EXECUTION COPY
$550,000,000
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1999-2
Home Equity Loan Pass-Through Certificates
Series 1999-2
UNDERWRITING AGREEMENT
----------------------
March 19, 1999
Bear, Xxxxxxx & Co. Inc.
as Representative of the Several Underwriters
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
ContiSecurities Asset Funding Corp. (the "Depositor"), a
Delaware corporation, has authorized the issuance and sale of Home Equity Loan
Pass-Through Certificates, Series 1999-2, Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9 IO (the "Class A
Certificates") and Class B (the "Class B Certificates" and, together with the
Class A Certificates, the "Offered Certificates"). Also issued are the Class C
Certificates, the Class R Certificates, the Class R-I Certificates and the Class
R-II Certificates (the "Retained Certificates"). The Class A Certificates, the
Class B Certificates and the Retained Certificates are collectively referred to
as the "Certificates."
Only the Offered Certificates are being purchased by the
Underwriters named in Schedule A hereto, and the Underwriters are purchasing,
severally, only the Offered Certificates set forth opposite their names in
Schedule A, except that the amounts purchased by the Underwriters may change in
accordance with Section X of this Agreement. Bear, Xxxxxxx & Co. Inc. is acting
as representative of the several Underwriters and in such capacity is
hereinafter referred to as the "Representative."
The Certificates will be issued under a pooling and servicing
agreement (the "Pooling and Servicing Agreement"), to be dated as of March 1,
1999 among the Depositor, ContiMortgage Corporation ("ContiMortgage"), as the
servicer and a seller (in such capacity, the "Servicer" or a "Seller," as the
case may be), ContiWest Corporation ("ContiWest"), as a seller (a "Seller," and
collectively with ContiMortgage, the "Sellers") and Manufacturers and Traders
Trust Company, as the Trustee (in such capacity, the "Trustee"). Each of the
Depositor, ContiMortgage and ContiWest is a subsidiary of ContiFinancial
Corporation ("ContiFinancial").
The Certificates will evidence fractional undivided interests
in the Trust (the "Trust") formed pursuant to the Pooling and Servicing
Agreement. The assets of the Trust will initially include, among other things,
two pools of home equity loans, one comprised of fixed
rate home equity loans and the other comprised of adjustable rate home equity
loans, having a Cut-Off Date as of the close of business on March 13, 1999 (the
"Home Equity Loans"), and such amounts as may be held by the Trustee in any
accounts held by the Trustee for the Trust. The Home Equity Loans are secured
primarily by first and second deeds of trust or mortgages on one- to four-family
residential properties. A form of the Pooling and Servicing Agreement has been
filed as an exhibit to the Registration Statement.
The Certificates are more fully described in a Registration
Statement which the Depositor has furnished to the Underwriters. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Pooling and Servicing Agreement.
The Class A Certificates will be entitled to the benefits of a
certificate guaranty insurance policy (the "Policy") issued by MBIA Insurance
Corporation (the "Certificate Insurer"). The Depositor, ContiMortgage and
ContiWest will also enter into an Indemnification Agreement (the
"Indemnification Agreement") dated as of March 1, 1999 among the Underwriters,
the Depositor, ContiMortgage, ContiWest and the Certificate Insurer, governing
the liability of the several parties with respect to the losses resulting from
material misstatements or omissions contained in the Prospectus Supplement.
Pursuant to Section 3.05 of the Pooling and Servicing
Agreement and concurrently with the execution thereof, ContiMortgage and
ContiWest will transfer to the Depositor all of their right, title and interest
in and to the unpaid principal balances of the Home Equity Loans as of the
Cut-Off Date and interest due after the Cut-Off Date and the collateral securing
each Home Equity Loan.
SECTION I. Representations and Warranties of the Depositor.
The Depositor represents and warrants to, and agrees with the Underwriters
that as of the date hereof and as of the Closing Date:
A. A Registration Statement on Form S-3 (No. 333-61863), 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) been filed with the
Commission under the Securities Act and (iii) become effective and is still
effective as of the date hereof under the Securities Act; Copies of such
Registration Statement have been delivered by the Depositor to the Underwriters.
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; "Basic Prospectus" means such
final prospectus dated September 17, 1998; and "Prospectus Supplement" means the
final prospectus supplement relating to the Offered Certificates, to be filed
with the Commission pursuant to paragraphs (2), (3) or (5) of Rule 424(b) of the
Rules and Regulations. "Prospectus" means the Basic Prospectus together with the
Prospectus Supplement. Reference made herein to the Prospectus shall be deemed
to refer to and
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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 (the "Exchange Act") after the date of the Prospectus, and incorporated by
reference in the Prospectus and any reference to any 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 Prospectus or the effectiveness of the Registration Statement and no
proceedings for such purpose are pending or, to the Depositor's knowledge,
threatened by the Commission. 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 any Underwriter delivers to the Depositor pursuant to
Section VIII (D) hereof for filing on Form 8-K. The conditions for use of Form
S-3, as set forth in the General Instructions thereto, have been satisfied.
To the extent that any Underwriter has provided to the
Depositor Computational Materials that such Underwriter has provided to a
prospective investor, the Depositor will file or cause to be filed with the
Commission a report on Form 8-K containing such Computational Materials, as soon
as reasonably practicable after the date of this Agreement, but in any event,
not later than 11:00 a.m. New York time the date on which the Prospectus is made
available to the Underwriter and is filed with the Commission pursuant to Rule
424 of the Rules and Regulations.
B. The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or the
Prospectus will conform, when they become effective or are filed with the
Commission, as the case may be, 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,
in the light of the circumstances under which they were made, not misleading;
provided 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 any Underwriters through the Representative expressly for use therein.
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,
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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 that no representation is made as to documents deemed to be
incorporated by reference in the Prospectus as the result of filing a Form 8-K
at the request of the Underwriters except to the extent such documents reflect
information furnished by the Depositor to the Underwriters for the purpose of
preparing such documents.
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 its jurisdiction of
incorporation 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 so requires such standing. The Depositor 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 and
the Pooling and Servicing Agreement and to cause the Certificates 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) asserting the
invalidity of this Agreement, the Pooling and Servicing Agreement or the
Certificates (c) seeking to prevent the issuance of the Certificates or the
consummation by the Depositor of any of the transactions contemplated by the
Pooling and Servicing 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 Pooling and
Servicing Agreement, this Agreement or the Certificates.
G. This Agreement has been, and the Pooling and Servicing
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 Pooling and Servicing Agreement when executed and
delivered as contemplated herein will constitute, legal, valid and binding
instruments enforceable against the Depositor in accordance with their
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respective terms, subject as to enforceability to (x) applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws 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,
and the Pooling and Servicing Agreement by the Depositor and the consummation of
the transactions contemplated hereby and thereby, and the issuance and delivery
of the Certificates 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 or
its ability to perform its obligations under this Agreement or the Pooling and
Servicing Agreement, nor will such actions result in any violation of the
provisions of the articles of incorporation or by-laws of the Depositor or 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 or its ability to perform its
obligations under this Agreement, or the Pooling and Servicing Agreement.
I. The Depositor has no reason to know that Xxxxxx Xxxxxxxx &
Co. are not independent public accountants with respect to the Depositor as
required by the Securities Act and the Rules and Regulations.
J. The direction by the Depositor to the Trustee to
authenticate, issue and deliver the Certificates has been duly authorized by the
Depositor, and, assuming the Trustee has been duly authorized to undertake such
actions, when executed, authenticated, issued and delivered by the Trustee, as
applicable, in accordance with the Pooling and Servicing Agreement, the
Certificates will be validly issued and outstanding and the holders of the
Certificates will be entitled to the rights and benefits of the Certificates as
provided by the Pooling and Servicing Agreement.
