__________________________________
________________ TRUST __________
HOME LOAN ASSET BACKED NOTES, SERIES _______
Class A-1, Class A-2, Class A-3, Class A-4,
Class M-1, Class M-2 and Class B Notes
UNDERWRITING AGREEMENT
___________________________
_______________________________
As Underwriter
_______________________________
_______________________________
Dear Sirs:
Residential Asset Funding Corporation (the "Depositor"), a North Carolina
corporation, has authorized the issuance and sale of _______________ Trust
___________________, Home Loan Asset Backed Notes in the series and classes, in
the respective original principal amounts and with the designations set forth in
Schedule A hereto (the Class A-1, Class A-2, Class A-3, Class A-4, Class M-1,
Class M-2 and Class B Notes, collectively, the "Notes")._______________________
(the "Underwriter") is purchasing all of the Notes at the prices set forth on
Schedule A hereto. The Notes will be issued pursuant to an indenture, to be
dated as of ___________ (the "Indenture"), between _______________ Trust
________________ (the "Trust") and ______________________________, as indenture
trustee (the "Indenture Trustee"). The Depositor has also entered into a trust
agreement, dated as of ___________________ (the "Trust Agreement"), among the
Depositor, as depositor, ________________), _______________________________, as
owner trustee (the "Owner Trustee"), and ____________________________, as
co-owner trustee (the "Co-Owner Trustee"). The Notes will be secured by the
assets of the Trust pursuant to the Indenture. The Notes are described more
fully in Schedule A hereto and in a prospectus supplement furnished to you by
the Depositor. The assets of the Trust will initially include, among other
things, home loans to be transferred on the Closing Date (as defined herein)
(the "Initial Loans") in an amount of approximately $_______________ as of the
close of business on _____________________ (the "Cut-Off Date")
(the actual aggregate unpaid principal balance of the Initial Loans as of the
Cut-Off Date, the "Original Pool Principal Balance") [and such amounts as may be
held by the Indenture Trustee in the Pre-Funding Account (the "Pre-Funding
Account"), the Capitalized Interest Account (the "Capitalized Interest
Account")] and any other accounts held by the Indenture Trustee for the benefit
of the Noteholders, all pursuant to a sale and servicing agreement, dated as of
________________________ (the "Sale and Servicing Agreement") among the Trust,
as issuer, the Depositor, as depositor, ______________, ("Servicer"), as
servicer, the Depositor, and ___________________________,
________________________, as indenture trustee and co-owner trustee. [On the
Closing Date, approximately $______________________ (as adjusted pursuant to the
immediately following sentence, the "Original Pre-Funded Account Amount") will
be deposited in the name of the Indenture Trustee in the Pre-Funding Account. To
the extent that the Original Pool Principal Balance is more or less than the
amount set forth in the second preceding sentence, the Original Pre-Funded
Amount will be decreased or increased by a corresponding amount provided that
the amount of any such adjustment shall not exceed $________________. It is
intended that additional home loans satisfying the criteria specified in the
Sale and Servicing Agreement (the "Subsequent Loans") will be purchased by the
Trust for inclusion in the Trust from time to time on or before
_______________________ from funds on deposit in the Pre-Funding Account at the
time of execution and delivery of each subsequent transfer agreement (each, a
"Subsequent Transfer Agreement"). Funds in the Capitalized Interest Account will
be applied by the Indenture Trustee and Co-Owner Trustee to cover shortfalls in
interest during the Pre-Funding Period.] Forms of the Indenture and the Sale and
Servicing Agreement have been filed as exhibits to the Registration Statement
(as hereinafter defined).
The Notes are more fully described in the Registration Statement which the
Depositor has furnished to the Underwriter. Capitalized terms used but not
defined herein shall have the meanings given to them in the Sale and Servicing
Agreement.
Pursuant to a loan sale agreement, dated as of __________________ (the
"Loan Sale Agreement") by and between Servicer, as seller and servicer, and the
Depositor, Servicer will transfer to the Depositor all of Servicer's right,
title and interest in and to the unpaid principal balances of the Initial Loans
as of the Cut-Off Date and the collateral securing each Initial Loan. Pursuant
to the Sale and Servicing Agreement, the Depositor will transfer to the Trust
all such right, title and interest in and to the unpaid principal balances of
the Initial Loans as of the Cut-Off Date and the collateral securing each
Initial Loan.
SECTION 1. Representations and Warranties of the Depositor. The Depositor
represents and warrants to, and agrees with you that:
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(a) A Registration Statement on Form S-3 (No. ______________________) has
(i) been prepared by the Depositor 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, (ii) bee filed with the
Commission under the Securities Act and (iii) become effective under the
Securities Act. Copies of such Registration Statement have been delivered by the
Depositor to the Underwriter. As used in this Agreement, "Effective Time" means
the date and the time as of which such Registration Statement, or the most
recent post-effective amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective Time; "Registration
Statement" means such registration statement, at the Effective Time, including
any documents incorporated by reference therein at such time; "Preliminary
Prospectus" means each prospectus included in such Registration Statement, or
amendments thereof, including a preliminary prospectus supplement which, as
completed, is proposed to be used in connection with the sale of the Notes and
any prospectus filed with the Commission by the Depositor with the consent of
the Underwriter pursuant to Rule 424(a) of the Rules and Regulations; and
"Prospectus" means the final prospectus dated ______________________, as first
supplemented by a prospectus supplement (the "Prospectus Supplement") relating
to the Notes, to be filed with the Commission pursuant to paragraphs (2), (3) or
(5) of Rule 424(b) of the Rules and Regulations. Reference made herein to the
Prospectus shall be deemed to refer to and include any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act as of
the date of the Prospectus and any reference to any amendment or supplement to
the Prospectus shall be deemed to refer to and include any document filed under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the
date of such Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or the Prospectus, as
the case may be, and any reference to and amendment to the Registration
Statement shall be deemed to include any report of the Depositor filed with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act after the
Effective Time that is incorporated by reference in the Registration Statement.
The Commission has not issued any order preventing or suspending the use of the
Preliminary Prospectus or Prospectus. There are no contracts or documents of the
Depositor 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 Underwriter delivers to the Depositor pursuant to
Section 8(d) hereof for filing on an Additional Materials 8-K (as defined
below). The conditions
3
for use of Form S-3, as set forth in the General Instructions thereto, have been
satisfied.
(b) The Registration Statement conforms, and the Prospectus 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 Registration Statement, as of the Effective Date thereof
and of any amendment thereto, did 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. The Prospectus as of its date,
and as amended or supplemented as of the Closing Date, does not and will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading; provided,
however, that no representation or warranty is made as to information contained
in or omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with written information furnished to the Depositor in writing
by the Underwriter expressly for use therein. The only information furnished by
the Underwriter or on behalf of the Underwriter for use in connection with the
preparation of the Registration Statement or the Prospectus is described in
Section 8(i) hereof.
(c) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
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; and any further
documents so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, 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, however, that no
representation is made as to Computational Materials, Structural Term Sheets and
Collateral Term Sheets (each as defined herein) deemed to be incorporated by
reference in the Prospectus as the result of filing an Additional Materials 8-K
(as defined below) pursuant to the terms hereof except to the extent such
Computational Materials, Structural Term Sheets and Collateral Term Sheets
reflect information furnished by the Depositor to the Underwriter.
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(d) Since the respective dates as of which information is given in the
Prospectus, there has not been any material adverse change in the general
affairs, management, financial condition, or results of operations of the
Depositor, otherwise than as set forth or contemplated in the Prospectus as
supplemented or amended as of the Closing Date.
(e) The Depositor has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of North Carolina, 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, 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 this Agreement, the
Loan Purchase Agreement, the Sale and Servicing Agreement and the Trust
Agreement or any Subsequent Transfer Agreement and to cause the Notes to be
issued.
(f) There are no actions, proceedings or investigations pending with
respect to which the Depositor has received service of process before, or
threatened by, any court, administrative agency or other tribunal to which the
Depositor is a party or of which any of its properties is the subject (a) which
if determined adversely to the Depositor would have a material adverse effect on
the business or financial condition of the Depositor, (b) which assert the
invalidity of this Agreement, the Loan Sale Agreement, the Sale and Servicing
Agreement, the Trust Agreement, the Notes, [or any Subsequent Transfer
Agreement,] (c) which seek to prevent the issuance of the Notes or the
consummation by the Depositor of any of the transactions contemplated by the
Sale and Servicing Agreement, the Loan Sale Agreement, the Trust Agreement, this
Agreement [or any Subsequent Transfer Agreement,] as the case may be, or (d)
which might materially and adversely affect the performance by the Depositor of
its obligations under, or the validity or enforceability of, the Sale and
Servicing Agreement, the Loan Sale Agreement, this Agreement, the Trust
Agreement, the Notes [or any Subsequent Transfer Agreement.]
(g) This Agreement has been, and the Sale and Servicing Agreement, the Loan
Sale Agreement, the Trust Agreement [and each Subsequent Transfer Agreement,]
when executed and delivered as contemplated hereby and thereby, will have been,
duly authorized, executed and delivered by the Depositor, and this Agreement
constitutes, and the Sale and Servicing Agreement, the Loan Sale Agreement, the
Trust Agreement [and each Subsequent Transfer Agreement] when executed and
delivered as contemplated herein, will constitute, legal, valid and binding
instruments enforceable against the Depositor in accordance with their
respective terms, subject as to enforceability to (x) applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws
5
affecting creditors' rights generally, (y) general 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,
limitations of public policy under applicable securities laws.
(h) The execution, delivery and performance of this Agreement, the Sale and
Servicing Agreement, the Loan Sale Agreement, the Trust Agreement [and any
Subsequent Transfer Agreement] by the Depositor and the consummation of the
transactions contemplated hereby and thereby, and the issuance and delivery of
the Notes do not and will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Depositor is a party, by which the Depositor is bound or
to which any of the properties or assets of the Depositor or any of its
subsidiaries is subject, which breach or violation would have a material adverse
effect on the business, operations or financial condition of the Depositor, nor
will such actions result in any violation of the provisions of the certificate
of incorporation or by-laws of the Depositor or any statute or any order, rule
or regulation of any court of governmental agency or body having jurisdiction
over the Depositor or any of its properties or assets, which breach or violation
would have a material adverse effect on the business, operations or financial
condition of the Depositor.
(i) The Depositor has no reason to believe that ____________________ are
not independent public accountants with respect to the Depositor as required by
the Securities Act and the Rules and Regulations.
(j) As of the Closing Date, the Notes, the Indenture and the Trust
Agreement will conform in all material respects to the respective descriptions
thereof contained in the Prospectus. As of the Closing Date, the Notes will be
duly and validly authorized and, when duly and validly executed, authenticated
and delivered in accordance with the Indenture, and delivered to you against
payment therefor as provided herein, will be duly and validly issued and
outstanding and entitled to the benefits of the Sale and Servicing Agreement.
The Notes will not be "mortgage related securities," as such term is defined in
the singular in the Exchange Act.
(k) 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 the sale of the Notes to the
Underwriter, or the consummation by the Depositor of the other transactions
contemplated by this Agreement, the Sale and Servicing Agreement, the Loan Sale
Agreement, the Trust Agreement [and any Subsequent Transfer Agreement,] except
such consents,
6
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 Notes by the Underwriter or as have been obtained.
(l) The Depositor 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 Prospectus, and the Depositor has not received notice
of any proceedings relating to the revocation or modification of any such
license, certificate, authority or permit which if decided adversely to the
Depositor would, singly or in the aggregate, materially and adversely affect the
conduct of its business, operations or financial condition.
(m) At the time of execution and delivery of the Sale and Servicing
Agreement, the Depositor will: (i) be the sole beneficial owner of the Initial
Loans, free and clear of any lien, mortgage, pledge, charge, encumbrance,
adverse claim or other security interest (collectively, "Liens"); (ii) not have
assigned to any Person any of its right or title in the Initial Loans, in the
Sale and Servicing Agreement or in the Notes being issued pursuant to the
Indenture; and (iii) have the power and authority to sell its interest in the
Initial Loans to the Trust and to sell the Notes to the Underwriter. Upon
execution and delivery of the Sale and Servicing Agreement by the Trust, the
Trust will have acquired beneficial ownership of all of the Depositor's right,
title and interest in and to the Loans. Upon delivery to the Underwriter of the
Notes, the Underwriter will have good title to the Notes, free and clear of any
Liens.
(n) [At the time of execution and delivery of any Subsequent Transfer
Agreement, the Depositor will: (i) be the sole beneficial owner of the
Subsequent Loans, free and clear of any Liens; (ii) not have assigned to any
Person any of its right or title in the Subsequent Loans, in the Sale and
Servicing Agreement or in the Subsequent Transfer Agreement; and (iii) have the
power and authority to sell the Subsequent Loans to the Trust. Upon execution
and delivery of each Subsequent Transfer Agreement by the Trust, the Trust will
have acquired beneficial ownership of all of the Depositor's right, title and
interest in and to the related Subsequent Loans.]
(o) As of the Cut-Off Date, each of the Initial Loans will meet the
eligibility criteria described in the Prospectus and will conform in all
material respects to the descriptions thereof contained in the Prospectus.
(p) [As of any Subsequent Transfer Date, each of the Subsequent Loans will
meet the eligibility criteria described
7
in the Prospectus and will conform in all material respects to the descriptions
thereof contained in the Prospectus.]
(q) Neither the Depositor nor the Trust created by the Trust Agreement is
an "investment company" within the meaning of such term under the Investment
Company Act of 1940 (the "1940 Act") and the rules and regulations of the
Commission thereunder
(r) At the Closing Date, the Notes, the Sale and Servicing Agreement and
the Indenture will conform in all material respects to the descriptions thereof
contained in the Prospectus.
(s) At the Closing Date, each of the Senior Notes will have been rated
"[AAA]" by [Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. ("S&P")], and [Fitch Investors Service, L.P. ("Fitch")], and
"[Aaa]" by [Moody's Investor Service ("Moody's")]; the Class M-1 Notes "[AA]" by
[S&P] and [Fitch] and "[A]" by [Moody's]; the Class M-2 Notes rated "[A]" by
[S&P] and [Fitch] and "[A2]" by [Moody's]; and the Class [B] Notes rated
"[BBB+]" by [S&P] and [Fitch] and "[Baa2]" by [Moody's].
(t) Any taxes, fees and other governmental charges in connection with the
execution, delivery and issuance of this Agreement, the Sale and Servicing
Agreement, the Loan Sale Agreement, the Trust Agreement and the Notes have been
paid or will be paid at or prior to the Closing Date.
(u) At the Closing Date, each of the representations and warranties of the
Depositor set forth in the Sale and Servicing Agreement and the Loan Sale
Agreement will be true and correct in all material respects.
Any certificate signed by an officer of the Depositor and delivered to the
Underwriter or counsel for the Underwriter in connection with an offering of the
Notes shall be deemed to be a representation and warranty as to the matters
covered thereby to each person to whom the representations and warranties in
this Section 1 are made.
SECTION 1. Purchase and Sale. The commitment of the Underwriter to purchase
the Notes pursuant to this Agreement shall be deemed to have been made on the
basis of the representations and warranties herein contained and shall be
subject to the terms and conditions herein set forth. The Depositor agrees to
instruct the Indenture Trustee to issue the Notes and agrees to sell to the
Underwriter, and the Underwriter agrees (except as provided in Section 10) to
purchase from the Depositor the aggregate principal amount of the Class A-1,
Class A-2, Class A-3, Class A-4, Class M-1, Class M-2 and Class B Notes at the
purchase price or prices set forth in Schedule A. The Underwriter may offer the
Notes to certain dealers at such prices less a concession not in excess of
8
the respective amounts set forth in Schedule A. The Underwriter may allow and
such dealer, may re-allow a discount to certain dealers not in excess of the
respective amounts set forth in Schedule A.
SECTION 3. Delivery and Payment. Delivery of and payment for the Notes to
be purchased by the Underwriter shall be made at the offices of ___________or at
such other place as shall be agreed upon by the Underwriter and the Depositor at
10:00 a.m. ______ time on ___________ or at such other time or date as shall be
agreed upon in writing by the Underwriter and the Depositor (such date being
referred to as the "Closing Date"). Payment shall be made to the Depositor by
wire transfer of same day funds payable to the account of the Depositor.
Delivery of the Notes shall be made to the Underwriter for the accounts of the
Underwriter against payment of the purchase price thereof. The Notes shall be in
such authorized denominations and registered in such names as the Underwriter
may request in writing at least two business days prior to the Closing Date. The
Notes will be made available for examination by the Underwriter no later than
2:00 p.m. _______ time on the first business day prior to the Closing Date.
SECTION 4. Offering by the Underwriter. It is understood that, subject to
the terms and conditions hereof, the Underwriter proposes to offer the Notes for
sale to the public as set forth in the Prospectus.
SECTION 5. Covenants of the Depositor. The Depositor agrees as follows:
(a) To prepare the Prospectus in a form approved by the Underwriter
and to file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than the Commission's close of business on the second
business day following the availability of the Prospectus to the
Underwriter and to make no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to the Closing Date
except as permitted herein; to advise the Underwriter, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective prior to the Closing Date or
any supplement to the Prospectus or any amended Prospectus has been filed
prior to the Closing Date and to furnish the Underwriter with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Depositor 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, for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Notes to advise the Underwriter promptly 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 any Preliminary Prospectus or the
9
Prospectus; (ii) the suspension of the qualification of the Notes 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 any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, the Depositor promptly shall use its best efforts to obtain
the withdrawal of such order by the Commission.
(b) To furnish promptly to the Underwriter and to counsel for the
Underwriter 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 Underwriter such number of the
following documents as the Underwriter 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) each Preliminary Prospectus, 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 Notes, 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 Depositor shall notify the Underwriter and, upon the Underwriter's
request, shall file such document and prepare and furnish without charge to
the Underwriter and to any dealer in securities as many copies as the
Underwriter may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which corrected such statement
or omission or effects such compliance.
(d) To file 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 Depositor or the Underwriter,
be required by the Securities Act or requested by the Commission.
10
(e) The Depositor will (i) cause any Computational Materials or any
Structural Term Sheet (each as defined below in this subsection) with
respect to the Class A-1, Class A-2, Class A-3, Class A-1, Class M-1, Class
M-2 and Class B Notes which are delivered by the Underwriter to the
Depositor to be filed with the Commission on Additional Materials 8-K (as
defined below) at or before the time of filing of the Prospectus pursuant
to Rule 424(b) under the Securities Act and (ii) cause any Collateral Term
Sheet (ac defined below in this subsection) with respect to the Class A-1,
Class A-2, Class A-3, Class A-4, Class M-1, Class M-2 and Class B Notes
which are delivered by the Underwriter to the Depositor to be filed with
the Commission on an Additional Materials 8-K within two business days
after the date on which the Underwriter advises the Depositor that such
Collateral Term Sheet was first used; provided, however, that the Depositor
shall have no obligation to file any materials which, in the reasonable
determination of the Depositor after consultation with the Underwriter, (x)
are not required to be filed pursuant to the Kidder Letters and/or the PSA
Letter (each as defined below) or (y) contain any erroneous information or
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; it being understood, however, that the Depositor shall have
no obligation to review or pass upon the accuracy or adequacy of, or to
correct, any Computational Materials, Structural Term Sheets or Collateral
Term Sheets provided by the Underwriter to the Depositor as aforesaid. For
purposes of this subsection (e), (1) the term "Computational Materials"
shall mean those materials delivered by the Underwriter to the Depositor
within the meaning of the no-action letter dated May 20, 1994 issued by the
Division of Corporation Finance of the Commission to Kidder, Peabody
Acceptance Corporation I and certain affiliates 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") for which the filing of such material is a condition of the
relief granted in such letters, (2) the terms "Structural Term Sheet" and
"Collateral Term Sheet" shall mean those materials delivered by the
Underwriter to the Depositor within the meaning of the no-action letter
dated February 13, 1995 issued by the Division of Corporation Finance of
the Commission to the Public Securities Association (the "PSA Letter") for
which the filing of such material on an Additional Materials 8-K is a
condition of the relief granted in such letter and (3) the term "Additional
Materials 8-K" shall mean a Current Report on Form 8-K used to file
Computational Materials, Structural Term Sheets and/or Collateral Term
Sheets.
(f) To furnish the Underwriter and counsel for the Underwriter, prior
to filing with the Commission, and to obtain the consent of the Underwriter
for the filing of the
11
following documents relating to the Notes: any (i) Preliminary Prospectus,
(ii) amendment to the Registration Statement or supplement to the
Prospectus, or document incorporated by reference in the Prospectus, or
(iii) Prospectus pursuant to Rule 424 of the Rules and Regulations.
(g) To make generally available to holders of the Notes as soon as
practicable, but in any event not later than ninety (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, at the option of the
Depositor, 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.
(h) To use its best efforts, in cooperation with the Underwriter, to
qualify the Notes for offering and sale under the applicable securities
laws of such states and other jurisdictions of the United States or
elsewhere as the Underwriter 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 Notes; provided, however, that in connection
therewith, the Depositor shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction. The Depositor will file or cause the filing of such
statements and reports as may be required by the laws of each jurisdiction
in which the Notes have been so qualified.
(i) Unless the Underwriter shall otherwise have given its written
consent, no notes or pass-through certificates backed by home equity loans
or other similar securities representing interest in or secured by other
mortgage-related assets originated or owned by the Depositor or the
Servicer shall be publicly offered or sold nor shall the Depositor or the
Servicer enter into any contractual arrangements that contemplate the
public offering or sale of such securities for a period of seven (7)
business days following the commencement of the offering of the Notes to
the public.
(j) So long as the Notes shall be outstanding the Depositor shall
furnish, or cause to be furnished to the Underwriter as soon as such
statements are furnished to the Depositor; (i) the annual statement as to
compliance delivered by the Servicer to the Depositor pursuant to Section
7.4 of the Sale and Servicing Agreement; (ii) the annual statement of a
firm of independent public accountants furnished to the Depositor pursuant
to Section 7.5 of the Sale and Servicing Agreement; and (iii) the monthly
statements furnished by the Indenture Trustee pursuant to Section 6.1 of
the Sale and Servicing Agreement.
12
(k) To apply the net proceeds from the sale of the Notes in the manner
set forth in the Prospectus.
SECTION 6. Conditions to the Underwriter's Obligations. The obligations of
the Underwriter to purchase the Notes 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 Depositor herein contained; (ii) the performance
by the Depositor of all of its obligations hereunder; and (iii) the following
conditions as of the Closing Date:
(a) The Underwriter shall have received confirmation of the
effectiveness of the Registration Statement. No stop order suspending the
effectiveness of the Registration Statement or any part thereof 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) The Underwriter shall not have discovered and disclosed to the
Depositor on or prior to the Closing Date that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact or omits to state a fact which, in the opinion of the
Underwriter and its counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters relating to the
authorization, form and validity of this Agreement, the Sale and Servicing
Agreement, the Loan Sale Agreement, the Trust Agreement, the Notes, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be satisfactory in all respects to the Underwriter and its counsel, and the
Depositor shall have furnished to the Underwriter and its counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters.
(d) You shall have received from in-house counsel of the Depositor or
an affiliate of the Depositor, a favorable opinion, dated the Closing Date,
in form and substance satisfactory to the Underwriter, to the effect that:
(i) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of North Carolina. and has all corporate power and authority necessary
to own or hold its properties and to conduct the business in which it
is engaged and to enter into and perform its obligations under this
Agreement, the Loan Sale
13
Agreement, the Sale and Servicing Agreement and the Trust Agreement,
and to cause the Notes to be issued.
(ii) The Depositor is not in violation of its certificate of
incorporation or by-laws or to such counsel's knowledge in default in
the performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Depositor
is a party or by which it or its properties may be bound, which
default might result in any material adverse changes in the financial
condition, earnings, affairs or business of the Depositor or which
might materially and adversely affect the properties or assets, taken
as a whole, of the Depositor.
(iii) This Agreement, the Sale and Servicing Agreement, the Loan
Sale Agreement and the Trust Agreement have been duly authorized,
executed and delivered by the Depositor and the Subsequent Transfer
Agreements have been duly authorized, and when duly executed and
delivered by the Depositor and, assuming the due authorization,
execution and delivery of such agreement, by the other parties
thereto, such agreements constitute, and in the case of any Subsequent
Transfer Agreement will constitute, valid and binding obligations,
enforceable against the Depositor in accordance with their respective
terms, subject as to enforceability to (x) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, (y) general 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, limitations of public policy under applicable
securities laws.
(iv) The execution, delivery and performance of this Agreement,
the Loan Sale Agreement, the Sale and Servicing Agreement, the Trust
Agreement and each Subsequent Transfer Agreement by the Depositor, the
consummation of the transactions contemplated hereby and thereby, and
the issuance and delivery of the Notes to such counsel's knowledge do
not and will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Depositor is a party or by which the
Depositor is bound or to which and of the property or assets of the
Depositor or any of its subsidiaries is subject, which breach or
violation would have a material adverse effect on the business,
operations or financial condition of the Depositor, nor will such
actions result in a violation of the provisions of the certificate of
incorporation or by-laws of the
14
Depositor or to such counsel's knowledge any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Depositor or any of its properties or assets,
which breach or violation would have a material adverse effect on the
business, operations or financial condition of the Depositor.
(v) The direction by the Depositor to the Owner Trustee or to
Co-Owner Trustee to execute and direct the Indenture Trustee to
authenticate and deliver the Notes have been duly authorized by the
Depositor.
(vi) 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 of the Notes, the sale
of the Notes to the Underwriter, or the consummation by the Depositor
of the other transactions contemplated by thi3 Agreement, the Loan
Sale Agreement, the Sale and Servicing Agreement and the Trust
Agreement, except such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Securities Act or state securities or "blue sky" laws in connection
with the purchase and distribution of the Notes by the Underwriter or
as have been previously obtained.
(vii) There are not, to such counsel's knowledge, any actions,
proceedings or investigations pending with respect to which the
Depositor has received service of process before, or threatened by any
court, administrative agency or other tribunal to which the Depositor
is a party or of which any of its properties is the subject: (a)
which, if determined adversely to the Depositor, would have a material
adverse effect on the business, results of operations or financial
condition of the Depositor; (b) which assert the invalidity of the
Sale and Servicing Agreement, the Loan Sale Agreement, the Trust
Agreement or the Notes; (c) seeking to prevent the issuance of the
Notes or the consummation by the Depositor of any of the transactions
contemplated by the Sale and Servicing Agreement, the Loan Sale
Agreement, the Trust Agreement or this Agreement, as the case may be;
or (d) which might materially and adversely affect the performance by
the Depositor of its obligations under, or the validity or
enforceability of the Sale and Servicing Agreement, the Loan Sale
Agreement, the Trust Agreement, this Agreement or the Notes.
(viii) The statements set forth in the Basic Prospectus under the
captions "Summary of Terms --
15
Depositor" and "The Depositor" provide a fair and accurate summary of
the matters addressed therein.
(e) __________________ shall have furnished to the Underwriter their
written opinion, as special counsel to the Depositor, addressed to the
Underwriter and dated the Closing Date, in form and substance satisfactory
to the Underwriter, to the effect that:
(i) The conditions to the use by the Depositor of a registration
statement on Form S-3 under the Securities Act, as set forth in the
General Instructions to Form S-3, have been satisfied with respect to
the Registration Statement and the Prospectus.
(ii) The Registration Statement and any amendments thereto have
become effective under the Securities Act; to the best of such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and not withdrawn and no
proceedings for that purpose have been instituted or threatened and
not terminated; and the Registration Statement, the Prospectus and
each amendment or supplement thereto, as of their respective effective
or issue dates (other than the 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 Securities Act and the Rules and Regulations.
(iii) To the best of such counsel's knowledge, there are no
material contracts, indentures or other documents of a character
required to be described or referred to in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration
Statement other than those described or referred to therein or filed
or incorporated by reference as exhibits thereto.
(iv) The statements set forth in the Basic Prospectus under the
captions "Description of the Securities" and "The Agreements" and in
the Prospectus Supplement under the captions "Description of the
Notes" to the extent such statements purport to summarize certain
provisions of the Notes, the Sale and Servicing Agreement, the
Indenture, and the Trust Agreement are fair and accurate in all
material respects.
(v) The statements set forth in the Prospectus under the captions
"ERISA Considerations" and "Certain Material Federal Income Tax
Consequences" and in the Prospectus Supplement under the captions
"ERISA Considerations" and "Certain Federal Income Tax Consequences,"
to the extent that they constitute
16
matters of federal law, provide a fair and accurate summary of such
law or conclusions.
(vi) The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended, and neither the Depositor nor the
Trust is required to be registered under the 1940 Act, as amended.
(vii) Neither the Depositor nor the Trust is an "investment
company" or under the "control" of an "investment company" as such
terms are defined in the 1940 Act.
(viii) The Notes, when executed, authenticated and delivered in
accordance with the Trust Agreement and the Indenture, will be validly
issued, will be entitled to the benefits of the Indenture and will
conform to the description thereof contained in the Prospectus.
Such counsel shall also have furnished to the Underwriter a written
statement, addressed to the Underwriter and dated the Closing Date, in form and
substance satisfactory to the Underwriter, to the effect that no facts have come
to the attention of such counsel which lead them to believe that: (a) the
Registration Statement, at the time such Registration Statement became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading (except as to financial or statistical data
contained in the Registration Statement); or (b) the Prospectus, as of its date
and as of the Closing Date, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading.
(f) The Underwriter shall have received the favorable opinion, dated
the Closing Date, of [______________,] special counsel to the Depositor,
addressed to the Depositor and satisfactory to [Moody's Investors Service
("Moody's")], [Fitch Investors Service, L.P. ("Fitch")] and the
Underwriter, with respect to certain matters relating to the transfer of
the Initial Loans, [together with amounts on deposit in the Pre-Funding
Account and the Capitalized Interest Account,] from the Depositor to the
Trust, and such counsel shall have consented to the reliance on such
opinion by [Moody's], [Fitch] and the Underwriter as though such opinion
had been addressed to each such party.
(g) _________________________, special counsel to the Depositor and
the Servicer, shall have furnished to the Underwriter their written
opinion, addressed to the Underwriter and the Depositor and dated the
Closing Date, in form and substance satisfactory to the Underwriter, to the
effect that:
17
(i) The Depositor has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the
State of North Carolina and has duly authorized all actions
contemplated hereby to be taken by
(ii) The Depositor has full power and authority to the Loans to
the Trustee as contemplated in the Sale and Servicing Agreement.
(iii) The Servicer has been duly chartered and is validly
existing and in good standing as a federal savings bank under the laws
of the United States and has duly authorized all actions contemplated
hereby to be taken by it.
(iv) The Servicer has full power and authority to transfer the
Loans to the Depositor as contemplated in the Loan Sale Agreement and
to serve in its capacity as servicer of the Loans as contemplated in
the Sale and Servicing Agreement.
(v) The Sale and Servicing Agreement, the Loan Sale Agreement and
the Trust Agreement have been duly authorized, executed and delivered
by the Depositor or the Servicer, as applicable, and, assuming the due
authorization, execution and delivery of such agreements by the other
parties thereto, constitute the legal, valid and binding agreements of
the Depositor or the Servicer, as applicable, enforceable against the
Depositor or the Servicer, as applicable, in accordance with their
terms respective, subject as to enforceability to (x) bankruptcy,
insolvency, reorganization, moratorium, receivership or other similar
laws now or hereafter in effect relating to creditors' rights
generally and (y) the qualification that the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion, with respect to
such remedies, of the court before which any proceedings with respect
thereto may be brought.
(vi) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body
having jurisdiction over the Depositor or the Servicer is required for
the consummation by the Depositor or the Servicer, as applicable, of
the transactions contemplated by the Sale and Servicing Agreement, the
Loan Sale Agreement and the Trust Agreement, except such consents,
approvals, authorizations, registrations and qualifications as have
been obtained.
18
(vii) Neither (A) the execution, delivery or performance by the
Depositor of the Sale and Servicing Agreement, the Loan Sale Agreement
or the Trust Agreement and the transactions contemplated therein, nor
(B) the execution, delivery or performance by the Servicer of the Sale
and Servicing Agreement or the Loan Sale Agreement and the
transactions contemplated therein, including the transfer of the
Initial Loans by the Servicer to the Depositor (1) conflict with or
result in a breach of, or constitute a default under, (a) any term or
provision of the formation documents of the Depositor or the Servicer,
as applicable; (b) any term or provision of any material agreement,
deed of trust, mortgage loan agreement, contract, instrument or
indenture, or other agreement to which the Depositor or the Servicer,
as applicable, is a party or is bound or to which any of the property
or assets of the Depositor or the Servicer, as applicable, or any of
its subsidiaries is subject; (c) to the best of such firm's knowledge
without independent investigation any order, judgment, writ,
injunction or decree of any court or governmental authority having
jurisdiction over the Depositor or the Servicer, as applicable; or (d)
any law, rule or regulations applicable to the Depositor or the
Servicer, or (B) to the best of such firm's knowledge without
independent investigation, results in the creation or imposition of
any lien, charge or encumbrance upon the Trust Estate.
(viii) [Each Subsequent Transfer Agreement at the time of its
execution and delivery will be sufficient to convey all of the
Depositor's right, title and interest in the Subsequent Loans to the
Trust and following the consummation of the transaction contemplated
by each Subsequent Transfer Agreement, the transfer of the Subsequent
Loans by the Depositor to the Trust will be a sale thereof.]
(ix) There are, to the best of such counsel's knowledge without
independent investigation, no actions, proceedings or investigations
pending with respect to which the Depositor or the Servicer, as
applicable, has received service of process before, or threatened
against the Depositor or the Servicer, as applicable, by any court:,
administrative agency or other tribunal (a) contesting the validity of
the Sale and Servicing Agreement, the Loan Sale Agreement, the Trust
Agreement or the Notes, (b) seeking to prevent the consummation of any
of the transactions contemplated by the Sale and Servicing Agreement
or (c) which would materially and adversely affect the performance by
the Depositor or the Servicer, as applicable, of its obligations
under, or the validity or enforceability of the Sale and Servicing
19
Agreement, the Loan Sale Agreement, or the Trust Agreement.
Such counsel shall also have furnished to the Underwriter a written
statement, addressed to the Underwriter and dated the Closing Date, in form and
substance satisfactory to the Underwriter, to the effect that facts have come to
the attention on such counsel which had thereto believe that the information
contained in the Prospectus Supplement under the headings "SUMMARY-Servicer,"
"-Company", and "[NAME OF SERVICER", as of its date and on the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading.
(h) The Underwriter shall have received the favorable opinion, dated
the Closing Date, of _____________________ special counsel to the Depositor
and the Servicer, addressed to the Depositor and satisfactory to [Moody's],
[Fitch] and the Underwriter, with respect to certain matters relating to
(i) the transfer of the Initial Loans from the Servicer to the Depositor
and (ii) the transfer of the Initial Loans from the Depositor to the
Trustee, [together with amounts on deposit in the Pre-Funding Account and
the Capitalized Interest Account,] and such counsel shall have consented to
the reliance on such opinion by [Moody's], [Fitch] and the Underwriter as
though such opinion had been addressed to each such party.
(i) The Underwriter shall have received the favorable opinion of
counsel to the Trust and the Owner Trustee, dated the Closing Date,
addressed to the Underwriter and in form and scope satisfactory to the
Underwriter and counsel to the Underwriter, to the effect that:
(i) The Owner Trustee is a banking corporation, duly incorporated
and validly existing under the laws of the State of Delaware. and has
the power and authority to enter into, and to take all action required
of it under, the Trust Agreement and the Indenture.
(ii) Each of the Trust Agreement, the Sale and Servicing
Agreement and the Indenture Agreement has been duly authorized,
executed and delivered by the Trust or the Owner Trustee, as
applicable, and, assuming due authorization, execution and delivery
thereof by the other parties thereto, constitutes a valid and binding
obligation of the Trust or the Owner Trustee, as the case may be,
enforceable against the Trust or the Owner Trustee, as the case may
be, in accordance with their respective terms, subject, as to
enforceability, to limitations of bankruptcy, insolvency, moratorium,
fraudulent conveyance and other laws relating to or affecting
creditors' rights generally and court
20
decisions with respect thereto, and to general principles of equity.
(iii) The Notes have been duly authorized and executed by the
Trust, and when duly authenticated pursuant to the Indenture and
delivered to and paid for by the purchase as thereof, will be legal,
valid and binding obligations of the Trust, enforceable against the
Trust, in accordance with their terms, and will be entitled to the
benefits of the Indenture.
(iv) The execution and delivery by the Owner Trustee of the Sale
and Servicing Agreement and the performance by the Owner Trustee of
its terms do not conflict with or result in a violation of (A) any law
or regulation of the United States of America or the State of
Delaware. governing the banking or trust powers of the Trustee or (B)
the charter or by-laws of the Trustee.
(v) No approval, authorization, or other action by, or filing
with, any governmental authority of the United States of America or
the State of North Carolina having jurisdiction over the banking or
trust powers of the Trustee is required in connection with the
execution and. delivery by the Owner Trustee of the Sale and Servicing
Agreement, or the performance by the Owner Trustee of the transactions
contemplated by the Sale and Servicing Agreement.
(j) The Underwriter shall have received the favorable opinion of
counsel to the Indenture Trustee and Co-Owner Trustee, dated the Closing
Date, addressed to the Underwriter and in form and scope satisfactory to
the Underwriter and counsel to the Underwriter, to the effect that:
(i) The Indenture Trustee and Co-Owner Trustee is a national
banking association duly organized, validly existing and in good
standing under the laws of the United States.
(ii) The Indenture Trustee is duly eligible and qualified to act
as Indenture Trustee under the Indenture and the applicable provisions
of the Trust Indenture Act of 1934, as amended.
(iii) The Co-Owner Trustee is duly eligible and qualified to act
as Co-Owner Trustee under the Trust Agreement.
(iv) Each of the Trust Agreement, the Sale and Servicing
Agreement and the Indenture has been authorized, executed and
delivered by the Indenture Trustee or the Co-Owner Trustee, as
applicable, and
21
assuming the due authorization, execution and delivery thereof by the
other parties thereto, constitutes a legal, valid and binding
agreement of the Indenture Trustee or Co-Owner Trustee, as applicable,
enforceable against the Indenture Trustee or Co-Owner Trustee, as
applicable, in accordance with their respective terms.
(v) The Notes have been duly and validly authenticated by the
Indenture Trustee and delivered upon the order of the Trust.
(vi) Neither the execution and authentication of the Notes by the
Indenture Trustee nor the execution, delivery and performance of the
Indenture and the Sale and Servicing Agreement by the Indenture
Trustee or Co- Owner Trustee, as applicable, conflict with or result
in a violation of (A) any law or regulation of the United States of
America giving the banking or trust powers of the Indenture Trustee
and Co-Owner Trustee, or (B) the articles of association of the
Indenture and Co-Owner Trustee.
(vii) No approval, authorization or other action by, or filing
with, any governmental authority of the United States of America
having jurisdiction over the banking or trust powers of the Indenture
Trustee and Co-Owner Trustee is required in connection with the
authentication and delivery of the Notes by the Indenture Trustee and
the execution and delivery by the Indenture Trustee or Co-Owner
Trustee, as applicable, of the Indenture and the Sale and Servicing
Agreement or the performance by the Indenture Trustee or Owner
Trustee, as applicable, of the transactions contemplated by the
Indenture or the Sale and Servicing Agreement.
(k) The Underwriter shall have received the favorable opinion or
opinions, dated the date of the Closing Date, of counsel for the
Underwriter, with respect to the enforceability of this Agreement and such
other related matters as the Underwriter may reasonably require.
(l) The Depositor shall have furnished to the Underwriter a
certificate, dated the Closing Date and signed by the Chairman of the
Board, the President or a Vice President of the Depositor, stating as it
relates to each such entity:
(i) The representations and warranties made by the Depositor, as
applicable, in this Agreement, and the Sale and Servicing Agreement
(excluding the representations and warranties relating to the Home
Loans), as applicable, are true and correct as of the Closing Date;
and the Depositor has complied with all
22
agreements contained herein which are to have been complied with on or
prior to the Closing Date.
(ii) Nothing has come to his or her attention that would lead
such officer to believe that the Registration Statement or the
Prospectus includes any untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein not
misleading.
(iii) There has been no amendment or other document filed
affecting the Certificate of Incorporation or bylaws of the Depositor
since _________________ and no such amendment has been authorized. No
event has occurred since _______________, _______ which has affected
the good standing of such entities under the laws of the State of
________________.
(iv) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of such entities from _____________________.
In addition to the foregoing, the certificate of the Depositor shall state
that the representations and warranties set forth in Sections l(d), (e), (f),
(g), (h), (l), (m), (p) and (q) hereof are made by the Depositor and are true as
to the Depositor as though such representations and warranties were fully set
forth in such certificate.
(m) The Owner Trustee and the Indenture Trustee and Co-Owner Trustee,
as applicable, shall have furnished to the Underwriter a certificate of the
Trustee, signed by one or more duly authorized officers of such entities,
dated the Closing Date, as to the due authorization, execution and delivery
of the Sale and Servicing Agreement by the Owner Trustee and the Indenture
Trustee and Co-Owner Trustee and the Indenture by the Indenture Trustee and
the acceptance by the Owner Trustee and Co-Owner Trustee and by the
Indenture Trustee, as applicable, of the respective trusts created thereby
and the due authentication and delivery of the Notes by the Trustee
thereunder and such other matters as the Underwriter shall reasonably
request.
(n) The Depositor shall have furnished to the Underwriter such further
information, certificates and documents as the Underwriter may reasonably
have requested not less than three full business days prior to the Closing
Date.
(o) Prior to the Closing Date, ________________ shall have been
furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the
Notes as herein
23
contemplated and related proceedings or in order to evidence the accuracy
and completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained, and all proceedings
taken by the Depositor in connection with the issuance and sale of the
Notes as herein contemplated shall be satisfactory in form and substance to
the Underwriter and counsel for the Underwriter.
(p) Subsequent to the execution and delivery of this Agreement none of
the following shall have occurred: (i) trading in securities generally on
the New York Stock Exchange, the American Stock Exchange or the
over-the-counter market shall have been suspended or minimum prices shall
have been established on either of such exchanges or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction; (ii) a banking moratorium shall
have been declared by federal or state authorities; (iii) the United States
shall have become engaged in hostilities, there shall have been an
escalation of hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the United States; or
(iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of international
conditions on the financial markets of the United States shall be such) as
to make it in each of the instances set forth in clauses (i), (ii, (iii)
and (iv) herein, in the reasonable judgment of the Underwriter, impractical
or inadvisable to proceed with the public offering or delivery of the Notes
on the terms and in the manner contemplated in the Prospectus.
(q) The Underwriter shall have received from [Deloitte & Touche LLP],
a letter dated the date hereof and satisfactory in form and substance to
the Underwriter and its counsel, on the effect that they have performed
certain specified procedures, all of which have been agreed to by the
Underwriter, as a result of which they determined that certain information
of an accounting, financial or statistical nature set forth in the
Prospectus Supplement agrees with the records of the Depositor and the
Servicer excluding any questions of legal interpretation. The Underwriter
shall have received from [Deloitte & Touche, LLP], a letter dated the
Closing Date and satisfactory in form and substance to the Underwriter and
its counsel, confirming as of such date the information set forth in the
letter provided pursuant to this clause (q).
If any condition specified in this Section 6 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriter by notice to the Depositor 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 7.
24
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
SECTION 7. Payment of Expenses. The Depositor agrees to pay: (a) the costs
incident to the authorization, issuance, sale and delivery of the Notes and any
taxes payable in connection therewith; (b) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement and any amendments and exhibits thereto; (c) the costs of distributing
the Registration Statement as originally filed and each amendment thereto and
any post-effective amendments thereof (including, in each case, exhibits), the
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, or any document incorporated by reference therein, all as provided
in this Agreement; (d) the costs of reproducing and distributing this Agreement;
(e) the fees and expenses of qualifying the Notes under the securities laws of
the several jurisdictions as provided in Section 5(h) hereof and of preparing,
printing and distributing a Blue Sky Memorandum (including related fees and
expenses of counsel to the Underwriter); (f) any fees charged by securities
rating service, for rating the Notes; and (g) all other costs and expenses
incident to the performance of the obligations of the Depositor (including costs
and expenses of your counsel); provided that, except as provided in this Section
7, the Underwriter shall part their own costs and expenses, including the costs
and expenses of their counsel, any transfer taxes on the Notes which they may
sell and the expenses of advertising any offering of the Notes made by the
Underwriter, and the Underwriter shall pay the cost: of any accountants' comfort
letters relating to any Computational Materials, Structural Term Sheets or
Collateral Term Sheets (each as defined in Section 5(e) hereof).
If this Agreement is terminated by the Underwriter in accordance with the
provisions of Section 6 or Section 10, the Depositor shall cause the Underwriter
to be reimbursed for all reasonable out-of-pocket expenses, including fees and
disbursements of ______________________, counsel for the Underwriter.
SECTION 8. Indemnification and Contribution. (a) The Depositor agrees to
indemnify and hold harmless the Underwriter and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the Securities 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
Notes), to which the Underwriter or any such controlling person may become
subject, under the Securities 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
Registration Statement, or any amendment thereof or supplement
25
thereto, (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iii) any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus, or any amendment thereof or supplement
thereto, or (iv) 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 Underwriter and each such controlling person promptly upon
demand for any legal or other expenses reasonably incurred by the 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 Depositor shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in the Prospectus,
or any amendment thereof or supplement thereto, or the Registration Statement,
or any amendment thereof or supplement thereto, in reliance upon and in
conformity with written information furnished to the Depositor on behalf of the
Underwriter specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability which the Depositor may otherwise have
to the Underwriter or any controlling person of the Underwriter. The only
information furnished by the Underwriter or on behalf of the Underwriter for use
in connection with the preparation of the Registration Statement or the
Prospectus is described in Section 8(i) hereof.
(b) The Underwriter agrees to indemnify and hold harmless the
Depositor, each of its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Depositor
within the meaning of Section 15 of the Securities Act against any and all
loss, claim, damage or liability, or any action in respect thereof, to
which the Depositor or any such director, officer or controlling person may
become subject, under the Securities 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 Registration Statement, or any amendment thereof or
supplement thereto, (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus, or any
amendment thereof or supplement thereto, or (iv) 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, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance
26
upon and in conformity with written information furnished to the Depositor
by or on behalf of the Underwriter specifically for inclusion therein, and
shall reimburse the Depositor and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the Depositor
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 the
Underwriter may otherwise have to the Depositor or any such director,
officer or controlling person. The only information furnished by the
Underwriter or on behalf of the Underwriter for use in connection with the
preparation of the Registration Statement or the Prospectus is described in
Section 8(i) hereof.
(c) Promptly after receipt by any indemnified party under this Section
8 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 8, 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 8 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 8.
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 assume the defense
thereof with counsel reasonably satisfactory to the indemnified 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 8 for any legal or other expenses
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
27
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 one local counsel per jurisdiction) at any time for
all such indemnified parties, which firm shall be designated in writing by the
Underwriter, if the indemnified parties under this Section 8 consist of the
Underwriter or any of its controlling persons, or the Depositor, if the
indemnified parties under this Section 8 consist of the Depositor or any of the
Depositor's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 8(a) 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
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.
Notwithstanding the foregoing paragraph, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than thirty (30)
days after receipt by such indemnifying party of the aforesaid reque3t and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement.
(d) The Underwriter agrees to provide the Depositor for filing with
the Commission on an Additional Materials 8-K (i) no later than two (2)
Business Days prior to the day on which the Prospectus Supplement is
required to be filed pursuant to Rule 424 with a copy of any Computational
Materials and Structural Term Sheets (each as defined in Section 5(e)
hereof) distribute by the Underwriter and (ii) no later than one (1)
business day after first use with a copy of any
28
Collateral Term Sheets (as defined in Section 5(e) hereof) distributed by
the Underwriter.
(e) The Underwriter agrees, assuming all Depositor-Provided
Information (as defined in Section 8(g)) is accurate and complete in all
material respects, to indemnify and hold harmless the Depositor, each of
the Depositor's officers and directors an each person who controls the
Depositor within the meaning of Section 15 of the Securities Act against
any and all losses, claims, damages or liabilities, joint or several, to
which they may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement of a
material fact contained in the Computational Materials, Structural Term
Sheets and Collateral Term Sheets provided by the Underwriter 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 the Underwriter
under this Section 8(e) shall be in addition to any liability which the
Underwriter may otherwise have.
The procedures set forth in Section 8(c) shall be equally applicable to
this Section 8(e).
(f) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a), (b) or (e) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Depositor on the one hand
and the Underwriter on the other from the offering of the related Notes or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law or if the indemnified party failed to give the notice
required under Section 8(c), 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 the Depositor on the one hand and the
Underwriter on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations.
The relative benefits of the Underwriter and the Depositor shall be deemed
to be in such proportion as the total net proceeds from the offering (before
deducting expenses) received by the Depositor bear to the total underwriting
discounts and commissions
29
received by the related Underwriter from time to time in negotiated sales of the
related Notes.
The relative fault of the Underwriter and the Depositor shall be determined
by reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Depositor or by the Underwriter, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission and other equitable
considerations.
The Depositor and the Underwriter agree that it would not be just and
equitable if contributions pursuant to this Section 8(i) were to be determined
by pro rata allocation (even if the Underwriter were treated as one entity for
such purposes) 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 8(f)
shall be deemed to include, for purposes of this Section 8(f), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
For purposes of this Section 8, in no case shall the Underwriter be
responsible for any amount in excess of (x) the amount received by the
Underwriter in connection with its resale of the Notes over (y) the amount paid
by the Underwriter to the Depositor for the Notes by the Underwriter hereunder.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(g) For purposes of this Section 8 the terms "Computational
Materials", "Structural Term Sheets" and "Collateral Term Sheets" mean such
portion, if any, of the information delivered to the Depositor by the
Underwriter pursuant to Section 8(d) for filing with the Commission on an
Additional Materials 8-K as:
(i) is not contained in the Prospectus without taking into
account information incorporated therein by reference through an
Additional Materials 8-K; and
(ii) does not constitute Depositor-Provided Information.
"Depositor-Provided Information" means the information and data set forth
on any computer tape (or other electronic or printed medium) furnished to the
Underwriter by or on behalf of the Depositor concerning the assets comprising
the Trust.
30
(h) The Depositor agrees to indemnify each indemnified party referred
to in Section 8(a) hereof with respect to Depositor-Provided Information to
the same extent as the indemnity granted under such section. The procedures
set forth in Section 8(c) shall be equally applicable to this Section 8(h).
(i) The Underwriter confirms that the information set forth in the
fourth and sixth paragraphs of page i of the Prospectus Supplement, the
information regarding the Underwriter set forth under the caption "Method
of Distribution" in the Prospectus Supplement and the Computational
Materials, Structural Term Sheets and Collateral Term Sheets (excluding in
each case Depositor-Provided Information) are correct, and the parties
hereto acknowledge that such information constitutes the only information
furnished in writing by or on behalf of the Underwriter for use in
connection with the preparation of the Registration Statement or the
Prospectus.
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Depositor submitted pursuant hereto
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriter or controlling persons
thereof, or by or on behalf of the Depositor and shall survive delivery of any
Notes to the Underwriter.
SECTION 10. Termination of Agreement. The Underwriter may terminate this
Agreement immediately upon notice to the Depositor, at any time at or prior to
the Closing Date if any of the events or conditions described in Section 6(r) of
this Agreement shall occur and be continuing. In the event of any such
termination, the covenant set forth in Section 5(g), the provisions of Section
7, the indemnity agreement set forth in Section 8, and the provisions of
Sections 9 and 15 shall remain in effect.
SECTION 11. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
A. if to the Underwriter, shall be delivered or sent by mail, telex or
facsimile transmission to ________________________________
________________________________________________________________________,
Attention:___________________________________________________________ (Fax:
_____________________);
B. if to the Depositor, shall be delivered or sent by mail, telex or
facsimile transmission to care of [ADDRESS OF DEPOSITOR] (Fax:
_____________________);
SECTION 12. Persons Entitled to the Benefit of this Agreement. This
Agreement shall inure to the benefit of and be
31
binding upon the Underwriter and the Depositor and their respective successors.
This Agreement and the terms and provisions hereof are for the sole benefit of
only those persons, except that the representations, warranties, indemnities and
agreements contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control the Underwriter within the
meaning of Section 15 of the Securities Act, and for the benefit of directors of
the Depositor, officers of the Depositor who have signed the Registration
Statement and any person controlling the Depositor within the meaning of Section
15 of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
12, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
SECTION 13. Survival. The respective indemnities, representations,
warranties and agreements of the Depositor and the Underwriter contained in this
Agreement, or made by or on behalf of them, respectively, pursuant to the shall
survive the delivery of and payment for the Notes and shall remain in full force
and effect, regardless of any investigation made by or on behalf of any of them
or any person controlling any of them.
SECTION 14. Definition of the Term "Business Day". For purposes of this
Agreement, "Business Day" means any day on which the New York Stock Exchange is
open for trading.
SECTION 15. Governing Law; Submission to Jurisdiction. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York without giving effect to the conflict of law rules thereof.
The parties hereto hereby submit to the jurisdiction of the United States
District Court for the Southern District of New York and any court in the State
of New York located in the City and County of New York, and appellate court from
any thereof, in any action, suit or proceeding brought against it or in
connection with this Agreement or any of the related documents or the
transactions contemplated hereunder or for recognition or enforcement of any
judgment, and the parties hereto hereby agree that all claims in respect of any
such action or proceeding may be heard or determined in New York State court or,
to the extent permitted by law, in such federal court.
SECTION 16. Counterparts. This Agreement may be executed in counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
SECTION 17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
32
If the foregoing correctly sets forth the agreement between the Depositor
and the Underwriter, please indicate your acceptance in the space provided for
the purpose below.
Very truly yours,
____________________________
____________________________
By:_________________________
Name: _____________________
Title: _____________________
CONFIRMED AND ACCEPTED, as
of the date first above written:
____________________________________
Acting on its own behalf and
the Underwriter referred to in
the foregoing Agreement
By:_________________________
Name: _____________________
Title: _____________________
33
SCHEDULE A
HOME LOAN ASSET BACKED NOTES,
Class A-1 _____% Loan Asset Backed Notes
Principal Price to Public Underwriting Discount
- - --------- --------------- -------------------
$ % %
Class A-2 _____% Loan Asset Backed Notes
Principal Purchase Price Underwriting Discount
- - --------- -------------- --------------------
$ % %
Class A-3 _____% Loan Asset Backed
Principal Purchase Price Underwriting Discount
- - --------- -------------- --------------------
$ % %
Class A-_____% Loan Asset Backed Notes
Principal Purchase Price Underwriting Discount
- - --------- -------------- --------------------
$ % %
Class M-1 _____% Loan Asset Backed Notes
Principal Purchase Price Underwriting Discount
- - --------- -------------- --------------------
$ % %
Class M-2 _____% Loan Asset Backed Notes
Principal Purchase Price Underwriting Discount
- - --------- -------------- --------------------
$ % %
Class B _____% Loan Asset Backed Notes
Principal Purchase Price Underwriting Discount
- - --------- -------------- --------------------
$ % %
Class Selling Reallowance
Concession Discount
---------- --------
A-1 % %
A-2 % %
A-3 % %
A-4 % %
M-1 % %
M-2 % %
B % %