EXHIBIT 1.1
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COMPASS ASSET ACCEPTANCE COMPANY L.L.C.
Compass Receivables Asset Funding Trust 200_-_
Home Equity Loan Asset-Backed Notes, Series 200_-_, Class A Notes
UNDERWRITING AGREEMENT
[Date]
[Underwriters]
Ladies and Gentlemen:
Compass Asset Acceptance Company L.L.C. (the "Seller"), has entered
into a Trust Agreement dated as of [_____] (the "Trust Agreement") with
[_________] as owner trustee (the "Owner Trustee") governing Compass Receivables
Asset Funding Trust 200_-_ (the "Trust"), a New York common law trust. The Owner
Trustee shall cause the issuance of the Home Equity Loan Trust Series 200_-_,
Class A Notes (the "Class A Notes") pursuant to an indenture to be dated as of
[________] (the "Indenture") between the Owner Trustee, as issuer and
[_________] as indenture trustee, (the "Indenture Trustee"). In addition, the
Seller proposes to direct the Owner Trustee pursuant to the Trust Agreement to
cause the Trust to a single class of ownership interests (the "Ownership
Interests" and, together with the Class A Notes, the "Securities").
Only the Class A Notes are being purchased by [_________] (each, an
"Underwriter" and collectively, the "Underwriters"), severally and not jointly,
in the amount set forth opposite their names on Schedule A attached hereto,
except that the amount purchased by each Underwriter may change in accordance
with Section X of this Agreement.
The Class A Notes will be secured by the assets of the Trust consisting
of a pool of [closed-end, fixed-rate home equity mortgage loans secured by first
or second deeds of trust and mortgages primarily on one-to four-family
residential properties and properties that include both residential and
income-producing, non-residential units] (the "Mortgage Loans") conveyed to the
Owner Trustee by the Seller pursuant to a sale and servicing agreement dated as
of [________] (the "Sale and Servicing Agreement") among the Seller, the Owner
Trustee, the Indenture Trustee and Compass Bank as originator (the "Originator")
and servicer (the "Servicer"). The Seller will acquire the Mortgage Loans,
simultaneously with the execution of the Sale and Servicing Agreement, pursuant
to a mortgage loan purchase agreement dated as of [________] (the "Purchase
Agreement") between the Seller, as purchaser and the Originator, as seller,
pursuant to which the Originator will transfer to the Seller all of its right,
title and interest in and to the Mortgage Loans after the Cut-Off Date and the
collateral securing each Mortgage Loan.
The Class A Notes will be issued pursuant to the Indenture. The
aggregate principal balance of the Class A Notes initially will be equal to
$[________], which represents
approximately [___]% of the outstanding principal balances of the Mortgage Loans
as of the close of business on [________] (the "Cut-Off Date"). Forms of the
Indenture, the Sale and Servicing Agreement and the Trust Agreement have been
filed as an exhibit to the Registration Statement (hereinafter defined).
The Class A Notes are more fully described in a Registration Statement
which the Seller has furnished to the Underwriters. Capitalized terms used but
not defined herein shall have the meanings given to them in the Sale and
Servicing Agreement or the Indenture, as applicable.
This Underwriting Agreement, the Sale and Servicing Agreement, the
Purchase Agreement, the Indenture and the Trust Agreement are referred to
collectively herein as the "Agreements."
Section I. Representations and Warranties of the Seller. The Seller
represents and warrants to, and agrees with the Underwriters that:
A. A Registration Statement on Form S-3 (No. 333-[__]) has (i) been
prepared by the Seller 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 under the Securities Act. Copies of
such Registration Statement have been delivered by the Seller 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; and "Prospectus" means such
final prospectus, as first supplemented by a prospectus supplement (the
"Prospectus Supplement") relating to the Class A Notes, as first filed with the
Commission pursuant to paragraph (3) or (5) of Rule 424(b) of the Rules and
Regulations. Reference made herein to the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Securities Act, as of the date of the Prospectus, and any
reference to any amendment or supplement to the Prospectus shall be deemed to
refer to and include any document filed under the Securities Exchange Act of
1934 (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 filed with the
Commission with respect to the Trust pursuant to Section 13(a) or 15(d) of the
Exchange Act after the date of the Prospectus that is incorporated by reference
in the Registration Statement. There are no contracts or documents of the Seller
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. 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 (i) has provided to the Seller
Collateral term sheets (as hereinafter defined) that such Underwriter has
provided to a prospective investor, the Seller has filed such Collateral term
sheets as an exhibit to a report on Form 8-K within two business days
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of its receipt thereof, or (ii) has provided to the Seller Structural term
sheets or Computational Materials (each as defined below) that such Underwriter
has provided to a prospective investor, the Seller will file or cause to be
filed with the Commission a report on Form 8-K containing such Structural term
sheet and Computational Materials, as soon as reasonably practicable after the
date of this Agreement, but in any event, not later than the date on which the
Prospectus is filed with the Commission pursuant to Rule 424 of the Rules and
Regulations.
