$1,750,000,000
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-2
Home Equity Loan Pass-Through Certificates
Series 1998-2
UNDERWRITING AGREEMENT
June 9, 1998
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated
As Representative of the Several Underwriters
World Financial Center
North Tower
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 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 1998-2, Class A-1, Class A-2 Fixed, Class A-2
Internal, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8,
Class A-9, Class A-10 IO, (the "Class A Trust Certificates"), Class B (the
"Subordinate Certificates") and the Grantor Trust Pass-Through Certificates,
Series 1998-A, Class A-2 Floating (the "Class A-2 Floating Certificates"). The
Class A Trust Certificates (other than the Class A-2 Internal Certificates), the
Class A-2 Floating Certificates and the Subordinate Certificates are
collectively referred to as the "Offered Certificates". Also issued are the
Class R, Class R-I and Class R-II Certificates (the "Retained Certificates").
The Class A-2 Floating Certificates evidence interests in the ContiMortgage
Grantor Trust 1998-A (the "Grantor Trust"). The Class A Trust Certificates, the
Class A-2 Floating Certificates, the Subordinate Certificates and the Retained
Certificates shall be 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. Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx &
Xxxxx Incorporated ("Xxxxxxx Xxxxx") is acting as representative of the several
Underwriters and in such capacity is hereinafter referred to as the
"Representative."
The Class A Trust Certificates, Subordinate Certificates and
Retained Certificates (collectively the "Trust Certificates") will be issued
under a pooling and
servicing agreement (the "Pooling and Servicing Agreement"), to be dated as of
June 1, 1998 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 Trust 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 and
adjustable rate home equity loans and the other comprised only of adjustable
rate home equity loans, having a Cut-Off Date as of the close of business on
June 17, 1998 (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 Class A-2 Floating Certificates will be issued pursuant to
a Grantor Trust Agreement (the "Grantor Trust Agreement") dated as of June 1,
1998, among the Depositor, the Servicer and Manufacturers and Traders Trust
Company, as the Grantor Trustee (in such capacity, the "Grantor Trustee").
The Class A-2 Floating Certificates evidence interests in the
ContiMortgage Grantor Trust 1998-A, which is comprised of: (i) the Class A-2
Internal Certificates issued by the Trust, (ii) a swap agreement between the
Grantor Trust and National Westminster Bank, Plc. (the "Swap Agreement") and
(iii) the rights of the Grantor Trustee under the related Certificate Insurance
Policy.
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 and the Grantor Trust Agreement.
The Class A Trust Certificates and the Class A-2 Floating
Certificates will each be entitled to the benefits of a certificate guaranty
insurance policy (together, the "Policies") issued by MBIA Insurance Corporation
("MBIA"). The Depositor, ContiMortgage and ContiWest will also enter into an
Indemnification Agreement (the "Indemnification Agreement") dated as of June 1,
1998 among the Underwriters, the Depositor, ContiMortgage, ContiWest and MBIA,
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
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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. 333-39505), 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 December 16, 1997; 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 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
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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, 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.
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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, the
Grantor Trust 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, the Grantor Trust Agreement or this Agreement,
as the case may be, or (d) which might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, the Pooling and Servicing Agreement, the Grantor Trust
Agreement, this Agreement or the Certificates.
G. This Agreement has been, and the Grantor Trust Agreement
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 and the Grantor Trust Agreement when executed and delivered
as contemplated herein will constitute, legal, valid and binding instruments
enforceable against the Depositor in accordance with their respective terms,
subject as to enforceability to (x) applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors' rights
generally, (y) general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law), and (z) with respect to rights
of indemnity under this Agreement, limitations of public policy under applicable
securities laws.
H. The execution, delivery and performance of this Agreement,
the Grantor Trust 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, the Grantor Trust Agreement and 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
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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, the Grantor Trust Agreement and
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 and the
Grantor Trustee to authenticate, issue and deliver the Certificates has been
duly authorized by the Depositor, and, assuming the Trustee and the Grantor
Trustee have been duly authorized to undertake such actions, when executed,
authenticated, issued and delivered by the Trustee and the Grantor Trustee, as
applicable, in accordance with the Pooling and Servicing Agreement and the
Grantor Trust 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 and the
Grantor Trust 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, the Grantor Trust
Agreement and 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 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
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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 nor the Grantor Trust created pursuant to the Grantor
Trust Agreement is an "investment company" within the meaning of such term under
the Investment Company Act of 1940 (the "1940 Act") and the rules and
regulations of the Commission thereunder.