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 of the Certificates and the sale of the
Offered Certificates to the Underwriters, or the consummation by the Depositor
of the other transactions contemplated by this Agreement or the Pooling and
Servicing Agreement except such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Offered
Certificates by the Underwriters 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
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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 Pooling and
Servicing Agreement, the Depositor will: (i) have good title to the Home Equity
Loans conveyed by the Sellers, 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
Home Equity Loans contemplated in the Pooling and Servicing Agreement or in the
Certificates being issued pursuant thereto; and (iii) have the power and
authority to sell its interest in the Home Equity Loans to the Trustee and to
sell the Offered Certificates to the Underwriters. Upon execution and delivery
of the Pooling and Servicing Agreement by the Trustee, the Trustee will have
acquired beneficial ownership of all of the right, title and interest in and to
the Home Equity Loans free of any Liens. Upon delivery to the Underwriters of
the Offered Certificates, the Underwriters will have good title to the Offered
Certificates, free of any Liens.
N. Reserved.
O. As of the Statistical Calculation Date, each of the Home
Equity Loans will meet the eligibility criteria described in the Prospectus and
will conform to the descriptions thereof contained in the Prospectus.
P. Reserved.
Q. 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.
R. At the Closing Date, the Offered Certificates and the
Pooling and Servicing Agreement will conform in all material respects to the
descriptions thereof contained in the Prospectus.
S. At the Closing Date, the Offered Certificates (other than
the Class B Certificates) shall have been rated in the highest rating category
by Xxxxx'x Investors Service, Inc. ("Moody's") and Standard & Poor's Ratings
Services, a division of the XxXxxx-Xxxx Companies, Inc. ("Standard & Poor's")
and the Class B Certificates shall have been rated "Baa3" by Moody's and "BBB-"
by Standard & Poor's.
T. Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of this Agreement and the
Pooling and Servicing Agreement and the Certificates have been paid or will be
paid at or prior to the Closing Date.
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U. At the Closing Date, each of the representations and
warranties of the Depositor, ContiMortgage and ContiWest set forth herein and in
the Pooling and Servicing Agreement will be true and correct in all material
respects.
V. Any certificate signed by an officer of the Depositor and
delivered to the Representative or counsel for the Representative in connection
with an offering of the Offered Certificates shall be deemed, and shall state
that it is, a representation and warranty as to the matters covered thereby to
each person to whom the representations and warranties in this Section I are
made.
W. Reserved.
SECTION II. Purchase and Sale. The commitment of the
Underwriters to purchase the Offered Certificates 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 Trustee to issue the
Offered Certificates and agrees to sell to the Underwriters, and the
Underwriters agree (except as provided in Sections X and XI hereof) severally
and not jointly to purchase from the Depositor, the aggregate initial principal
amounts or percentage interests of the Offered Certificates of each Class, as
set forth opposite their names on Schedule A, at the purchase price or prices
set forth on Schedule A.
Notwithstanding anything herein to the contrary, if the
purchase price of the Class B Certificates is not specified in Schedule A on the
date hereof, the purchase price of the Class B Certificates will be subject to
the negotiated price to be determined on or prior to the Closing Date, as set
forth in a letter between the parties hereto (the "Pricing Letter") which
Pricing Letter, a form of which is attached hereto as Exhibit B, shall be deemed
to be incorporated by reference as part of Schedule A hereto. Any reference to
delivery and payment of the Offered Certificates shall only include the Class B
Certificates to the extent that the Pricing Letter has been fully executed. The
failure of the parties hereto agree on a purchase price for the Class B
Certificates shall not in any way affect the obligation of the parties hereto
with respect to the purchase and delivery of the other Offered Certificates.
Upon the execution of the Pricing Letter by the parties hereto, the purchase and
sale of the Class B Certificates shall otherwise be subject to all of the terms
and conditions contained in this agreement.
SECTION III. Delivery and Payment. Delivery of and payment for
the Offered Certificates shall be made at the offices of Xxxxx Xxxxxxxxxx LLP,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as
shall be agreed upon by the Representative and the Depositor at 10:00 A.M. New
York City time on March 26, 1999 or at such other time or date as shall be
agreed upon in writing by the Representative 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 Offered Certificates shall be made to the Representative for the
accounts of the Underwriters against payment of the purchase price thereof. The
Offered Certificates shall be in such authorized denominations and registered in
such names as the Representative may request
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in writing at least two business days prior to the Closing Date. The Offered
Certificates will be made available for examination by the Representative no
later than 2:00 p.m. New York City time on the first business day prior to the
Closing Date.
SECTION IV. Offering by the Underwriters. It is understood
that, subject to the terms and conditions hereof, the Underwriters propose
to offer the Offered Certificates for sale to the public as set forth in
the Prospectus.
SECTION V. Covenants of the Depositor. The Depositor and, to
the extent the provisions of subsections H and I below relate to ContiMortgage
and ContiWest, respectively, ContiMortgage and ContiWest agree as follows:
A. To prepare the Prospectus in a form approved by the
Underwriters 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 Underwriters;
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 Underwriters, 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
Underwriters with copies thereof without charge; 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 l5(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 Offered Certificates; to promptly advise the Underwriters of its receipt
of notice of the issuance by the Commission of any stop order or the institution
of or, to the knowledge of the Depositor, the threatening of any proceeding for
such purpose, or of: (i) any order preventing or suspending the use of the
Prospectus; (ii) the suspension of the qualification of the Offered Certificates
for offering or sale in any jurisdiction; (iii) the initiation of or threat of
any proceeding for any such purpose; or (iv) any request by the Commission for
the amending or supplementing of the Registration Statement or the Prospectus or
for additional information. In the event of the issuance of any stop order or of
any order preventing or suspending the use of the Prospectus or suspending any
such qualification, the Depositor promptly shall use its best efforts to obtain
the withdrawal of such order by the Commission.
B. To furnish promptly to the Underwriters and to counsel for
the Underwriters a signed copy of the Registration Statement as originally filed
with the Commission, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
C. To deliver promptly to the Underwriters without charge such
number of the following documents as the Underwriters shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case including exhibits); (ii)
the Prospectus and any amended or supplemented
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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 prior to the expiration of nine months after the Closing Date in connection
with the offering or sale of the Offered Certificates, and if at such time any
events shall have occurred as a result of which the Prospectus as then amended
or supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Securities Act or the Exchange Act, the Depositor shall
notify the Underwriters and, upon any Underwriter's request, shall file such
document and prepare and furnish without charge to the Underwriters and to any
dealer in securities as many copies as the Underwriters may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which corrects such statement or omission or effects such compliance, and in
case the Underwriters are required to deliver a Prospectus in connection with
sales of any of the Offered Certificates at any time nine months or more after
the Effective Time, upon the request of the Underwriters but at their expense,
the Depositor shall prepare and deliver to the Underwriters as many copies as
the Underwriters may reasonably request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Securities Act.
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 Underwriters, be required by
the Securities Act or requested by the Commission. Neither the Underwriters'
consent to nor their distribution of any amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section VI.
E. To furnish the Underwriters and counsel for the
Underwriters, prior to filing with the Commission, and to obtain the consent of
the Underwriters for the filing of the following documents relating to the
Certificates: (i) any Post-Effective Amendment to the Registration Statement or
supplement to the Prospectus, or document incorporated by reference in the
Prospectus, or (ii) Prospectus pursuant to Rule 424 of the Rules and
Regulations.
F. To make generally available to holders of the Offered
Certificates as soon as practicable, but in any event not later than 90 days
after the close of the period covered thereby, a statement of earnings of the
Trust (which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including, 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.
G. To use its best efforts, in cooperation with the
Underwriters, to qualify the Offered Certificates for offering and sale under
the applicable securities laws of such states and other jurisdictions of the
United States or elsewhere as the Underwriters may designate, and maintain or
cause to be maintained such qualifications in effect for as long as may be
required for
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the distribution of the Offered Certificates. 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 Offered Certificates have been so
qualified.