B. The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations. The Registration Statement, as of the
Effective Date thereof and of any amendment thereto, did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Prospectus as of its date and as amended or supplemented as of the Closing Date
does not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that no representation or warranty is made as to (i) that part of the
Registration Statement which constitutes the Statements of Eligibility of
Qualification (Form T-1) of the Indenture Trustee or other indenture trustees
under the Trust Indenture Act or (ii) information contained in or omitted from
the Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Seller in writing by the Underwriters
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, 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 necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
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
Seller, otherwise than as set forth or contemplated in the Prospectus as
supplemented or amended as of the Closing Date.
E. The Seller has been duly organized and is validly existing as a
limited liability company in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing in each
jurisdiction in which its ownership of property or the conduct of its business
requires such qualification, and has all power and authority necessary to
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own or hold its properties, to conduct the business in which it is engaged and
to enter into and perform its obligations under the Agreements and to cause the
Securities to be issued.
F. There are no actions, proceedings or investigations pending before
or threatened by any court, administrative agency or other tribunal to which the
Seller is a party or of which any of its properties is the subject (a) which if
determined adversely to the Seller would have a material adverse effect on the
business or financial condition of the Seller, (b) asserting the invalidity of
the Agreements or the Securities, (c) seeking to prevent the issuance of the
Securities or the consummation by the Seller of any of the transactions
contemplated by any of the Agreements or (d) which might materially and
adversely affect the performance by the Seller of its obligations under, or the
validity or enforceability of, any of the Agreements or the Securities.
G. This Agreement has been, and the Sale and Servicing Agreement and
the Purchase Agreement when executed and delivered as contemplated hereby and
thereby will have been, duly authorized, executed and delivered by the Seller,
and this Agreement constitutes, and the Sale and Servicing Agreement and the
Purchase Agreement, when executed and delivered as contemplated herein, will
constitute, legal, valid and binding instruments enforceable against the Seller
in accordance with their 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 and the
Purchase Agreement, limitations of public policy under applicable securities
laws.
H. The execution, delivery and performance of the Agreements by the
Seller and the consummation of the transactions contemplated hereby and thereby,
and the issuance and delivery of the Securities do not and will not conflict
with or result in a material 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 Seller is a
party, by which the Seller is bound or to which any of the property or assets of
the Seller or any of its subsidiaries is subject, nor will such actions result
in any material violation of the provisions of the certificate of formation or
limited liability company agreement of the Seller or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Seller or any of its properties or assets.
I. [________] are independent public accountants with respect to the
Seller as required by the Securities Act and the Rules and Regulations.
J. The Class A Notes are duly and validly authorized and, when
executed, authenticated and delivered in accordance with the Indenture and the
Sale and Servicing Agreement, and issued and delivered to and paid for by the
Underwriters, as contemplated hereby, will be entitled to the benefits provided
by the Indenture and the Sale 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
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Class A Notes and the sale of the Class A Notes to the Underwriters, or the
consummation by the Seller of the other transactions contemplated by the
Agreements, 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 Class A Notes by the
Underwriters, or as have been obtained.
L. Neither the Seller nor the Trust governed by the Trust Agreement is
an "investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations
of the Commission thereunder.
Any certificate signed by an officer of the Seller and delivered to the
Underwriters or counsel for the Underwriters in connection with an offering of
the Class A Notes 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.
Section II. Purchase and Sale. The commitment of the Underwriters to
purchase the Class A Notes pursuant to this Agreement shall be deemed to have
been made on the basis of the representations and warranties herein contained
and shall be subject to the satisfaction of the terms and conditions set forth
herein. The Seller agrees to sell to the Underwriters, and the Underwriters
severally agree (except as provided in Section X hereof) to purchase from the
Seller, the Class A Notes in the principal amounts set forth opposite their
names and at the purchase price set forth in Schedule A hereto.
Section III. Delivery and Payment. Delivery of and payment for the
Class A Notes to be purchased by the Underwriters shall be made at the offices
of Mayer, Brown, Xxxx & Maw, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as shall be agreed upon by the Underwriters and the Seller at 10:00
a.m. New York City time on [______] or at such other time or date as shall be
agreed upon in writing by the Underwriters and the Seller (such date being
referred to as the "Closing Date"). Payment shall be made to the Seller by wire
transfer of same day funds payable to the account of the Seller. The Seller
shall deliver (or shall cause the Owner Trustee to deliver on behalf of the
Trust) the Class A Notes to the Underwriters for the account of the Underwriters
against payment of the purchase price thereof. The Class A Notes shall be in
such denominations and registered in such names as the Underwriters may request
in writing at least two business days prior to the Closing Date. The Class A
Notes will be made available for examination by the Underwriters 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 Class A Notes for sale to the public as set forth in the Prospectus.
Section V. Covenants of the Seller. The Seller agrees 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 execution and delivery of this Agreement; to make no further
amendment or any supplement to the Registration Statement or to
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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
or any supplement to the Prospectus or any amended Prospectus has been filed and
to furnish the Underwriters with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed by the
Seller with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and, for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Class A Notes, to promptly advise the Underwriters of its receipt of notice
of the issuance by the Commission of any stop order or of: (i) any order
preventing or suspending the use of the Prospectus; (ii) the suspension of the
qualification of the Class A Notes 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 Seller
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, including all consents and exhibits filed therewith.
C. To deliver promptly to the Underwriters such number of the following
documents as the Underwriters shall reasonably request: (i) conformed copies of
the Registration Statement as originally filed with the Commission and each
amendment thereto (in each case including exhibits); (ii) the Prospectus and any
amended or supplemented Prospectus; and (iii) any document incorporated by
reference in the Prospectus (including exhibits thereto). If the delivery of a
prospectus is required at any time in connection with the offering or sale of
the Class A Notes, and if at such time any events shall have occurred as a
result of which the Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, the Seller shall notify the Underwriters
and, upon the Underwriters' 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
Class A Notes, upon the request of the Underwriters but at such requesting
party's expense, the Seller 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 Seller or the Underwriters, be required by the
Securities Act or requested by the Commission.
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E. Prior to filing with the Commission any (i) supplement to the
Prospectus, or document incorporated by reference in the Prospectus, or (ii)
Prospectus pursuant to Rule 424 of the Rules and Regulations, to furnish a copy
thereof to the Underwriters and counsel for the Underwriters and obtain the
consent of the Underwriters to the filing.
F. To assist the Underwriters in their efforts to qualify the Class A
Notes for offering and sale under the applicable securities laws of such states
and other jurisdictions of the United States as the Underwriters may designate,
and maintain or cause to be maintained such qualifications in effect for as long
as may be required for the distribution of the Class A Notes; provided, however,
the Underwriters will file or cause the filing of such statements and reports as
may be required by the laws of each jurisdiction in which the Class A Notes will
be or have been so qualified.
G. So long as the Class A Notes shall be outstanding, to deliver to the
Underwriters as soon as such statements are furnished to the Indenture Trustee:
(i) the annual statement as to compliance delivered to the Indenture Trustee
pursuant to [Section 3.10] of the Sale and Servicing Agreement; (ii) the annual
statement of a firm of independent public accountants furnished to the Indenture
Trustee pursuant to [Section 3.11] of the Sale and Servicing Agreement; and
(iii) the Monthly Statement furnished to the Noteholders pursuant to [Section
5.03] of the Sale and Servicing Agreement.
Section VI. Conditions to the Underwriters' Obligations. The obligation
of the Underwriters to purchase the Class A Notes pursuant to this Agreement is
subject to: (i) the accuracy on and as of the Closing Date of the
representations and warranties on the part of the Seller herein contained; (ii)
the performance by the Seller 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 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. No Underwriter shall have discovered and disclosed to the Seller 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 [____________________], 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 the Agreements, the Class A Notes, the
Registration Statement and the Prospectus, and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be satisfactory
in all respects to counsel for the Underwriters, and the Seller shall have
furnished to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
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D. Mayer, Brown,. Xxxx & Maw shall have furnished to the Underwriters
their written opinion, as counsel to the Seller, addressed to the Underwriters
and dated the Closing Date, in form and substance satisfactory to the
Underwriters.
E. The Underwriters shall have received the favorable opinion, dated
the Closing Date, of [_____________________] , special counsel to the Originator
and the Seller, addressed to the Originator, the Seller and [_________] (the
"Rating Agencies"), in form and substance satisfactory to the Underwriters and
the Rating Agencies.
F. [_____________________], counsel to [the Originator], shall have
furnished to the Underwriters his written opinion, as counsel to [the
Originator], addressed to the Originator, the Seller, the Underwriters and the
Rating Agencies, dated the Closing Date, in form and substance satisfactory to
the Underwriters and the Rating Agencies.
G. The Underwriters shall have received the favorable opinion of
counsel to the Indenture Trustee, dated the Closing Date, addressed to the
Originator, the Seller, the Underwriters and the Rating Agencies and in form and
scope satisfactory to the Underwriters and the Rating Agencies.
H. The Underwriters shall have received the favorable opinion, dated
the Closing Date of [__________], counsel to the Owner Trustee, addressed to the
Originator, the Seller, the Underwriters and the Rating Agencies in form and
substance satisfactory to the Rating Agencies and the Underwriters.
I. The Seller shall have furnished to the Underwriters a certificate,
dated the Closing Date, of its Chairman of the Board, its President, a Director,
a Senior Vice President or a Vice President stating that:
1. The representations and warranties of the Seller in Section I of
this Agreement are true and correct as of the Closing Date; and the
Seller has complied with all its agreements contained herein.
2. Such person has carefully examined the Registration Statement and
the Prospectus and, in his opinion (x) as of the Effective Date, the
Registration Statement and Prospectus did not include an untrue
statement of a material fact and did not omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and (y) since the Effective Date
no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement or the
Prospectus.
J. The Indenture Trustee shall have furnished to the Underwriters a
certificate of the Indenture Trustee, signed by one or more duly authorized
officers of the Indenture Trustee, dated the Closing Date, as to the due
authorization, execution and delivery of the Sale and Servicing Agreement and
the Indenture by the Indenture Trustee and the acceptance by the Indenture
Trustee of the trusts created thereby and the due authentication and delivery of
the Class A Notes by the Indenture Trustee under the Indenture and such other
matters as the Underwriters shall reasonably request.
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K. The Class A Notes shall have been rated at least ["AAA"] by [the
Rating Agencies].
L. The Underwriters shall have received at or before the Closing Date,
from [Accountant], letters, dated as of the date of this Agreement, satisfactory
in form and content (the "Initial Letters") and bring-down letters dated as of
the Closing Date, (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants under Rule
201 of Regulation S-X of the Commission, (ii) stating the conclusions and
findings of such firm with respect to the financial information and other
matters covered by its letter, and (iii) in the case of the bring-down letters,
confirming in all material respects the conclusions and findings set forth in
the Initial Letters.
M. Subsequent to the execution and delivery of this Agreement, none of
the following shall have occurred: (i) a material suspension of trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the over-the-counter market shall have occurred or minimum prices shall have
been established on either of such exchanges or such market by the Commission,
by such exchange or market, or by any other regulatory body or governmental
authority having jurisdiction; (ii) a banking moratorium shall have been
declared by Federal or New York state authorities; or (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.
If any condition specified in this Section VI shall not have been
materially fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters by notice to the Seller 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 herein.
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. As between the Seller and the
Underwriters, the Seller agrees to pay: (a) the costs incident to the
authorization, issuance, sale and delivery of the Class A Notes and any taxes
payable in connection therewith; (b) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement and
any amendments and exhibits thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), the
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) any fees charged by
securities rating services for rating the Class A Notes; and (f) all other costs
and expenses incident to the performance of the obligations of the Seller
(including costs and expenses of Underwriters' counsel); 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 Class A Notes which they may sell, the expenses of advertising any
offering of the Class A Notes made by the Underwriters and the fees and expenses
of qualifying the Class A Notes under
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the securities laws of the several jurisdictions as provided in Section V(F)
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
Underwriters).
If this Agreement is terminated by the Underwriters in accordance with
the provisions of Section VI herein, the Seller shall reimburse the Underwriters
for all reasonable out-of-pocket expenses, including fees and disbursements of
[__________].
Section VIII. Indemnification and Contribution.
A. The Seller agrees to indemnify and hold harmless the Underwriters
and each person, if any, who controls the Underwriters 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 Class A Notes), to which the Underwriters
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, (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 (iv) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading and
shall reimburse the Underwriters and each such controlling person promptly upon
demand for any legal or other expenses reasonably incurred by the Underwriters
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 Seller 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 the Registration Statement in reliance upon and in conformity with written
information furnished to the Seller by or on behalf of the Underwriters
specifically for inclusion therein. The foregoing indemnity agreement is in
addition to any liability which the Seller may otherwise have to the
Underwriters or any controlling person of the Underwriters.
B. Each Underwriter, severally, and not jointly, agrees to indemnify
and hold harmless the Seller, each of its directors, each of its officers who
signed the Registration Statement, and each person, if any, who controls the
Seller 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 Seller 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, (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 (iv) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, but in each case only to the extent
10
that the untrue statement or alleged untrue statement or omission or alleged
omission was (x) made in reliance upon and in conformity with written
information furnished to the Seller by or on behalf of the Underwriters
specifically for inclusion therein and (y) in the Derived Information (as
defined below) other than a misstatement or omission arising from a misstatement
or omission in the Originator-Provided Information (as defined below), and shall
reimburse the Seller and any such director, officer or controlling person for
any legal or other expenses reasonably incurred by the Seller 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 Underwriters may otherwise have to the Seller 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, 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, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of
11
attorneys (in addition to local counsel) at any time for all such indemnified
parties, which firm shall be designated in writing by the Underwriters, if the
indemnified parties under this Section VIII consist of the Underwriters or any
of their respective controlling persons, or by the Seller, if the indemnified
parties under this Section VIII consist of the Seller or any of the Seller's
directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section VIII(A) and (B) above, shall use its best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
D. Each Underwriter agrees to provide the Seller no later than two
Business Days prior to the date on which it is required to be filed with the
Commission a copy of its Derived Information for filing with the Commission on
Form 8-K.
E. Each Underwriter agrees, severally and not jointly, assuming all
Originator-Provided Information is accurate and complete in all material
respects, to indemnify and hold harmless the Seller, each of the Seller's
officers and directors and each person who controls the Seller within the
meaning of Section 15 of the Securities Act against any and all losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement of a material fact contained in the Derived Information
provided by any Underwriter, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by him,
her or it in connection with investigating or defending or preparing to defend
any such loss, claim, damage, liability or action as such expenses are incurred.
The obligations of the Underwriters under this Section VIII(E) shall be in
addition to any liability which the Underwriters may otherwise have.
The procedures for seeking indemnification set forth in Section VIII(C)
shall be equally applicable to this Section VIII(E).
F. 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) or (E) above 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 Seller on the one hand and the Underwriters on the other from
the offering of the Class A Notes or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law or if the indemnified party failed
to give the notice required under Section VIII(C) above, in such proportion as
is appropriate to reflect
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not only the relative benefits referred to in clause (i) above but also the
relative fault of the Seller on the one hand and the Underwriters on the other
with respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations.
The relative benefits of the Underwriters and the Seller shall be
deemed to be in such proportions that each Underwriter is responsible for its
pro rata portion of such losses, liabilities, claims, damages and expenses
determined in accordance with the ratio that the excess of the aggregate resale
price received by such Underwriter for the Class A Notes over the purchase price
paid to the Seller by such Underwriter (before deducting expenses) bears to the
aggregate resale price received by such Underwriter for the Class A Notes, and
the Seller shall be responsible for the balance.
The relative fault of the Underwriters and the Seller 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 Seller or by the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission and other equitable
considerations.
The Seller and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section VIII(F) were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section VIII(F) shall be deemed to include, for purposes of this Section
VIII(F), any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
In no case shall the Underwriters be responsible for any amount in
excess of the aggregate principal amount of the Class A Notes purchased by the
Underwriters. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
G. For purposes of this Section VIII, the term "Derived Information"
means such portion, if any, of the information delivered to the Seller pursuant
to Section VIII(D) for filing with the Commission on Form 8-K as:
(i) is not contained in the Prospectus without taking into account
information incorporated therein by reference;
(ii) does not constitute Originator-Provided Information; and
(iii) is of the type of information defined as Collateral term sheets,
Structural term sheets or Computational Materials (as such terms
are interpreted in the No-Action Letters (as defined below)).
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"Originator-Provided Information" means the information contained on any
computer tape furnished to the Underwriters by [seller] concerning the assets
comprising the Trust.
The term "Computational Materials" shall have the meaning assigned to
it in a no-action letter (the "Xxxxxx No-Action Letter") issued by the staff of
the Commission on May 20, 1994 to Xxxxxx, Peabody Acceptance Corporation I, et
al., as modified by a no-action letter (the "First PSA No-Action Letter") issued
by the staff of the Commission on May 27, 1994 to the Public Securities
Association (the "PSA") and as further modified by a no-action letter (the
"Second PSA No-Action Letter", and together with the Xxxxxx No-Action Letter and
the First PSA No-Action Letter, the "No-Action Letters") issued by the staff of
the Commission on February 17, 1995 to the PSA. The terms "Structural Term
Sheet" and "Collateral Term Sheet" shall have the meanings assigned to them in
the Second PSA No-Action Letter. The term "Collateral term sheet" as used herein
includes any subsequent Collateral term sheet that reflects a substantive change
in the information presented.
H. The Underwriters confirm that the information set forth (i) in the
[third, fourth, fifth, sixth, seventh and last paragraphs] under the caption
"Underwriting" in the Prospectus Supplement and (ii) the Derived Information is
correct and constitutes the only information furnished in writing to the Seller
by or on behalf of the Underwriters 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 Seller 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 Seller and shall survive delivery of
any Class A Notes to the Underwriters.
Section X. Default by One of the Underwriters. If one of the
Underwriters participating in the public offering of the Class A Notes shall
fail at the Closing Date to purchase the Class A Notes which it is obligated to
purchase hereunder (the "Defaulted Notes"), then the non-defaulting Underwriter
shall have the right, within 24 hours thereafter, to purchase all, but not less
than all, of the Defaulted Notes in such amounts as may be agreed upon and upon
the terms herein set forth. If, however, the non-defaulting Underwriters have
not completed such arrangements within such 24-hour period, then:
(i) (i) if the aggregate principal amount of Defaulted Notes does not
exceed 25% of the aggregate principal amount of the Class A Notes
to be purchased pursuant to this Agreement, the non-defaulting
Underwriters shall be obligated to purchase the full amount
thereof, or
(ii) if the aggregate principal amount of Defaulted Notes exceeds 25%
of the aggregate principal amount of the Class A Notes to be
purchased pursuant to this Agreement, this Agreement shall
terminate, without any liability on the part of the non-defaulting
Underwriters.
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No action taken pursuant to this Section X shall relieve a defaulting
Underwriter from 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 non-defaulting Underwriters and the Seller 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.
Section XI. 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 [_____________].
B. if to the Seller, shall be delivered or sent by mail, telex or
facsimile transmission to [_____________].
Section XII. Persons Entitled to the Benefit of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriters and
the Seller, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
the representations, warranties, indemnities and agreements contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control the Underwriters within the meaning of Section 15 of the
Securities Act, and for the benefit of directors of the Seller, officers of the
Seller who have signed the Registration Statement and any person controlling the
Seller 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 XIII. Survival. The respective indemnities, representations,
warranties and agreements of the Seller 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 Class A Notes and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
Section XIV. 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.
Section XV. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
Section XVI. 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.
15
Section XVII. 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.
16
If the foregoing correctly sets forth the agreement between the Seller
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
COMPASS ASSET ACCEPTANCE
COMPANY L.L.C.
By: ____________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
[Underwriter]
By: ___________________________
Name:
Title:
17
SCHEDULE A
Initial Principal Amount of Notes
Purchased by Underwriters
Underwriter Class A
----------- -------
Purchase Price for Class A Notes - [_]% plus accrued interest from [_] to but
not including the Closing Date.
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