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EXECUTION COPY
AMRESCO RESIDENTIAL SECURITIES CORPORATION
AND
PRUDENTIAL SECURITIES INCORPORATED
As Representative of the several Underwriters
UNDERWRITING AGREEMENT
FOR
AMRESCO RESIDENTIAL SECURITIES CORPORATION MORTGAGE LOAN TRUST 1996-5
MORTGAGE LOAN PASS THROUGH CERTIFICATES,
CLASS A-1 FIXED RATE CERTIFICATES
CLASS A-2 FIXED RATE CERTIFICATES
CLASS A-3 FIXED RATE CERTIFICATES
CLASS A-4 FIXED RATE CERTIFICATES
CLASS A-5 FIXED RATE CERTIFICATES
CLASS A-6 FIXED RATE CERTIFICATES
CLASS A-7 FIXED RATE CERTIFICATES
CLASS A-8 ADJUSTABLE RATE CERTIFICATES
December 4, 0000
XXXXXXX XXXXXXXXXXX SECURITIES CORPORATION MORTGAGE LOAN TRUST 1996-5
MORTGAGE LOAN PASS THROUGH CERTIFICATES,
CLASS A-1 FIXED RATE CERTIFICATES
CLASS A-2 FIXED RATE CERTIFICATES
CLASS A-3 FIXED RATE CERTIFICATES
CLASS A-4 FIXED RATE CERTIFICATES
CLASS A-5 FIXED RATE CERTIFICATES
CLASS A-6 FIXED RATE CERTIFICATES
CLASS A-7 FIXED RATE CERTIFICATES
CLASS A-8 ADJUSTABLE RATE CERTIFICATES
UNDERWRITING AGREEMENT
----------------------
December 4, 1996
Prudential Securities Incorporated
as Representative of the
several Underwriters
Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Ladies and Gentlemen:
AMRESCO Residential Securities Corporation (the "Depositor"), a
Delaware corporation, has authorized the issuance and sale of Mortgage Loan
Pass-Through Certificates, Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7 and Class A-8 (the "Offered Certificates") and the
Class S, the Class B-IO and the Class R Certificates (the "Subordinated
Certificates," and collectively with the Offered Certificates, the
"Certificates"), evidencing interests in a pool of fixed and adjustable rate
mortgage loans (the "Mortgage Loans"). The Mortgage Loans are secured primarily
by first deeds of trust or mortgages on one- to four-family residential
properties.
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. Prudential Securities Incorporated is acting as
representative of the several Underwriters and in such capacity, is hereinafter
referred to as the "Representative."
The Certificates will be issued under a pooling and servicing agreement
(the "Pooling and Servicing Agreement"), dated as of December 1, 1996 among the
Depositor, AMRESCO Residential Capital Markets, Inc., as Seller (the "Seller"),
Advanta Mortgage Corp. USA ("Advanta") and Option One Mortgage Corporation
("Option One") as Servicers (the "Servicers") and The Chase Manhattan Bank, as
trustee (the "Trustee"). The Certificates will evidence fractional undivided
interests in the trust (the "Trust"). The assets of the Trust will initially
include, among other things, a pool of fixed and adjustable rate Mortgage Loans
(the "Initial Mortgage Loans") and such amounts as may be held by the Trustee in
the Pre-Funding Account (the "Pre-Funding Account"), the Capitalized Interest
Account (the "Capitalized Interest Account") and any other accounts held by the
Trustee for the Trust. The Initial Mortgage Loans will be acquired, in part, (i)
from New Century Mortgage Corporation ("New Century")
pursuant to a Continuing Loan Purchase Agreement dated April 5, 1996 between New
Century, as seller and the Seller, as buyer, as supplemented by the Supplement
dated December 18, 1996 (the "New Century Purchase Agreement"), (ii) from Option
One pursuant to a Continuing Loan Purchase Agreement dated March 1, 1996 between
Option One, as seller and the Seller, as buyer, as supplemented by the
Supplement dated December 18, 1996 (the "Option One Purchase Agreement"), (iii)
from First Colony Financial Group ("First Colony") pursuant to the Continuing
Loan Purchase Agreement dated August 15, 1996 (the "First Colony Transfer
Agreement") between First Colony, as seller and the Seller, as buyer, as
supplemented by the Supplement dated December 18, 1996 (the "First Colony
Purchase Agreement"), (iv) from Quality Mortgage USA, Inc. ("Quality") pursuant
to the Continuing Loan Purchase Agreement dated as of October 25, 1996, between
Quality, as seller and the Seller, as buyer, as supplemented by the Supplement
dated December 18, 1996 (the "Quality Purchase Agreement"), (v) from First
Franklin Corporation ("First Franklin") pursuant to the Continuing Loan Purchase
Agreement dated as of August 20, 1996, between First Franklin, as seller and the
Seller, as buyer, as supplemented by the Supplement dated December 18, 1996 (the
"First Franklin Purchase Agreement"), (vi) from Highland Federal Bank, a federal
savings bank ("Highland"), pursuant to the Continuing Loan Purchase Agreement
dated as of September 1, 1996, between Highland, as seller and the Seller, as
buyer, as supplemented by the Supplement dated December 18, 1996 (the "Highland
Purchase Agreement"), (vii) from Weyerhaeuser Mortgage Company ("Weyerhaeuser")
pursuant to the Continuing Loan Purchase Agreement dated as of October 1, 1996,
between Weyerhaeuser, as seller and the Seller, as buyer, as supplemented by the
Supplement dated December 18, 1996 (the "Weyerhaeuser Purchase Agreement"),
(viii) from DLJ Mortgage Capital, Inc. ("DLJ") pursuant to the Assignment,
Assumption and Recognition Agreement dated as of September 12, 1996, between
DLJ, as seller and the Seller, as buyer, along with that certain Master Mortgage
Loan Purchase Agreement dated October 31, 1995, between BNC Mortgage, Inc.
("BNC"), as seller and DLJ, as buyer, as supplemented by the Supplement dated
December 18, 1996 (the "DLJ Purchase Agreement I"), (ix) from DLJ pursuant to
the Assignment, Assumption and Recognition Agreement dated as of September 25,
1996 between DLJ, as seller and the Seller, as buyer, along with that certain
Master Mortgage Loan Purchase Agreement dated October 31, 1995, between BNC, as
seller and DLJ, as buyer, as supplemented by the Supplement dated December 18,
1996 (the "DLJ Purchase Agreement II"), and (x) from DLJ pursuant to the
Assignment, Assumption and Recognition Agreement dated as of September 27, 1996,
between DLJ, as seller and the Seller, as buyer, along with that certain Master
Mortgage Loan Purchase Agreement dated September 29, 1995, between Quality, as
seller and DLJ, as buyer, as supplemented by the Supplement dated December 18,
1996 (the "DLJ Purchase Agreement III" and together with the New Century
Purchase Agreement, the Option One Purchase Agreement, the First Colony Purchase
Agreement, the Quality Purchase Agreement, the First Franklin Purchase
Agreement, the Highland Purchase Agreement, the Weyerhaeuser Purchase Agreement,
the DLJ Purchase Agreement I and the DLJ Purchase Agreement II, the "Mortgage
Loan Purchase Agreements").
On the Closing Date, approximately $141,782,321 will be deposited by
the Depositor in the name of the Trustee in the Pre-Funding Account from the
sale of the Certificates. It is intended that additional Mortgage Loans
satisfying the criteria specified in the Pooling and Servicing Agreement (the
"Subsequent Mortgage Loans") will be purchased by the Trust for inclusion in the
Trust from the Depositor from time to time on or before February 28, 1997 from
funds on deposit in the Pre-Funding Account at the time of execution and
delivery of each Subsequent Transfer Agreement ("Subsequent Transfer
Agreement"). Funds in the Capitalized Interest Account will be applied by the
Trustee to cover shortfalls in interest during the Funding Period. The Offered
Certificates will initially represent an undivided ownership interest in the sum
of (i) a pool of Initial Mortgage Loans in an amount of $408,217,679 as of the
close of business on December 1, 1996 (the "Cut-Off Date") and (ii)
approximately $141,782,321 on deposit in the Pre-Funding Account. The Offered
Certificates will also have the benefit of two Certificate Insurance Policies
(the "Certificate Insurance Policies") issued by MBIA Insurance Corporation, a
New York stock insurance company (the "Certificate Insurer"). The Certificate
Insurance Policies will be
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issued pursuant to the insurance agreement (the "Insurance Agreement") dated as
of December 1, 1996 among the Certificate Insurer, the Depositor and the
Trustee. A form of the Pooling and Servicing Agreement has been filed as an
exhibit to the Registration Statement (hereinafter defined).
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.
SECTION I. Representations and Warranties of the Depositor. The
Depositor represents and warrants to, and agrees with the Underwriters that:
A. A Registration Statement on Form S-3 (No. 333-8687), has (i) been
prepared by the Depositor in conformity with the requirements of the Securities
Act of 1933 (the "Securities Act") and the rules and regulations (the "Rules and
Regulations") of the United States Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act. Copies of
such Registration Statement have been delivered by the Depositor to the
Representative. 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 July 28, 1996; 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, 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. 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.
B. The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations. The Registration Statement, as of the
Effective Date thereof and of any amendment thereto, did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
Prospectus as of its date, and as amended or supplemented as of the Closing Date
does not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that no representation or warranty is made as to information contained in or
omitted from the
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Registration Statement or the Prospectus in reliance upon and in conformity with
written information furnished to the Depositor in writing by the Underwriters
expressly for use therein.
C. The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact 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, or any development
involving a prospective material adverse change, in the general affairs,
management, financial condition, or results of operations of the Depositor,
otherwise than as set forth or contemplated in the Prospectus as supplemented or
amended as of the Closing Date.
E. The Depositor has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, and has all
power and authority necessary to own or hold its properties, to conduct the
business in which it is engaged and to enter into and perform its obligations
under this Agreement, the Pooling and Servicing Agreement and the Insurance
Agreement or any Subsequent Transfer 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, the Insurance
Agreement, the Certificates, or any Subsequent Transfer Agreement, (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 Insurance Agreement, this Agreement or any Subsequent Transfer Agreement, as
the case may be, (d) which might individually or in the aggregate materially and
adversely affect the performance by the Depositor of its obligations under, or
the validity or enforceability of, the Pooling and Servicing Agreement, this
Agreement, and the Insurance Agreement, the Certificates or any Subsequent
Transfer Agreement or (e) which might adversely affect the federal income tax
attributes of the Certificates as described in the Prospectus.
G. This Agreement has been, and the Pooling and Servicing Agreement,
each Subsequent Transfer Agreement and the Insurance 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 Insurance Agreement when executed and
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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 and the Insurance Agreement,
limitations of public policy under applicable securities laws.
H. The execution, delivery and performance of this Agreement, the
Pooling and Servicing Agreement, any Subsequent Transfer Agreement and the
Insurance Agreement by the Depositor and the consummation of the transactions
contemplated hereby and thereby, compliance with the provisions thereof, 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, nor will such actions result in any violation of the
provisions of the articles of incorporation or by-laws of the Depositor (which
breach or violation would have a material adverse effect on the business,
operations or financial condition 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. The
Depositor is not a party to, bound by, or in breach or violation of, any
indenture or other agreement or instrument, or subject to or in violation of any
statute, order, rule or regulation of any court, governmental agency or body or
other tribunal having jurisdiction over the Depositor, which materially and
adversely affects, or is reasonably likely in the future to materially and
adversely affect, (i) the ability of the Depositor to perform its obligations
under this Agreement, the Pooling and Servicing Agreement and the Insurance
Agreement or (ii) the business, operations, results of operations, financial
position, income, properties or assets of the Depositor.
I. The Depositor has no reason to know that Deloitte & Touche, LLP are
not independent public accountants with respect to the Depositor as required by
the Securities Act and the Rules and Regulations.
J. The direction by the Depositor to the Trustee to execute,
authenticate, issue and deliver the Certificates has been duly authorized by the
Depositor, and assuming the Trustee has been duly authorized to do so, when
executed, authenticated, issued and delivered by the Trustee in accordance with
the Pooling and Servicing Agreement, the Certificates will be validly issued and
outstanding and will be entitled to the benefits provided by the Pooling and
Servicing Agreement.
K. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States is required for the issuance of the Certificates and the sale of the
Offered Certificates to the Underwriters, or the consummation by the Depositor
of the other transactions contemplated by this Agreement, the Pooling and
Servicing Agreement, any Subsequent Transfer Agreement and the Insurance
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 there are no proceedings pending
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with respect to which the Depositor has received service of process or, to the
best knowledge of the Depositor threatened, 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 Mortgage Loans
conveyed by the Seller, 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 Mortgage
Loans, 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 Mortgage Loans to the Trustee and to sell the Offered
Certificates to the Underwriters. Upon execution and delivery of the Pooling and
Servicing Agreement by the Trustee, the Trustee will have acquired beneficial
ownership of all of the Depositor's right, title and interest in and to the
Mortgage Loans. Upon delivery to the Underwriters of the Offered Certificates,
the Underwriters will have good title to the Offered Certificates, free of any
Liens.
N. As of the Cut-Off Date, each of the Mortgage Loans will meet the
eligibility criteria described in the Prospectus and will conform to the
descriptions thereof contained in the Prospectus.
O. Neither the Depositor nor the Trust created by the Pooling and
Servicing Agreement is an "investment company" within the meaning of such term
under the Investment Company Act of 1940 (the "1940 Act") and the rules and
regulations of the Commission thereunder.
P. At the Closing Date, the Offered Certificates, the Mortgage Loan
Purchase Agreements and the Pooling and Servicing Agreement will conform in all
material respects to the descriptions thereof contained in the Prospectus.
Q. At the Closing Date, the Offered Certificates shall have been rated
in the highest rating category by at least two nationally recognized rating
agencies.
R. Any taxes, fees and other governmental charges in connection with
the execution, delivery and issuance of this Agreement, the Pooling and
Servicing Agreement, the Insurance Agreement and the Certificates have been paid
or will be paid at or prior to the Closing Date.
S. At the Closing Date, each of the representations and warranties of
the Depositor set forth in the Pooling and Servicing Agreement and the Insurance
Agreement will be true and correct in all material respects.
T. The transfer of the Mortgage Loans to the Trust at the Closing Date
and, if applicable, on each Subsequent Transfer Date, will be treated by the
Depositor for financial accounting and reporting purposes as a sale of assets
and not as a pledge of assets to secure debt.
U. The Depositor is not aware of (i) any request by the Commission for
any further amendment of the Registration Statement or the Prospectus or for any
additional information, or (ii) any notification with respect to the suspension
of the qualification of the Certificates for sale in any jurisdiction or the
initiating or threatening of any proceeding for such purpose.
V. The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as amended.
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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.
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 set forth opposite their names on Schedule A, at the
purchase price or prices set forth in Schedule A.
SECTION III. Delivery and Payment. Delivery of and payment for the
Offered Certificates to be purchased by the Underwriters shall be made at the
offices of the Depositor in Dallas, Texas or at such other place as shall be
agreed upon by the Representative and the Depositor at 10:00 A.M. central time
on December 18, 1996 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
Underwriters 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. central 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 agrees as follows:
A. To prepare the Prospectus in a form approved by the Underwriters and
to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the second business day
following the availability of the Prospectus to the Underwriters; to make no
further amendment or any supplement to the Registration Statement or to the
Prospectus prior to the Closing Date except as permitted herein; to advise the
Underwriters, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective
prior to the Closing Date or any supplement to the Prospectus or any amended
Prospectus has been filed prior to the Closing Date and to furnish the
Underwriters with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the Depositor
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and, for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Offered Certificates; to promptly advise the Underwriters of its receipt of
notice of the issuance by the Commission of any stop order or of: (i) any order
preventing or suspending the use of the Prospectus; (ii) the suspension of the
qualification of the Offered Certificates for offering or sale in any
jurisdiction; (iii) the initiation of or threat of any proceeding for any such
purpose; (iv) any request by the Commission for the amending or supplementing of
the Registration Statement or the Prospectus or for additional information. In
the event of the issuance of any stop order or of any order
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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 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 Effective Time in connection with the offering or sale of the Offered
Certificates, and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, the Depositor shall notify the Underwriters
and, upon any Underwriter's request, shall file such document and prepare and
furnish without charge to the Underwriters and to any dealer in securities as
many copies as the Underwriters may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which corrects such
statement or omission or effects such compliance, and in case the Underwriters
are required to deliver a Prospectus in connection with sales of any of the
Offered Certificates at any time nine months or more after the Effective Time,
upon the request of an Underwriter but at its expense, the Depositor shall
prepare and deliver to such Underwriter as many copies as such Underwriter may
reasonably request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Securities Act. If such amendment or supplement to the
Prospectus is required to be contained in a post-effective amendment to the
Registration Statement, the Depositor will use its best efforts to cause such
amendment of the Registration Statement to be made effective as soon as
possible.
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.
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)
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.
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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. 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
8.29 of the Pooling and Servicing Agreement; (iv) the monthly reports furnished
to the Certificateholders pursuant to Section 7.09 of the Pooling and Servicing
Agreement; and (v) from time to time, any other information concerning the Trust
filed with any government or regulatory authority that is otherwise publicly
available, as the Representative may reasonably request.
I. To apply the net proceeds from the sale of the Offered Certificates
in the manner set forth in the Prospectus.
J. During a period of seven calendar days from the Closing Date,
neither the Depositor nor any trust established, directly or indirectly, by the
Depositor will, without the Representative's prior written consent (which
consent shall not be unreasonably withheld), offer or sell mortgage pass-through
certificates backed by mortgage loans, except pursuant to this Agreement.
K. The Depositor will enter into the applicable agreements, to which it
is a party pursuant to the Pooling and Servicing Agreement, on or prior to the
Closing Date and will cause to be delivered to the Trustee the Insurance
Policies issued by the Certificate Insurer.
L. On each Subsequent Transfer Date, the Depositor shall cause its
special counsel to deliver a favorable opinion substantially to the effect set
forth in Section VI.G (except as it applies to subdivisions 5 and 6 therein)
hereof, appropriately modified to refer to the applicable Subsequent Mortgage
Loans, Subsequent Transfer Agreement, Subsequent Cut-Off Date and Subsequent
Transfer Date.
M. The Depositor will cause the Computational Materials (as defined in
Section VIII.D below) with respect to the Certificates which are delivered to
the Depositor as provided in Section VIII.D below to be filed with the
Commission on a Current Report on Form 8-K (the "Current Report") not later than
the date on which such materials are required to be filed pursuant to the
Xxxxxx/PSA Letters (as defined in Section VIII.D below).
SECTION VI. Conditions to the Underwriters' Obligations. The
obligations of the Underwriters to purchase the Offered Certificates pursuant to
this Agreement are subject to: (i) the accuracy on and as of the Closing Date of
the representations and warranties on the part of the Depositor herein contained
(including those representations and warranties set forth in the Pooling and
Servicing Agreement and incorporated herein); (ii) the performance by the
Depositor of all of its obligations hereunder; (iii) the accuracy of the
statements of the Depositor made in any certificate or other document delivered
pursuant to the provisions hereof; and (iv) the following conditions as of the
Closing Date:
9
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. The Prospectus shall have been filed pursuant to Rule
424(b).
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 Xxxxx & Xxxxxx,
counsel for the Underwriters, is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
C. All corporate proceedings and other legal matters relating to the
authorization, form and validity of this Agreement, the Pooling and Servicing
Agreement, the Insurance Agreement, the Certificates, the Registration Statement
and the Prospectus, and all other legal matters relating to this Agreement and
the transactions contemplated hereby shall be satisfactory in all respects to
counsel for the Underwriters, and the Depositor shall have furnished to such
counsel all documents and information that they may reasonably request to enable
them to pass upon such matters. The Representative shall have received the
Pooling and Servicing Agreement and the Offered Certificates in form and
substance satisfactory to the Representative, duly executed by all signatories
required pursuant to the respective terms thereof.
X. Xxxxx & Xxxxxx shall have furnished to the Underwriters their
written opinion, as counsel to the Depositor, addressed to the Underwriters and
dated the Closing Date, in form and substance satisfactory to the Underwriters,
to the effect that:
1. 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.
2. The Registration Statement and any amendments thereto have become
effective under the 1933 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 1933 Act and
the rules and regulations thereunder, and such counsel does not know of any
amendment to the Registration Statement required to be filed.
3. 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.
4. The statements set forth in the Basic Prospectus under the captions
"Description of The Securities" and in the Prospectus Supplement under the
captions "Description of The Class A Certificates" and "The Pooling and
Servicing Agreement," to the extent such statements purport to summarize certain
10
provisions of the Certificates or of the Pooling and Servicing Agreement, are
fair and accurate in all material respects.
5. The statements set forth in the Basic Prospectus and the Prospectus
Supplement under the captions "ERISA Considerations," "Certain Federal Income
Tax Consequences," "Legal Investment Matters" and, "Certain Legal Aspects of the
Mortgage Assets" to the extent that they constitute matters of federal law,
provide a fair and accurate summary of such law or conclusions.
6. The Pooling and Servicing Agreement and the Mortgage Loan Purchase
Agreements conform in all material respects to the description thereof contained
in the Prospectus and the Pooling and Servicing Agreement 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.
7. Neither the Depositor nor the Trust is an "investment company" or
under the "control" of an "investment company" as such terms are defined in the
1940 Act.
8. Assuming that the Trustee causes certain assets of the REMIC 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 the parties to the Pooling and Servicing Agreement comply with the terms
thereof, such assets of the REMIC Estate will be treated as a REMIC, the Offered
Certificates, the Class S Certificates and the Class B-IO Certificates will be
treated as the "regular interests" in the REMIC and the Class R Certificates
will be treated as the sole "residual interest" in the REMIC. Neither the Trust
nor certain assets and accounts are subject to tax upon its income or assets by
any taxing authority of the State of New York or the City of New York.
9. Assuming that the Offered Certificates are rated at the time of
issuance in one of the two highest rating categories by a nationally recognized
statistical rating organization, the Offered Certificates at such time will be a
"mortgage related security" as such term is defined in Section 3(a)(41) of the
Securities Exchange Act of 1934, as amended.
10. To the best of such counsel's knowledge, there are no actions,
proceedings or investigations pending that would adversely affect the status of
the REMIC Estate as a REMIC.
11. As a consequence of the qualification of the REMIC Estate as a
REMIC, the Offered Certificates will be treated as "qualifying real property
loans" under Section 593(d) of the Code, "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 the REMIC Estate as a REMIC 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.
12. The Certificates will, when issued, conform to the description
thereof contained in the Prospectus.
Such counsel shall also have furnished to the Underwriters a written statement,
addressed to the Underwriters and dated the Closing Date, in form and substance
satisfactory to the Underwriters to the effect that no facts have come to the
attention of such counsel which lead them to believe that: (a) the Registration
Statement, at the time such Registration Statement became effective, contained
an untrue
11
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 (except as to statements set forth in the Prospectus
Supplement under the caption "The Certificate Insurance Policies and the
Certificate Insurer"); 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 & Xxxxxx, special counsel to the Depositor, addressed
to the Depositor and satisfactory to the Certificate Insurer, Standard & Poor's,
A Division of The XxXxxx-Xxxx Companies, Xxxxx'x Investors Service Inc., Fitch
Investors Service, L.P. and the Underwriters, with respect to certain matters
relating to the transfer of the Mortgage Loans to the Depositor and from the
Depositor to the Trust, and such counsel shall have consented to reliance on
such opinion by the Certificate Insurer, Standard & Poor's, A Division of The
XxXxxx-Xxxx Companies, Xxxxx'x Investors Service Inc., Fitch Investors Service,
L.P. and the Underwriters as though such opinion had been addressed to each such
party.
F. Xxxxx Xxxxxxxxxx, counsel for Advanta and Xxxxxxxx & Xxxxxxxx,
counsel for Option One, each shall have furnished to the Underwriters their
written opinion, as counsel to the related Servicer, addressed to the
Underwriters and the Depositor and dated the Closing Date, in form and substance
satisfactory to the Underwriters, to the effect that:
1. Each Servicer is validly existing in good standing as a corporation
under the laws of its State of incorporation.
2. Each Servicer has full corporate power and authority to serve in the
capacity of servicers of the related Mortgage Loans as contemplated in the
Pooling and Servicing Agreement.
3. The Pooling and Servicing Agreement and the Insurance Agreement have
been duly authorized, executed and delivered by each Servicer, and, assuming the
due authorization, execution and delivery of such agreements by the other
parties thereto, constitute the legal, valid and binding agreements of each
Servicer, enforceable against them in accordance with their 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.
4. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body having
jurisdiction over either Servicer is required for the consummation by either of
them of the transactions contemplated by the Pooling and Servicing Agreement and
the Insurance Agreement, except such consents, approvals, authorizations,
registrations and qualifications as have been obtained.
12
5. The execution, delivery or performance by each Servicer of the
Pooling and Servicing Agreement or the Insurance Agreement and the transactions
contemplated thereby do not (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 such Servicer; (ii) any term or provision of any
material agreement, deed of trust, mortgage loan agreement, contract, instrument
or indenture, or other agreement to which such Servicer is a party or is bound
or to which any of the property or assets of such Servicer 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 such Servicer; or (iv)
any law, rule or regulations applicable to such Servicer; or (B) to the best of
such firm's knowledge without independent investigation, results in the creation
or imposition of any lien, charge or encumbrance upon the Trust Estate or upon
the Certificates.
6. There are, to the best of such counsel's knowledge without
independent investigation, no actions, proceedings or investigations pending or
threatened against a Servicer before any court, administrative agency or other
tribunal (a) asserting the validity of the Pooling and Servicing Agreement, the
Insurance 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 the
Servicers of its obligations under, or the validity or enforceability of, the
Pooling and Servicing Agreement, or the Insurance Agreement.
G. Counsel for the Depositor and the Seller (which may be in-house
counsel) shall have furnished to the Underwriters such counsel's written
opinion, addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Underwriters, to the effect that:
1. 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 duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property or the conduct of
its business requires such qualification (except where any such failure would
not have a material adverse effect on the Depositor's ability to perform its
obligations under this Agreement, the Pooling and Servicing Agreement or the
Insurance Agreement), and 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, the Pooling and Servicing
Agreement and the Insurance Agreement, and to cause the Certificates to be
issued.
2. 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 change in the financial condition
of the Depositor or which might materially and adversely affect the properties
or assets, taken as a whole, the Depositor.
3. This Agreement, the Pooling and Servicing Agreement, the
Indemnification Agreement dated as of December 18, 1996 among the Depositor and
each of the Underwriters (the "Indemnification Agreement") and the Insurance
Agreement have been duly authorized, executed and delivered by the Depositor and
the Subsequent Transfer Agreements have been duly authorized, and when duly
executed and delivered by the Depositor and, assuming the due authorization,
execution and delivery of such agreements by the other parties thereto, such
agreements constitute and in the case of any Subsequent Transfer Agreement will
constitute valid and binding obligations, enforceable against the Depositor in
accordance with their respective terms, subject as to enforceability to (x)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
13
generally, (y) general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law) and (z) with respect to rights of
indemnity under this Agreement and the Insurance Agreement, limitations of
public policy under applicable securities laws.
4. The execution, delivery and performance of this Agreement, the
Pooling and Servicing Agreement, the Insurance Agreement and each Subsequent
Transfer Agreement by the Depositor, the consummation of the transactions
contemplated hereby and thereby, and the issuance and delivery of the
Certificates (i) 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, (ii)
nor will such actions result in a violation of the provisions of the articles of
incorporation or by-laws of the Depositor, which breach or violation would have
a material adverse effect on the business, operations or financial condition 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) and (iii) nor will such actions result in the creation or
imposition of any lien, charge or encumbrance upon the Trust Estate or upon the
Certificates, except as otherwise contemplated by the Pooling and Servicing
Agreement.
5. The direction by the Depositor to the Trustee to execute, issue,
authenticate and deliver the Certificates has been duly authorized by the
Depositor and, assuming that the Trustee has been duly authorized to do so, when
executed, authenticated and delivered by the Trustee in accordance with the
Pooling and Servicing Agreement, the Certificates will be validly issued and
outstanding and will be entitled to the benefits of the Pooling and Servicing
Agreement.
6. 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 Pooling and
Servicing Agreement and the Insurance Agreement, except such consents,
approvals, authorizations, registrations or qualifications as may be required
under the 1933 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.
7. There are no actions, proceedings or investigations pending with
respect to which the Depositor has received service of process before or, to the
best of such counsel's knowledge, without independent investigation, to the best
of such counsel's knowledge without independent investigation, threatened by any
court, administrative agency or other tribunal to which the Depositor is a party
or of which any of its properties is the subject: (a) which if determined
adversely to the Depositor would have a material adverse effect on the business,
results of operations or financial condition of the Depositor; (b) asserting the
invalidity of the Pooling and Servicing Agreement, the Insurance 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 Insurance 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 Insurance Agreement,
this Agreement or the Certificates.
8. 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.
14
9. AMRESCO Residential Capital Markets, Inc. (the "Seller") has been
duly organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its business requires such
qualification, and has all power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged and to enter into
and perform its obligations under the Mortgage Loan Purchase Agreements.
10. The Seller 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 Seller 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 Seller or which might materially and
adversely affect the properties or assets, taken as a whole, of the Seller.
11. The Mortgage Loan Purchase Agreements have been duly authorized,
executed and delivered by the Seller and, assuming the due authorization,
execution and delivery of such agreements by the parties thereto other than the
Seller, such agreements will constitute valid and binding obligations,
enforceable against the Seller 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).
12. The execution, delivery and performance of the Mortgage Loan
Purchase Agreements by the Seller and the consummation of the transactions
contemplated thereby 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 Seller is a party or by which the Seller is bound or to
which any of the property or assets of the Seller or any of its subsidiaries is
subject, which breach or violation would have a material adverse effect on the
business, operations or financial condition of the Seller, nor will such actions
result in a violation of the provisions of the articles of incorporation or
by-laws of the Seller or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Seller or any
of its properties or assets, which breach or violation would have a material
adverse effect on the business, operations or financial condition of the Seller.
13. The assignment of rights under the Mortgage Loan Purchase
Agreements by the Seller to the Depositor and by the Depositor to the Trust is
effective to permit the Trustee to exercise the Seller's rights thereunder.
H. The Underwriters shall have received the favorable opinion of
counsel (which may be in-house counsel) to the Trustee, dated the Closing Date,
addressed to the Underwriters and in form and scope satisfactory to counsel to
the Underwriters, to the effect that:
1. The Trustee is a banking corporation duly incorporated and validly
existing under the laws of the State of New York.
2. The Trustee has the full corporate trust power to execute, deliver
and perform its obligations under the Pooling and Servicing Agreement.
15
3. The execution and delivery by the Trustee of the Pooling and
Servicing Agreement and the performance by the Trustee of its obligations under
the Pooling and Servicing Agreement have been duly authorized by all necessary
corporate action of the Trustee.
4. The Pooling and Servicing Agreement is a valid and legally binding
obligation of the Trustee enforceable against the Trustee.
5. The execution and delivery by the Trustee of the Pooling and
Servicing Agreement does not (a) violate the organization certificate of the
Trustee or the By-laws of the Trustee, (b) to such counsel's knowledge, violate
any judgment, decree or order of any New York or United States federal court or
other New York or United States federal governmental authority by which the
Trustee is bound or (c) assuming the non-existence of any judgment, decree or
order of any court or other governmental authority that would be violated by
such execution and delivery, violate any New York or United States federal
statute, rule or regulation or require any consent, approval or authorization of
any New York or United States federal court or other New York or United States
federal governmental authority.
6. The Certificates have been duly authenticated, executed and
delivered by the Trustee.
7. If the Trustee were acting in the stead of either 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 either
Servicer under the Pooling and Servicing Agreement.
8. To the best of such counsel's knowledge, there are no actions,
proceedings or investigations pending or threatened against or affecting the
Trustee before or by any court, arbitrator, administrative agency or other
governmental authority which, if decided adversely to the Trustee, would
materially and adversely affect the ability of the Trustee to carry out the
transactions contemplated in the Pooling and Servicing Agreement.
I. The Underwriters shall have received the favorable opinion or
opinions, dated the date of the Closing Date, of counsel for the Underwriters,
with respect to the issue and sale of the Offered Certificates, this Agreement,
the Prospectus and such other related matters as the Underwriters may reasonably
require.
J. The Underwriters shall have received the favorable opinion dated the
Closing Date, from Xxxxx Xxxx, counsel to the Certificate Insurer in form and
scope satisfactory to counsel for the Underwriters, substantially to the effect
that:
1. The Certificate Insurer is a stock insurance corporation duly
incorporated, validly existing, and in good standing under the laws of the State
of New York. The Certificate Insurer is validly licensed and authorized to issue
the Certificate Insurance Policies and perform its obligations under the
Insurance Agreement in accordance with the terms thereof, under the laws of the
State of New York.
2. The Certificate Insurer has the corporate power to execute and
deliver, and to take all action required of it under the Insurance Agreement and
the Certificate Insurance Policies.
3. The execution, delivery and performance by the Certificate Insurer
of the Certificate Insurance Policies and Insurance Agreement is within the
corporate power of the Certificate Insurer and has been authorized by all
necessary corporate action on the part of the Certificate Insurer, and does not
require the consent or approval of, the giving of notice to, the prior
registration with, or the taking of
16
any other action in respect of any state or other governmental agency or
authority which has not previously been obtained or effected.
4. The Certificate Insurance Policies and Insurance Agreement have been
duly authorized, executed and delivered by the Certificate Insurer and
constitute the legal, valid and binding agreement of the Certificate Insurer,
enforceable against the Certificate Insurer in accordance with its terms
subject, as to enforcement, to (x) bankruptcy, reorganization, insolvency,
moratorium and other similar laws relating to or affecting the enforcement of
creditors' rights generally, including, without limitation, laws relating to
fraudulent transfers or conveyances, preferential transfers and equitable
subordination, presently or from time to time in effect and general principles
of equity (regardless of whether such enforcement is considered in a proceeding
in equity or at law), as such laws may be applied in any such proceeding with
respect to the Certificate Insurer and (y) the qualification that the remedy of
specific performance and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceedings with respect thereto may be brought.
5. To the extent the Certificate Insurance Policies constitutes a
security within the meaning of Section 2(1) of the Securities Act, it is a
security that is exempt from the registration requirements of the Act.
6. The information set forth under the caption "THE CERTIFICATE
INSURANCE POLICIES AND THE CERTIFICATE INSURER" in the Prospectus Supplement,
insofar as such information constitutes a description of the Certificate
Insurance Policies, accurately summarizes the Certificate Insurance Policies.
K. The Depositor shall have furnished to the Underwriters a
certificate, dated the Closing Date and signed by the Chairman of the Board, the
President or a Vice President of the Depositor to the extent that the signer of
such certificate has carefully examined the Registration Statement (excluding
any documents incorporated therein by reference), the Pooling and Servicing
Agreement and this Agreement and that, to the best of his or her knowledge based
upon reasonable investigation:
1. The representations and warranties of the Depositor in this
Agreement, the Pooling and Servicing Agreement and all related agreements are
true and correct as of the Closing Date; and the Depositor has complied with all
agreements and satisfied all the conditions on its part which are to have been
complied with on or prior to the Closing Date.
2. There has been no amendment or other document filed affecting the
certificate of incorporation or bylaws of the Depositor since November 9, 1995
and no such amendment has been authorized. No event has occurred since December
6, 1996 which has affected the good standing of the Depositor under the laws of
the State of Delaware.
3. 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 from September 30, 1996.
4. There are no actions, suits or proceedings pending with respect to
which it has received service of process or, to the best of such officer's
knowledge, threatened against or affecting the Depositor which if adversely
determined, individually or in the aggregate, would be reasonably likely to
adversely affect the Depositor's obligations under the Pooling and Servicing
Agreement or this Agreement in any material way; and no merger, liquidation,
dissolution or bankruptcy of the Depositor is pending or contemplated.
17
L. The Trustee shall have furnished to the Underwriters 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.
M. 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.
N. The Offered Certificates shall have been rated "AAA" by Standard &
Poor's, "Aaa" by Xxxxx'x Investors Service and "AAA" by Fitch Investors Service,
L.P.
O. 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.
P. 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.
Q. Subsequent to the execution and delivery of this Agreement none of
the following shall have occurred: (i) trading in securities generally on the
New York Stock Exchange, the American Stock Exchange or the over-the counter
market shall have been suspended or minimum prices shall have been established
on either of such exchanges or such market by the Commission, by such exchange
or by any other regulatory body or governmental authority having jurisdiction;
(ii) a banking moratorium shall have been declared by Federal or state
authorities; (iii) the United States shall have become engaged in hostilities,
there shall have been an escalation of hostilities involving the United States
or there shall have been a declaration of a national emergency or war by the
United States; or (iv) there shall have occurred such a material adverse change
in general economic, political or financial conditions (or the effect of
international conditions on the financial markets of the United States shall be
such) as to make it in each of the instances set forth in clauses (i), (ii),
(iii) and (iv) herein, in the reasonable judgment of the Representative,
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.
R. The Representative shall have received a letter from Deloitte &
Touche, LLP, dated on or before the Closing Date, in form and substance
satisfactory to the Representative and special counsel for the Underwriters,
addressed to each of 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 the
Depositor.
S. The Representative and special counsel for the Underwriters shall
have received copies of any opinions of counsel supplied to the rating
organizations relating to any matters with respect to the Certificates. Any such
opinions shall be dated the Closing Date and addressed to each of the
18
Underwriters or accompanied by reliance letters to the Representative or shall
state that each of the Underwriters may rely upon them.
T. On or prior to the Closing Date there shall not have occurred any
downgrading, nor shall any notice have been given of (A) any intended or
potential downgrading or (B) any review or possible change in rating the
direction of which has not been indicated, in the rating accorded the
Certificate Insurer's claims paying ability by any "nationally recognized
statistical rating organization," as such term is defined for purposes of the
Securities Act.
U. There has not occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations, since September 30, 1996, of (A) the Depositor
and its subsidiaries or (B) the Certificate Insurer, that is in the
Representative's judgment material and adverse and that makes it in the
Representative's judgment impracticable to market the Offered Certificates on
the terms and in the manner contemplated in the Prospectus.
V. Counsel for the Originators shall have furnished to the Underwriters
their written opinion addressed to the Underwriters and the Depositor and dated
the Closing Date, in form and substance satisfactory to the Underwriters, to the
effect that the respective Purchase Agreement has been duly authorized, executed
and delivered by such Originator, and assuming the due authorization, execution
and deliver of such agreements by the other parties thereto, constitutes the
legal, valid and binding agreement of such Originator, enforceable against it in
accordance with its terms, subject as to enforceability to (x) bankruptcy,
insolvency, reorganization, moratorium, receivership or other similar laws now
or hereafter in effect relating to creditors' rights generally and (y) the
qualification that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion, with respect to such remedies, of the court before which any
proceedings with respect thereto may be brought.
If any condition specified in this Section VI 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. If the transaction closes, or if the
transaction fails to close other than as a result of a failure of the
Underwriters to perform hereunder, 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 (including the Prospectus);
(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 qualifying the Certificates under the securities
laws of the several jurisdictions as provided in Section V(G) hereof and of
preparing, printing and distributing a Blue Sky Memorandum and a Legal
Investment Survey (including related fees and expenses of counsel to the
Representative); (f) any fees charged by securities rating services for rating
the Offered Certificates; (g) the cost of the
19
accountant's letter relating to the Prospectus except for expenses relating to
the accountant's audit of the loan files; (h) the fees and expenses of the
Certificate Insurer (other than the fees payable pursuant to the Pooling and
Servicing Agreement) and (i) all other costs and expenses incident to the
performance of the obligations of the Depositor (including costs and expenses of
its counsel); provided that, except as provided in this Section VII, the
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the 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 which such Underwriters choose to request
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, whether or not the transactions
contemplated hereunder are consummated, the Depositor shall cause the
Underwriters to be reimbursed for all reasonable out-of-pocket expenses.
SECTION VIII. Indemnification and Contribution. A. The Depositor agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Securities Act
or Section 12 of the Exchange 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 in the Registration Statement 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 in the Prospectus 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 specifically for inclusion therein (except to the extent that any
untrue statement or alleged untrue statement or omission or alleged omission is
a result of Seller Provided Information which is not accurate and complete in
all material respects. The foregoing indemnity agreement is in addition to any
liability which the Depositor may otherwise have to any Underwriter or any
controlling person of any of 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 or Section 12 of the
Exchange 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 Prospectus, or any amendment thereof or supplement
thereto, or (ii) the omission or alleged omission to
20
state therein a material fact required to be stated therein or necessary to make
the statements in the Prospectus, when considered in conjunction with the
Prospectus, and 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, provided, however, that no Underwriter
shall be liable to the extent that such untrue statements or alleged untrue
statement or omission or alleged omission is a result of Seller Provided
Information that is not accurate and complete in all material respects. The
foregoing indemnity agreement is in addition to any liability which any
Underwriter may otherwise have to the Depositor or any such director, officer or
controlling person.
C. Promptly after receipt by any indemnified party under this Section
VIII of notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section VIII, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section VIII except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section
VIII.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, except to the extent
provided in the next following paragraph, the indemnifying party shall not be
liable to the indemnified party under this Section VIII for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, 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
21
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 best efforts to cooperate
with the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing paragraph, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding 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 claims
that are the subject matter of such proceeding.
D. Computational Materials. Not later than 10:30 a.m. New York City
time, on the business day before the date on which the Current Report relating
to the Certificates is required to be filed by the Depositor with the Commission
pursuant to Section V.M hereof, each Underwriter shall deliver to the Depositor
five complete copies of all materials, if any, provided by such Underwriter to
prospective investors in such Certificates which constitute "Computational
Materials" within the meaning of the no-action letter dated May 20, 1994,
issued by the Division of Corporation Finance of the Commission to Xxxxxx,
Xxxxxxx Acceptance Corporation I, Xxxxxx, Peabody & Co. Incorporated, and Xxxxxx
Structured Asset Corporation, the no-action letter dated May 27, 1994, issued by
the Division of Corporation Finance of the Commission to the Public Securities
Association and the no-action letter of February 17, 1995 issued by the
Commission to the Public Securities Association (collectively, the "Xxxxxx/PSA
Letters") and the filing of which is a condition of the relief granted in such
letters (such materials being the "Computational Materials"). Each delivery of
Computational Materials to the Depositor pursuant to this paragraph (a) shall be
effected by delivering four copies of such material to counsel for the Depositor
on behalf of the Depositor and one copy of such materials to the Depositor.
E. Each Underwriter severally and not jointly agrees, assuming all
Seller Provided Information is accurate and complete in all material respects,
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 and Section 12 of the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement of a material fact contained in the
Computational Materials provided by such Underwriter, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, when
considered in conjunction with the Prospectus, and 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
22
investigating or defending or preparing to defend any such loss, claim, damage,
liability or action as such expenses are incurred, provided, however, that no
Underwriter shall be liable to the extent that such untrue statements or alleged
untrue statement or omission or alleged omission is a result of Seller Provided
Information that is not accurate and complete in all material respects. 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. If the indemnification provided for in this Section VIII shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section VIII (A), (B) or (E) 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 related Underwriters on the
other from the offering of the related 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 total net proceeds from the offering
(before deducting expenses) received by the Depositor bear 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 or prepared 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(F) 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(F) shall be deemed to include, for purposes of this Section VIII(F), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
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 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 (x) the amount received by such
Underwriter in connection with its resale of the Offered Certificates over (y)
the amount paid by such Underwriter to the Depositor for the Offered
Certificates by such Underwriter hereunder. No person guilty of fraudulent
misrepresentation (within the
23
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The Depositor and each Underwriter expressly waive, and agree not to
assert, any defense to their respective indemnification and contribution
obligations under this Section VIII which they might otherwise assert based upon
any claim that such obligations are unenforceable under federal or state
securities laws or by reason of public policy.
"Seller-Provided Information" means any computer tape (or other information)
furnished to any Underwriter by the Seller concerning the assets comprising the
Trust.
G. Each Underwriter severally confirms that the information regarding
such Underwriter set forth in the last paragraph on the front cover page of the
Prospectus Supplement and the Computational Materials furnished by such
Underwriter are correct, and, the Depositor acknowledges that such information
constitutes 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 agreements delivered pursuant hereto or 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 48 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Certificates in such amounts as may be agreed
upon and upon the terms herein set forth (as used in this Agreement, the term
"Underwriter" includes any underwriter substituted for an Underwriter under this
Section X). If, however, the Underwriters have not completed such arrangements
within such 48-hour period, then:
(i) if the aggregate original principal amount of Defaulted
Certificates does not exceed 10% of the aggregate original 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 original principal amount of Defaulted
Certificates exceeds 10% of the aggregate original principal amount of the
Offered Certificates to be purchased pursuant to this Agreement, this Agreement
shall terminate, without any liability on the part of any non-defaulting
Underwriters.
No action taken pursuant to this Section X shall relieve any defaulting
Underwriter from the liability with respect to any default of such Underwriter
under this Agreement.
In the event of a default by any Underwriter as set forth in this
Section X, each of the Underwriters and the Depositor shall have the right to
postpone the Closing Date for a period not
24
exceeding seven 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(Q) of this Agreement shall occur and be continuing. In the event of any such
termination, the provisions of Section VII, the indemnity agreement set forth in
Section VIII, and the provisions of Sections IX and XIV 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 the Representative at its address set forth above;
B. if to the Depositor, shall be delivered or sent by overnight mail or
facsimile transmission to 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, XX #000, Xxxxxx,
XX 00000-0000, Attn.: General Counsel, Fax No. 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 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. The
provisions of Sections V, VII and VIII hereof shall survive the termination or
cancellation of this Agreement.
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. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York without giving effect to the conflict of law rules thereof.
The parties hereto hereby submit to the jurisdiction of the United
States District Court for the Southern District of New York and any court in the
State of New York located in the City and County of New York, and appellate
court from any thereof, in any action, suit or proceeding brought against it or
in connection with this Agreement or any of the related documents or the
transactions contemplated hereunder or for recognition or enforcement of any
judgment, and the parties hereto hereby agree that
25
all claims in respect of any such action or proceeding may be heard or
determined in New York State court or, to the extent permitted by law, in such
federal court.
SECTION 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. Amendments and Waivers. This Agreement may be amended,
modified, altered or terminated, and any of its provisions waived, only in a
writing signed on behalf of the Depositor and the Representative.
26
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,
AMRESCO RESIDENTIAL SECURITIES
CORPORATION
By:
----------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as
of the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
Acting on its own behalf and as
Representative of the several
Underwriters referred to in the
foregoing Agreement
By:
-----------------------------------------
Name:
Title:
SCHEDULE A
Class of Certificates Initial Percentage Interest of
Name of Purchased by the Certificates Purchased by
Underwriter Underwriters Underwriters
----------- ------------ ------------
Prudential Securities Incorporated Class A-1 60%
Class A-2 60%
Class A-3 60%
Class A-4 60%
Class A-5 60%
Class A-6 60%
Class A-7 60%
Class A-8 60%
CS First Boston Class A-1 20%
Class A-2 20%
Class A-3 20%
Class A-4 20%
Class A-5 20%
Class A-6 20%
Class A-7 20%
Class A-8 20%
Xxxxxxx Sachs & Co. Class A-1 10%
Class A-2 10%
Class A-3 10%
Class A-4 10%
Class A-5 10%
Class A-6 10%
Class A-7 10%
Class A-8 10%
Xxxxxx Xxxxxxx & Co. Class A-1 10%
Class A-2 10%
Class A-3 10%
Class A-4 10%
Class A-5 10%
Class A-6 10%
Class A-7 10%
Class A-8 10%