H. Unless the Underwriters shall otherwise have given their
written consent, no collateralized mortgage obligations or other similar
securities representing interests in or secured by other mortgage-related assets
originated or owned by ContiMortgage shall be publicly offered or sold, nor
shall ContiMortgage enter into any contractual arrangements that contemplate the
public offering or sale of such securities, until the earlier to occur of the
termination of the syndicate or the Closing Date.
I. Unless the Underwriters shall otherwise have given their
written consent, no collateralized mortgage obligations or other similar
securities representing interests in or secured by other mortgage-related assets
originated or owned by ContiWest shall be publicly offered or sold, nor shall
ContiWest enter into any contractual arrangements that contemplate the public
offering or sale of such securities, until the earlier to occur of the
termination of the syndicate or the Closing Date.
J. Unless the Underwriters shall otherwise have given their
written consent (such consent not to be unreasonably withheld), no
collateralized mortgage obligations or other similar securities representing
interests in or secured by other mortgage-related assets that are similar to the
Home Equity Loans originated or owned by the Depositor shall be publicly offered
or sold until the earlier to occur of the termination of the syndicate or the
Closing Date.
K. So long as the Offered Certificates shall be outstanding
the Depositor shall cause the Trustee, pursuant to the Pooling and Servicing
Agreement, to deliver to the Underwriters as soon as such statements are
furnished to the Trustee: (i) the annual statement as to compliance delivered to
the Trustee pursuant to Section 8.16 of the Pooling and Servicing Agreement;
(ii) the annual statement of a firm of independent public accountants furnished
to the Trustee pursuant to Section 8.17 of the Pooling and Servicing Agreement;
(iii) the monthly servicing report furnished to the Trustee pursuant to Section
7.08 of the Pooling and Servicing Agreement; and (iv) the monthly reports
furnished to the Certificateholders pursuant to Section 7.09 of the Pooling and
Servicing Agreement.
L. To apply the net proceeds from the sale of the Offered
Certificates in the manner set forth in the Prospectus.
SECTION VI. Conditions to the Underwriters' Obligation.
The obligations of the Underwriters hereunder to purchase the Offered
Certificates pursuant to the 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 Underwriters shall have received confirmation of the
effectiveness of the Registration Statement. No stop order suspending the
effectiveness of the Registration
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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 Underwriters 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 Stroock &
Stroock & Xxxxx LLP, counsel for the Underwriters, 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 Pooling and
Servicing Agreement, the Certificates, 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
counsel for the Underwriters, and the Depositor shall have furnished to such
counsel all documents and information that they may reasonably request to enable
them to pass upon such matters.
X. Xxxxx Xxxxxxxxxx LLP shall have furnished to the
Underwriters and the Certificate Insurer their written opinion, as counsel to
the Depositor, addressed to the Underwriters and the Certificate Insurer and
dated the Closing Date, in form and substance satisfactory to the Underwriters
and the Certificate Insurer, 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
thereunder.
(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.
11
(iv) The statements set forth in the Basic Prospectus
under the captions "Summary of Prospectus," "Description of The
Certificates," "The Trusts" and "The Pooling and Servicing Agreement"
and in the Prospectus Supplement under the captions "Description of The
Certificates" and "The Pooling and Servicing Agreement," to the extent
such statements purport to summarize certain provisions of the
Certificates or of the Pooling and Servicing Agreement, are fair and
accurate in all material respects.
(v) The statements set forth in the Basic Prospectus
and the Prospectus Supplement under the captions "ERISA
Considerations," "Certain Legal Aspects of the Mortgage Assets" and
"Certain Federal Income Tax Considerations" to the extent that they
constitute matters of federal law, provide a fair and accurate summary
of such law or conclusions.
(vi) The Pooling and Servicing Agreement conforms in
all material respects to the description thereof contained in the
Prospectus and is not required to be qualified under the Trust
Indenture Act of 1939, as amended, and the Trust is not required to be
registered under the Investment Company Act of 1940, 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)Assuming that (a) the Trustee causes certain
assets of the Trust Estate, as the Trustee has covenanted to do in the
Pooling and Servicing Agreement, to be treated as a "real estate
mortgage investment conduit" ("REMIC"), as such term is defined in the
Internal Revenue Code of 1986, as amended (the "Code"), and (b) the
parties to the Pooling and Servicing Agreement comply with the terms
thereof, REMIC I, REMIC II and REMIC III will each be treated as a
REMIC, each Class of the Class A Certificates, the Class B Certificates
and the Class C Certificates will be treated as "regular interests" in
a REMIC, and the Class R, Class R-I and Class R-II Certificates will be
treated as the sole "residual interest" in a REMIC. The Trust is not
subject to tax upon its income or assets by any taxing authority of the
State of New York.
(ix) To the best of such counsel's knowledge, there
are no actions, proceedings or investigations pending that would
adversely affect the status of REMIC I, REMIC II or REMIC III as a
REMIC.
(x) As a consequence of the qualifications of REMIC
I, REMIC II and REMIC III as REMICs, the Class A Certificates, Class B
and Class C Certificates will be treated as "regular . . . interest(s)
in a REMIC" under Section 7701(a)(19)(C) of the Code and "real estate
assets" under Section 856(c) of the Code in the same proportion that
the assets in the Trust consist of qualifying assets under such
Sections. In addition, as a consequence of the qualification of REMIC
I, XXXXX XX and XXXXX XXX as REMICs, interest on the Class A, Class B
and Class C Certificates will be treated as "interest on obligations
secured by mortgages on real property" under Section 856(c) of the Code
12
to the extent that such assets are treated as "real estate assets"
under Section 856(c) of the Code.
(xi) Reserved.
(xii) Reserved.
(xiii)The Certificates have been duly executed and
delivered by the Depositor to the Trustee for authentication.
Such counsel shall also have furnished to the Underwriters and the Certificate
Insurer a written statement, addressed to the Underwriters and the Certificate
Insurer and dated the Closing Date, in form and substance satisfactory to the
Underwriters and the Certificate Insurer to the effect that nothing has 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); (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, in the light of the
circumstances under which they were made, not misleading; or (c) any document
incorporated by reference in the Prospectus or any further amendment or
supplement to any such incorporated document made by the Depositor prior to the
Closing Date (other than any document filed at the request of an Underwriter to
the extent such document relates to Computational Materials) contained, as of
the time it became effective or was filed with the Commission, as the case may
be, an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
E. The Underwriters shall have received the favorable opinion,
dated the Closing Date, of Xxxxx Xxxxxxxxxx LLP, special counsel to the
Depositor, addressed to the Depositor and satisfactory to Xxxxx'x, Standard &
Poor's and the Underwriters, with respect to certain matters relating to the
transfer of the Home Equity Loans to the Depositor and from the Depositor to the
Trust, and such counsel shall have consented to reliance on such opinion by
Xxxxx'x, Standard & Poor's and the Underwriters as though such opinion had been
addressed to each such party.
X. Xxxxx Xxxxxxxxxx LLP, counsel for ContiMortgage in its
capacity as both a Seller and the Servicer and ContiWest in its capacity as a
Seller, shall have furnished to the Underwriters and the Certificate Insurer
their written opinion, as counsel to ContiMortgage and ContiWest, addressed to
the Underwriters and the Certificate Insurer and the Depositor and dated the
Closing Date, in form and substance satisfactory to the Underwriters, to the
effect that:
(i) ContiMortgage is duly organized, validly existing
in good standing as a corporation under the laws of the State of
Delaware.
13
(ii) ContiMortgage has full corporate power and
authority to serve in the capacity of a seller and the servicer of the
Home Equity Loans as contemplated in the Pooling and Servicing
Agreement and to transfer the Home Equity Loans to the Depositor as
contemplated in the Pooling and Servicing Agreement.
(iii) The Pooling and Servicing Agreement and this
Agreement have been duly authorized, executed and delivered by
ContiMortgage, and, assuming the due authorization, execution and
delivery of such agreements by the other parties thereto, constitute
the legal, valid and binding agreements of ContiMortgage, enforceable
against ContiMortgage in accordance with their respective terms,
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
and (z) public policy considerations under the securities laws which
may limit the availability of indemnification as to securities law
liability.
(iv) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body having jurisdiction over ContiMortgage is required for
the consummation by ContiMortgage of the transactions contemplated by
the Pooling and Servicing Agreement except such consents, approvals,
authorizations, registrations and qualifications as have been obtained.
(v) Neither the sale and transfer of the Home Equity
Loans by ContiMortgage to the Depositor, nor the execution, delivery or
performance by ContiMortgage of the Pooling and Servicing Agreement and
the transactions contemplated thereby (A) conflict with or result in a
breach of, or constitute a default under, (i) any term or provision of
the certificate of incorporation or by-laws of ContiMortgage; (ii) any
term or provision of any material agreement, deed of trust, mortgage
loan agreement, contract, instrument or indenture, or other agreement
to which ContiMortgage is a party or is bound or to which any of the
property or assets of ContiMortgage or any of its subsidiaries is
subject; (iii) 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 ContiMortgage;
or (iv) any law, rule or regulation, applicable to ContiMortgage; 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 or upon the Certificates.
(vi) The execution of the Pooling and Servicing
Agreement is sufficient to convey all of ContiMortgage's, ContiWest's
and the Depositor's right, title and interest in the Home Equity Loans
to the Trust (except as otherwise specifically set forth in the Pooling
and Servicing Agreement) and following the consummation of the
transaction contemplated by Section 3.05 of the Pooling and Servicing
Agreement, the transfers of
14
the Home Equity Loans by ContiMortgage and ContiWest to the
Depositor and by the Depositor to the Trust are sufficient
to vest in the Trust all of ContiMortgage's, ContiWest's and
the Depositor's right, title and interest in the Home Equity Loans
(except as otherwise specifically set forth in the Pooling and
Servicing Agreement).
(vii) There are, to the best of such counsel's
knowledge without independent investigation, no actions, proceedings or
investigations pending with respect to which ContiMortgage has received
service of process or threatened against ContiMortgage before any
court, administrative agency or other tribunal (a) asserting the
invalidity of the Pooling and Servicing Agreement, the Underwriting
Agreement or the Certificates, (b) seeking to prevent the consummation
of any of the transactions contemplated by the Pooling and Servicing
Agreement or (c) which would materially and adversely affect the
performance by ContiMortgage of its obligations under, or the validity
or enforceability of, the Pooling and Servicing Agreement or the
Underwriting Agreement.
X. Xxxxxxx X. Xxxxxxxx, Esq., Counsel for ContiWest, in its
capacity as a Seller, shall have furnished to the Underwriters and the
Certificate Insurer his written opinion, addressed to the Underwriters and dated
as of the Closing Date, in form and substance satisfactory to the Underwriters,
to the effect that:
(i) ContiWest is duly organized, validly existing in
good standing as a corporation under the laws of the State of Nevada.
(ii) ContiWest has full corporate power and authority
to serve in the capacity of a seller of the Home Equity Loans as
contemplated in the Pooling and Servicing Agreement and to transfer the
Home Equity Loans to the Depositor as contemplated in the Pooling and
Servicing Agreement.
(iii) The Pooling and Servicing Agreement and this
Agreement have been duly authorized, executed and delivered by
ContiWest, and, assuming the due authorization, execution and delivery
of such agreement by the other parties thereto, constitute the legal,
valid and binding agreements of ContiWest, enforceable against
ContiWest in accordance with its terms, 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 and (z) public policy considerations under the
securities laws which may limit the availability of indemnification as
to securities law xxxxxxxxx.
(iv) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body having jurisdiction over ContiWest is required for the
consummation by ContiWest of the transactions
15
contemplated by the Pooling and Servicing Agreement except
such consents, approvals, authorizations, registrations and
qualifications as have been obtained.
(v) Neither the sale and transfer of the Home Equity
Loans by ContiWest to the Depositor, nor the execution, delivery or
performance by ContiWest of the Pooling and Servicing Agreement and the
transactions contemplated thereby (A) conflict with or result in a
breach of, or constitute a default under, (i) any term or provision of
the articles of incorporation or by-laws of ContiWest; (ii) any term or
provision of any material agreement, deed of trust, mortgage loan
agreement, contract, instrument or indenture, or other agreement to
which ContiWest is a party or is bound or to which any of the property
or assets of ContiWest or any of its subsidiaries is subject; (iii) to
the best of such counsel's knowledge without independent investigation
any order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over ContiWest; or (iv) any
law, rule or regulation, applicable to ContiWest; or (B) to the best of
such counsel's knowledge without independent investigation, results in
the creation or imposition of any lien, charge or encumbrance upon the
Trust Estate or upon the Certificates.
(vi) There are, to the best of such counsel's
knowledge without independent investigation, no actions, proceedings or
investigations pending with respect to which ContiWest has received
service of process or threatened against ContiWest before any court,
administrative agency or other tribunal (a) asserting the invalidity of
the Pooling and Servicing Agreement, the Underwriting Agreement or the
Certificates, (b) seeking to prevent the consummation of any of the
transactions contemplated by the Pooling and Servicing Agreement or (c)
which would materially and adversely affect the performance by
ContiWest of its obligations under, or the validity or enforceability
of, the Pooling and Servicing Agreement or the Underwriting Agreement.
X. Xxxxxxx X. Xxxxxxxx, Esq., Counsel for the Depositor, shall
have furnished to the Underwriters and the Certificate Insurer his written
opinion, addressed to the Underwriters and the Certificate Insurer and dated the
Closing Date, in form and substance satisfactory to the Underwriters and the
Certificate Insurer, to the effect that:
(i) The Depositor has been duly organized and is
validly existing as a corporation in good standing under the laws of
the State of Delaware 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 so requires such standing except where the
failure to be in good standing would not result in a material adverse
change in the condition of the Depositor, whether or not arising in the
ordinary course of business. The Depositor has all 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 and the Pooling and Servicing Agreement and to cause the
Certificates to be issued.
16
(ii) The Depositor is not in violation of its
articles of incorporation or by-laws or 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 and the Pooling and Servicing
Agreement have been duly authorized, executed and delivered by the
Depositor and, assuming the due authorization, execution and delivery
of such agreements by the other parties thereto, such agreements
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 and the Pooling and Servicing Agreement by the Depositor, the
consummation of the transactions contemplated hereby and thereby, and
the issuance and delivery of the Certificates 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
any 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 or its ability to perform its obligations
under this Agreement and the Pooling and Servicing Agreement nor will
such actions result in a violation of the provisions of the articles of
incorporation or by-laws of the Depositor or 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 or its
ability to perform its obligations under this Agreement and the Pooling
and Servicing Agreement.
(v) The direction by the Depositor to the Trustee to
issue, authenticate and deliver the Certificates has been duly
authorized by the Depositor and, assuming that the Trustee has been
duly authorized to do so, when executed, authenticated and delivered by
the Trustee in accordance with the Pooling and Servicing Agreement, the
Certificates will be validly issued and outstanding and will be
entitled to the benefits of the Pooling and Servicing Agreement.
17
(vi) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body is required for the issuance of the Certificates, and
the sale of the Offered Certificates to the Underwriters, or the
consummation by the Depositor of the other transactions contemplated by
this Agreement and the Pooling and Servicing 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
Offered Certificates by the Underwriters or as have been previously
obtained.
(vii) There are not, to the best of his knowledge
without independent investigation, 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)
asserting the invalidity of the Pooling and Servicing Agreement or the
Certificates; (c) seeking to prevent the issuance of the Certificates
or the consummation by the Depositor of any of the transactions
contemplated by the Pooling and Servicing 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 Pooling and Servicing Agreement,
this Agreement or the Certificates.
(viii)The Certificates have been duly and validly
authorized and issued and, immediately prior to the sale of the Offered
Certificates to the Underwriters, such Certificates are owned by the
Depositor, free and clear of all Liens.
I. The Underwriters and the Certificate Insurer shall have
received the favorable opinion of counsel to the Trustee, dated the Closing
Date, addressed to the Underwriters and in form and scope satisfactory to
counsel to the Underwriters, to the effect that:
(i) The Trustee is a banking corporation duly
incorporated and validly existing under the law of the State of New
York.
(ii) The Trustee has the full corporate trust power
to execute, deliver and perform its obligations under the Pooling and
Servicing Agreement.
(iii) The execution and delivery by the Trustee of
the Pooling and Servicing Agreement, and the performance by the Trustee
of its obligations under the Pooling and Servicing Agreement, have been
duly authorized by all necessary corporate action of the Trustee.
(iv) The Pooling and Servicing Agreement is a valid
and legally binding obligation of the Trustee enforceable against the
Trustee.
18
(v) The execution and delivery by the Trustee of the
Pooling and Servicing Agreement does not (a) violate the Organization
Certificate of the Trustee or the by-laws of the Trustee, (b) to such
counsel's knowledge, violate any judgment, decree or order of any New
York or United States federal court or other New York or United States
federal governmental authority by which the Trustee is bound or (c)
assuming the non-existence of any judgment, decree or order of any
court or other governmental authority that would be violated by such
execution and delivery, violate any New York or United States federal
statute, rule or regulation or require any consent, approval or
authorization of any New York or United States federal court or other
New York or United States federal governmental authority.
(vi) The Certificates have been duly executed,
authenticated and delivered by the Trustee.
(vii) If the Trustee were acting as Servicer under
the Pooling and Servicing Agreement as of the date of such opinion, the
Trustee would have the full corporate trust power to perform the
obligations of the Servicer under the Pooling and Servicing Agreement;
and
(viii)To the best of such counsel's knowledge, there
are no actions, proceedings or investigations pending or threatened
against or affecting the Trustee before or by any court, arbitrator,
administrative agency or other governmental authority which, if decided
adversely to the Trustee, would materially and adversely affect the
ability of the Trustee to carry out the transactions contemplated in
the Pooling and Servicing Agreement.
J. The Underwriters and the Certificate Insurer shall have
received the favorable opinion or opinions, dated the Closing Date, of counsel
for the Underwriters, with respect to the issue and sale of the Offered
Certificates, the Registration Statement, this Agreement, the Prospectus and
such other related matters as the Underwriters may reasonably require.
K. Reserved.
L. The Depositor, ContiMortgage, ContiWest and ContiFinancial
shall each have furnished to the Underwriters and the Certificate Insurer a
certificate, dated the Closing Date and signed by the Chairman of the Board, the
President or a Vice President of the Depositor, ContiMortgage, ContiWest and
ContiFinancial, respectively, stating as it relates to each, as of the Closing
Date:
(i) The representations and warranties of the
Depositor, ContiMortgage and ContiWest in this Agreement are true and
correct as of the Closing Date; and the Depositor, ContiMortgage and
ContiWest have complied with each of their respective agreements
contained herein which are to have been complied with on or prior to
the Closing Date;
19
(ii) The information contained in the Prospectus
relating to the Depositor, ContiMortgage, ContiWest and the Home Equity
Loans is true and accurate in all material respects and 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 by-laws of the
Depositor since May 18, 1995 or the certificate of incorporation or
by-laws of ContiMortgage since October 19, 1990 or the Articles of
incorporation or by-laws of ContiWest since January 1, 1997 and no such
amendment has been authorized. No event has occurred since December 31,
1998 which has affected the good standing of the Depositor,
ContiMortgage or ContiWest under the laws of the States of Delaware and
Nevada, as applicable; and
(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 the Depositor, ContiMortgage, ContiWest or
ContiFinancial from December 31, 1998 other than as disclosed in
ContiFinancial's Form 10-Q dated February 16, 1999. No publicly-held
debt of ContiFinancial shall have been downgraded or put on credit
watch for possible downgrade, nor is ContiFinancial aware of any
anticipated downgrading or credit watch situation regarding
ContiFinancial, in each case since February 18, 1999, other than as
previously disclosed to the underwriter on or prior to the date hereof;
there has been no suspension of trading in ContiFinancial's
publicly-held common stock since December 31, 1998.
M. The Trustee shall have furnished to the Underwriters and
the Certificate Insurer a certificate of the Trustee, signed by one or more duly
authorized officers of the Trustee, dated the Closing Date, as to the due
authorization, execution and delivery of the Pooling and Servicing Agreement by
the Trustee and the acceptance by the Trustee of the Trusts created thereby and
the due execution, authentication and delivery of the Certificates by the
Trustee thereunder and such other matters as the Representative shall reasonably
request.
N. The Certificate Insurance Policy and the Insurance
Agreement shall have been issued by the Certificate Insurer and shall have been
duly authenticated by an authorized agent of the Certificate Insurer, if so
required under applicable state law or regulations.
O. The Offered Certificates (other than the Class B
Certificates) shall have been rated in the highest rating category by Xxxxx'x
Investors Service, Inc. ("Moody's") and Standard & Poor's Rating Services, a
division of the XxXxxx-Xxxx Companies, Inc. ("Standard & Poor's") and the Class
B Certificates shall have been rated "Baa3" by Moody's and "BBB-" by Standard &
Poor's; no Class of Offered Certificates shall have been put on credit watch for
possible downgrade.
20
P. The Depositor shall have furnished to the Underwriters such
further information, certificates and documents as the Underwriters may
reasonably have requested not less than three full business days prior to the
Closing Date.
Q. Prior to the Closing Date, counsel for the Underwriters
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 Certificates as herein 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 Certificates as herein contemplated shall be satisfactory in form
and substance to the Underwriters and counsel for the Underwriters.
R. 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 Underwriters,
impractical or inadvisable to proceed with the public offering or delivery of
the Certificates on the terms and in the manner contemplated in the Prospectus.
S. The Representative shall have received letters, including
bring-down letters, from Xxxxxx Xxxxxxxx LLP, dated on or before the Closing
Date, in form and substance satisfactory to the Representative and counsel for
the Underwriters, to the effect that they have performed certain specified
procedures requested by the Representative with respect to the information set
forth in the Prospectus and certain matters relating to ContiMortgage and
ContiWest.
T. The Underwriters shall have received any other opinions
delivered to the Ratings Agencies.
U. The Policy shall have been duly executed and issued at or
prior to the Closing Date and shall conform in all material respects to the
description thereof in the Prospectus. The Insurance Agreement and the
Indemnification Agreement shall each have been duly executed and delivered by
the Certificate Insurer and the other parties thereto at or prior to the Closing
Date.
21
V. The Underwriters shall have received a favorable opinion of
Xxxxx Xxxx, counsel to the Certificate Insurer, dated the Closing Date and in
form and substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Certificate Insurer is a stock insurance
corporation, duly incorporated and validly existing under the laws of
the State of New York. The Certificate Insurer is validly licensed to
do business in New York and is authorized to issue the Policy and
perform its obligations under the Policy in accordance with the terms
thereof.
(ii) The execution and delivery by the Certificate
Insurer of the Policy and the Indemnification Agreement are within the
corporate power of the Certificate Insurer and have been authorized by
all necessary corporate action on the part of the Certificate Insurer;
the Policy has been duly executed and is the valid and binding
obligation of the Insurer enforceable in accordance with its terms
except that the enforcement of the Policy may be limited by laws
relating to bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting creditors' rights
generally and by general principles of equity.