R. At the Closing Date, the Offered Certificates, the Grantor
Trust Agreement 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 Subordinate Certificates) shall have been rated in the highest rating
category by Xxxxx'x Investors Service, Inc. ("Moody's"), Standard & Poor's
Rating Services, a division of the XxXxxx-Xxxx Companies, Inc. ("Standard &
Poor's") and Fitch IBCA, Inc. ("Fitch") and the Subordinate Certificates shall
have been rated "Baa3" by Moody's, "BBB-" by Standard & Poor's and "BBB" by
Fitch.
T. Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of this Agreement, the
Grantor Trust Agreement, the Pooling and Servicing Agreement and the
Certificates have been paid or will be paid at or prior to the Closing Date.
U. At the Closing Date, each of the representations and
warranties of the Depositor, ContiMortgage and ContiWest set forth herein, and
in the Grantor Trust Agreement 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.
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W. The transfer of the Class A-2 Internal Certificates from
the Depositor to the Grantor Trust as set forth in the Grantor Trust Agreement
is not required to be registered under the Securities Act of 1933, as amended.
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.
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 June 29, 1998 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
Certificates shall be in such authorized denominations and registered in such
names as the Representative may request 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
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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 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 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 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
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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 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.
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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 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 Grantor Trust
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
11
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 MBIA their written opinion, as counsel to the Depositor,
addressed to the Underwriters and MBIA and dated the Closing Date, in form and
substance satisfactory to the Underwriters and MBIA, 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.
(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
Offered 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.
12
(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 nor the
Grantor 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 Trust Certificates and the Subordinate
Certificates will be treated as "regular interests" in REMIC III, the
Class R Certificates will be treated as the sole "residual interest" in
REMIC III, the Class R-I Certificates will be treated as the sole
"residual interest" in REMIC I and the Class R-II Certificates will be
treated as the sole "residual interest" in REMIC II. 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 Trust Certificates and
the Subordinate 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, the REMIC II and XXXXX XXX as REMICs, interest on the
Offered Certificates will be treated as "interest on obligations
secured by mortgages on real property" under Section 856(c) of the Code
to the extent that such Offered Certificates are treated as "real
estate assets" under Section 856(c) of the Code.
(xi) No election will be made to qualify the Grantor
Trust as a REMIC for federal income tax purposes. For federal income
tax purposes, the Grantor Trust will be classified as a grantor trust
under Subpart E, part I of Subchapter J of the Code, and not as an
association taxable as a corporation. The Grantor Trust Certificates
represent an undivided ownership interest in the Grantor Trust.
13
(xii) The transfer of the Class A-2 Internal
Certificates from the Depositor to the Grantor Trust as set forth in
the Grantor Trust Agreement is not required to be registered under the
Securities Act of 1933, as amended.
(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 MBIA a written
statement, addressed to the Underwriters and MBIA and dated the Closing Date, in
form and substance satisfactory to the Underwriters and MBIA 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, Fitch 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, Fitch 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 MBIA their written opinion,
as counsel to ContiMortgage and ContiWest, addressed to the Underwriters and
MBIA 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.
14
(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, Grantor
Trust 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 Grantor Trust Agreement and 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.
15
(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 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 Grantor Trust Agreement, 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 Grantor Trust
Agreement, 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 MBIA 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
16
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 ContiWest is required for the
consummation by ContiWest 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 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 MBIA his written opinion, addressed to
the Underwriters and MBIA and dated the Closing Date, in form and substance
satisfactory to the Underwriters and MBIA, 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
17
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.
(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, the Grantor Trust 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, the Grantor Trust 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, the Grantor Trust
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
18
ability to perform its obligations under this Agreement and the Pooling
and Servicing Agreement.
(v) The direction by the Depositor to the Trustee and
the Grantor Trustee to issue, authenticate and deliver the Certificates
has been duly authorized by the Depositor and, assuming that the
Trustee and the Grantor Trustee have been duly authorized to do so,
when executed, authenticated and delivered by the Trustee in accordance
with the Pooling and Servicing Agreement and the Grantor Trustee in
accordance with the Grantor Trust Agreement, the Certificates will be
validly issued and outstanding and will be entitled to the benefits of
the Pooling and Servicing Agreement and the Grantor Trust Agreement.
(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 Grantor Trust 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 Grantor Trust Agreement,
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 Grantor Trust Agreement, 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 MBIA shall have received the favorable
opinion of counsel to the Trustee and the Grantor Trustee (together, for
purposes of this section
19
only, "MTT"), dated the Closing Date, addressed to the Underwriters and in form
and scope satisfactory to counsel to the Underwriters, to the effect that:
(i) MTT is a banking corporation duly incorporated
and validly existing under the law of the State of New York.
(ii) MTT has the full corporate trust power to
execute, deliver and perform its obligations under the Pooling and
Servicing Agreement and the Grantor Trust Agreement.
(iii) The execution and delivery by MTT of the
Pooling and Servicing Agreement and the Grantor Trust Agreement, and
the performance by MTT of its obligations under the Pooling and
Servicing Agreement and the Grantor Trust Agreement, have been duly
authorized by all necessary corporate action of MTT.
(iv) The Pooling and Servicing Agreement and the
Grantor Trust Agreement are valid and legally binding obligations of
MTT enforceable against MTT.
(v) The execution and delivery by MTT of the Pooling
and Servicing Agreement and the Grantor Trust Agreement does not (a)
violate the Organization Certificate of MTT or the by-laws of the MTT,
(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 MTT 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 Trust Certificates have been duly executed,
authenticated and delivered by the Trustee. The Class A-2 Floating
Certificates have been duly executed, authenticated and delivered by
the Grantor 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 MTT before or by any court, arbitrator,
administrative agency or other governmental authority which, if decided
adversely to MTT, would materially and
20
adversely affect the ability of MTT to carry out the transactions
contemplated in the Pooling and Servicing Agreement or the Grantor
Trust Agreement.
J. The Underwriters and MBIA 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. The Underwriters and MBIA shall have received an executed
copy of the Swap Agreement with respect to the Class A-2 Floating Certificates.
L. The Depositor, ContiMortgage, ContiWest and ContiFinancial
shall each have furnished to the Underwriters and MBIA 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;
(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 March 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 March 31, 1998. No publicly-held debt of
ContiFinancial shall have been downgraded or put on credit watch for
possible downgrade since March 31, 1998; there has been no suspension
of trading in ContiFinancial's publicly-held common stock since March
31, 1998.
21
M. The Trustee shall have furnished to the Underwriters and
MBIA 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 Policies 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 Subordinate
Certificates) shall have been rated in the highest rating category by Xxxxx'x
Investors Service, Inc. ("Moody's"), Standard & Poor's Rating Services, a
division of the XxXxxx-Xxxx Companies, Inc. ("Standard & Poor's") and Fitch
IBCA, Inc. ("Fitch") and the Subordinate Certificates shall have been rated
"Baa3" by Xxxxx'x, "BBB-" by Standard & Poor's and "BBB" by Fitch; no Class of
Offered Certificates shall have been put on credit watch for possible downgrade.
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
22
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 Policies 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
MBIA and the other parties thereto at or prior to the Closing Date.
V. The Underwriters shall have received a favorable opinion of
Xxxxx Xxxx, counsel to MBIA, dated the Closing Date and in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) MBIA is a stock insurance corporation, duly
incorporated and validly existing under the laws of the State of New
York. MBIA is validly licensed to do business in New York and is
authorized to issue the Policies and perform its obligations under the
Policies in accordance with the terms thereof.
(ii) The execution and delivery by MBIA of the
Policies and the Indemnification Agreement are within the corporate
power of MBIA and have been authorized by all necessary corporate
action on the part of MBIA; the Policies have 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 Policies
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) MBIA 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 MBIA 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.
23
In rendering this opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of MBIA 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 MBIA.
W. The Underwriters shall have received from MBIA a
certificate, signed by the president, a senior vice president or a vice
president of MBIA, dated the Closing Date, to the effect that the signer of such
certificate has carefully examined the Policies, 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 MBIA which, if adversely
determined, individually or in the aggregate, would adversely affect
the Insurer's performance under the Policies or the Indemnification
Agreement;
(ii) Each person who as an officer or representative
of MBIA, signed or signs the Policies, 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 Policies" 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 Policies or the ability of MBIA
to meet its payment obligations under the Policies;
(iv) The tables regarding MBIA's capitalization set
forth under the caption "The Certificate Insurer" presents fairly the
capitalization of the Insurer as of March 31, 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 MBIA by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of the Securities Act;
(vi) The audited balance sheet of MBIA as of December
31, 1996 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
24
financial condition of MBIA 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 MBIA as
of March 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 MBIA 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, 1997 audited statements.
(vii) to the best knowledge of such officer, since
March 31, 1998, no material adverse change has occurred in the
financial position of MBIA other than as set forth in the Prospectus
Supplement.
The officer of MBIA certifying to items (v) - (vii) shall be
an officer in charge of a principal financial function.
MBIA 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
25
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.
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. The foregoing indemnity agreement is in
addition to any liability which the Depositor may otherwise
26
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 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
27
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
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
28
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 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
29
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 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-10 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.
30
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 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.
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
31
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 Depositors 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. 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 Xxxxxxx Xxxxx & Co., World Financial Center,
North Tower, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset
Finance Group (Fax: 000-000-0000); 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
32
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.
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.
33
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.. Miscellaneous. Xxxxxxx Xxxxx will be deemed to
be a Selling Agent with respect to the Class A-2 Internal Certificates.
34
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:
XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX INCORPORATED
Acting on its own behalf and as
Representative of the Several
Underwriters referred to in the foregoing
Agreement
By:
--------------------------------------
Name:
Title:
CONTIMORTGAGE CORPORATION CONTIWEST CORPORATION
Accepts and xxxxxx agrees solely Accepts and xxxxxx agrees solely
to the provisions of Section V (H) to the provisionsof Section V (I)
By: By:
------------------------------- -------------------------------
Name: Name:
Title: Title:
By: By:
-------------------------------- -------------------------------
Name: Name:
Title: Title:
SCHEDULE A
Class A-1 Certificates
Underwriters Principal Amount Underwriting
Discount
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $19,000,000 0.1000%
Incorporated
Bear, Xxxxxxx & Co. Inc. $19,000,000 0.1000%
Credit Suisse First Boston Corporation $19,000,000 0.1000%
Greenwich Capital Markets, Inc. $19,000,000 0.1000%
Xxxxxx Xxxxxxx & Co. Incorporated $19,000,000 0.1000%
Nomura Securities International, Inc. $19,000,000 0.1000%
Class A-2 Fixed
Certificates
Underwriters Principal Amount Underwriting
Discount
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $41,666,670 0.1600%
Incorporated
Bear, Xxxxxxx & Co. Inc. $41,666,666 0.1600%
Credit Suisse First Boston Corporation $41,666,666 0.1600%
Greenwich Capital Markets, Inc. $41,666,666 0.1600%
Xxxxxx Xxxxxxx & Co. Incorporated $41,666,666 0.1600%
Nomura Securities International, Inc. $41,666,666 0.1600%
Class A-2 Floating Certificates
Underwriters Principal Amount Underwriting
Discount
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $29,166,670 0.1600%
Incorporated
Bear, Xxxxxxx & Co. Inc. $29,166,666 0.1600%
Credit Suisse First Boston Corporation $29,166,666 0.1600%
Greenwich Capital Markets, Inc. $29,166,666 0.1600%
Xxxxxx Xxxxxxx & Co. Incorporated $29,166,666 0.1600%
Nomura Securities International, Inc. $29,166,666 0.1600%
Class A-3 Certificates
Underwriters Principal Amount Underwriting
Discount
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $45,833,335 0.1800%
Incorporated
Bear, Xxxxxxx & Co. Inc. $45,833,333 0.1800%
Credit Suisse First Boston Corporation $45,833,333 0.1800%
Greenwich Capital Markets, Inc. $45,833,333 0.1800%
Xxxxxx Xxxxxxx & Co. Incorporated $45,833,333 0.1800%
Nomura Securities International, Inc. $45,833,333 0.1800%
Class A-4 Certificates
Underwriters Principal Amount Underwriting
Discount
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $30,833,335 0.2500%
Incorporated
Bear, Xxxxxxx & Co. Inc. $30,833,333 0.2500%
Credit Suisse First Boston Corporation $30,833,333 0.2500%
Greenwich Capital Markets, Inc. $30,833,333 0.2500%
Xxxxxx Xxxxxxx & Co. Incorporated $30,833,333 0.2500%
Nomura Securities International, Inc. $30,833,333 0.2500%
Class A-5 Certificates
Underwriters Principal Amount Underwriting
Discount
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx $15,000,000 0.3000%
Incorporated
Bear, Xxxxxxx & Co. Inc. $15,000,000 0.3000%
Credit Suisse First Boston Corporation $15,000,000 0.3000%
Greenwich Capital Markets, Inc. $15,000,000 0.3000%
Xxxxxx Xxxxxxx & Co. Incorporated $15,000,000 0.3000%
Nomura Securities International, Inc. $15,000,000 0.3000%
Class A-6 Certificates
Underwriters Principal Amount Underwriting
Discount
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $16,166,670 0.3300%
Incorporated
Bear, Xxxxxxx & Co. Inc. $16,166,666 0.3300%
Credit Suisse First Boston Corporation $16,166,666 0.3300%
Greenwich Capital Markets, Inc. $16,166,666 0.3300%
Xxxxxx Xxxxxxx & Co. Incorporated $16,166,666 0.3300%
Nomura Securities International, Inc. $16,166,666 0.3300%
Class A-7 Certificates
Underwriters Principal Amount Underwriting
Discount
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $16,766,670 0.3500%
Incorporated
Bear, Xxxxxxx & Co. Inc. $16,766,666 0.3500%
Credit Suisse First Boston Corporation $16,766,666 0.3500%
Greenwich Capital Markets, Inc. $16,766,666 0.3500%
Xxxxxx Xxxxxxx & Co. Incorporated $16,766,666 0.3500%
Nomura Securities International, Inc. $16,766,666 0.3500%
Class A-8 Certificates
Underwriters Underwriting
Principal Amount Discount
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $235,000,000 0.2400%
Incorporated
Class A-9 Certificates
Underwriters Principal Amount Underwriting
Discount
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $23,900,000 0.2000%
Incorporated
Bear, Xxxxxxx & Co. Inc. $23,900,000 0.2000%
ContiFinancial Services Corporation $15,000,000 0.2000%
Credit Suisse First Boston Corporation $23,900,000 0.2000%
Greenwich Capital Markets, Inc. $23,900,000 0.2000%
Xxxxxx Xxxxxxx & Co. Incorporated $23,900,000 0.2000%
Nomura Securities International, Inc. $23,900,000 0.2000%
Class A-10 IO Certificates
Underwriters Percentage Interest Underwriting
Discount
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx 100% 0.5000%
Incorporated
Class B Certificates
Underwriters Principal Amount Underwriting
Discount
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $11,666,670 0.6000%
Incorporated
Bear, Xxxxxxx & Co. Inc. $11,666,666 0.6000%
Credit Suisse First Boston Corporation $11,666,666 0.6000%
Greenwich Capital Markets, Inc. $11,666,666 0.6000%
Xxxxxx Xxxxxxx & Co. Incorporated $11,666,666 0.6000%
Nomura Securities International, Inc. $11,666,666 0.6000%
EXHIBIT A
[LETTERHEAD OF CONTIFINANCIAL CORPORATION]
June 9, 1998
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated
As Representative of the Several Underwriters
World Financial Center
North Tower
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 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 Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as Representative
of the Several Underwriters, with its principal office at World Financial
Center, North Tower, 000 Xxxxx 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 June 9, 1998, between Depositor and Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, 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 June , 1998
XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX INCORPORATED
as representative of the Several Underwriters
By:
------------------------------------------
Name:
Title:
