such documents reflect Company - Provided
Information.
(iv) Since the respective dates as of which information is given in the
Company Offering Materials, or the Company Offering Materials as amended and
supplemented, (x) there has not been any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, business, management, financial condition, stockholders'
equity, results of operations, regulatory situation or business prospects of the
Company and (y) the Company has not entered into any transaction or agreement
(whether or not in the ordinary course of business) material to the Company
that, in either case, would reasonably be expected to materially adversely
affect the interests of the holders of the Offered Certificates, otherwise than
as set forth or contemplated in the Company Offering Materials, as so amended or
supplemented.
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(v) The Company is not aware of (x) any request by the Commission for any
further amendment of the Registration Statement or the Prospectus or for any
additional information, (y) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose or (z) any notification with
respect to the suspension of the qualification of the Offered Certificates for
the sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
(vi) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material adverse effect on
the business or financial condition of the Company and has all power and
authority necessary to own or hold its properties, to conduct the business in
which it is engaged and to enter into and perform its obligations under each
Company Agreement and to cause the Certificates to be issued.
(vii) There are no actions, proceedings or investigations pending before or
threatened by any court, administrative agency or other tribunal to which the
Company is a party or of which any of its properties is the subject (i) which if
determined adversely to it is likely to have a material adverse effect
individually, or in the aggregate, on the business or financial condition of the
Company, (ii) asserting the invalidity of any Company Agreement, in whole or in
part or the Certificates, (iii) seeking to prevent the issuance of the
Certificates or the consummation by the Company of any of the transactions
contemplated by any Company Agreement, in whole or in part, or (iv) which if
determined adversely it is likely to materially and adversely affect the
performance by the Company of its obligations under, or the validity or
enforceability of, any Company Agreement, in whole or in part or the
Certificates.
(viii) Each Company Agreement has been, or, when executed and delivered
will have been, duly authorized, validly executed and delivered by the Company
and each Company Agreement constitutes, a valid and binding agreement of the
Company, enforceable against the Company in accordance with their respective
terms, except to the extent that the enforceability hereof may be subject (x) to
insolvency, reorganization, moratorium, receivership, conservatorship, or other
similar laws, regulations or procedures of general applicability now or
hereafter in effect relating to or affecting creditors' rights generally, (y) to
general
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principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law), and (z) with respect to rights of indemnity
under this Agreement, to limitations of public policy under applicable
securities laws.
(ix) The issuance and delivery of the Certificates, and the execution,
delivery and performance of each Company Agreement and the consummation of the
transactions contemplated hereby and thereby, do not and will not conflict with
or result in a breach of or violate any term or provision of or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement, or other
agreement or instrument to which the Company is a party, by which the Company
may be bound or to which any of the property or assets of the Company or any of
its subsidiaries may be subject, nor will such actions result in any violation
of the provisions of the articles of incorporation or by-laws of the Company or
any law, statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its respective
properties or assets.
(x) KPMG Peat Marwick is an independent public accountant with respect to
the Company as required by the Securities Act and the Rules and Regulations.
(xi) The direction by the Company to the Trustee to execute, authenticate,
countersign, issue and deliver the Certificates will be duly authorized by the
Company, and, assuming the Trustee has been duly authorized to do so, when
executed, authenticated, countersigned, issued and delivered by the Trustee in
accordance with the Pooling and Servicing Agreement, the Certificates will be
validly issued and outstanding and will be entitled to the benefits of the
Pooling and Servicing Agreement.
(xii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States is required for the issuance and sale of the Certificates, or the
consummation by the Company of the other transactions contemplated by this
Agreement, except the registration under the Securities Act of the Offered
Certificates and such consents, approvals, authorizations, registrations or
qualifications as may have been obtained or effected or as may be required under
securities or Blue Sky laws in connection with the purchase and distribution of
the Offered Certificates by you.
(xiii) The Company possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, Federal or foreign
regulatory agencies or bodies necessary to conduct the business now conducted by
it and as described in the Company Offering Materials (or is exempt
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therefrom) and the Company has not received notice of any proceedings relating
to the revocation or modification of such license, certificate, authority or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, is likely to materially and adversely affect the
conduct of its business, operations, financial condition or income.
(xiv) Neither the Company nor the Trust created by the Pooling and
Servicing Agreement will conduct its operations while any of the Certificates
are outstanding in a manner that would require the Company or the Trust to be
registered as an "investment company" under the Investment Company Act of 1940,
as amended (the "1940 Act"), as in effect on the date hereof.
(xv) Any taxes, fees and other governmental charges in connection with the
execution, delivery and issuance of any Company Agreement, the Certificate
Insurance Policies and the Certificates that are required to be paid by the
Company at or prior to the Closing Date have been paid or will be paid at or
prior to the Closing Date.
(xvi) At the Closing Date, each of the representations and warranties of
the Company set forth in any Company Agreement will be true and correct in all
material respects.
(xvii) (a) Following the conveyance of the Mortgage Loans to the Trust
pursuant to the Pooling and Servicing Agreement, the Trust will own the Mortgage
Loans free and clear of any lien, mortgage, pledge, charge, encumbrance, adverse
claim or other security interest (collectively, "Liens") other than Liens
created by the Pooling and Servicing Agreement, and (b) the Company will have
the power and authority to sell such Mortgage Loans to the Trust.
(xviii) As of the Cut-off Date, each of the Mortgage Loans will meet the
eligibility criteria described in the Prospectus.
(xix) Each of the Certificates, the Pooling and Servicing Agreement, any
Sub-Servicing Agreement, the Indemnification Agreement and the Certificate
Insurance Policies conforms in all material respects to the descriptions thereof
contained in the Prospectus.
Any certificate signed by an officer of the Company and delivered to you or
your counsel in connection with an offering of the Offered Certificates shall be
deemed, and shall state that it is, a representation and warranty as to
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the matters covered thereby to each person to whom the representations and
warranties in this Section 2A are made.
Section 3. Purchase and Sale. The Underwriters' commitment to purchase the
Offered Certificates pursuant to this Agreement shall be deemed to have been
made on the basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein set forth. The
Company agrees to instruct the Trust to issue the Offered Certificates to each
Underwriter as set forth in Schedule 1 hereto, and each Underwriter agrees,
severally and not jointly, to purchase the Offered Certificates set forth by its
name on Schedule 1 hereto on the date of issuance thereof. The purchase prices
for the Offered Certificates shall be as set forth on Schedule 1 hereto.
Section 4. Delivery and Payment. Payment of the purchase price for, and
delivery of, any Offered Certificates to be purchased by you shall be made at
the office of Dewey Ballantine, 1301 Avenue of the Americas, New York, New York,
or at such other place as shall be agreed upon by you and the Company, at 10:00
a.m. New York City time on February 28, 1997 (the "Closing Date"), or at such
other time or date as shall be agreed upon in writing by you and the Company.
Payment shall be made by wire transfer of same day funds payable to the account
designated by the Company. Each of the Offered Certificates so to be delivered
shall be represented by one or more global certificates registered in the name
of Cede & Co., as nominee for The Depository Trust Company.
The Company agrees to have the Offered Certificates available for
inspection, checking and packaging by the Underwriters in New York, New York,
not later than 12:00 p.m. New York City time on the business day prior to the
Closing Date.
Section 5. Offering by Underwriters. It is understood that the Underwriters
propose to offer the Offered Certificates for sale to the public as set forth in
the Prospectus.
Section 6. Covenants of the Company. The Company covenants with each of the
Underwriters as follows:
A. To cause to be prepared a Prospectus in a form approved by the
Underwriters, to file such Prospectus pursuant to Rule 424(b) under the
Securities Act within the time period prescribed by Rule 424(b) and to provide
the Underwriters with evidence satisfactory to the Underwriters of such timely
filing; to cause to be made no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to the 91st day following the
Closing Date except as permitted herein; to advise the Underwriters, promptly
after
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it receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective prior to the 91st day following
the Closing Date or any supplement to the Prospectus or any amended Prospectus
has been filed prior to the 91st day following the Closing Date and to furnish
the Underwriters with copies thereof; to file promptly all reports and any
global proxy or information statements required to be filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and, until the 91st day following the
Closing Date; to promptly advise the Underwriters of its receipt of notice of
the issuance by the Commission of any stop order or of: (i) any order preventing
or suspending the use of the Prospectus; (ii) the suspension of the
qualification of the Offered Certificates for offering or sale in any
jurisdiction; (iii) the initiation of or threat of any proceeding for any such
purpose; (iv) any request by the Commission for the amending or supplementing of
the Registration Statement or the Prospectus or for additional information. In
the event of the issuance of any stop order or of any order preventing or
suspending the use of the Prospectus or suspending any such qualification, the
Company promptly shall use its best efforts to obtain the withdrawal of such
order by the Commission.
B. To furnish promptly to the Underwriters and to counsel for the
Underwriters a signed copy of the Registration Statement as originally filed
with the Commission, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
C. To deliver promptly to the Underwriters such number of the following
documents as the Underwriters shall reasonably request: (i) conformed copies of
the Registration Statement as originally filed with the Commission and each
amendment thereto (in each case including exhibits); (ii) the Prospectus and any
amended or supplemented Prospectus; and (iii) any document incorporated by
reference in the Prospectus (including exhibits thereto). If the delivery of a
prospectus is required at any time in connection with the offering or sale of
the Offered Certificates and if at such time any events shall have occurred 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 necessary
in order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, the Company shall notify the Underwriters
and, upon the Underwriters' request based upon the advice of
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counsel, shall file such document and prepare and furnish without charge to the
Underwriters and to any dealer in securities as many copies as the Underwriters
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which corrects such statement or omission or
effects such compliance.
D. To cause to be filed promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Underwriters, be required by the
Securities Act or requested by the Commission.
E. To cause to be furnished to the Underwriters and counsel for the
Underwriters, prior to filing with the Commission, and to obtain the consent of
the Underwriters, which consent will not unreasonably be withheld, for the
filing of the following documents relating to the Certificates: (i) any
amendment to the Registration Statement or supplement to the Prospectus, or
document incorporated by reference in the Prospectus, or (ii) Prospectus
pursuant to Rule 424 of the Rules and Regulations.
F. To cause to be made generally available to holders of the Offered
Certificates as soon as practicable, but in any event not later than 90 days
after the close of the period covered thereby, a statement of earnings of the
Trust (which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including Rule 158) and covering a period of
at least twelve consecutive months beginning not later than the first day of the
first fiscal quarter following the Closing Date.
G. To use its best efforts, in cooperating with the Underwriters, to
qualify the Offered Certificates for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States as
the Underwriters may designate, and maintain or cause to be maintained such
qualifications in effect for as long as may be required for the distribution of
the Offered Certificates. The Company will cause the filing of such statements
and reports as may be required by the laws of each jurisdiction in which the
Offered Certificates have been so qualified.
H. The Company will not, without the prior written consent of the
Underwriters, contract to sell any mortgage pass-through certificates, mortgage
pass-through notes or collateralized mortgage obligations or other similar
securities either directly or indirectly for a period of five (5) business days
prior to the later of termination of the syndicate or the Closing Date.
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I. So long as the Offered Certificates shall be outstanding, the Company
shall cause the Trustee, pursuant to the Pooling and Servicing Agreement, to
deliver to the Underwriters as soon as such statements are furnished to the
Trustee: (i) the annual statement as to compliance of the Master Servicer under
the Pooling and Servicing Agreement delivered to the Trustee pursuant to Section
10.16 thereof; (ii) the annual statement of a firm of independent public
accountants furnished to the Trustee pursuant to Section 10.17 of the Pooling
and Servicing Agreement; and (iii) the monthly reports furnished to the Owners
pursuant to Section 7.6 of the Pooling and Servicing Agreement.
J. So long as any of the Offered Certificates are outstanding, the Company
will furnish to the Underwriters (i) as soon as practicable after the end of the
fiscal year of the Trust all documents required to be distributed to
Certificateholders and other filings with the Commission pursuant to the
Exchange Act, or any order of the Commission thereunder with respect to any
securities issued by the Company that are (A) non-structured equity or debt
offering of the Company or (B) the Offered Certificates and (ii) from time to
time, any other information concerning the Company filed with any government or
regulatory authority which is otherwise publicly available, as the Underwriters
shall reasonably request in writing.
K. To apply the net proceeds from the sale of the Offered Certificates in
the manner set forth in the Prospectus.
L. If, between the date hereof or, if earlier, the dates as of which
information is given in the Prospectus and the Closing Date, to the knowledge of
the Company, there shall have been any material change, or any development
involving a prospective material change in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations of
the Company, the Company will give prompt written notice thereof to the
Underwriters.
M. The Trustee will prepare, or cause to be prepared, and file, or cause to
be filed, a timely election to treat the Trust Fund as a REMIC for Federal
income tax purposes and will file, or cause to be filed, such tax returns and
take such actions, all on a timely basis, as are required to elect and maintain
such status.
N. To the extent, if any, that the ratings provided with respect to the
Offered Certificates by the rating agency or agencies that initially rate the
Offered Certificates are conditional upon the furnishing of documents or the
taking of any other actions by the Company, the Company shall use its
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best efforts to furnish or cause to be furnished such documents and take any
such other actions.
Section 7. Conditions of the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Offered Certificates pursuant to
this Agreement are subject to (i) the accuracy on and as of the Closing Date of
the representations and warranties on the part of the Company herein contained,
(ii) the accuracy of the statements of officers of the Company made pursuant
hereto, (iii) the performance by the Company of all of its obligations
hereunder, and the performance by the Company of all of its obligations under
the Company Agreements and (iv) the following conditions as of the Closing Date:
A. No stop order suspending the effectiveness of the Registration Statement
shall have been issued, and no proceeding for that purpose shall have been
initiated or threatened by the Commission. Any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus shall have been complied with.
B. You shall have received the Transfer Agreement, the Pooling and
Servicing Agreement, any Sub-Servicing Agreements, the Insurance Agreement, the
Indemnification Agreement and the Offered Certificates in form and substance
satisfactory to you and duly executed by the signatories required pursuant to
the respective terms thereof.
C. You shall have received from Dewey Ballantine, counsel for the Company
and the Transferor, a favorable opinion, dated the Closing Date and satisfactory
in form and substance to the Underwriters and counsel for the Underwriters to
the effect that:
(i) The issuance and sale of the Offered Certificates have been duly
authorized and, when executed, authenticated, countersigned and delivered
by the Trustee in accordance with the Pooling and Servicing Agreement and
delivered and paid for pursuant to this Agreement, will be validly issued
and outstanding and will be entitled to the benefits of the Pooling and
Servicing Agreement.
(ii) No authorization, approval, consent or order of, or filing with,
any court or governmental agency or authority is necessary under the
federal law of the United States or the laws of the State of New York in
connection with the execution, delivery and performance by the Company of
the Company Agreements, except such as may be required under the Act or the
Rules and Regulations and Blue Sky or other state securities laws, filings
with respect to the transfer of the Mortgage
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Loans to the Trust pursuant to the Pooling and Servicing Agreement and such
other approvals or consents as have been obtained.
(iii) Each Company Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with their respective terms, except that as to enforceability such
enforcement may (A) be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally, (B) be limited by general principles of equity
(whether considered in a proceeding at law or in equity) and (C) the
enforceability as to rights to indemnification may be subject to
limitations of public policy under applicable laws.
(iv) Each Transferor Agreement constitutes the legal, valid and
binding obligation of the Transferor, enforceable against the Transferor in
accordance with their respective terms, except that as to enforceability
such enforcement may (A) be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally, (B) be limited by general principles of equity
(whether considered in a proceeding at law or in equity) and (C) the
enforceability as to rights to indemnification may be subject to
limitations of public policy under applicable laws.
(v) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended.
(vi) Neither the Company nor the Trust is required to be registered as
an "investment company" under the Investment Company Act of 1940, as
amended.
(vii) The direction by the Company to the Trustee to execute, issue,
countersign and deliver the Offered Certificates has been duly authorized
and, when the Offered Certificates are executed and authenticated by the
Trustee in accordance with the Pooling and Servicing Agreement and
delivered and paid for pursuant to this Agreement, they will be validly
issued and outstanding and entitled to the benefits provided by the Pooling
and Servicing Agreement.
(viii) Immediately prior to the transfer of the Mortgage Loans by the
Company to the Transferor pursuant to the Sale Agreement, the Company was
the sole owner of all right, title and interest in the Mortgage Loans and
other property to be transferred to the Transferor.
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(ix) The Company has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the Transferor and
has duly authorized such sale and assignment to the Transferor by all
necessary corporate action.
(x) The Company has directed the Trustee in its capacity as Trustee of
the Access Financial Loan Purchase Trust to transfer, assign, set over and
otherwise convey without recourse, to the Transferor, all right, title and
interest of the Company in and to each Mortgage Loan listed on the Mortgage
Loan Schedule delivered by the Company on the Startup Day, and all of its
right, title and interest in and to (A) scheduled payments of interest due
on each Mortgage Loan after the Cut-Off Date, (B) scheduled payments of
principal due, and unscheduled collections of principal received, on each
Mortgage Loan on and after the Cut-off Date and (C) the Certificate
Insurance Policy; such transfer of the Mortgage Loans set forth on the
Mortgage Loan Schedule to the Transferor will be absolute and is intended
by the Company and all parties hereto to be treated as a sale to the Trust.
(xi) The Offered Certificates, the Pooling and Servicing Agreement,
any Sub-Servicing Agreement and this Agreement each conform in all material
respects with the respective descriptions thereof contained in the
Registration Statement and the Prospectus.
(xii) The statements in the Prospectus under the captions "Summary of
Prospectus - Certain Federal Income Tax Considerations", "Summary of
Prospectus - ERISA Considerations", "ERISA Considerations" and "Certain
Federal Income Tax Considerations", "Summary - ERISA Considerations",
"Summary - Federal Tax Aspects", "ERISA Considerations", "Certain Federal
Tax Aspects" and "REMICS", to the extent that they constitute matters of
law or legal conclusions with respect thereto, have been reviewed by such
counsel and represent a fair and accurate summary of the matters addressed
therein, under existing law and the assumptions stated therein.
(xiii) The statements in the Prospectus under the caption "Certain
Legal Aspects of Mortgage Loans and Related Matters", "Legal Investment
Matters" and "Legal Investment Considerations" to the extent they
constitute matters of law or legal conclusions, are correct in all material
respects.
(xiv) The Offered Certificates will, when issued, be properly
characterized for Federal income tax purposes as indebtedness of the
Company and the Trust created by the Pooling and Servicing Agreement and
will not constitute
14
a "taxable mortgage pool" within the meaning of Section 7701(i) of the
code.
(xv) Assuming compliance with all of the provisions of the Pooling and
Servicing Agreement, the arrangement pursuant to which the Mortgage Loans
will be administered by the Trustee and pursuant to which the Offered
Certificates will be sold will be treated as a REMIC as defined by Section
860D of the Code and the Offered Certificates and the Class B Certificates
will be treated as "regular interests" in a REMIC (or a combination of
"regular interests" in a REMIC), and the Residual Certificates will be
treated as "residual interests" in a REMIC on the date of issuance thereof
and will continue to qualify as a REMIC for so long as such arrangement
continues to comply with any applicable changes in the provisions of the
Code and regulations issued thereunder.
(xvi) The Registration Statement is effective under the Act and no
stop order suspending the effectiveness of the Registration Statement has
been issued, and to the best of such counsel's knowledge no proceeding for
that purpose has been instituted or threatened by the Commission under the
Act.
(xvii) The conditions to the use by the Company of a registration
statement on Form S-3 under the Act, as set forth in the General
Instructions to Form S-3, have been satisfied with respect to the
Registration Statement and the Prospectus. There are no contracts or
documents which are required to be filed as exhibits to the Registration
Statement pursuant to the Act or the Rules and Regulations thereunder which
have not been so filed.
(xviii) The Registration Statement at the time it became effective,
and any amendments thereto at the time such amendment becomes effective
(other than the information set forth in the financial statements and other
financial and statistical information contained therein, as to which such
counsel need express no opinion), complied as to form in all material
respects with the applicable requirements of the Act and the Rules and
Regulations thereunder.
(xix) The execution, delivery and performance of each Company
Agreement by the Company will not conflict with or violate any federal
statute, rule, regulation or order of any federal governmental agency or
body, or any federal court having jurisdiction over the Company or its
properties or assets.
(xx) The execution, delivery and performance of each Transferor
Agreement by the Transferor will not conflict
15
with or violate any federal statute, rule, regulation or order of any
federal governmental agency or body, or any federal court having
jurisdiction over the Transferor or its properties or assets.
In addition, such counsel shall state that such counsel has participated in
conferences with officers and other representatives of each of the Company, the
Transferor, any Sub-Servicer, the Certificate Insurer, the Trustee and the
Underwriters at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and on the basis of the foregoing,
no facts have come to such counsel's attention that have led such counsel to
believe the Registration Statement, at the time it became effective and as of
the date of such counsel's opinion contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, as of its date and as of the date of such counsel's
opinion, contained or contains an untrue statement of material fact or omitted
or omits to state a material fact necessary to make the statements therein not
misleading; it being understood that such counsel need express no belief with
respect to the financial statements, schedules and other financial and
statistical data included in the Registration Statement or the Prospectus.
D. The Company shall have delivered to the Underwriters a certificate,
dated the Closing Date, of an authorized officer of the Company to the effect
that the signer of such certificate has carefully examined this Agreement and
the Prospectus and that: (i) the representations and warranties of the Company
in each Company Agreement are true and correct in all material respects at and
as of the Closing Date with the same effect as if made on the Closing Date, (ii)
the Company has complied in all material respects with all the agreements and
satisfied in all material respects all the conditions on its part to be
performed or satisfied at or prior to the Closing Date, (iii) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or, to such officer's
knowledge, threatened, (iv) there has been no material adverse change in the
condition (financial or other), earnings, business, properties or prospects of
the Company, whether or not arising from transactions in the ordinary course of
business, except as set forth or contemplated in the Prospectus and (v) nothing
has come to such officer's attention that would lead such officer to believe
that the Company Offering Materials contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
16
The Company shall attach to such certificate a true and correct copy of its
certificate of incorporation, as appropriate, and bylaws which are in full force
and effect on the date of such certificate and a certified true copy of the
resolutions of its Board of Directors with respect to the transactions
contemplated herein.
E. The Transferor shall have delivered to the Underwriters a certificate,
dated the Closing Date, of an authorized officer of the Transferor to the effect
that the signer of such certificate has carefully examined this Agreement and
the Prospectus and that: (i) the representations and warranties of the
Transferor in each Transferor Agreement are true and correct in all material
respects at and as of the Closing Date with the same effect as if made on the
Closing Date and (ii) the Transferor has complied in all material respects with
all the agreements and satisfied in all material respects all the conditions on
its part to be performed or satisfied at or prior to the Closing Date.
The Transferor shall attach to such certificate a true and correct copy of
its certificate of incorporation, as appropriate, and bylaws which are in full
force and effect on the date of such certificate and a certified true copy of
the resolutions of its Board of Directors with respect to the transactions
contemplated herein.
F. The Underwriters shall have received from in-house counsel of the
Company, a favorable opinion, dated the Closing Date and satisfactory in form
and substance to the Underwriters and counsel for the Underwriters to the effect
that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
full corporate power to own its property or assets and to conduct its
business as presently conducted by it and as described in the Prospectus,
and is in good standing in each jurisdiction in which the conduct of its
business or the ownership of its property or assets requires such
qualification or where the failure to be so qualified would have a material
adverse effect on its condition (financial or otherwise).
(ii) Each Company Agreement has been duly authorized, executed and
delivered by authorized officers or signers of the Company.
(iii) The direction by the Company to the Trustee to execute, issue,
countersign and deliver the Offered Certificates has been duly authorized
by the Company.
17
(v) The execution, delivery and performance of each Company Agreement
by the Company will not conflict with or result in a material breach of any
of the terms or provisions of, or constitute a material default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any of the property or assets of the Company pursuant to the terms of
the certificate of incorporation or the by-laws of the Company or any
statute, rule, regulation or order of any governmental agency or body of
the State of Minnesota, or any Minnesota state court having jurisdiction
over the Company or its property or assets or any material agreement or
instrument known to such counsel, to which the Company is a party or by
which the Company or any of its property or assets is bound.
(vii) No authorization, approval, consent or order of, or filing with,
any court or governmental agency or authority of the State of Minnesota is
necessary in connection with the execution, delivery and performance by the
Company of any Company Agreement, except such as may be required under the
Act or the Rules and Regulations and Blue Sky or other state securities
laws, filings with respect to the transfer of the Mortgage Loans to the
Transferor pursuant to the Sale Agreement and such other approvals or
consents as have been obtained.
(viii) To such counsel's knowledge, there are no legal or governmental
proceedings pending to which the Company is a party or of which any
property or assets of the Company is the subject, and no such proceedings
are to the best of such counsel's knowledge threatened or contemplated by
governmental authorities against the Company or the Trust, that, (A) are
required to be disclosed in the Registration Statement or (B) (i) assert
the invalidity against the Company of all or any part of any Company
Agreement, (ii) seek to prevent the issuance of the Offered Certificates,
(iii) could materially adversely affect the Company's obligations under any
Company Agreement, or (iv) seek to affect adversely the federal or state
income tax attributes of the Offered Certificates.
G. The Underwriters shall have received from in-house counsel of the
Transferor, a favorable opinion, dated the Closing Date and satisfactory in form
and substance to the Underwriters and counsel for the Underwriters to the effect
that:
(i) The Transferor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with full
18
corporate power to own its property or assets and to conduct its
business as presently conducted by it, and is in good standing in each
jurisdiction in which the conduct of its business or the ownership of its
property or assets requires such qualification or where the failure to be
so qualified would have a material adverse effect on its condition
(financial or otherwise).
(ii) Each Transferor Agreement has been duly authorized, executed and
delivered by authorized officers or signers of the Transferor.
(v) The execution, delivery and performance of each Transferor
Agreement by the Transferor will not conflict with or result in a material
breach of any of the terms or provisions of, or constitute a material
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the property or assets of the Transferor
pursuant to the terms of the certificate of incorporation or the by-laws of
the Transferor or any statute, rule, regulation or order of any
governmental agency or body of the State of Minnesota, or any Minnesota
state court having jurisdiction over the Transferor or its property or
assets or any material agreement or instrument known to such counsel, to
which the Transferor is a party or by which the Transferor or any of its
property or assets is bound.
(vii) No authorization, approval, consent or order of, or filing with,
any court or governmental agency or authority of the State of Minnesota is
necessary in connection with the execution, delivery and performance by the
Transferor of any Transferor Agreement, except such as may be required
under the Act or the Rules and Regulations and Blue Sky or other state
securities laws, filings with respect to the transfer of the Mortgage Loans
to the Trust pursuant to the Pooling and Servicing Agreement and such other
approvals or consents as have been obtained.
(viii) To such counsel's knowledge, there are no legal or governmental
proceedings pending to which the Transferor is a party or of which any
property or assets of the Transferor is the subject, and no such
proceedings are to the best of such counsel's knowledge threatened or
contemplated by governmental authorities against the Transferor or the
Trust, that, (A) are required to be disclosed in the Registration Statement
or (B) (i) assert the invalidity against the Transferor of all or any part
of any Transferor Agreement, (ii) seek to prevent the issuance of the
Offered Certificates, (iii) could materially adversely affect the
Transferor's obligations
19
under any Transferor Agreement, or (iv) seek to affect adversely the
federal or state income tax attributes of the Offered Certificates.
H. The Underwriters shall have received from special counsel to the
Certificate Insurer, reasonably acceptable to the Underwriters, a favorable
opinion dated the Closing Date and satisfactory in form and substance to the
Underwriters and counsel for the Underwriters, to the effect that:
(i) The Certificate Insurer is a monoline insurance company licensed
and authorized to transact insurance business and to issue, deliver and
perform its obligations under its surety bonds under the laws of the State
of New York. The Certificate Insurer (a) is a monoline insurance company
validly existing and in good standing under the laws of the State of New
York, (b) has the corporate power and authority to own its assets and to
carry on the business in which it is currently engaged, and (c) is duly
qualified and in good standing as a foreign corporation under the laws of
each jurisdiction where failure so to qualify or to be in good standing
would have a material and adverse effect on its business or operations.
(ii) No litigation or administrative proceedings of or before any
court, tribunal or governmental body are currently pending or, to the best
of such counsel's knowledge, threatened against the Certificate Insurer,
which, if adversely determined, would have a material and adverse effect on
the ability of the Certificate Insurer to perform its obligations under the
Certificate Insurance Policy.
(iii) The Certificate Insurance Policy and the Indemnification
Agreement constitute the irrevocable, valid, legal and binding obligations
of the Certificate Insurer in accordance with their respective terms to the
extent provided therein, enforceable against the Certificate Insurer in
accordance with their respective terms, except as the enforceability
thereof and the availability of particular remedies to enforce the
respective terms thereof against the Certificate Insurer may be limited by
applicable laws affecting the rights of creditors of the Certificate
Insurer and by the application of general principles of equity.
(iv) The Certificate Insurer, as an insurance company, is not eligible
for relief under the United States Bankruptcy Code. Any proceedings for the
liquidation, conservation or rehabilitation of the
20
Certificate Insurer would be governed by the provisions of the Insurance
Law of the State of New York.
(v) The statements set forth in the Prospectus under the caption "The
Certificate Insurance Policy and the Certificate Insurer" are true and
correct, except that no opinion is expressed as to financial statements or
other financial information included in the Prospectus relating to the
Certificate Insurer and, insofar as such statements constitute a summary of
the Certificate Insurance Policy, accurately and fairly summarize the terms
of the Certificate Insurance Policy.
(vi) The Certificate Insurance Policy constitutes an insurance policy
within the meaning of Section 3(a)(8) of the Act.
(vii) Neither the execution or delivery by the Certificate Insurer of
the Certificate Insurance Policy, the Insurance Agreement, the
Indemnification Agreement, nor the performance by the Certificate Insurer
of its obligations thereunder, will conflict with any provision of the
certificate of incorporation or the amended by-laws of the Certificate
Insurer nor, to the best of such counsel's knowledge, result in a breach
of, or constitute a default under, any agreement or other instrument to
which the Certificate Insurer is a party or by which any of its property is
bound nor, to the best of such counsel's knowledge, violate any judgment,
order or decree applicable to the Certificate Insurer of any governmental
regulatory body, administrative agency, court or arbitrator located in any
jurisdiction in which the Certificate Insurer is licensed or authorized to
do business.
I. The Underwriters shall have received from counsel to LSI Financial
Group, Inc. ("LSI"), reasonably acceptable to the Underwriters, a favorable
opinion dated the Closing Date and satisfactory in form and substance to the
Underwriters and counsel for the Underwriters, to the effect that:
(i) LSI has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its state of incorporation.
(ii) LSI has full corporate power and authority to enter into and
perform its obligations under the Sub-Servicing Agreement, including, but
not limited to, its obligation to serve in the capacity of sub-servicer
pursuant to the Sub-Servicing Agreement.
21
(iii) The Sub-Servicing Agreement has been duly authorized, executed
and delivered by LSI and constitutes a legal, valid and binding obligation
of LSI enforceable against LSI in accordance with its terms, except that as
to enforceability such enforcement may (A) be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and (B) be limited by general
principles of equity (whether considered in a proceeding at law or in
equity).
(iv) The execution, delivery and performance of the Sub-Servicing
Agreement by LSI will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the
property or assets of LSI pursuant to the terms of the certificate of
incorporation or the by-laws of LSI or any statute, rule, regulation or
order of any governmental agency or body, or any court having jurisdiction
over LSI or its property or assets or any agreement or instrument known to
such counsel, to which LSI is a party or by which LSI or any of its
property or assets is bound.
(v) No authorization, approval, consent or order of, or filing with,
any state or federal court or governmental agency or authority is necessary
in connection with the execution, delivery and performance by LSI of the
Sub-Servicing Agreement.
J. The Underwriters shall have received a certificate of LSI signed by an
authorized officer of LSI, dated the Closing Date to the effect that such
officer has examined the information contained under the heading "The
Sub-Servicer" with respect to LSI and the Sub-Servicing Agreement in the
Prospectus and that such information does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
K. The Underwriters shall have received from Dewey Ballantine, counsel for
the Underwriters, such opinion or opinions, dated the Closing Date, with respect
to the validity of the Offered Certificates and such other related matters as
the Underwriters may require.
L. The Underwriters shall have received from counsel to the Trustee a
favorable opinion dated the Closing Date and satisfactory in form and substance
to the Underwriters and counsel for the Underwriters, to the effect that:
22
(i) The Trustee has been duly incorporated and is validly existing as
a banking association in good standing under the laws of the state of New
York.
(ii) The Trustee has full corporate trust power and authority to enter
into and perform its obligations under the Pooling and Servicing Agreement,
including, but not limited to, its obligation to serve in the capacity of
Trustee and to execute, issue, countersign and deliver the Offered
Certificates.
(iii) The Pooling and Servicing Agreement has been duly authorized,
executed and delivered by the Trustee, and constitutes a legal, valid and
binding obligation of the Trustee, enforceable against the Trustee, in
accordance with its terms, except that as to enforceability such
enforcement may (A) be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally and (B) be limited by general principles of equity
(whether considered in a proceeding at law or in equity).
(iv) The Certificates have been duly authorized, executed and
authenticated by the Trustee on the date hereof on behalf of the Trust in
accordance with the Pooling and Servicing Agreement.
(v) The execution, delivery and performance of the Pooling and
Servicing Agreement and the Certificates by the Trustee will not conflict
with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of the
Trustee pursuant to the terms of the articles of association or the by-laws
of the Trustee or any statute, rule, regulation or order of any
governmental agency or body, or any court having jurisdiction over the
Trustee or its property or assets or any agreement or instrument known to
such counsel, to which the Trustee is a party or by which the Trustee or
any of its respective property or assets is bound.
(vi) No authorization, approval, consent or order of, or filing with,
any state or federal court or governmental agency or authority is necessary
in connection with the execution, delivery and performance by the Trustee
of the Pooling and Servicing Agreement and the Offered Certificates, as
applicable.
(vii) If the Trustee were acting as Master Servicer under the Pooling
and Servicing Agreements on the date hereof, the Trustee would have the
power and authority to
23
perform the obligations of the Master Servicer as provided in the Pooling
and Servicing Agreement.
M. The Trustee shall have furnished to the Underwriters a certificate of
the Trustee, signed by one or more duly authorized officers of the Trustee,
dated the Closing Date, as to the due authorization, execution and delivery of
the Pooling and Servicing Agreement by the Trustee and the acceptance by the
Trustee of the trusts created thereby and the due execution and delivery of the
Certificates by the Trustee thereunder and such other matters as the
Underwriters shall reasonably request.
N. The Indemnification Agreement shall have been executed and delivered, in
which the Certificate Insurer shall represent, among other representations, that
(i) the information under the captions "Certificate Insurer" and "Certificate
Insurance Policy" in the section entitled "Summary" and "The Certificate
Insurance Policy and the Certificate Insurer" in the Prospectus Supplement was
approved by the Certificate Insurer and does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and (ii) there has been no change in the financial
condition of the Certificate Insurer since June 30, 1996, which would have a
material adverse effect on the Certificate Insurer's ability to meet its
obligations under the Certificate Insurance Policy.
O. The Certificate Insurance Policy shall have been issued by the
Certificate Insurer and shall have been duly countersigned by an authorized
agent of the Certificate Insurer, if so required under applicable state law or
regulation.
P. The Offered Certificates shall have been rated "AAA" by Standard &
Poor's Corporation ("S&P") and "Aaa" by Moody's Investors Service, Inc.
("Moody's").
Q. The Underwriters shall have received copies of letters dated as of the
Closing Date, from S&P and Moody's stating the current ratings of the Offered
Certificates as set forth in Section P. above.
R. The Underwriters shall have received from Dewey Ballantine, counsel to
the Company, a favorable opinion, dated the Closing Date and satisfactory in
form and substance to the Underwriters and counsel for the Underwriters, as to
true sale matters relating to the transaction, and the Underwriters shall be
addressees of any opinions of counsel supplied to the rating organizations
relating to the Certificates.
24
S. All proceedings in connection with the transactions contemplated by this
Agreement, and all documents incident hereto, shall be reasonably satisfactory
in form and substance to the Underwriters and counsel for the Underwriters, and
the Underwriters and counsel for the Underwriters shall have received such other
information, opinions, certificates and documents as they may reasonably request
in writing.
T. The Prospectus and any supplements thereto shall have been filed (if
required) with the Commission in accordance with the rules and regulations under
the Act and Section 2 hereof, and prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or shall
be contemplated by the Commission or by any authority administering any state
securities or Blue Sky law.
If any condition specified in this Section 7 shall not have been fulfilled
when and as required to be fulfilled, (i) this Agreement may be terminated by
you by notice to the Company at any time at or prior to the Closing Date, and
such termination shall be without liability of any party to any other party
except as provided in Section 8 and (ii) the provisions of Section 8, the
indemnity set forth in Section 9, the contribution provisions set forth in
Section 10 and the provisions of Sections 12 and 15 shall remain in effect.
Section 8. Payment of Expenses. The Company agrees to pay the following
expenses incident to the performance of the Company's obligations under this
Agreement, (i) the filing of the Registration Statement and all amendments
thereto, (ii) the duplication and delivery to you, in such quantities as you may
reasonably request, of copies of this Agreement, (iii) the preparation, issuance
and delivery of the Certificates, (iv) the fees and disbursements of Dewey
Ballantine, counsel for the Underwriters and special counsel to the Company and
the Transferor, (v) the fees and disbursements of KPMG Peat Marwick, accountants
of the Company (excluding fee and disbursements of KPMG Peat Marwick related to
providing comfort in connection with the Derived Information), (vi) the
qualification of the Offered Certificates under securities and Blue Sky laws and
the determination of the eligibility of the Offered Certificates for investment
in accordance with the provisions hereof, including filing fees and the fees and
disbursements of Dewey Ballantine, counsel to the Underwriters, in connection
therewith and in connection with the preparation of any Blue Sky survey, (vii)
the printing and delivery to you, in such quantities as you may reasonably
request, of copies of the Registration Statement and Prospectus and all
amendments and supplements thereto, and of any Blue Sky survey, (viii) the
duplication and delivery to
25
you, in such quantities as you may reasonably request, of copies of the Pooling
and Servicing Agreement and the other transaction documents, (ix) the fees
charged by nationally recognized statistical rating agencies for rating the
Offered Certificates, (x) the fees and expenses of the Trustee and its counsel
and (xi) the fees and expenses of the Certificate Insurer and its counsel.
If this Agreement is terminated by you in accordance with the provisions of
Section 7, the Company shall reimburse you for all reasonable third-party
out-of-pocket expenses, including the reasonable fees and disbursements of Dewey
Ballantine, your counsel.
Section 9. Indemnification. A. The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls each Underwriter
within the meaning of the Securities Act or the Exchange Act, from and against
any and all loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of the Offered
Certificates), to which each Underwriter or any such controlling person may
become subject, under the Securities Act or the Exchange Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Company Offering Materials or (ii) the omission or alleged
omission to state therein a material fact required to be stated or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading and shall reimburse each Underwriter and each such
controlling person promptly upon demand for any documented legal or documented
other expenses reasonably incurred by each Underwriter or such controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the foregoing indemnity with respect to any
untrue statement contained in or omission from a prospectus shall not inure to
the benefit of each Underwriter if the Company shall sustain the burden of
proving that the person asserting against such Underwriter the loss, liability,
claim, damage or expense purchased any of the Offered Certificates which are the
subject thereof and was not sent or given a copy of the appropriate Prospectus
(or the appropriate Prospectus as amended or supplemented), if required by law,
at or prior to the written confirmation of the sale of such Offered Certificates
to such person and the untrue statement contained in or omission from such
preliminary prospectus was corrected in the appropriate Prospectus (or the
appropriate Prospectus as amended or supplemented).
26
The foregoing indemnity agreement is in addition to any liability which the
Company may otherwise have to the Underwriters or any controlling person of any
of the Underwriters.
B. Each Underwriter severally, and not jointly, agrees to indemnify and
hold harmless the Company, the directors and the officers of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act against any
and all loss, claim, damage or liability, or any action in respect thereof, to
which the Company or any such director, officer or controlling person may become
subject, under the Securities Act or the Exchange Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Underwriter Information or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and shall reimburse the Company
promptly on demand, and any such director, officer or controlling person for any
documented legal or other documented expenses reasonably incurred by the
Company, or any director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred.
The foregoing indemnity agreement is in addition to any liability which
each Underwriter may otherwise have to the Company or any such director, officer
or controlling person.
C. Promptly after receipt by any indemnified party under this Section 9 of
notice of any claim or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 9, promptly notify the indemnifying party in writing of
the claim or the commencement of that action; provided, however, that the
failure to notify an indemnifying party shall not relieve it from any liability
which it may have under this Section 9 except to the extent it has been
materially prejudiced by such failure; and provided, further, that the failure
to notify any indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under this Section 9.
If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to
27
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party, unless such indemnified party reasonably objects to such
assumption on the ground that there may be legal defenses available to it which
are different from or in addition to those available to such indemnifying party.
After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, except to the extent
provided in the next following paragraph, the indemnifying party shall not be
liable to the indemnified party under this Section 9 for any fees and expenses
of counsel subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Underwriters, if the indemnified
parties under this Section 9 consist of the Underwriters or any of its
controlling persons, or by the Company, if the indemnified parties under this
Section 9 consist of the Company or any of the Company's directors, officers or
controlling persons, but in either case reasonably satisfactory to the
indemnified party.
Each indemnified party, as a condition of the indemnity agreements
contained in Sections 9A and B, shall use its best efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action
28
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without prior written consent of the indemnified party, effect any settlement of
any pending or threatened action in respect of which such indemnified party is
or could have been a party and indemnity could have been sought hereunder by
such indemnified party unless such settlement includes an unconditional release
of such indemnified party from all liability on any claims that are the subject
matter of such action.
Notwithstanding the foregoing, if (x) the indemnified party has made a
proper request to the indemnifying party for the payment of the indemnified
party's legal fees and expenses, as permitted hereby, and (y) such request for
payment has not been honored within thirty days, then, for so long as such
request thereafter remains unhonored, the indemnifying party shall be liable for
any settlement entered into by the indemnified party whether or not the
indemnifying party consents thereto.
D. The Underwriters agree to provide the Company no later than the date on
which the Prospectus Supplement is required to be filed pursuant to Rule 424
with a copy of any Derived Information (defined below) for filing with the
Commission on Form 8-K.
E. Each Underwriter, severally and not jointly, agrees, assuming all
Company-Provided Information (defined below) is accurate and complete in all
material respects, to indemnify and hold harmless the Company, its officers and
directors and each person who controls the Company within the meaning of the
Securities Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they may become subject under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement of a material fact contained in the Derived
Information provided by such Underwriter, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by him, her or it in connection with investigating or defending or
preparing to defend any such loss, claim, damage, liability or action as such
expenses are incurred. The obligations of each Underwriter under this
29
Section 9(E) shall be in addition to any liability which each Underwriter may
otherwise have.
The procedures set forth in Section 9C shall be equally applicable to this
Section 9E.
F. For purposes of this Agreement, the term "Derived Information" means
such portion, if any, of the information delivered to the Company pursuant to
Section 9D for filing with the Commission on Form 8-K as: (i) is not contained
in the Prospectus without taking into account information incorporated therein
by reference; and (ii) does not constitute Company-Provided Information.
"Company-Provided Information" means any computer tape furnished to the
Underwriters by the Company concerning the assets comprising the Trust.
Section 10. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 9 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the
Underwriters (each, a "Contributing Party") shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by such Contributing Party (i) in such
proportion as is appropriate to reflect the relative benefits received by such
Contributing Party from the offering of the Offered Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of such Contributing
Party in connection with the statements or omissions which resulted in the
losses, liabilities, claims, damages and expenses as well as any other relevant
equitable considerations; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Contributing Party and the Contributing Parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission and other equitable considerations.
Notwithstanding the provisions of Section 9 or of this Section 10, neither
Underwriter shall be required to be responsible for any amount in excess of the
amount by which
30
the total re-offering price at which the Offered Certificates underwritten by it
and distributed and offered to the public exceeds the amount paid hereunder by
such Underwriter for the Offered Certificates. For purposes of this Section 10,
each person, if any, who controls you within the meaning of the Securities Act
or the Exchange Act shall have the same rights to contribution as each of the
Underwriters and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act shall have
the same rights to contribution as the Company.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 10 were to be determined by
pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 10
shall be deemed to include, for purposes of this Section 10, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
Section 11. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Underwriters, by notice given to the Company
prior to delivery of and payment for the Offered Certificates if prior to such
time (i) any change, or any development involving a prospective change, in or
affecting particularly the business or properties of the Trust or the Company
which, in the reasonable judgment of the Underwriters, materially impairs the
investment quality of the Certificates or makes it impractical or inadvisable to
market the Offered Certificates; (ii) the Offered Certificates have been placed
on credit watch by S&P or Moody's with negative implications; (iii) trading in
securities generally on the New York Stock Exchange or the National Association
of Securities Dealers National Market System shall have been suspended or
limited, or minimum prices shall have been established on such exchange or
market system; (iv) a banking moratorium shall have been declared by either
Federal or New York State authorities; or (v) there shall have occurred any
outbreak or material escalation of hostilities or other calamity or crisis, the
effect of which makes it, in the reasonable judgment of the Underwriters,
impractical or inadvisable to proceed with the completion of the sale and
payment for the Offered Certificates. Upon such notice being given, the parties
to this Agreement shall (except for any liability arising before or in relation
to such termination) be released and discharged from their respective
obligations under this Agreement.
31
Section 12. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Company submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of you or controlling person of you, or by or
on behalf of the Company or any officers, directors or controlling persons and
shall survive delivery of any Offered Certificates to you or any controlling
person.
Section 13. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication to:
The Underwriters: Prudential Securities Incorporated
One New York Plaza
15th Floor
New York, New York 10292-2015
Fax: (212) 778-7401
J.P. Morgan Securities Inc.
60 Wall Street, 18th Floor
New York, New York 10260-0060
Fax: (212) 648-5251
The Company: Access Financial Lending Corp.
400 Highway 169 South, Suite 400
Post Office Box 26365
St. Louis Park, MN 55426-0365
Attention: General Counsel
Fax: (612) 542-6510
Section 14. Parties. This Agreement shall inure to the benefit of and be
binding upon you and the Company, and their respective successors or assigns.
Nothing expressed or mentioned in this Agreement is intended nor shall it be
construed to give any person, firm or corporation, other than the parties hereto
or thereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 9 and 10 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
with respect to this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties and their respective successors and said
controlling persons and officers and directors and their heirs and legal
representatives (to the extent of their rights as specified herein and therein)
and except as provided above for the benefit of no other person, firm or
corporation. No purchaser of Offered Certificates
32
from you shall be deemed to be a successor by reason merely of such purchase.
SECTION 15. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED IN ACCORDANCE WITH SUCH
LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section 16. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but together they shall
constitute but one instrument.
Section 17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of or affect the meaning or
interpretation of, this Agreement.
Section 18. Default of Underwriters. If either Underwriter defaults in its
obligations to purchase the Offered Certificates offered to it hereunder (such
Underwriter, the "Defaulting Underwriter"), then the remaining Underwriter (the
"Performing Underwriter") shall have the option, but not the obligation, to
purchase all, but not less than all, of the Offered Certificates offered to the
Defaulting Underwriter. If the Performing Underwriter elects not to exercise
such option, then this Agreement will terminate without liability on the part of
the Performing Underwriter. Nothing contained herein shall relieve the
Defaulting Underwriter from any and all liabilities to the Company and the
Performing Underwriter resulting from the default of the Defaulting Underwriter.
[remainder of page deliberately left blank]
33
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between you and the
Company in accordance with its terms.
Very truly yours,
ACCESS FINANCIAL LENDING CORP.
By: /s/ Dan J. Cheever
------------------------------
Name: Dan J. Cheever
Title: Chief Financial Officer
and Secretary
CONFIRMED AND ACCEPTED, as of
the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Len Blum
------------------------------
Name: Len Blum
Title: Authorized Signatory
J.P. MORGAN SECURITIES INC.
By: /s/ James Pomposelli
------------------------------
Name: James Pomposelli
Title: Vice President
[Underwriting Agreement]
Schedule 1
Underwriting
Class A-1
---------------------------------------
Purchase Price
Percentage Proceeds
(excluding Principal (excluding
Underwriter accrued interest) Amount accrued interest)
----------- ----------------- ------ -----------------
Prudential ................................ 99.75% $31,750,000 $31,670,625.00
Securities
Incorporated
J.P. Morgan .............................. 99.75% 31,750,000 31,670,625.00
----------- --------------
Securities Inc.
TOTAL .................................... $63,500,000 $63,341,250.00
=========== ==============
Class A-2
---------------------------------------
Purchase Price
Percentage Proceeds
(excluding Principal (excluding
Underwriter accrued interest) Amount accrued interest)
----------- ----------------- ---------- -----------------
Prudential ............................... 99.65625% $15,100,000 $15,048,093.75
Securities
Incorporated
J.P. Morgan .............................. 99.65625% 15,100,000 15,048,093.75
----------- --------------
Securities Inc.
TOTAL .................................... $30,200,000 $30,096,187.50
=========== ==============
Class A-3
---------------------------------------
Purchase Price
Percentage Proceeds
(excluding Principal (excluding
Underwriter accrued interest) Amount accrued interest)
----------- ----------------- --------- -----------------
Prudential ............................... 99.6875% $10,650,000 $10,616,718.75
Securities
Incorporated
J.P. Morgan .............................. 99.6875% 10,650,000 10,616,718.75
----------- --------------
Securities Inc.
TOTAL .................................... $21,300,000 $21,233,437.50
=========== ==============
Class A-4
---------------------------------------
Purchase Price
Percentage Proceeds
(excluding Principal (excluding
Underwriter accrued interest) Amount accrued interest)
----------- ----------------- --------- -----------------
Prudential ............................... 99.703125% $ 9,866,500 $ 9,837,208.83
Securities
Incorporated
J.P. Morgan .............................. 99.703125% 9,866,500 9,837,208.83
----------- --------------
Securities Inc.
TOTAL .................................... $19,733,000 $19,674,417.66
=========== ==============
Class A-5
---------------------------------------
Purchase Price
Percentage Proceeds
(excluding Principal (excluding
Underwriter accrued interest) Amount accrued interest)
----------- ----------------- --------- -----------------
Prudential ............................... 99.75% $ 69,433,000 $ 69,259,417.50
Securities
Incorporated
------------
J.P. Morgan .............................. 99.75% 69,433,000 69,259,417.50
------------ ---------------
Securities Inc.
TOTAL .................................... $138,866,000 $138,518,835.00
============ ===============