(iii) The Certificate Insurer is authorized to
deliver the Indemnification Agreement, and such agreement has been duly
executed and delivered and constitutes the legal, valid and binding
obligations of the Certificate Insurer enforceable in accordance with
its terms except that the enforcement of the Indemnification Agreement
may be limited by laws relating to bankruptcy, insolvency,
reorganization, moratorium, receivership and other similar laws
affecting creditors' rights generally and by general principles of
equity and by public policy considerations relating to indemnification
for securities law violations.
In rendering this opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the Certificate
Insurer and public officials. Such opinion may assume the due authorization,
execution and delivery of the instruments and documents referred to therein by
the parties thereto other than the Certificate Insurer.
W. The Underwriters shall have received from the Certificate
Insurer a certificate, signed by the president, a senior vice president or a
vice president of the Certificate Insurer, dated the Closing Date, to the effect
that the signer of such certificate has carefully examined the Policy, the
Indemnification Agreement and the related documents and that, to the best of his
or her knowledge based on reasonable investigation:
(i) There are no actions, suits or proceedings
pending or threatened against or affecting the Certificate Insurer
which, if adversely determined, individually or in the aggregate, would
adversely affect the Insurer's performance under the Policy or the
Indemnification Agreement;
22
(ii) Each person who as an officer or representative
of the Certificate Insurer, signed or signs the Policy, the
Indemnification Agreement or any other document delivered pursuant
hereto, on the date thereof, or on the Closing Date, in connection with
the transactions described in this Agreement was, at the respective
times of such signing and delivery, and is now, duly elected or
appointed, qualified and acting as such officer or representative, and
the signatures of such persons appearing on such documents are their
genuine signatures;
(iii) The information contained in the Prospectus
Supplement under the captions "Credit Enhancement," "The Certificate
Insurance Policy" and "The Certificate Insurer" is true and correct in
all material respects and does not omit to state a material fact with
respect to the description of the Policy or the ability of the
Certificate Insurer to meet its payment obligations under the Policy;
(iv) The tables regarding the Certificate Insurer's
capitalization set forth under the caption "The Certificate Insurer"
presents fairly the capitalization of the Insurer as of September 30,
1998;
(v) On or prior to the Closing Date, there has been
no downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating accorded
the claims paying ability of the Certificate Insurer by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of the Securities Act;
(vi) The audited balance sheet of the Certificate
Insurer as of December 31, 1998 and the related statement of income and
retained earnings for the fiscal year then ended, and the accompanying
footnotes, together with the related opinion of an independent
certified public accountant, copies of which are incorporated by
reference in the Prospectus Supplement, fairly present in all material
respects the financial condition of the Certificate Insurer as of such
date and for the period covered by such statements in accordance with
generally accepted accounting principles consistently applied; the
unaudited balance sheet of the Certificate Insurer as of December 31,
1998 and the related statement of income and retained earnings for the
three-month period then ended, copies of which are included in the
Prospectus Supplement, fairly present in all material respects the
financial condition of the Certificate Insurer as of such date and for
the period covered by such statements in accordance with generally
accepted accounting principles applied consistently with those
principles applied in preparing the December 31, 1998 audited
statements.
(vii) to the best knowledge of such officer, since
December 31, 1998, no material adverse change has occurred in the
financial position of the Certificate Insurer other than as set forth
in the Prospectus Supplement.
23
The officer of the Certificate Insurer certifying to items (v)
- (vii) shall be an officer in charge of a principal financial function.
The Certificate Insurer shall attach to such certificate a
true and correct copy of its certificate or articles of incorporation, as
appropriate, and its by-laws, all of which are in full force and effect on the
date of such certificate.
If any condition specified in this Section VII shall not have
been fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters 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 VII.
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 Underwriters.
SECTION VII. Payment of Expenses. The Depositor agrees
to pay:
A. the costs incident to the authorization, issuance, sale and
delivery of the Certificates 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 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 Stroock & Stroock & Xxxxx LLP in qualifying the
Certificates under the securities laws of the several jurisdictions as provided
in Section V (G) hereof and of preparing, printing and distributing a Blue Sky
Memorandum and a Legal Investment Survey (including related fees and expenses of
counsel to the Representative); (f) any fees charged by securities rating
services for rating the Offered Certificates; (g) the cost of the accountants
comfort letter relating to the Prospectus; and (h) all other costs and expenses
incidental to the performance of the obligations of the Depositor (including
costs and expenses of counsel to the Depositor); provided that, except as
provided in this Section VII, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer taxes
on the Offered Certificates which they may sell and the expenses of advertising
any offering of the Offered Certificates made by the Underwriters, and the
Underwriters shall pay the cost of any accountant's comfort letters relating to
any Computational Materials (as defined herein).
If this Agreement is terminated by the Underwriters in
accordance with the provisions of Section VI or Section XI, the Depositor shall
cause the Underwriters to be reimbursed for all reasonable out-of-pocket
expenses, including fees and disbursements of Stroock & Stroock & Xxxxx LLP,
counsel for the Underwriters.
SECTION VIII. Indemnification and Contribution.
24
A. The Depositor agrees to indemnify and hold harmless each
Underwriter, each Underwriter's respective officers and directors and each
person, if any, who controls such 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 Offered Certificates), to which such 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 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 such Underwriter and each such controlling person
promptly upon demand for any legal or other expenses reasonably incurred by such
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 by or on behalf of such Underwriter through the Representative,
specifically for inclusion therein, and shall reimburse such Underwriter and any
such director, officer or controlling person for any legal or other expenses
reasonably incurred by such Underwriter 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 Depositor may otherwise have to any Underwriter or any such officer or
director or any controlling person of any such Underwriter.
B. Each Underwriter severally 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
25
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 upon and in
conformity with written information furnished to the Depositor by or on behalf
of such 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 any Underwriter may otherwise have to the Depositor or any such
director, officer or controlling person.
C. Promptly after receipt by any indemnified party under this
Section VIII 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 VIII, 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 VIII 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
VIII.
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 VIII 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 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 that the
26
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 related
Underwriter, if the indemnified parties under this Section VIII consist of one
or more Underwriters or any of its or their controlling persons, or the
Depositor, if the indemnified parties under this Section VIII 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 VIII (A) and (B), shall use its reasonable 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. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject of such action.
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 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement.
D. Each Underwriter agrees to provide the Depositor no later
than two Business Days prior to the day on which the Prospectus Supplement is
required to be filed pursuant to Section I (A) hereof with a copy of any
Computational Materials (defined below) produced by such Underwriter for filing
with the Commission on Form 8-K.
E. Each Underwriter severally agrees, to indemnify and hold
harmless the Depositor, each of the Depositor's officers and directors and 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, 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 provided by such Underwriter, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading when read
27
in conjunction with the Prospectus, 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;
provided, however, that in no event shall an Underwriter be liable to the
Depositor under this paragraph E in an amount in excess of the fees received by
such Underwriter in connection with the offering of the Offered Certificates.
The obligations of an Underwriter under this Section VIII (E) shall be in
addition to any liability which such Underwriter may otherwise have.
The procedures set forth in Section VIII (C) shall be equally
applicable to this Section VIII (E).
F. The Depositor agrees to indemnify and hold harmless each
Underwriter, each Underwriter's respective officers and directors and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of the Offered Certificates), to which 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 Seller Provided
Information (as defined below) provided by the Company, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
agrees to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by him, her or it in connection with investigating or
defending or preparing to defend any such loss, claim, damage, liability or
action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which the Depositor may otherwise have to any
Underwriter or any such officer or director or any controlling person of any
such Underwriter.
The procedures set forth in Section VIII (C) shall be equally
applicable to this Section VIII (F).
G. If the indemnification provided for in this Section VIII
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section VIII (A), (B), (E) or (F) 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 Underwriters on the
other from the offering of the relevant Class of Offered 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
VIII (C), in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the
28
relative fault of the Depositor on the one hand and the related 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 an Underwriter and the Depositor
shall be deemed to be in such proportion as the sum of the original principal
amount of the offering, plus the total proceeds to the Depositor from the sale
of the Class A-9 IO Certificates (before deducting expenses) bears to the total
underwriting discounts and commissions received by the related Underwriter from
time to time in negotiated sales of the related Offered Certificates.
The relative fault of an 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 such 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 Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section VIII (G) were to be
determined by pro rata allocation (even if the Underwriters 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
VIII (G) shall be deemed to include, for purposes of this Section VIII (G), 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 VIII, in no case shall any
Underwriter (except with respect to any document (other than the Computational
Materials) incorporated by reference into the Registration Statement or
Prospectus at the request of such Underwriter through the Representative and
except as may be provided in any agreement among the Underwriters relating to
the offering of the Offered Certificates) be responsible for any amount in
excess of the amount by which (x) the amount received by such Underwriter in
connection with its sale of the Offered Certificates exceeds (y) the amount paid
by such Underwriter to the Depositor for the Offered Certificates 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 fraudulent misrepresentation.
H. For purposes of this Section VIII, as to each Underwriter
the term "Computational Materials" means collectively, "Computational
Materials," "Collateral Term Sheets" and "Structural Term Sheets" as such terms
are defined in the No-Action Letter of May 20, 1994 issued by the Securities and
Exchange Commission (the "Commission") to Xxxxxx, Xxxxxxx Acceptance Corporation
I, Xxxxxx, Xxxxxxx & Co. Incorporated and Xxxxxx 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,
and the No-Action Letter of February 17, 1995 issued by the Commission to the
Public Securities
29
Association, provided, that the term Computational Materials shall not include
any Seller Provided Information. "Seller Provided Information" means any
computer tape (or other information) furnished to any Underwriter by any Seller
concerning the assets comprising the Trust including such information as to
which an accountant's letter was not furnished to the Underwriter or the Seller.
I. The Underwriters confirm that the information set forth in
the last paragraph on the cover page of and under the caption "Underwriting" in
the Prospectus Supplement and the Computational Materials are correct and
constitute the only information furnished in writing to the Depositor by or on
behalf of any Underwriter specifically for inclusion in the Registration
Statement and the Prospectus.
SECTION IX. 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 Underwriters or
controlling persons thereof, or by or on behalf of the Depositor, and shall
survive delivery of any Offered Certificates to the Underwriters.
SECTION X. Default by One or More of the Underwriters. If one
or more of the Underwriters participating in the public offering of the Offered
Certificates shall fail at the Closing Date to purchase the Offered Certificates
which it is (or they are) obligated to purchase hereunder (the "Defaulted
Certificates"), then the non-defaulting Underwriters shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Certificates in such amounts as may be agreed
upon and upon the terms herein set forth. If, however, the Underwriters have not
completed such arrangements within such 24 hour period, then (i) if the
aggregate principal amount of Defaulted Certificates does not exceed 10% of the
aggregate principal amount of the Offered Certificates to be purchased pursuant
to this Agreement, the non-defaulting Underwriters named in this Agreement shall
be obligated to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all such non-defaulting Underwriters, or (ii) if the aggregate
principal amount of Defaulted Certificates exceeds 10% of the aggregate
principal amount of the Offered Certificates to be purchased pursuant to this
Agreement, this Agreement shall terminate, without any liability on the part of
any non-defaulting Underwriters. No action taken pursuant to this Section X
shall relieve any defaulting Underwriter from the liability with respect to any
default of such Underwriter under this Agreement. In the event of a default by
any Underwriter as set forth in this Section X, each of the Underwriters and the
Depositor shall have the right to postpone the Closing Date for a period not
exceeding five Business Days in order that any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements
may be effected.
30
SECTION XI. Termination of Agreement. The Underwriters 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 VI (R) of this Agreement shall occur and be continuing, or if any other
closing condition set forth in Section VI shall not have been fulfilled when
required to be fulfilled. In the event of any such termination, the covenant set
forth in Section V (H), the provisions of Section VII, the indemnity and
contribution agreements set forth in Section VIII, and the provisions of
Sections IX, XIV and XVI shall remain in effect.
SECTION XII. Notices. All statements, requests, notices
and agreements hereunder shall be in writing, and:
A. if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Bear, Xxxxxxx & Co. Inc., 000 Xxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxx Xxxxxxx; and
B. if to the Depositor, shall be delivered or sent by mail,
telex or facsimile transmission to care of ContiSecurities Asset Funding Corp.,
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxx Xxxxxx 00000 (fax:
000-000-0000), with a copy to ContiFinancial Corporation, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Chief Counsel (Fax: 000-000-0000).
SECTION XIII. Persons Entitled to the Benefit of this
Agreement. This Agreement shall inure to the benefit of and be binding upon the
Underwriters 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 any of the Underwriters within the
meaning of Section 15 of the Securities Act, and for the benefit of each
Underwriter's respective officers and directors 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
XIII, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
SECTION XIV. Survival. The respective indemnities,
representations, warranties and agreements of the Depositor and the Underwriters
contained in this Agreement, or made by or on behalf of them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Certificates 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 XV. Definition of the Term "Business Day". For
purposes of this Agreement, "Business Day" means any day on which the New York
Stock Exchange, Inc. is open for trading.
31
SECTION XVI. Governing Law: Submission to Jurisdiction;
Waiver of Jury Trial. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
principles of conflicts of law 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.
The parties hereto hereby irrevocably waive, to the fullest
extent permitted by law, any and all rights to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
SECTION XVII. 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 XVIII. 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.
SECTION XIX. Reserved.
32
If the foregoing correctly sets forth the agreement between
the Depositor and the Underwriters, please indicate your acceptance in the space
provided for the purpose below.
Very truly yours,
CONTISECURITIES ASSET FUNDING CORP.
By: /s/ Xxxx Xxxx
------------------
Name: Xxxx Xxxx
Title: Authorized Signatory
By: /s/ Xxxx Xxxxxxxx
-------------------
Name: Xxxx Xxxxxxxx
Title: Authorized Signatory
CONFIRMED AND ACCEPTED, as of the date first above written:
BEAR, XXXXXXX & CO. INC.
Acting on its own behalf and as Representative
of the Several Underwriters
referred to in the foregoing agreement
By: /s/ Xxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
CONTIMORTGAGE CORPORATION CONTIWEST CORPORATION
Accepts and xxxxxx agrees solely Xxxxxxx and xxxxxx agrees
to the provisions of Section V (H) solely to the provisions
of Section V (I)
By: /s/ Xxxxxxxx Xxxxx By: /s/ Xxx Xxxxxxx
------------------ ----------------
Name: Xxxxxxxx Xxxxx Name: Xxx Xxxxxxx
Title: Senior Vice President Title: Vice President
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxx Xxxx
---------------- ------------------
Name: Xxxxxx Xxxxx Name: Xxxx Xxxx
Title: Senior Vice President Title: Assistant Vice President
SCHEDULE A
Class A-1 Certificates
Underwriter Principal Amount Price to Public Underwriting Purchase Price
----------- ---------------- --------------- Discount ---------------
------------
Bear, Xxxxxxx & Co. Inc. $25,520,200 99.99321% 0.140% 99.85321%
Credit Suisse First Boston Corporation $25,520,200 99.99321% 0.140% 99.85321%
Greenwich Capital Markets, Inc. $25,520,200 99.99321% 0.140% 99.85321%
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $25,520,200 99.99321% 0.140% 99.85321%
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated $25,520,200 99.99321% 0.140% 99.85321%
Class A-2 Certificates
Underwriter Principal Amount Price to Public Underwriting Purchase Price
----------- ---------------- --------------- Discount ---------------
-------------
Bear, Xxxxxxx & Co. Inc. $15,123,000 99.99485% 0.175% 99.81985%
Credit Suisse First Boston Corporation $15,123,000 99.99485% 0.175% 99.81985%
Greenwich Capital Markets, Inc. $15,123,000 99.99485% 0.175% 99.81985%
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $15,123,000 99.99485% 0.175% 99.81985%
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated $15,123,000 99.99485% 0.175% 99.81985%
Class A-3 Certificates
Underwriter Principal Amount Price to Public Underwriting Purchase Price
----------- ---------------- --------------- Discount --------------
------------
Bear, Xxxxxxx & Co. Inc. $8,951,000 99.98891% 0.200% 99.78891%
Credit Suisse First Boston Corporation $8,951,000 99.98891% 0.200% 99.78891%
Greenwich Capital Markets, Inc. $8,951,000 99.98891% 0.200% 99.78891%
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $8,951,000 99.98891% 0.200% 99.78891%
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated $8,951,000 99.98891% 0.200% 99.78891%
Class A-4 Certificates
Underwriter Principal Amount Price to Public Underwriting Purchase Price
----------- ---------------- --------------- Discount ---------------
------------
Bear, Xxxxxxx & Co. Inc. $5,259,400 99.97405% 0.225% 99.74905%
Credit Suisse First Boston Corporation $5,259,400 99.97405% 0.225% 99.74905%
Greenwich Capital Markets, Inc. $5,259,400 99.97405% 0.225% 99.74905%
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $5,259,400 99.97405% 0.225% 99.74905%
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated $5,259,400 99.97405% 0.225% 99.74905%
Class A-5 Certificates
Underwriter Principal Amount Price to Public Underwriting Purchase Price
----------- ---------------- --------------- Discount ---------------
------------
Bear, Xxxxxxx & Co. Inc. $4,748,800 99.97822% 0.275% 99.70322%
Credit Suisse First Boston Corporation $4,748,800 99.97822% 0.275% 99.70322%
Greenwich Capital Markets, Inc. $4,748,800 99.97822% 0.275% 99.70322%
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $4,748,800 99.97822% 0.275% 99.70322%
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated $4,748,800 99.97822% 0.275% 99.70322%
Class A-6 Certificates
Underwriter Principal Amount Price to Public Underwriting Purchase Price
----------- ---------------- --------------- Discount ---------------
------------
Bear, Xxxxxxx & Co. Inc. $8,927,600 99.96128% 0.375% 99.58628%
Credit Suisse First Boston Corporation $8,927,600 99.96128% 0.375% 99.58628%
Greenwich Capital Markets, Inc. $8,927,600 99.96128% 0.375% 99.58628%
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $8,927,600 99.96128% 0.375% 99.58628%
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated $8,927,600 99.96128% 0.375% 99.58628%
Class A-7 Certificates
Underwriter Principal Amount Price to Public Underwriting Purchase Price
----------- ---------------- -------------- Discount --------------
------------
Bear, Xxxxxxx & Co. Inc. $5,390,000 99.98992% 0.350% 99.63992%
Credit Suisse First Boston Corporation $5,390,000 99.98992% 0.350% 99.63992%
Greenwich Capital Markets, Inc. $5,390,000 99.98992% 0.350% 99.63992%
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $5,390,000 99.98992% 0.350% 99.63992%
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated $5,390,000 99.98992% 0.350% 99.63992%
Class A-8 Certificates
Underwriter Principal Amount Price to Public Underwriting Purchase Price
----------- ---------------- --------------- Discount ---------------
-------------
Bear, Xxxxxxx & Co. Inc. $31,680,000 100.00000% 0.250% 99.75000%
Credit Suisse First Boston Corporation $31,680,000 100.00000% 0.250% 99.75000%
Greenwich Capital Markets, Inc. $31,680,000 100.00000% 0.250% 99.75000%
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $31,680,000 100.00000% 0.250% 99.75000%
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated $31,680,000 100.00000% 0.250% 99.75000%
Class A-9 IO Certificates
Underwriter Percentage Interest Price to Public Underwriting Purchase Price
----------- ------------------- --------------- Discount --------------
------------
Bear, Xxxxxxx & Co. Inc. 100% 15.57898% 0.0779% 15.50108%
Class B Certificates
Underwriter Percentage Interest Price to Public Underwriting Purchase Price
----------- ------------------ --------------- Discount --------------
--------------
Bear, Xxxxxxx & Co. Inc. 100% 90.72584% 0.860% 89.86584%
EXHIBIT A
[LETTERHEAD OF CONTIFINANCIAL CORPORATION]
March 19, 1999
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This Guaranty is made by ContiFinancial Corporation, a Delaware
corporation with its principal office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("CFC"), in favor of Bear, Xxxxxxx & Co. Inc., as Representative of the
Several Underwriters, with its principal office at 000 Xxxx Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
As an inducement to you and in consideration of your entering into the
Underwriting Agreement referred to below, CFC hereby absolutely, unconditionally
and irrevocably guarantees the prompt performance of the obligations, including
any payment obligations, of ContiSecurities Asset Funding Corp., ("Depositor"),
a Delaware corporation with its principal office at 0000 Xxxx Xxxxxxxxxx
Xxxxxxxxx, Xxx Xxxxx, Xxxxxx 00000, under Section VIII of the Underwriting
Agreement, dated as of March 19, 1999, between Depositor and Bear, Xxxxxxx & Co.
Inc., as Representative of the Several Underwriters. This Guaranty is a guaranty
of performance and payment and not of collection. The obligations of CFC
hereunder shall not be impaired by failure of Depositor to provide notice to CFC
of any modification or amendment of said contract agreed to by the parties
thereto. This Guaranty may be amended only by an instrument in writing executed
by the undersigned.
This Guaranty shall be governed by the laws of the State of New York
applicable to agreements made and to be performed in the State of New York
without giving effect to the conflict of law rules thereof.
IN WITNESS WHEREOF, CFC has caused this Guaranty to be executed by duly
authorized corporate officers the day and year first above written.
CONTIFINANCIAL CORPORATION
By:
------------------------
Name:
Title:
By:
------------------------
Name:
Title:
ACCEPTED
as of March __, 1999
BEAR, XXXXXXX & CO. INC.
as Representative of the Several Underwriters
By:
------------------------
Name:
Title:
EXHIBIT B
[FORM OF PRICING LETTER]
March __, 1999
Bear, Xxxxxxx & Co. Inc.
as Representative of the Several Underwriters
000 Xxxx Xxxxxx. 4th Floor
New York, NY 10167
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement (the "Underwriting Agreement")
dated as of March 19, 1999, among ContiSecurities Asset Funding Corp.,
ContiMortgage Corporation, ContiWest Corporation and Bear, Xxxxxxx & Co. Inc.,
as representative of the Several Underwriters. Capitalized terms used herein and
not otherwise defined shall have the meanings set forth in the Underwriting
Agreement.
This letter shall constitute the Pricing Letter referred to in Section II of the
Underwriting Agreement and shall be deemed to be incorporated by reference as
part of Schedule A thereto.
The parties hereto agree on the following purchase price for the Class
B Certificates:
Class B Certificates
Underwriter Principal Amount Price to Public Underwriting Purchase Price
----------- ---------------- --------------- Discount --------------
------------
Bear, Xxxxxxx & Co. Inc. $_________ $__________ _____% $__________
If the foregoing correctly sets forth the agreement between
the Depositor and the Underwriters, please indicate your acceptance in the space
provided for the purpose below.
Very truly yours,
CONTISECURITIES ASSET FUNDING CORP.
By:
----------------------
Name:
Title:
By:
----------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
BEAR, XXXXXXX & CO. INC.
Acting on its own behalf and as
Representative of the Several Underwriters
referred to in the Underwriting Agreement
By:
----------------------
Name:
Title:
CONTIMORTGAGE CORPORATION CONTIWEST CORPORATION
By: By:
---------------------- ----------------------
Name: Name:
Title: Title:
By: By:
----------------------- ----------------------
Name: Name:
Title: Title:
