EXHIBIT 99.2
EXECUTION COPY
Mortgage Pass-Through Certificates, Series 2004-2
$165,600,000 Class AF-1 Certificates Variable Pass-Through Rate
$34,400,000 Class AF-2 Certificates 2.829% Pass-Through Rate
$70,500,000 Class AF-3 Certificates 3.515% Pass-Through Rate
$18,400,000 Class AF-4 Certificates 4.624% Pass-Through Rate
$13,057,000 Class AF-5 Certificates 5.199% Pass-Through Rate
$22,000,000 Class AF-6 Certificates 4.656% Pass-Through Rate
$175,000,000 Class AV-1 Certificates Variable Pass-Through Rate
$76,443,000 Class AV-2 Certificates Variable Pass-Through Rate
$58,800,000 Class M-1 Certificates 5.192% Pass-Through Rate
$35,700,000 Class M-2 Certificates 5.560% Pass-Through Rate
$8,050,000 Class M-3 Certificates 5.681% Pass-Through Rate
$7,350,000 Class M-4 Certificates 5.878% Pass-Through Rate
$7,350,000 Class B-1 Certificates Variable Pass-Through Rate
$7,350,000 Class B-2 Certificates Variable Pass-Through Rate
Equity One ABS, Inc.
Depositor
Equity One, Inc.
Seller and Servicer
UNDERWRITING AGREEMENT
April 29, 2004
Wachovia Capital Markets, LLC
301 South College Street
Charlotte, North Carolina 28288
Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Friedman, Billings, Ramsey & Co., Inc.
1001 Nineteenth Street North, 7th Floor
Arlington, Virginia 22209
Ladies and Gentlemen:
Equity One ABS, Inc., a Delaware corporation ("Depositor"), a wholly owned
subsidiary of Equity One, Inc., a Delaware corporation ("Equity One"), proposes
to sell $700,000,000
aggregate principal amount of Mortgage Pass-Through Certificates, Series 2004-2,
described in Schedule I hereto (the "Certificates") to be issued pursuant to a
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") to be
dated as of March 31, 2004, among the Depositor, Equity One, as seller and
servicer, JPMorgan Chase Bank, a New York banking corporation, as trustee (the
"Trustee"), and each of the other Sellers named therein, and proposes to sell
the Certificates to you (the "Underwriters"). The assets of the Trust Fund will
include, among other things, a pool of fixed- and adjustable-rate mortgage loans
secured primarily by first and second liens on one- to four-family dwellings and
multi-family properties, which pool will be further divided into three groups of
loans. The Certificates are described more fully in a registration statement
which the Depositor has furnished to you. This is to confirm the arrangements
with respect to your purchase of the Certificates. To the extent not defined
herein, capitalized terms used herein have the meanings assigned in the Pooling
and Servicing Agreement.
The Certificates will evidence fractional undivided interests in the
property held in trust for the holders of such Certificates (the "Trust"). The
assets of the Trust will include, among other things: mortgage loans identified
as of the close of business on March 31, 2004 (the "Initial Loans") and the
additional mortgage loans to be purchased by the Trust on or prior to July 22,
2004 (the "Subsequent Loans" and together with the Initial Loans, the "Loans")
and such amounts as may be held by the Trustee in any accounts held by the
Trustee for the Trust. The aggregate undivided interest in the Trust represented
by the Certificates initially will be equal to $700,000,000 of principal. The
"Initial Cut-Off Date" for the Initial Loans is the close of business on March
31, 2004. A form of the Pooling and Servicing Agreement has been filed as an
exhibit to the Registration Statement (hereinafter defined).
Elections will be made to treat certain assets of the Trust (exclusive of
the Net WAC Cap Account, the Reserve Fund, the Pre-Funding Account and the Yield
Maintenance Agreement) as one or more "real estate mortgage investment conduits"
(each, a "REMIC") for federal income tax purposes creating a tiered REMIC
structure. The Certificates (excluding, with respect to the Class AF-1, Class
AV-1, Class AV-2, Class B-1 and Class B-2 Certificates, any associated rights to
receive payments of Net WAC Cap Carryover and, with respect to the Class AV-1
and Class AV-2 Certificates, any associated rights to receive payments from the
Reserve Fund) and the Class X Certificates will represent beneficial ownership
of "regular interests" in a REMIC and the Class R Certificates will represent
beneficial ownership of "residual interests" in one or more REMICs.
Pursuant to the Pooling and Servicing Agreement, the Depositor will
transfer to the Trust on the Closing Date all of its right, title and interest
in and to the Initial Loans as of the Initial Cut-Off Date (including all
payments on the Initial Loans received after the Initial Cut-Off Date other than
amounts received after the Initial Cut-off Date in respect of principal and
interest due on the Initial Loans on or before the Initial Cut-Off Date) and the
collateral securing each such Loan. Pursuant to any Subsequent Transfer
Agreement, the Depositor will transfer to the Trust on the closing date
specified therein all of its right, title and interest in and to the Subsequent
Loans specified therein as of the cut-off date specified therein (including all
payments on such Subsequent Loans received after such cut-off date other than
amounts received after such cut-off date in respect of principal and interest
due on such Subsequent Loans on or before such cut-off date) and the collateral
securing each such Subsequent Loan.
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The Trustee, on behalf of the Class AV-1 and Class AV-2 Certificateholders,
will enter into a yield maintenance agreement (the "Yield Maintenance
Agreement") with Wachovia Bank, National Association, dated on or about May 6,
2004. Pursuant to its terms, the Yield Maintenance Agreement will make payments
from time to time into a reserve account (the "Reserve Fund") established on the
Closing Date for purpose of covering shortfalls in principal and interest on the
Class AV-1 and Class AV-2 Certificates.
This Underwriting Agreement and the Pooling and Servicing Agreement are
referred to collectively herein as the "Agreements".
1. Representations and Warranties. Each of the Depositor and Equity One
represents and warrants to, and agrees with, the Underwriters as set forth below
in this Section 1. Certain terms used in this Section 1 are defined in paragraph
(c) hereof.
(a) The Depositor has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (No. 333-104580) on
Form S-3 for the registration under the Securities Act of 1933, as amended
(the "Act"), of asset backed securities (issuable in series), which
registration statement, as amended to the date hereof, has become
effective. Such registration statement, as amended to the date of this
Agreement, meets the requirements set forth in Rule 415(a)(1)(x) under the
Act, complies with Form S-3 and complies in all other material respects
with such Rule. The Company proposes to file with the Commission pursuant
to Rule 424(b) under the Act a supplement dated the date hereof to the
prospectus dated April 29, 2004 relating to the Certificates and the method
of distribution thereof and has previously advised the Underwriters of all
further information (financial and other) with respect to the Certificates
to be set forth therein. Such registration statement, including the
exhibits thereto, as amended to the date hereof, is hereinafter called the
"Registration Statement"; such prospectus dated April 29, 2004, in the form
in which it will be filed with the Commission pursuant to Rule 424(b) under
the Act is hereinafter called the "Basic Prospectus"; such supplement dated
the date hereof to the Basic Prospectus, in the form in which it will be
filed with the Commission pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus Supplement"; and the Basic Prospectus
and the Prospectus Supplement together are hereinafter called the
"Prospectus." Any preliminary form of the Prospectus Supplement which has
heretofore been filed pursuant to Rule 424 under the Act is hereinafter
called a "Preliminary Prospectus Supplement." "Effective Date" shall mean
the date the Registration Statement became effective. "Execution Time"
shall mean the date and time that this Agreement is executed and delivered
by the parties hereto. Any reference herein to the Registration Statement,
the Basic Prospectus, any Preliminary Prospectus Supplement, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the
material and documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, such
Preliminary Prospectus Supplement, the Prospectus Supplement or the
Prospectus, as the case may be; and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any Preliminary Prospectus Supplement, the
Prospectus Supplement or the Prospectus shall be deemed to refer to and
include the filing of any
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document under the Exchange Act after the Effective Date of the
Registration Statement, or the issue date of the Basic Prospectus, any
Preliminary Prospectus Supplement, the Prospectus Supplement or the
Prospectus, as the case may be, deemed to be incorporated therein by
reference.
(b) On the Effective Date, the Registration Statement did, and when
the Prospectus is first filed in accordance with Rule 424(b) under the Act
and on the Closing Date (as defined in Section 3 below), the Prospectus
will, comply in all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules thereunder; on the
Effective Date, the Registration Statement did not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading; and on the date of any filing pursuant to Rule 424(b) under the
Act and on the Closing Date the Prospectus will not, include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that neither
the Depositor nor Equity One makes any representations or -------- -------
warranties as to the information contained in or omitted from (x) the
Underwriter Information furnished to the Depositor by the Underwriters and
(y) any Derived Information set forth in the Computational Materials (each
as defined in Section 9 below), or in any amendment thereof or supplement
thereto, incorporated by reference in the Registration Statement or the
Prospectus except to the extent such Derived Information results from an
error or omission in any Seller-Provided Information (as defined in Section
9 below).
(c) RESERVED.
(d) No consent, approval, authorization or order of, or filing with,
any court or governmental agency or body is required to be obtained or made
by Equity One, the Depositor or any Seller for the consummation of the
transactions contemplated by this Agreement except (A) such as have been
obtained or made, (B) such as may be required under the state securities
laws of any jurisdiction in connection with the purchase and distribution
of the Certificates by the Underwriter and (C) recordations of assignments
of Mortgages to the Trustee (to the extent required under the Pooling and
Servicing Agreement) that have not been completed.
(e) None of Equity One, the Depositor or any Seller is in violation of
its charter or bylaws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any agreement or
instrument to which it is a party or by which it or its properties is bound
that would have a material adverse effect on the transactions contemplated
herein or in the Pooling and Servicing Agreement. The execution, delivery
and performance of the Agreements and the issuance and sale of the
Certificates and compliance with the terms and provisions thereof will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, rule, regulation or order of any
governmental agency or body or any court having jurisdiction over any of
Equity One, the Depositor or any Seller or any of their properties or any
agreement or instrument to which any of them is a party or by which any of
them is bound or to which any of the properties of any of them is subject
or the
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charter or by-laws of any of them, and each of them has full power and
authority to authorize, issue and sell the Loans and the Certificates as
contemplated by the Agreements.
(f) The final computer tape of the Initial Loans created with balances
as of March 31, 2004 and made available to you by Equity One and the
Depositor, was complete and accurate as of the date thereof and includes a
description of the Initial Loans that are described in a schedule to the
Pooling and Servicing Agreement.
(g) Any taxes, fees and other governmental charges in connection with
the execution, delivery and issuance of this Agreement and the Pooling and
Servicing Agreement or the execution, delivery and sale of the Certificates
have been or will be paid at or prior to the Closing Date, to the extent
then due and payable.
(h) Immediately prior to the assignment of the Loans to the Trustee as
contemplated by the Pooling and Servicing Agreement or any Subsequent
Transfer Agreement, as applicable, the Depositor (i) will have good title
to, and will be the sole owner of, each related Loan and the other property
purported to be transferred by it to the Trustee pursuant to the Pooling
and Servicing Agreement or such Subsequent Transfer Agreement, as
applicable, free and clear of any pledge, mortgage, lien, security interest
or other encumbrance (collectively, "Liens"), (ii) will not have assigned
to any person any of its right, title or interest in such Loans or property
or in the Pooling and Servicing Agreement or such Subsequent Transfer
Agreement, as applicable, and (iii) will have the power and authority to
sell such Loans and property to the Trustee, and upon the execution and
delivery of the Pooling and Servicing Agreement or such Subsequent Transfer
Agreement, as applicable by the Trustee, on behalf of the
Certificateholders, the Trustee will have acquired all of the Depositor's
or the Seller(s), as the case may be, right, title and interest in and to
such Loans and property free and clear of any Lien.
(i) All actions required to be taken by the Depositor and Equity One
as a condition to the offer and sale of the Certificates as described
herein or the consummation of any of the transactions described in the
Prospectus have been or, prior to the Closing Date, will be taken.
(j) The representations and warranties of each of the Sellers, the
Depositor and Equity One in (or incorporated in) the Pooling and Servicing
Agreement and made in any Officers' Certificate of the Sellers, the
Depositor or Equity One delivered pursuant to the Pooling and Servicing
Agreement, will be true and correct at the time made and on and as of the
Closing Date as if set forth herein.
(k) None of the Depositor, Equity One or any Seller will grant,
assign, pledge or transfer to any Person a security interest in, or any
other right, title or interest in, the Loans, except as provided in the
Pooling and Servicing Agreement or any Subsequent Transfer Agreement, as
applicable, and each will take all action necessary in order to maintain
the security interest in the Loans granted pursuant to the Pooling and
Servicing Agreement or any such Subsequent Transfer Agreement, as
applicable.
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(l) There are no actions, proceedings or investigations pending, or to
the best knowledge of either the Depositor or Equity One, threatened
against the Sellers, the Depositor or Equity One before any court or before
any governmental authority, arbitration board, administrative agency or
tribunal (a) which, if adversely determined, could materially and adversely
affect, either in the individual or in the aggregate, the financial
position, business, operations or prospects of the Sellers, the Depositor
or Equity One, (b) asserting the invalidity of the Agreements or the
Certificates, (c) seeking to prevent the issuance of the Certificates or
the consummation by the Depositor, Equity One or any Seller of any of the
transactions contemplated by any of the Agreements or (d) which, if
adversely determined, could reasonably be expected to materially and
adversely affect the performance by the Depositor, Equity One or any Seller
of its respective obligations under, or the validity or enforceability of,
any of the Agreements or the Certificates.
(m) Reserved.
(n) 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
Equity One or any Seller, otherwise than as set forth or contemplated in
the Prospectus as supplemented or amended as of the Closing Date.
(o) Each of the Depositor, Equity One and each Seller has been duly
incorporated or formed, as the case may be, and is validly existing as a
corporation or a limited liability company, as the case may be, in good
standing under the laws of the state of its incorporation or formation, as
the case may be, is duly qualified to do business and is in good standing
as a foreign corporation or a limited liability company in each
jurisdiction in which its ownership or lease of property or the conduct of
its business requires such qualification and the failure to be so qualified
would have a material adverse effect on its financial condition or
operations, 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 the Agreements and to cause the
Certificates to be issued.
(p) Neither the Depositor nor the Trust created by the Pooling and
Servicing 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.
(q) At the Closing Date, the Certificates and the Pooling and
Servicing Agreement will conform in all material respects to the
descriptions thereof contained in the Prospectus.
(r) Any taxes, fees and other governmental charges in connection with
the execution, delivery and issuance of the Agreements and the Certificates
have been paid or will be paid at or prior to the Closing Date.
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(s) Each of the Depositor, Equity One and the Sellers 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 none of the Depositor, Equity One or any Seller has
received notice of any proceedings relating to the revocation or
modification of any such license, certificate, authority or permit which if
decided adversely to any such entity would, singly or in the aggregate,
materially and adversely affect the conduct of its business, operations or
financial condition.
Any certificate signed by an officer of the Depositor, Equity One or any
Seller and delivered to the Underwriters or counsel for the Underwriters in
connection with an offering of the Certificates shall be deemed, 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.
2. Purchase and Sale. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Depositor agrees
to sell to the Underwriters, and the Underwriters agree, severally and not
jointly, to purchase from the Depositor, the Certificates, in the principal
amounts and at the purchase prices set forth in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Certificates shall
be made at 10:00 a.m. New York time, on May 6, 2004 at the offices of Stradley,
Ronon, Stevens & Young, LLP, 2600 One Commerce Square, Philadelphia,
Pennsylvania 19103, or such later time or date not later than five business days
thereafter as the Underwriters shall designate (such date and time of delivery
and payment for the Certificates being herein called the "Closing Date").
Delivery of one or more global certificates evidencing the full principal amount
of each of the respective classes of Certificates, shall be made to the
Underwriters, against payment by the Underwriters of the purchase price thereof
to the Depositor by wire transfer in immediately available funds. The global
certificates to be so delivered to the Underwriters shall be registered in the
name of Cede & Co., as nominee for The Depository Trust Company ("DTC"). The
interest of beneficial owners of the Certificates will be represented by book
entries on the records of DTC and participating members thereof. Definitive
certificates evidencing the Certificates will be available only under limited
circumstances.
The Depositor agrees to have the Certificates available for inspection,
checking and packaging by the Underwriters in Philadelphia, Pennsylvania, not
later than 1:00 PM on the business day prior to the Closing Date.
4. Offering by Underwriters. It is understood that the Underwriters propose
to offer the Certificates for sale to the public (which may include selected
dealers) as set forth in the Prospectus.
5. Agreements. Each of Equity One and the Depositor agrees with the
Underwriter that:
(a) Prior to the termination of the offering of the Certificates, the
Depositor will not file any amendment of the Registration Statement any
Prospectus or any Preliminary Prospectus Supplement unless the Depositor
has furnished you a copy for your review prior to filing and will not file
any such proposed amendment to which you reasonably
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object unless such filing is required by law. Subject to the foregoing
sentence, the Depositor will cause the Prospectus to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) under the
Act within the time period prescribed and will provide evidence
satisfactory to the Underwriters of such timely filing. The Depositor will
promptly advise the Underwriters (i) when the Prospectus shall have been
filed with the Commission pursuant to Rule 424(b) under the Act, (ii) when,
prior to termination of the offering of the Securities, any amendment to
the Registration Statement shall have been filed or become effective, (iii)
of any request by the Commission for any amendment of the Registration
Statement or the Prospectus or for any additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the Depositor or the
Trust of any notification with respect to the suspension of the
qualification of the Certificates for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, and will use
their best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Certificates is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein
in the light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend the the Prospectus to
comply with the Act or the Exchange Act or the respective rules thereunder,
the Depositor promptly will (i) prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this Section 5, an
amendment which will correct such statement or omission or effect such
compliance and (ii) supply any amended Prospectus to you in such quantities
as you may reasonably request.
(c) The Depositor will furnish to the Underwriters and counsel for the
Underwriters, without charge, copies of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus by
the Underwriters or a dealer may be required by the Act, as many copies of
any Preliminary Prospectus Supplement and the Prospectus as the
Underwriters may reasonably request. The Depositor will pay the expenses of
printing or other production of all documents relating to the offering.
(d) The Depositor will cooperate, when and if requested by the
Underwriters at Depositor's sole expense, in the qualification of the
Certificates for sale under the laws of such jurisdictions as the
Underwriters may designate and will maintain such qualifications in effect
so long as required for the distribution of the Certificates; provided,
however, that the Depositor shall not be required to qualify to do business
in any jurisdiction where it is not now so qualified or to take any action
which would subject it to general or unlimited service of process in any
jurisdiction where it is not now so subject.
(e) Reserved.
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(f) As soon as practicable, the Depositor will cause the Trust Fund to
make generally available to the Certificateholders and to the Underwriters
an earnings statement or statements of the Trust Fund which will satisfy
the provisions of Section 11(a) of the Act and will satisfy the
requirements of Rule 158 under the Act.
(g) The Depositor will cause any Computational Materials and ABS Term
Sheets (as defined in Section 9 hereof) with respect to the Certificates
which are delivered by the Underwriters to the Depositor pursuant to
Section 9 hereof to be filed with the Commission on a Current Report on
Form 8-K on or before the date of the filing of the Prospectus pursuant to
Rule 424 under the Act.
(h) The Depositor and Equity One will cooperate with the Underwriters
and use their best efforts to permit the Certificates to be eligible for
clearance and settlement through The Depository Trust Company.
(i) For a period from the date of this Agreement until the retirement
of the Certificates, the Servicer will deliver to you the monthly servicing
report, the annual statements of compliance and the annual independent
certified public accountants' reports furnished to the Trustee pursuant to
the Pooling and Servicing Agreement, as soon as such statements and reports
are furnished to the Trustee.
(j) So long as any of the Certificates is outstanding, Equity One will
furnish to you (i) as soon as practicable after the end of the fiscal year
all documents required to be distributed to holders of Certificates or
filed with the Commission pursuant to the Exchange Act or any order of the
Commission thereunder and (ii) from time to time, any other information
concerning Equity One or the Depositor filed with any government or
regulatory authority that is otherwise publicly available, as you may
reasonably request.
(k) To the extent, if any, that the rating provided with respect to
the Certificates by Moody's, Standard & Poor's or Fitch (collectively, the
"Rating Agencies") is conditional upon the furnishing of documents or the
taking of any actions by the Depositor, the Depositor shall furnish such
documents and take such actions.
(l) Until 30 days following the Closing Date, neither the Depositor
nor any trust or other entity originated, directly or indirectly, by the
Depositor or Equity One will, without the prior written consent of the
Underwriters, offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any asset-backed
securities collateralized by mortgage loans (other than the Certificates).
6. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Certificates shall be subject to the accuracy
of the representations and warranties on the part of Equity One and the
Depositor contained herein as of the Execution Time and the Closing Date, to the
accuracy of the statements of Equity One and the Depositor made in any
certificates pursuant to the provisions hereof, to the performance by each of
Equity One and the Depositor of its obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become effective no later
than the date hereof, and no stop order suspending the effectiveness of the
Registration Statement shall
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have been issued and no proceedings for that purpose shall have been
instituted or threatened, and the Prospectus shall have been filed pursuant
to Rule 424(b) under the Act.
(b) The Underwriters shall have received the opinion of Stradley,
Ronon, Stevens & Young, LLP, counsel for Equity One and the Depositor,
dated the Closing Date, to the effect that:
(i) Each of the Depositor and Equity One is a corporation organized
and validly existing under the laws of the state of its incorporation with
all corporate power and authority necessary to own or hold its properties,
to conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement and the Pooling and
Servicing Agreement and is duly qualified to do business where its
ownership or lease of property or the conduct of its business requires such
qualification.
(ii) The Pooling and Servicing Agreement has been duly authorized,
executed and delivered by, and constitutes a legal, valid and binding
instrument enforceable against each of the Depositor and Equity One in
accordance with its terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other laws affecting
creditors' rights generally from time to time in effect) (such opinion may
also state that the enforceability of the obligations of Equity One and the
Depositor is subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law)).
(iii) The Certificates, the Class X Certificates and the Class R
Certificates have been duly authorized and, when executed and authenticated
in accordance with the provisions of the Pooling and Servicing Agreement
and delivered to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued and outstanding and will be entitled to
the benefits of the Pooling and Servicing Agreement.
(iv) To the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving Equity One, the
Depositor, any Seller or any of their subsidiaries, of a character required
to be disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus, and there is no material contract or other
document of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit to the Registration
Statement, which is not described or filed as required.
(v) The Certificates and the Pooling and Servicing Agreement conform
in all material respects to the descriptions thereof contained in the
Prospectus.
(vi) The Registration Statement has become effective under the Act;
any required filing of the Basic Prospectus, any Preliminary Prospectus
Supplement, the Prospectus Supplement and the Prospectus pursuant to Rule
424(b) under the Act has been made in the manner and within the time period
required by Rule 424(b) under the Act; to the knowledge of such counsel, no
stop order suspending the effectiveness of the
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Registration Statement has been issued, no proceedings for that purpose
have been instituted or threatened, and the Registration Statement and the
Prospectus (other than (A) Computational Materials, the financial
statements and other financial and statistical information contained
therein, (B) the Underwriter Information and (C) any description therein of
any third party provider of credit enhancement, each as to which such
counsel need express no opinion) comply as to form in all material respects
with the applicable requirements of the Act, the Exchange Act and the
respective rules thereunder; and such counsel has no reason to believe that
at the Effective Date the Registration Statement contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, at the date thereof or at the Closing
Date, included or includes any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (other than (A) Computational Materials, the financial
statements and other financial and statistical information contained
therein, (B) the Underwriter Information and (C) any description therein of
any third party provider of credit enhancement, each as to which such
counsel need express no opinion).
(vii) This Agreement has been duly authorized, executed and delivered
by Equity One and the Depositor.
(viii) The statements in the Prospectus under the headings "Summary of
Terms--Federal Income Tax Consequences", "Summary of Terms--ERISA
Considerations", "Federal Income Tax Consequences", "ERISA Considerations"
and "Other Tax Considerations", to the extent that they constitute matters
of federal law or legal conclusions with respect thereto, are correct in
all material respects.
(ix) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended, and neither
the Depositor nor the Trust Fund is required to be registered under the
Investment Company Act of 1940, as amended.
(x) Certain assets of the trust fund (exclusive of the Net WAC Cap
Account, the Reserve Fund, the Pre-Funding Account and the Yield
Maintenance Agreement) as described in the Prospectus and the Pooling and
Servicing Agreement will qualify as one or more REMICs within the meaning
of Section 860D of the Internal Revenue Code of 1986, as amended (the
"Code"), the Certificates (excluding, in respect of the Class AF-1, Class
AV-1, Class AV-2, Class B-1 and Class B-2 Certificates, any associated
rights to receive payments of Net WAC Cap Carryover) and the Class X
Certificates will be treated as "regular interests" in a REMIC and the
Class R Certificates will be treated as "residual interests" in one or more
REMICs, assuming: (i) an election is made to treat the trust fund as one or
more REMICs, (ii) compliance with the Pooling and Servicing Agreement and
(iii) compliance with changes in the law, including any amendments to the
Code or applicable Treasury regulations thereunder.
(xi) No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or governmental
agency or body is
11
required for the consummation of the transactions contemplated herein
except (A) such as have been obtained under the Act, (B) such as may be
required under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Certificates by the Underwriter, (C)
recordations of assignments of Mortgages to the Trustee (to the extent
required under the Pooling and Servicing Agreement) that have not been
completed, and (D) such other approvals (specified in such opinion) as have
been obtained.
(xii) Neither the execution and delivery of the Pooling and Servicing
Agreement, the issue and sale of the Certificates, nor the consummation of
any other of the transactions herein contemplated nor the fulfillment of
the terms hereof or of the Pooling and Servicing Agreement will conflict
with, result in a breach of, or constitute a default under the charter or
by-laws of Equity One or the Depositor or the terms of any indenture or
other agreement or instrument known to such counsel and to which Equity One
or the Depositor is a party or bound, or, to the knowledge of such counsel,
any law, order or regulation applicable to Equity One, or the Depositor of
any court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over Equity One or the Depositor.
(xiii) To the best knowledge of such counsel and except as set forth
in the Prospectus, no default exists and no event has occurred which, with
notice, lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
agreement to which the Depositor is a party or by which it is bound, which
default is or would have a material adverse effect on the financial
condition, earnings, prospects, business or properties of the Depositor,
taken as a whole.
(xiv) To the best knowledge of such counsel, the Depositor has
obtained all material licenses, permits and other governmental
authorizations that are necessary to the conduct of its business; such
licenses, permits and other governmental authorizations are in full force
and effect, and the Depositor is in all material respects complying
therewith; and the Depositor is otherwise in compliance with all laws,
rules, regulations and statutes of any jurisdiction to which it is subject,
except where non-compliance would not have a material adverse effect on the
Depositor.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
Commonwealth of Pennsylvania, the State of Delaware, the State of New
Jersey or the United States, to the extent deemed proper by such counsel
and specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable by such counsel and who are satisfactory
to counsel for the Underwriter and (B) as to matters of fact, to the extent
deemed proper by such counsel, on certificates of responsible officers of
Equity One, the Depositor, the Sellers and the other parties to this
Agreement and the Pooling and Servicing Agreement, and of public officials.
References to the Prospectus in this paragraph (b) include any supplements
thereto at the Closing Date.
(c) The Underwriters shall have received from McKee Nelson LLP,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Certificates, the
Pooling and Servicing Agreement, this
12
Agreement, the Registration Statement, the Prospectus and other related
matters as the Underwriters may reasonably require, and shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass on such matters.
(d) The Underwriters shall have received from PricewaterhouseCoopers
LLP, certified public accountants, two letters, one such letter dated the
date hereof and satisfactory in form and substance to the Underwriters and
its counsel, confirming that they are independent accountants within the
meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and stating to the effect that
they have performed certain specified procedures as a result of which they
determined that certain information of an accounting, financial or
statistical nature set forth in the Prospectus, agrees with the provisions
of the Pooling and Servicing Agreement and the records of Equity One and
the Sellers, and the other such letter dated the Closing Date and
satisfactory in form and substance to the Underwriters and its counsel,
confirming that the first such letter remains true as of the Closing Date.
(e) The representations and warranties in this Agreement shall be true
and correct on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of such date,
and the Underwriters shall have been furnished a certificate of each of
Equity One and the Depositor, signed by a Vice President, Senior
Vice-President or Executive Vice President and by the principal financial
or accounting officer of Equity One and the Depositor, respectively, dated
the Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement and the Prospectus and this
Agreement and that:
(i) the representations and warranties of Equity One and the Depositor
in this Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect, as if made on the Closing Date,
and each of Equity One and the Depositor has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) 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; and
(iii) since the date of Equity One's most recent audited financial
statements, there has been no material adverse change, or any development
respecting a prospective change, in the condition (financial or other) of
Equity One, the Depositor or any Seller, whether or not arising from
transactions in the ordinary course of business.
(f) Prior to the Closing Date, Equity One, the Depositor, and each
Seller shall have furnished to the Underwriters such further information,
certificates and documents as the Underwriters may reasonably request.
13
(g) The Certificates have been given the following ratings:
Class Standard & Poor's Moody's Fitch
--------------- ----------------- ---------------- ----------------
AF-1 AAA Aaa AAA
AF-2 AAA Aaa AAA
AF-3 AAA Aaa AAA
AF-4 AAA Aaa AAA
AF-5 AAA Aaa AAA
AF-6 AAA Aaa AAA
AV-1 AAA Aaa AAA
AV-2 AAA Aaa AAA
M-1 AA Aa2 AA
M-2 A A2 A+
M-3 A- A3 A
M-4 BBB+ Baa1 A-
B-1 BBB Baa1 BBB+
B-2 BBB- Baa2 BBB
(h) The Underwriters shall have received from counsel to the Trustee
an opinion, dated the Closing Date and satisfactory in form and substance
to the Underwriters and its counsel to the effect that:
(i) the Trustee is duly organized and validly existing as a New York
banking corporation with the power and authority under the laws of New York
to conduct business and affairs as a trustee;
(ii) the Trustee has the corporate power and lawful authority to
perform the duties and obligation of trustee under, to act as successor
Servicer upon the terms and conditions set forth in, and to accept the
trust contemplated by, the Pooling and Servicing Agreement;
14
(iii) the Pooling and Servicing Agreement has been duly authorized,
executed, delivered and accepted by the Trustee, and the Pooling and
Servicing Agreement is a legal, valid and binding obligation enforceable
against the Trustee in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization and other laws
affecting creditors' rights generally from time to time in effect) (such
opinion may also state that the enforceability of the Trustee's obligations
is subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law));
(iv) the Certificates have been duly authenticated by the Trustee; and
(v) neither the execution nor delivery by the Trustee of the Pooling
and Servicing Agreement nor the consummation of any of the transactions
contemplated thereby require the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action with
respect to, any governmental authority or agency under any existing federal
or state law governing the banking or trust powers of the Trustee.
(i) The Underwriters shall have received such opinions, addressed to
the Underwriters and dated the Closing Date, as are delivered to the rating
agencies that have assigned ratings to the Certificates.
(j) The Underwriters shall have received an opinion from Stradley,
Ronon, Stevens & Young, LLP, counsel for Equity One and the Depositor,
dated the Closing Date and satisfactory in form and substance to the
Underwriters regarding the true sale of the Loans by the Sellers to the
Depositor and by the Depositor to the Trustee, for the benefit of
Certificateholders.
(k) The Underwriters shall have received an opinion from Stradley,
Ronon, Stevens & Young, LLP counsel for Equity One and the Depositor, dated
the Closing Date and satisfactory in form and substance to the Underwriters
regarding substantive consolidation.
(l) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and the date of the
most recent audited financial statements of Equity One, there shall not
have been any change, or any development involving a prospective change,
which has not been disclosed to the Underwriters on or before the date
hereof in or affecting the condition, financial or otherwise, of Equity
One, the Depositor or any Seller the effect of which is, in the reasonable
judgment of the Underwriters, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or the delivery of
the Certificates as contemplated by the Registration Statement and the
Prospectus.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriters and counsel for the
15
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Underwriters. Notice of such cancellation shall be given to the Depositor and
Equity One in writing or by telephone or telegraph confirmed in writing.
7. Reimbursement of Underwriter's Expenses. If the sale of the Certificates
provided for herein is not consummated because any condition to the obligations
of an Underwriter set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof or because of any refusal, inability
or failure on the part of Equity One or the Depositor to perform any agreement
herein or comply with any provision hereof other than by reason of a default by
an Underwriter, the Depositor will reimburse such Underwriter upon demand for
all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by it in connection with the proposed
purchase and sale of the Certificates.
8. Indemnification and Contribution.
(a) Equity One and the Depositor, jointly and severally, agree to
indemnify and hold harmless the Underwriters and each person who controls
the Underwriters within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus Supplement or the Prospectus, or in any amendment
thereof, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and agrees to reimburse each
such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that
(i) neither Equity One nor the Depositor will be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made (x) in any Underwriter Information, or
(y) in any Derived Information (as defined in Section 9 below) included, or
which should have been included, by an Underwriter in any Computational
Materials provided by such Underwriter to the Depositor or any amendment or
supplement thereof unless such untrue statement or alleged untrue statement
or omission or alleged omission made in any Derived Information results
from an error or omission in any Seller-Provided Information (as defined
herein), and (ii) such indemnity with respect to any Preliminary Prospectus
Supplement or Computational Materials shall not inure to the benefit of the
Underwriters (or any person controlling the Underwriters) from whom the
person asserting any such loss, claim, damage or liability purchased the
Certificates which are the subject thereof if such person did not receive a
copy of the Prospectus at or prior to the confirmation of the sale of such
Certificates to such person in any case where such delivery is required by
the Act and the untrue statement or omission of a material fact contained
in the Preliminary
16
Prospectus Supplement was corrected in the Prospectus. This indemnity
agreement will be in addition to any liability which Equity One or the
Depositor may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless Equity One and the Depositor, each of their respective
directors, each of their respective officers who signs the Registration
Statement, and each person who controls Equity One or the Depositor within
the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from Equity One and the Depositor to the
Underwriters, but only with reference to (x) Underwriter Information
furnished to the Depositor by such Underwriter or (y) any Derived
Information included, or which should have been included, by such
Underwriter in any Computational Materials provided by such Underwriter to
the Depositor or any amendment or supplement thereof; provided, however
that the indemnity with respect to clause (y) above shall not apply to any
untrue statement or alleged untrue statement or omission or alleged
omission made in any Derived Information that results from an error or
omission in any Seller-Provided Information. This indemnity agreement will
be in addition to any liability which each Underwriter may otherwise have.
Equity One and the Depositor acknowledge that "Underwriter Information"
means the statements set forth in the last paragraph of the cover page and
under the heading "Underwriting" in any Preliminary Prospectus Supplement
or the Prospectus and constitute the only information furnished in writing
by such Underwriter for inclusion in the documents referred to in the
foregoing indemnity, and you, as the Underwriters, confirm that such
statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 8. In case any such action is
brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to appoint counsel satisfactory to such indemnified party to represent the
indemnified party in such action; provided, however, that if the defendants
in any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there
may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to defend such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to appoint counsel to
defend such action and approval by the indemnified party of such counsel,
the indemnifying party will not be liable to such indemnified party under
this Section 8 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i)
the indemnified party shall have employed separate counsel in accordance
with the proviso to the preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more
than one separate counsel, approved by the Underwriters in the case of
paragraph (a) of this Section 8, representing the indemnified parties under
such paragraph (a) who
17
are parties to such action), (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party or (iv) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
(d) 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) or (b), 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 (a) if such loss, claim, damage or liability does
not arise from Computational Materials or ABS Term Sheets, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Depositor and Equity One on the one hand and the
Underwriters on the other from the offering of the Certificates 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 and Equity One on the one hand and the Underwriters
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 and (b) if such loss,
claim, damage or liability arises from Computational Materials or ABS Term
Sheets, in such proportion as is appropriate to reflect the relative
benefits received by the Equity One and the Depositor on the one hand and
the Underwriters on the other from the offering of the Certificates and the
relative fault of Equity One and the Depositor on the one hand and the
Underwriters on the other with respect to the statements or omissions which
resulted in such loss, claims, damages or liability, or actions in respect
thereof, as well as any other relevant equitable consideration.
The relative benefits of the Underwriters and Equity One and the
Depositor shall be deemed to be in such proportions that the Underwriters
are responsible for that portion of such losses, liabilities, claims,
damages and expenses represented by the percentage that the underwriting
discount on the cover of the Prospectus as amended or supplemented bears to
the initial public offering price as set forth thereon, and Equity One and
the Depositor shall be responsible for the balance.
The relative fault of the Underwriters and Equity One 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 Equity One or the
Depositor or by the Underwriters, 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.
18
Equity One and the Depositor and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 8(d)
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 8(d) shall be deemed to include,
for purposes of this Section 8(d), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim.
In no case shall an Underwriter be responsible for any amount in
excess of the underwriting discount applicable to the Certificates
purchased by it as disclosed on the cover of the Prospectus as amended. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person who controls the
Underwriters within the meaning of the Act shall have the same rights to
contribution as the Underwriters, and each person who controls Equity One
or the Depositor within the meaning of either the Act or the Exchange Act,
each officer of Equity One or the Depositor and each director of Equity One
or the Depositor shall have the same rights to contribution as Equity One
and the Depositor, subject in each case to the proviso to the first
sentence of this paragraph (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution
may be made against another party or parties under this paragraph (d),
notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it
or they may have hereunder or otherwise than under this paragraph (d).
9. Computational Materials. It is understood that the Underwriters may
provide to prospective investors certain Computational Materials and ABS Term
Sheets in connection with your offering of the Certificates, subject to the
following conditions:
(a) Each Underwriter shall comply with all applicable laws and
regulations in connection with the use of Computational Materials,
including the No-Action Letter of May 20, 1994 issued by the Commission to
Kidder, Peabody Acceptance Corporation I, Kidder, Peabody & Co.
Incorporated and Kidder Structured Asset Corporation, as made applicable to
other issuers and underwriters by the Commission in response to the request
of the Public Securities Association dated May 24, 1994 (collectively, the
"Kidder/PSA Letter"), as well as the PSA Letter referred to below. Each
Underwriter shall comply with all applicable laws and regulations in
connection with the use of ABS Term Sheets, including the No Action Letter
of February 17, 1995 issued by the Commission to the Public Securities
Association (the "PSA Letter" and, together with the Kidder/PSA Letter, the
"No-Action Letters").
(b) For purposes hereof, "Computational Materials" as used herein
shall have the meaning given such term in the No-Action Letters, but shall
include only those
19
Computational Materials that have been prepared or delivered to prospective
investors by or at the direction of an Underwriter. For purposes hereof,
"ABS Term Sheets" and "Collateral Term Sheets" as used herein shall have
the meanings given such terms in the PSA Letter but shall include only
those ABS Term Sheets or Collateral Term Sheets that have been prepared or
delivered to prospective investors by or at the direction of an
Underwriter.
(c) (i) All Computational Materials and ABS Term Sheets provided to
prospective investors that are required to be filed with the Commission
pursuant to the No-Action Letters shall bear a legend substantially similar
to the following statement:
"THE INFORMATION HEREIN IS PRELIMINARY, AND WILL BE SUPERSEDED BY
THE APPLICABLE PROSPECTUS SUPPLEMENT AND BY ANY OTHER INFORMATION
SUBSEQUENTLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION."
(ii) In the case of Collateral Term Sheets, such legend shall
also include a statement substantially similar to the following
statement:
"THE INFORMATION CONTAINED HEREIN WILL BE SUPERSEDED BY THE
DESCRIPTION OF THE MORTGAGE POOL CONTAINED IN THE PROSPECTUS
SUPPLEMENT RELATING TO THE CERTIFICATES AND [EXCEPT WITH RESPECT TO
THE INITIAL COLLATERAL TERM SHEET] SUPERSEDES ALL INFORMATION
CONTAINED IN ANY COLLATERAL TERM SHEETS RELATING TO THE MORTGAGE POOL
PREVIOUSLY PROVIDED BY [UNDERWRITER]"
The Depositor shall have the right to require additional specific legends
or notations to appear on any Computational Materials or ABS Term Sheets, the
right to require changes regarding the use of terminology and the right to
determine the types of information appearing therein. Notwithstanding the
foregoing, this subsection (c) will be satisfied if all Computational Materials
and ABS Term Sheets referred to therein bear a legend in a form previously
approved in writing by the Depositor.
(d) The Underwriters shall provide the Depositor with representative
forms of all Computational Materials and ABS Term Sheets prior to their
first use, to the extent such forms have not previously been approved by
the Depositor for use by the Underwriters. The Underwriters shall provide
to the Depositor, for filing on Form 8-K, copies (in such format as
required by the Depositor) of all Computational Materials and ABS Term
Sheets that are required to be filed with the Commission pursuant to the
No-Action Letters. The Underwriters may provide copies of the foregoing in
a consolidated or aggregated form including all information required to be
filed. All Computational Materials and ABS Term Sheets described in this
subsection (d) must be provided to the Depositor not later than 10:00 a.m.
New York time one business day before filing thereof is required pursuant
to the terms of this Agreement. The Underwriters agree, severally and not
jointly, that they will not provide to any investor or prospective investor
in the Certificates any Computational Materials or ABS Term Sheets on or
after the day on
20
which Computational Materials and ABS Term Sheets are required to be
provided to the Depositor pursuant to this Section 9(d) (other than copies
of Computational Materials or ABS Term Sheets previously submitted to the
Depositor in accordance with this Section 9(d) for filing with the
Commission), unless such Computational Materials or ABS Term Sheets are
preceded or accompanied by the delivery of a Prospectus to such investor or
prospective investor.
(e) All information included in the Computational Materials and ABS
Term Sheets shall be generated based on substantially the same methodology
and assumptions that are used to generate the information in the Prospectus
Supplement as set forth therein; provided, however, that the Computational
Materials and ABS Term Sheets may include information based on alternative
methodologies or assumptions if specified therein. If any Computational
Materials or ABS Term Sheets that are required to be filed were based on
assumptions with respect to the Loans included in the Trust that differ
from the final Pool Information in any material respect or on Certificate
structuring terms that were revised in any material respect prior to the
printing of the Prospectus, the Underwriters shall prepare revised
Computational Materials or ABS Term Sheets, as the case may be, based on
the final Pool Information and structuring assumptions, circulate such
revised Computational Materials and ABS Term Sheets to all recipients of
the preliminary versions thereof that indicated or subsequently indicate
orally to the Underwriters they will purchase all or any portion of the
Certificates, and include such revised Computational Materials and ABS Term
Sheets (marked, "as revised") in the materials delivered to the Depositor
pursuant to subsection (d) above. As used herein, "Pool Information" means
information with respect to the characteristics of the Loans, as provided
by or on behalf of the Depositor to the Underwriters in final form and set
forth in the Prospectus Supplement.
(f) The Depositor shall not be obligated to file any Computational
Materials or ABS Term Sheets that have been determined to contain any
material error or omission; provided, however, that, at the request of an
Underwriter, the Depositor will file Computational Materials or ABS Term
Sheets that contain a material error or omission if clearly marked
"superseded by materials dated _____" and accompanied by corrected
Computational Materials or ABS Term Sheets that are marked, "material
previously dated _____, as corrected." In the event that, within the period
during which the Prospectus relating to the Certificates is required to be
delivered under the Act, any Computational Materials or ABS Term Sheets are
determined, in the reasonable judgment of the Depositor or the
Underwriters, to contain a material error or omission, the Underwriters
shall prepare a corrected version of such Computational Materials or ABS
Term Sheets, shall circulate such corrected Computational Materials and ABS
Term Sheets to all recipients of the prior versions thereof that either
indicated orally to the Underwriters they would purchase all or any portion
of the Certificates, or actually purchased all or any portion thereof, and
shall deliver copies of such corrected Computational Materials and ABS Term
Sheets (marked, "as corrected") to the Depositor for filing with the
Commission in a subsequent Form 8-K submission.
(g) The Depositor and the Underwriters shall receive a letter from
PricewaterhouseCoopers LLP, certified public accountants, satisfactory in
form and
21
substance to the Depositor and the Underwriters, to the effect that such
accountants have performed certain specified procedures agreed to by the
Depositor and the Underwriters, as a result of which they determined that
the specified information that is included in the Computational Materials
and ABS Term Sheets (if any) provided by the Underwriters to the Depositor
for filing on Form 8-K as provided in this Section 9 has been accurately
computed or compiled from the Depositor Provided Information.
(h) If the Underwriters do not provide any Computational Materials or
ABS Term Sheets to the Depositor pursuant to subsection (d) above, the
Underwriters, severally and not jointly, shall be deemed to have
represented, as of the Closing Date, that they did not provide any
prospective investors with any information in written or electronic form in
connection with the offering of the Certificates that is required to be
filed with the Commission in accordance with the No-Action Letters.
(i) In the event of any delay in the delivery by the Underwriters to
the Depositor of all Computational Materials and ABS Term Sheets required
to be delivered in accordance with subsection (d) above, or in the delivery
of the accountant's comfort letter in respect thereof pursuant to Section
9(g), the Depositor shall have the right to delay the release of the
Prospectus to investors or to the Underwriters, to delay the Closing Date
and to take other appropriate actions in each case as necessary in order to
allow the Depositor to comply with its obligation to file the Computational
Materials and ABS Term Sheets with the Commission.
(j) For purposes of this Agreement, as to the Underwriters, the term
"Derived Information" means such portion, if any, of the information that
is:
(i) delivered to the Depositor by an Underwriter pursuant to this
Section 9 for filing with the Commission on Form 8-K;
(ii) is not contained in the Prospectus without taking into
account information incorporated therein by reference; and
(iii) does not constitute Seller-Provided Information.
"Seller-Provided Information" means any computer tape concerning the assets
comprising the Trust Fund and any other information with respect to the
Certificates or the Loans furnished to an Underwriter by the Depositor for use
as contemplated herein.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Underwriters, by notice given to the Depositor and
Equity One prior to delivery of and payment for the Certificates, if prior to
such time (i) trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities, (iii) there shall have occurred
any outbreak or material escalation of hostilities, declaration by the United
States of a national emergency or war or (iv) there shall have occurred such
other calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the Underwriters,
22
impracticable or inadvisable to proceed with the offering or delivery of the
Certificates as contemplated by the Prospectus (exclusive of any supplement
thereto).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of Equity One or
the Depositor or their respective officers and of each Underwriter set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Underwriters, Equity
One or the Depositor or any of the officers, directors or controlling persons
referred to in Section 8 hereof, and will survive delivery of and payment for
the Certificates. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Underwriters, will be mailed, delivered or
telegraphed and confirmed to Greenwich Capital Markets, Inc., 600 Steamboat
Road, Greenwich, Connecticut 06830, to Wachovia Capital Markets, LLC, 301 South
College Street, 10th Floor, Charlotte, North Carolina 28288 and to Friedman,
Billings, Ramsey & Co., Inc., 1001 Nineteenth Street North, 7th Floor,
Arlington, Virginia 22209; or, if sent to the Depositor or Equity One, will be
mailed, delivered or telegraphed and confirmed to Equity One at Equity One,
Inc., 301 Lippincott Drive, Marlton, New Jersey 08053, attention: Chief
Financial Officer, and to the Depositor at 103 Springer Building, 3411
Silverside Road, Wilmington, Delaware 19810, attention: Chief Financial Officer.
13. Default of Underwriters. If any of the Underwriters defaults in its
obligations to purchase the Certificates offered to it hereunder (such
Underwriter, the "Defaulting Underwriter"), then the remaining Underwriters (the
"Performing Underwriters") shall have the option, but not the obligation, to
purchase all, but not less than all, of the Certificates offered to the
Defaulting Underwriter. If the Performing Underwriters elect not to exercise
such option, then this Agreement will terminate without liability on the part of
such Performing Underwriters. Nothing contained herein shall relieve the
Defaulting Underwriter from any and all liabilities to the Depositor, Equity One
and the Performing Underwriters resulting from the default of the Defaulting
Underwriter.
14. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation hereunder.
15. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
Counterparts will together constitute one and the same agreement.
23
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among Equity One,
the Depositor and the Underwriters.
Very truly yours,
EQUITY ONE ABS, INC.
By: /s/ James H. Jenkins
-------------------------------------
Name: James H. Jenkins
Title: Executive Vice President and
Chief Financial Officer
EQUITY ONE, INC.
By: /s/ James H. Jenkins
-------------------------------------
Name: James H. Jenkins
Title: Executive Vice President and
Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written
WACHOVIA CAPITAL MARKETS, LLC
By: /s/ Sharvin Setoodeh
-------------------------------------
Name: Sharvin Setoodeh
Title: Vice President
GREENWICH CAPITAL MARKETS, INC.
By: /s/ Vinu Phillips
-------------------------------------
Name: Vinu Phillips
Title: Vice President
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
By: /s/ Jim Kleeblatt
-------------------------------------
Name: Jim Kleeblatt
Title: Senior Managing Director
Class AF-1 Certificates
-----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $78,660,000 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $78,660,000 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $8,280,000 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $165,600,000
Class AF-2 Certificates
-----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $16,340,000 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $16,340,000 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $1,720,000 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $34,400,000
Class AF-3 Certificates
-----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $33,487,500 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $33,487,500 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $3,525,000 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $70,500,000
Class AF-4 Certificates
-----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $8,740,000 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $8,740,000 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $920,000 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $18,400,000
Class AF-5 Certificates
-----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $6,202,075 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $6,202,075 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $652,850 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $13,057,000
Class AF-6 Certificates
-----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $10,450,000 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $10,450,000 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $1,100,000 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $22,000,000
Class AV-1 Certificates
-----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $83,125,000 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $83,125,000 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $8,750,000 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $175,000,000
Class AV-2 Certificates
-----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $36,310,425 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $36,310,425 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $3,822,150 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $76,443,000
Class M-1 Certificates
----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $27,930,000 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $27,930,000 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $2,940,000 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $58,800,000
Class M-2 Certificates
----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $16,957,500 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $16,957,500 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $1,785,000 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $35,700,000
Class M-3 Certificates
----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $3,823,750 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $3,823,750 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $402,500 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $8,050,000
Class M-4 Certificates
----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $3,491,250 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $3,491,250 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $367,500 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $7,350,000
Class B-1 Certificates
----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $3,491,250 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $3,491,250 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $367,500 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $7,350,000
Class B-2 Certificates
----------------------
Underwriter Principal Amount Discount Purchase Price
- ---------------------------------------------- --------------------------- ------------------ ------------------------
Wachovia Capital Markets, LLC $3,491,250 X.XX% XX.XXXX%
Greenwich Capital Markets, Inc. $3,491,250 X.XX% XX.XXXX%
Friedman, Billings, Ramsey & Co., Inc. $367,500 X.XX% XX.XXXX%
--------------------------- ------------------ ------------------------
Total: $7,350,000