Mortgage Pass-Through Certificates, Series 1998-1
$100,027,563 Class A-1 Certificates 6.70% Pass-Through Rate
$25,002,775 Class A-2 Certificates 6.98% Pass-Through Rate
Equity One ABS, Inc.
Depositor
Equity One, Inc.
Servicer
UNDERWRITING AGREEMENT
November 20, 1998
Xxxxxxx Xxxxx Xxxxxx Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Equity One ABS Inc., a Delaware corporation ("Depositor"), a wholly owned
subsidiary of Equity One, Inc., a Delaware corporation ("Equity One"), proposes
to sell $125,030,338 aggregate principal amount of Mortgage Pass-Through
Certificates, Series 1998-1, of the classes described in Schedule I hereto (the
"Certificates") to be issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") to be dated as of November 30, 1998 (the
"Cut-Off Date"), among the Depositor, Equity One, as seller and servicer, The
Chase Manhattan Bank, a New York banking corporation, as trustee (the
"Trustee"), and each of the other Sellers named therein, and proposes to sell
the Certificates to you (the "Underwriter"). The assets of the Trust Fund will
include, among other things, a pool of fixed-rate mortgage loans (the "Loans")
secured primarily by first liens on one-to-four family dwellings, units in
condominium developments and mixed-use properties. The Certificates are
described more fully in a registration statement which the Depositor has
furnished to you. This is to confirm the arrangements with respect to your
purchase of the Certificates. To the extent not defined herein, capitalized
terms used herein have the meanings assigned in the Pooling and Servicing
Agreement.
REPRESENTATIONS AND WARRANTIES. EACH OF THE DEPOSITOR AND EQUITY ONE REPRESENTS
AND WARRANTS TO, AND AGREES WITH, THE UNDERWRITER AS SET FORTH BELOW IN THIS
SECTION 1. CERTAIN TERMS USED IN THIS SECTION 1 ARE DEFINED IN PARAGRAPH (C)
HEREOF.
The Depositor meets the requirements for the use of Form S-3 under the
Securities Act of 1933, as amended (the "Act") and has filed with the Securities
and Exchange Commission (the "Commission") a registration statement (file no.
333-24599), including a related preliminary basic prospectus and a preliminary
prospectus supplement, on Form S-3 for the registration under the Act of the
offering and sale of asset-backed securities, including the Certificates. The
Depositor may have filed one or more amendments thereto, including a preliminary
basic prospectus and preliminary prospectus supplement, each of which has
previously been furnished to you. The Depositor will next file with the
Commission either (i) prior to effectiveness of such registration statement, a
further amendment thereto (including the form of final basic prospectus and
final prospectus supplement), (ii) after effectiveness of such registration
statement, a final basic prospectus and a final prospectus supplement relating
to the Certificates in accordance with Rules 430A and 424(b)(1) or (4) or (iii)
a final basic prospectus and final prospectus supplement relating to the
Certificates in accordance with Rules 415 and 424(b)(2) or (5). In the case of
clauses (ii) and (iii) above, the Depositor has included in such registration
statement, as amended at the Effective Date, all information (other than Rule
430A Information) required by the Act and the rules thereunder to be included in
the Final Prospectus with respect to the Certificates and the offering thereof.
As filed, such amendment and form of final prospectus, or such final prospectus,
as the case may be, shall include all Rule 430A Information together with all
other such required information with respect to the Certificates and the
offering thereof and, except to the extent the Underwriter shall agree in
writing to a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not completed at
the Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the latest preliminary basic prospectus
and preliminary prospectus supplement, if any, that have previously been
furnished to you) as the Depositor has advised you, prior to the Execution Time,
will be included or made therein. If the Registration Statement contains the
undertaking specified in Regulation S-K Item 512(a), the Registration Statement,
at the Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).
On the Effective Date, the Registration Statement did or will, and when the
Final Prospectus is first filed (if required) in accordance with Rule 424(b) and
on the Closing Date, the Final Prospectus (and any supplements thereto) will,
comply in all material respects with the applicable requirements of the Act and
the Exchange Act and the respective rules thereunder; on the Effective Date, the
Registration Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading; and, on the
Effective Date, the Final Prospectus, if not filed pursuant to Rule 424(b), did
not or will not, and on the date of any filing pursuant to Rule 424(b) and on
the Closing Date (as defined in Section 3 below) the Final Prospectus (together
with any supplement thereto) will not, include any untrue statement of a
material fact or omit to
2
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that neither the Depositor nor Equity One makes any representations or
warranties as to the information contained in or omitted from (x) the
Registration Statement or the Final Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to the
Depositor by or on behalf of the Underwriter specifically for inclusion in the
Registration Statement or the Final Prospectus (or any supplement thereto) and
(y) any Derived Information set forth in the Computational Materials (each as
defined in Section 9 below), or in any amendment thereof or supplement thereto,
incorporated by reference in such Registration Statement or such Final
Prospectus (or any amendment thereof or supplement thereto) except to the extent
such Derived Information results from an error or omission in any
Seller-Provided Information (as defined in Section 9 below).
For purposes of this Agreement, "Effective Time" means the date and time as of
which such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission, and "Effective Date"
means the date of the Effective Time and each date after the date hereof on
which a document incorporated by reference in the Registration Statement is
filed. "Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto. Such registration statement, as
amended at the Effective Time, including all information deemed to be a part of
such registration statement as of the Effective Time pursuant to Rule 430A(b)
under the Act, the exhibits thereto and any material and documents incorporated
by reference therein, is hereinafter referred to as the "Registration
Statement." "Basic Prospectus" shall mean the basic prospectus referred to in
paragraph (a) above contained in the Registration Statement at the Effective
Date; provided, that, if the Basic Prospectus used in connection with any
Preliminary Prospectus Supplement or the Final Prospectus shall differ from the
Basic Prospectus contained in the Registration Statement at the Effective Date,
then "Basic Prospectus" shall mean the Basic Prospectus included with such
Preliminary Prospectus Supplement or the Final Prospectus, as filed pursuant to
Rule 424(b). "Preliminary Prospectus Supplement" shall mean a preliminary
prospectus supplement, if any, to the Basic Prospectus which describes the
Certificates and the offering thereof and is used prior to the filing of the
Final Prospectus. "Final Prospectus" shall mean the prospectus supplement
relating to the Certificates that is first filed pursuant to Rule 424(b) after
the Execution Time, together with the Basic Prospectus or, if no filing pursuant
to Rule 424(b) is required, shall mean the prospectus supplement relating to the
Certificates, including the Basic Prospectus, included in the Registration
Statement at the Effective Date including in each such case any material and
documents incorporated by reference therein. "Rule 430A Information" means
information with respect to the Certificates and the offering of the
Certificates permitted to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A. "Rule 415," "Rule 424," "Rule 430A" and
"Regulation S-K" refer to such rules or regulations under the Act. Any reference
herein to the Registration Statement, any Preliminary Prospectus Supplement or
the Final Prospectus shall be deemed to refer to and include the material and
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on
3
or before the Effective Date of the Registration Statement or the issue date of
the Basic Prospectus, such Preliminary Prospectus Supplement or the Final
Prospectus, as the case may be; and any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any Preliminary Prospectus Supplement or the Final Prospectus
shall be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement, or the
issue date of the Basic Prospectus, any Preliminary Prospectus Supplement or the
Final Prospectus, as the case may be, deemed to be incorporated therein by
reference.
No consent, approval, authorization or order of, or filing with, any court or
governmental agency or body is required to be obtained or made by Equity One,
the Depositor or any Seller for the consummation of the transactions
contemplated by this Agreement except such as have been obtained, made under the
Act or as may be required under state securities laws.
None of Equity One, the Depositor or any Seller is in violation of its charter
or by-laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any agreement or instrument to
which it is a party or by which it or its properties is bound that would have a
material adverse effect on the transactions contemplated herein or in the
Pooling and Servicing Agreement. The execution, delivery and performance of this
Agreement and the Pooling and Servicing Agreement and the issuance and sale of
the Certificates and compliance with the terms and provisions thereof will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, rule, regulation or order of any
governmental agency or body or any court having jurisdiction over any of Equity
One, the Depositor or any Seller or any of their properties or any agreement or
instrument to which any of them is a party or by which any of them is bound or
to which any of the properties of any of them is subject or the charter or
by-laws of any of them, and each of them has full power and authority to
authorize, issue and sell the Loans and the Certificates as contemplated by this
Agreement and to enter into this Agreement and the Pooling and Servicing
Agreement.
The computer tape of the Loans created as of November 30, 1998 and made
available to you by Equity One and the Depositor, was complete and accurate as
of the date thereof and includes a description of the Loans that are described
in a schedule to the Pooling and Servicing Agreement.
This Agreement has been duly authorized, executed and delivered by each of
Equity One and the Depositor.
Any taxes, fees and other governmental charges in connection with the execution,
delivery and issuance of this Agreement and the Pooling and Servicing Agreement
or the execution, delivery and sale of the Certificates have been or will be
paid at or prior to the Closing Date, to the extent then due and payable.
4
Immediately prior to the assignment of the Loans to the Trustee as contemplated
by the Pooling and Servicing Agreement, the Depositor (i) will have good title
to, and will be the sole owner of, each Loan and the other property purported to
be transferred by it to the Trustee pursuant to the Pooling and Servicing
Agreement free and clear of any pledge, mortgage, lien, security interest or
other encumbrance (collectively, "Liens"), (ii) will not have assigned to any
person any of its right, title or interest in such Loans or property or in the
Mortgage Loan Purchase Agreement and (iii) will have the power and authority to
sell such Loans and property to the Trustee, and upon the execution and delivery
of the Pooling and Servicing Agreement by the Trustee, on behalf of the
Certificateholders, the Trustee will have acquired all of the Depositor's right,
title and interest in and to such Loans and property free and clear of any Lien.
All actions required to be taken by the Depositor and Equity One as a condition
to the offer and sale of the Certificates as described herein or the
consummation of any of the transactions described in the Final Prospectus have
been or, prior to the Closing Date, will be taken.
The representations and warranties of each of the Sellers, the Depositor and
Equity One in (or incorporated in) the Pooling and Servicing Agreement and made
in any Officers' Certificate of the Sellers, the Depositor or Equity One
delivered pursuant to the Pooling and Servicing Agreement, will be true and
correct at the time made and on and as of the Closing Date as if set forth
herein.
The Loans conveyed to the Trust Fund had aggregate outstanding balances
determined as of the Cut-off Date in the amount set forth in the Final
Prospectus.
None of the Depositor, Equity One or any Seller will grant, assign, pledge or
transfer to any Person a security interest in, or any other right, title or
interest in, the Loans, except as provided in the Pooling and Servicing
Agreement, and each will take all action necessary in order to maintain the
security interest in the Loans granted pursuant to the Pooling and Servicing
Agreement.
There are no actions, proceedings or investigations pending, or to the best
knowledge of either the Depositor or Equity One, threatened against the Sellers,
the Depositor or Equity One before any court or before any governmental
authority, arbitration board or tribunal which, if adversely determined, could
materially and adversely affect, either in the individual or in the aggregate,
the financial position, business, operations or prospects of the Depositor or
Equity One.
Under generally accepted accounting principles, each Seller will record its
transfer of the Loans to the Depositor pursuant to the Pooling and Servicing
Agreement as a sale of the Loans.
PURCHASE AND SALE. SUBJECT TO THE TERMS AND CONDITIONS AND IN RELIANCE UPON THE
REPRESENTATIONS AND WARRANTIES HEREIN SET FORTH, THE DEPOSITOR AGREES TO SELL TO
THE UNDERWRITER, AND THE UNDERWRITER AGREES TO PURCHASE FROM THE DEPOSITOR,
$125,030,338
5
AGGREGATE PRINCIPAL AMOUNT OF THE CERTIFICATES, IN THE PRINCIPAL AMOUNTS AND AT
THE PURCHASE PRICES SET FORTH IN SCHEDULE I HERETO.
DELIVERY AND PAYMENT. DELIVERY OF AND PAYMENT FOR THE CERTIFICATES SHALL BE MADE
AT 10:00 A.M. NEW YORK TIME, ON DECEMBER 9, 1998, AT THE OFFICES OF STRADLEY,
RONON, XXXXXXX & XXXXX, LLP, 0000 XXXXXXXX XXXXXX, XXXXXXXXXXXX, XXXXXXXXXXXX
00000, XX SUCH LATER TIME OR DATE NOT LATER THAN FIVE BUSINESS DAYS THEREAFTER
AS THE UNDERWRITER SHALL DESIGNATE (SUCH DATE AND TIME OF DELIVERY AND PAYMENT
FOR THE CERTIFICATES BEING HEREIN CALLED THE "CLOSING DATE"). DELIVERY OF 2
(TWO) GLOBAL CERTIFICATES, EACH CERTIFICATE EVIDENCING THE FULL PRINCIPAL AMOUNT
OF EACH OF THE CLASSES OF THE CERTIFICATES, SHALL BE MADE TO THE UNDERWRITER,
AGAINST PAYMENT BY THE UNDERWRITER OF THE PURCHASE PRICE THEREOF TO THE
DEPOSITOR BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE FUNDS. THE GLOBAL
CERTIFICATES TO BE SO DELIVERED TO THE UNDERWRITER SHALL BE REGISTERED IN THE
NAME OF CEDE & CO., AS NOMINEE FOR THE DEPOSITORY TRUST COMPANY ("DTC"). THE
INTEREST OF BENEFICIAL OWNERS OF THE CERTIFICATES WILL BE REPRESENTED BY BOOK
ENTRIES ON THE RECORDS OF DTC AND PARTICIPATING MEMBERS THEREOF. DEFINITIVE
CERTIFICATES EVIDENCING THE CERTIFICATES WILL BE AVAILABLE ONLY UNDER LIMITED
CIRCUMSTANCES.
The Depositor agrees to have the Certificates available for inspection, checking
and packaging by the Underwriter in New York, New York, not later than 1:00 PM
on the business day prior to the Closing Date.
OFFERING BY UNDERWRITER. IT IS UNDERSTOOD THAT THE UNDERWRITER PROPOSES TO OFFER
THE CERTIFICATES FOR SALE TO THE PUBLIC (WHICH MAY INCLUDE SELECTED DEALERS) AS
SET FORTH IN THE FINAL PROSPECTUS.
AGREEMENTS. EACH OF EQUITY ONE AND THE DEPOSITOR AGREES WITH THE UNDERWRITER
THAT:
The Depositor will use its best efforts to cause the Registration Statement, if
not effective at the Execution Time, and any amendment thereto, to become
effective. Prior to the termination of the offering of the Certificates, the
Depositor will not file any amendment of the Registration Statement or
supplement to the Final Prospectus or any Preliminary Prospectus Supplement
unless the Depositor has furnished you a copy for your review prior to filing
and will not file any such proposed amendment or supplement to which you
reasonably object. Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule 430A, or filing of
the Final Prospectus is otherwise required under Rule 424(b), the Depositor will
cause the Final Prospectus,
6
properly completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Underwriter of such
timely filing. The Depositor will promptly advise the Underwriter (i) when the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (ii) when the Final Prospectus,
and any supplement thereto shall have been filed with the Commission pursuant to
Rule 424(b), (iii) when, prior to termination of the offering of the Securities,
any amendment to the Registration Statement shall have been filed or become
effective, (iv) of any request by the Commission for any amendment of the
Registration Statement or supplement to the Final Prospectus or for any
additional information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (vi) of the receipt by the
Depositor or the Trust of any notification with respect to the suspension of the
qualification of the Certificates for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose, and will use their best
efforts to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
If, at any time when a prospectus relating to the Certificates is required to be
delivered under the Act, any event occurs as a result of which the Final
Prospectus as then supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
in the light of the circumstances under which they were made not misleading, or
if it shall be necessary to amend the Registration Statement or supplement the
Final Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Depositor promptly will (i) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this Section 5,
an amendment or supplement which will correct such statement or omission or
effect such compliance and (ii) supply any supplemented Final Prospectus to you
in such quantities as you may reasonably request.
The Depositor will furnish to the Underwriter and counsel for the Underwriter,
without charge, copies of the Registration Statement (including exhibits
thereto) and, so long as delivery of a prospectus by the Underwriter or a dealer
may be required by the Act, as many copies of any Preliminary Prospectus
Supplement and the Final Prospectus and any supplement thereto as the
Underwriter may reasonably request. The Depositor will pay the expenses of
printing or other production of all documents relating to the offering.
The Depositor will cooperate, when and if requested by the Underwriter at
Depositor's sole expense, in the qualification of the Certificates for sale
under the laws of such jurisdictions as the Underwriter may designate and will
maintain such qualifications in effect so long as required for the distribution
of the Certificates; provided, however, that the Depositor shall not be required
to qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to general or unlimited service of
process in any jurisdiction where it is not now so subject.
7
The Depositor will file with the Commission such reports on Form SR as may be
required pursuant to Rule 463 under the Act.
As soon as practicable, the Depositor will cause the Trust Fund to make
generally available to the Certificateholders and to the Underwriter an earnings
statement or statements of the Trust Fund which will satisfy the provisions of
Section 11(a) of the Act and will satisfy the requirements of Rule 158.
The Depositor will cause any Computational Materials (as defined in Section 9
hereof) with respect to the Certificates which are delivered by an Underwriter
to the Depositor pursuant to Section 9 hereof to be filed with the Commission on
a Current Report on Form 8-K on or before the date of the filing of the Final
Prospectus pursuant to Rule 424.
The Depositor and Equity One will cooperate with the Underwriter and use their
best efforts to permit the Offered Certificates to be eligible for clearance and
settlement through The Depository Trust Company.
For a period from the date of this Agreement until the retirement of the
Certificates, the Servicer will deliver to you the monthly servicing report, the
annual statements of compliance and the annual independent certified public
accountants' reports furnished to the Trustee pursuant to the Pooling and
Servicing Agreement, as soon as such statements and reports are furnished to the
Trustee.
So long as any of the Certificates is outstanding, Equity One will furnish to
you (i) as soon as practicable after the end of the fiscal year all documents
required to be distributed to holders of Certificates or filed with the
Commission pursuant to the Exchange Act or any order of the Commission
thereunder and (ii) from time to time, any other information concerning Equity
One or the Depositor filed with any government or regulatory authority that is
otherwise publicly available, as you may reasonably request.
To the extent, if any, that the rating provided with respect to the Certificates
by Xxxxx'x Investors Service, Inc. ("Xxxxx'x") or Standard & Poor's Ratings
Service ("S&P" and together with Xxxxx'x, the "Rating Agencies") is conditional
upon the furnishing of documents or the taking of any actions by the Depositor,
the Depositor shall furnish such documents and take such actions.
Until 30 days following the Closing Date, neither the Depositor nor any trust or
other entity originated, directly or indirectly, by the Depositor or Equity One
will, without the prior written consent of the Underwriter, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or announce
the offering of, any asset-backed securities collateralized by mortgage loans
(other than the Certificates).
CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITER. THE OBLIGATIONS OF THE
UNDERWRITER TO PURCHASE THE CERTIFICATES SHALL BE SUBJECT TO THE ACCURACY OF THE
REPRESENTATIONS AND WARRANTIES ON THE PART OF EQUITY ONE AND THE DEPOSITOR
CONTAINED HEREIN AS OF THE EXECUTION TIME AND THE CLOSING DATE,
8
TO THE ACCURACY OF THE STATEMENTS OF EQUITY ONE AND THE DEPOSITOR MADE IN ANY
CERTIFICATES PURSUANT TO THE PROVISIONS HEREOF, TO THE PERFORMANCE BY EACH OF
EQUITY ONE AND THE DEPOSITOR OF ITS OBLIGATIONS HEREUNDER AND TO THE FOLLOWING
ADDITIONAL CONDITIONS:
If the Registration Statement has not become effective prior to the Execution
Time, unless the Underwriter agrees in writing to a later time, the Registration
Statement will become effective not later than (i) 6:00 p.m. New York City time,
on the date of determination of the public offering price, if such determination
occurred at or prior to 3:00 p.m. New York City time on such date or (ii) 12:00
noon on the business day following the day on which the public offering price
was determined, if such determination occurred after 3:00 p.m. New York City
time on such date; if filing of the Final Prospectus, or any supplement thereto,
is required pursuant to Rule 424(b), the Final Prospectus, and any such
supplement, shall have been filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
The Underwriter shall have received the opinion of Xxxxxxxx, Xxxxx, Xxxxxxx &
Xxxxx, LLP, counsel for Equity One and the Depositor, dated the Closing Date, to
the effect that:
Each of the Depositor and Equity One is a corporation duly organized and validly
existing under the laws of the state of its incorporation with all corporate
power and authority necessary to own or hold its properties, to conduct its
business as described in the Final Prospectus and to enter into and perform its
obligations under this Agreement and the Pooling and Servicing Agreement and is
duly qualified to do business where its ownership or lease of property or the
conduct of its business requires such qualification.
The Pooling and Servicing Agreement has been duly authorized, executed and
delivered by, and constitutes a legal, valid and binding instrument enforceable
against each of the Depositor and Equity One in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights generally
from time to time in effect) (such opinion may also state that the
enforceability of the obligations of Equity One and the Depositor is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law)).
The Certificates and the Class R Certificates have been duly authorized and,
when executed and authenticated in accordance with the provisions of the Pooling
and Servicing Agreement and delivered to and paid for by the Underwriter
pursuant to this Agreement, will be validly issued and outstanding and will be
entitled to the benefits of the Pooling and Servicing Agreement.
To the knowledge of such counsel, there is no pending or threatened action, suit
or proceeding before any court or governmental agency, authority or body or any
arbitrator involving Equity One, the Depositor, any Seller or any of their
subsidiaries, of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final Prospectus, and there
is no franchise, contract or other document of a character required to be
described in the
9
Registration Statement or Final Prospectus, or to be filed as an exhibit, which
is not described or filed as required.
The Certificates and the Pooling and Servicing Agreement conform in all material
respects to the descriptions thereof contained in the Registration Statement and
the Final Prospectus.
The Registration Statement has become effective under the Act; any required
filing of the Basic Prospectus, any Preliminary Prospectus Supplement, and the
Final Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b); to the
knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that purpose have
been instituted or threatened, and the Registration Statement and the Final
Prospectus (other than Computational Materials, the financial statements and
other financial and statistical information contained therein as to which such
counsel need express no opinion) comply as to form in all material respects with
the applicable requirements of the Act, the Exchange Act and the respective
rules thereunder; and such counsel has no reason to believe that at the
Effective Date the Registration Statement contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the Final
Prospectus, at the date thereof or at the Closing Date, included or includes any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than
Computational Materials, the financial statements and other financial and
statistical information contained therein as to which such counsel need express
no opinion).
This Agreement has been duly authorized, executed and delivered by Equity One
and the Depositor.
The statements in the Registration Statement and the Final Prospectus under the
headings "Summary of Terms Federal Income Tax Consequences", "Federal Income Tax
Consequences" and "ERISA Considerations" in the prospectus supplement and
"Summary of Terms--Federal Income Tax Consequences", "Summary of Terms--ERISA
Considerations", "Federal Income Tax Consequences", "State Tax Consequences" and
"ERISA Considerations" in the basic prospectus, to the extent that they
constitute matters of law or legal conclusions with respect thereto, are correct
in all material respects.
The statements in the Final Prospectus under the headings "Risk Factors--Certain
Other Legal Aspects of the Loans" and "Certain Legal Aspects of the Loans" in
the basic prospectus, to the extent that they constitute matters of law or legal
conclusions with respect thereto, provide a fair and accurate summary of such
law or conclusions.
The Pooling and Servicing Agreement is not required to be qualified under the
Trust Indenture Act of 1939, as amended, and neither the Depositor nor the Trust
Fund is required to be registered under the Investment Company Act of 1940, as
amended.
The trust fund as described in the Final Prospectus and the Pooling and
Servicing Agreement will qualify as a "real estate mortgage investment conduit"
("REMIC") within the meaning of
10
Section 860D of the Internal Revenue Code of 1986, as amended (the "Code"), the
Certificates will be treated as "regular interests" in such REMIC and the Class
R Certificates will be treated as the single class of "residual interests" in
such REMIC, assuming: (i) an election is made to treat the trust funds as a
REMIC, (ii) compliance with the Pooling and Servicing Agreement and (iii)
compliance with changes in the law, including any amendments to the Code or
applicable Treasury regulations thereunder.
No consent, approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or governmental agency or body is
required for the consummation of the transactions contemplated herein except
such as have been obtained under the Act, such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase and distribution of
the Certificates by the Underwriter, and such other approvals (specified in such
opinion) as have been obtained.
Neither the execution and delivery of the Pooling and Servicing Agreement, the
issue and sale of the Certificates, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof or of
the Pooling and Servicing Agreement will conflict with, result in a breach of,
or constitute a default under the charter or by-laws of Equity One or the
Depositor or the terms of any indenture or other agreement or instrument known
to such counsel and to which Equity One or the Depositor is a party or bound,
or, to the knowledge of such counsel, any law, order or regulation applicable to
Equity One, or the Depositor of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over Equity One or
the Depositor.
To the best knowledge of such counsel and except as set forth in the Prospectus,
no default exists and no event has occurred which, with notice, lapse of time or
both, would constitute a default in the due performance and observance of any
term, covenant or condition of any agreement to which the Depositor is a party
or by which it is bound, which default is or would have a material adverse
effect on the financial condition, earnings, prospects, business or properties
of the Depositor, taken as a whole;
To the best knowledge of such counsel, the Depositor has obtained all material
licenses, permits and other governmental authorizations that are necessary to
the conduct of its business; such licenses, permits and other governmental
authorizations are in full force and effect, and the Depositor is in all
material respects complying therewith; and the Depositor is otherwise in
compliance with all laws, rules, regulations and statutes of any jurisdiction to
which it is subject, except where non-compliance would not have a material
adverse effect on the Depositor;
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
Commonwealth of Pennsylvania, the State of Delaware, the State of New
Jersey or the United States, to the extent deemed proper by such counsel
and specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable by such counsel and who are satisfactory
to counsel for the Underwriter and (B) as to matters of fact, to the extent
deemed proper by such counsel, on certificates of responsible officers of
Equity One, the Depositor, the Sellers and the other parties to this
Agreement and the Pooling and Servicing Agreement,
11
and of public officials. References to the Final Prospectus in this
paragraph (b) include any supplements thereto at the Closing Date.
12
The Underwriter shall have received from Brown & Wood LLP, counsel for the
Underwriter, such opinion or opinions, dated the Closing Date, with respect to
the issuance and sale of the Certificates, the Pooling and Servicing Agreement,
this Agreement, the Registration Statement, the Final Prospectus and other
related matters as the Underwriter may reasonably require, and shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass on such matters.
The Underwriter shall have received from PricewaterhouseCoopers LLP, certified
public accountants, two letters, one such letter dated the date hereof and
satisfactory in form and substance to the Underwriter and its counsel,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the respective applicable published rules and
regulations thereunder and stating to the effect that they have performed
certain specified procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature set forth in the
Final Prospectus, agrees with the provisions of the Pooling and Servicing
Agreement and the records of Equity One and the Sellers, and the other such
letter dated the Closing Date and satisfactory in form and substance to the
Underwriter and its counsel, confirming that the first such letter remains true
as of the Closing Date.
The representations and warranties in this Agreement shall be true and correct
on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date, and the
Underwriter shall have been furnished a certificate of each of Equity One and
the Depositor, signed by the Chairman of the Board or the President and by the
principal financial or accounting officer of Equity One and the Depositor,
respectively, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Final
Prospectus, any supplement to the Final Prospectus and this Agreement and that:
the representations and warranties of Equity One and the Depositor in this
Agreement are true and correct in all material respects on and as of the Closing
Date with the same effect, as if made on the Closing Date, and each of Equity
One and the Depositor has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the Closing
Date;
no stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for that purpose have been instituted or, to
such officer's knowledge, threatened; and
since the date of Equity One's most recent audited financial statements, there
has been no material adverse change, or any development respecting a prospective
change, in the condition (financial or other) of Equity One, the Depositor or
any Seller, whether or not arising from transactions in the ordinary course of
business.
Prior to the Closing Date, Equity One, the Depositor, and each Seller shall have
furnished to the Underwriter such further information, certificates and
documents as the Underwriter may reasonably request.
13
The Certificates have been given the rating of AAA by Standard & Poor's and Aaa
by Moody's.
The Underwriter shall have received from counsel to the Trustee an opinion,
dated the Closing Date and satisfactory in form and substance to the Underwriter
and its counsel to the effect that:
the Trustee is duly organized and validly existing as a New York banking
corporation with the power and authority under the laws of New York to conduct
business and affairs as a trustee;
the Trustee has the corporate power and lawful authority to perform the duties
and obligation of trustee under, to act as successor Servicer upon the terms and
conditions set forth in, and to accept the trust contemplated by, the Pooling
and Servicing Agreement;
the Pooling and Servicing Agreement has been duly authorized, executed,
delivered and accepted by the Trustee, and the Pooling and Servicing Agreement
is a legal, valid and binding obligation enforceable against the Trustee in
accordance with its terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization and other laws affecting creditors' rights
generally from time to time in effect) (such opinion may also state that the
enforceability of the Trustee's obligations is subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law));
the Certificates have been duly authenticated by the Trustee; and
neither the execution nor delivery by the Trustee of the Pooling and Servicing
Agreement nor the consummation of any of the transactions contemplated thereby
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action with respect to, any governmental
authority or agency under any existing federal or state law governing the
banking or trust powers of the Trustee.
The Underwriter shall have received such opinions, addressed to the Underwriter
and dated the Closing Date, as are delivered to the Rating Agencies.
The Underwriter shall have received an opinion from Xxxxxxxx, Xxxxx, Xxxxxxx &
Xxxxx, LLP, counsel for Equity One and the Depositor, dated the Closing Date and
satisfactory in form and substance to the Underwriter regarding the true-sale of
the Loans by the Sellers to the Depositor and by the Depositor to the Trustee,
for the benefit of Certificateholders.
The Underwriter shall have received an opinion from counsel for Equity One and
the Depositor, dated the Closing Date and satisfactory in form and substance to
the Underwriter regarding substantive consolidation.
The Underwriter shall have received an opinion from Counsel to the Insurer,
dated the Closing Date and satisfactory in form and substance to the
Underwriter, addressed to the Underwriter and the Trustee.
14
The Underwriter shall have received a fully executed Insurance Agreement by and
among Equity One, the Depositor and the Insurer, dated as of December 1, 1998
(the "Insurance Agreement"), and all representations and warranties thereunder
or made pursuant thereto shall be true and correct, and the Depositor shall have
performed its obligations thereunder.
The Policy relating to the Certificates shall have been duly executed and issued
at or prior to the Closing Date and shall conform in all material respects to
the description thereof in the Final Prospectus.
Subsequent to the Execution Time, there shall not have been any reduction or
withdrawal by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Securities Act) of the current
rating of any securities issued or originated by the Depositor or Equity One or
any notice given of any intended or potential reduction in or withdrawal of any
such rating or of a possible change in any such rating that does not indicate
the direction of the possible change.
Subsequent to the respective dates as of which information is given in the
Registration Statement and the Final Prospectus and the date of the most recent
audited financial statements of Equity One, there shall not have been any
change, or any development involving a prospective change, which has not been
disclosed to the Underwriter on or before the date hereof in or affecting the
condition, financial or otherwise, of Equity One, the Depositor or any Seller
the effect of which is, in the reasonable judgment of the Underwriter, so
material and adverse as to make it impractical or inadvisable to proceed with
the offering or the delivery of the Certificates as contemplated by the
Registration Statement and the Final Prospectus.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriter and counsel for the Underwriter, this Agreement
and all obligations of the Underwriter hereunder may be canceled at, or at any
time prior to, the Closing Date by the Underwriter. Notice of such cancellation
shall be given to the Depositor and Equity One in writing or by telephone or
telegraph confirmed in writing.
REIMBURSEMENT OF UNDERWRITER'S EXPENSES. IF THE SALE OF THE CERTIFICATES
PROVIDED FOR HEREIN IS NOT CONSUMMATED BECAUSE ANY CONDITION TO THE OBLIGATIONS
OF THE UNDERWRITER SET FORTH IN SECTION 6 HEREOF IS NOT SATISFIED, BECAUSE OF
ANY TERMINATION PURSUANT TO SECTION 10 HEREOF OR BECAUSE OF ANY REFUSAL,
INABILITY OR FAILURE ON THE PART OF EQUITY ONE OR THE DEPOSITOR TO PERFORM ANY
AGREEMENT HEREIN OR COMPLY WITH ANY PROVISION HEREOF OTHER THAN BY REASON OF A
DEFAULT BY THE UNDERWRITER, THE DEPOSITOR WILL REIMBURSE THE UNDERWRITER UPON
DEMAND FOR ALL OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL) THAT SHALL HAVE BEEN INCURRED BY IT IN
15
CONNECTION WITH THE PROPOSED PURCHASE AND SALE OF THE CERTIFICATES.
INDEMNIFICATION AND CONTRIBUTION. 1) EQUITY ONE AND THE DEPOSITOR, JOINTLY AND
SEVERALLY, AGREE TO INDEMNIFY AND HOLD HARMLESS THE UNDERWRITER AND EACH PERSON
WHO CONTROLS THE UNDERWRITER WITHIN THE MEANING OF EITHER THE ACT OR THE
EXCHANGE ACT AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES OR LIABILITIES, JOINT
OR SEVERAL, TO WHICH THEY OR ANY OF THEM MAY BECOME SUBJECT UNDER THE ACT, THE
EXCHANGE ACT OR OTHER FEDERAL OR STATE STATUTORY LAW OR REGULATION, AT COMMON
LAW OR OTHERWISE, INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES OR LIABILITIES (OR
ACTIONS IN RESPECT THEREOF) ARISE OUT OF OR ARE BASED UPON ANY UNTRUE STATEMENT
OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED IN THE REGISTRATION
STATEMENT, THE BASIC PROSPECTUS, ANY PRELIMINARY PROSPECTUS SUPPLEMENT OR THE
FINAL PROSPECTUS, OR IN ANY AMENDMENT THEREOF OR SUPPLEMENT THERETO, OR ARISE
OUT OF OR ARE BASED UPON THE OMISSION OR ALLEGED OMISSION TO STATE THEREIN A
MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING, AND AGREES TO REIMBURSE EACH SUCH INDEMNIFIED PARTY, AS
INCURRED, FOR ANY LEGAL OR OTHER EXPENSES REASONABLY INCURRED BY THEM IN
CONNECTION WITH INVESTIGATING OR DEFENDING ANY SUCH LOSS, CLAIM, DAMAGE,
LIABILITY OR ACTION; PROVIDED, HOWEVER, THAT (I) NEITHER EQUITY ONE NOR THE
DEPOSITOR WILL BE LIABLE IN ANY SUCH CASE TO THE EXTENT THAT ANY SUCH LOSS,
CLAIM, DAMAGE OR LIABILITY ARISES OUT OF OR IS BASED UPON ANY SUCH UNTRUE
STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION MADE (X)
THEREIN IN RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION FURNISHED TO
THE DEPOSITOR BY THE UNDERWRITER SPECIFICALLY FOR INCLUSION THEREIN, OR (Y) IN
ANY DERIVED INFORMATION (AS DEFINED IN SECTION 9 BELOW) INCLUDED BY THE
UNDERWRITER IN ANY COMPUTATIONAL MATERIALS PROVIDED BY THE UNDERWRITER TO THE
DEPOSITOR OR ANY AMENDMENT OR SUPPLEMENT THEREOF UNLESS SUCH UNTRUE STATEMENT OR
ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION MADE IN ANY DERIVED
INFORMATION RESULTS FROM AN ERROR OR OMISSION IN ANY SELLER-PROVIDED INFORMATION
(AS DEFINED HEREIN), AND (II) SUCH INDEMNITY WITH RESPECT TO ANY PRELIMINARY
PROSPECTUS SUPPLEMENT OR COMPUTATIONAL MATERIALS SHALL NOT INURE TO THE BENEFIT
OF THE UNDERWRITER (OR ANY PERSON CONTROLLING THE UNDERWRITER) FROM WHOM THE
PERSON ASSERTING ANY SUCH LOSS, CLAIM, DAMAGE OR LIABILITY PURCHASED THE
CERTIFICATES WHICH ARE THE SUBJECT THEREOF IF SUCH PERSON DID NOT RECEIVE A COPY
OF THE FINAL PROSPECTUS (OR THE FINAL PROSPECTUS AS SUPPLEMENTED) AT OR PRIOR TO
THE CONFIRMATION OF THE SALE OF SUCH CERTIFICATES TO
16
SUCH PERSON IN ANY CASE WHERE SUCH DELIVERY IS REQUIRED BY THE ACT AND THE
UNTRUE STATEMENT OR OMISSION OF A MATERIAL FACT CONTAINED IN THE PRELIMINARY
PROSPECTUS SUPPLEMENT WAS CORRECTED IN THE FINAL PROSPECTUS (OR THE FINAL
PROSPECTUS AS SUPPLEMENTED). THIS INDEMNITY AGREEMENT WILL BE IN ADDITION TO ANY
LIABILITY WHICH EQUITY ONE OR THE DEPOSITOR MAY OTHERWISE HAVE.
The Underwriter agrees to indemnify and hold harmless Equity One and the
Depositor, each of their respective directors, each of their respective officers
who signs the Registration Statement, and each person who controls Equity One or
the Depositor within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from Equity One and the Depositor to the
Underwriter, but only with reference to (x) written information relating to the
Underwriter furnished to the Depositor by the Underwriter specifically for
inclusion in the documents referred to in the foregoing indemnity or (y) any
Derived Information included by the Underwriter in any Computational Materials
provided by the Underwriter to the Depositor or any amendment or supplement
thereof; provided, however that the indemnity with respect to clause (y) above
shall not apply to any untrue statement or alleged untrue statement or omission
or alleged omission made in any Derived Information that results from an error
or omission in any Seller-Provided Information. This indemnity agreement will be
in addition to any liability which the Underwriter may otherwise have. For the
purpose of clause (x) of this indemnity, Equity One and the Depositor
acknowledge that the statements set forth in the last paragraph of the cover
page and under the heading "Underwriting" in any Preliminary Prospectus
Supplement or the Final Prospectus constitute the only information furnished in
writing by the Underwriter for inclusion in the documents referred to in the
foregoing indemnity, and you, as the Underwriter, confirm that such statements
are correct.
Promptly after receipt by an indemnified party under this Section 8 of notice of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this Section
8, notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to appoint counsel satisfactory to such indemnified party
to represent the indemnified party in such action; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to appoint counsel to defend such action
and approval by the indemnified party of such counsel, the indemnifying party
will not be liable to such
17
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Underwriter in the case of
paragraph (a) of this Section 8, representing the indemnified parties under such
paragraph (a) who are parties to such action), (ii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party or (iv) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest; and except that, if clause (i) or (iii) is applicable, such liability
shall be only in respect of the counsel referred to in such clause (i) or (iii).
In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in paragraph (a) of this Section 8 is due
in accordance with its terms but is for any reason held by a court to be
unavailable from Equity One or the Depositor on grounds of policy or otherwise,
Equity One and the Depositor, on the one hand, and the Underwriter, on the
other, shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) to which Equity One and the Depositor, on the
one hand, and the Underwriter, on the other, may be subject in such proportion
so that the Underwriter is responsible for that portion represented by the
percentage that the underwriting discount bears to the sum of such discount and
the purchase price of the Certificates, and Equity One and the Depositor are
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls the Underwriter within the meaning of the Act shall have the same
rights to contribution as the Underwriter, and each person who controls Equity
One or the Depositor within the meaning of either the Act or the Exchange Act,
each officer of Equity One or the Depositor and each director of Equity One or
the Depositor shall have the same rights to contribution as Equity One and the
Depositor, subject in each case to the proviso to the first sentence of this
paragraph (d). Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this paragraph (d), notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
paragraph (d).
COMPUTATIONAL MATERIALS. IT IS UNDERSTOOD THAT THE UNDERWRITER MAY PROVIDE TO
PROSPECTIVE INVESTORS CERTAIN COMPUTATIONAL MATERIALS AND ABS TERM SHEETS IN
CONNECTION WITH YOUR OFFERING OF THE CERTIFICATES, SUBJECT TO THE FOLLOWING
CONDITIONS:
18
The Underwriter shall comply with all applicable laws and regulations in
connection with the use of Computational Materials, including the No-Action
Letter of May 20, 1994 issued by the Commission to Xxxxxx, Xxxxxxx Acceptance
Corporation I, Xxxxxx, Xxxxxxx & Co. Incorporated and Xxxxxx Structured Asset
Corporation, as made applicable to other issuers and underwriters by the
Commission in response to the request of the Public Securities Association dated
May 24, 1994 (collectively, the "Xxxxxx/PSA Letter"), as well as the PSA Letter
referred to below. The Underwriter shall comply with all applicable laws and
regulations in connection with the use of ABS Term Sheets, including the No
Action Letter of February 17, 1995 issued by the Commission to the Public
Securities Association (the PSA Letter" and, together with the Xxxxxx/PSA
Letter, the "No-Action Letters").
For purposes hereof, "Computational Materials" as used herein shall have the
meaning given such term in the No-Action Letters, but shall include only those
Computational Materials that have been prepared or delivered to prospective
investors by or at the direction of the Underwriter. For purposes hereof, "ABS
Term Sheets" and "Collateral Term Sheets" as used herein shall have the meanings
given such terms in the PSA Letter but shall include only those ABS Term Sheets
or Collateral Term Sheets that have been prepared or delivered to prospective
investors by or at the direction of the Underwriter.
a) All Computational Materials and ABS Term Sheets provided to prospective
investors that are required to be filed with the Commission pursuant to the
No-Action Letters shall bear a legend on each page including the following
statement:
"THE INFORMATION HEREIN IS PRELIMINARY, AND WILL BE SUPERSEDED BY THE
APPLICABLE PROSPECTUS SUPPLEMENT AND BY ANY OTHER INFORMATION SUBSEQUENTLY
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION."
In the case of Collateral Term Sheets, such legend shall also include the
following statement:
"THE INFORMATION CONTAINED HEREIN WILL BE SUPERSEDED BY THE DESCRIPTION OF
THE MORTGAGE POOL CONTAINED IN THE PROSPECTUS SUPPLEMENT RELATING TO THE
CERTIFICATES AND [EXCEPT WITH RESPECT TO THE INITIAL COLLATERAL TERM SHEET]
SUPERSEDES ALL INFORMATION CONTAINED IN ANY COLLATERAL TERM SHEETS RELATING
TO THE MORTGAGE POOL PREVIOUSLY PROVIDED BY XXXXXXX XXXXX XXXXXX INC."
The Depositor shall have the right to require additional specific legends or
notations to appear on any Computational Materials or ABS Term Sheets, the right
to require changes regarding the use of terminology and the right to determine
the types of information appearing therein. Notwithstanding the foregoing, this
subsection (c) will be satisfied if all Computational Materials and ABS Term
Sheets referred to therein bear a legend in a form previously approved in
writing by the Depositor.
19
The Underwriter shall provide the Depositor with representative forms of all
Computational Materials and ABS Term Sheets prior to their first use, to the
extent such forms have not previously been approved by the Depositor for use by
the Underwriter. The Underwriter shall provide to the Depositor, for filing on
Form 8-K, copies (in such format as required by the Depositor) of all
Computational Materials and ABS Term Sheets that are required to be filed with
the Commission pursuant to the No-Action Letters. The Underwriter may provide
copies of the foregoing in a consolidated or aggregated form including all
information required to be filed. All Computational Materials and ABS Term
Sheets described in this subsection (d) must be provided to the Depositor not
later than 10:00 a.m. New York time one business day before filing thereof is
required pursuant to the terms of this Agreement. The Underwriter agrees that it
will not provide to any investor or prospective investor in the Certificates any
Computational Materials or ABS Term Sheets on or after the day on which
Computational Materials and ABS Term Sheets are required to be provided to the
Depositor pursuant to this Section 9(d) (other than copies of Computational
Materials or ABS Term Sheets previously submitted to the Depositor in accordance
with this Section 9(d) for filing with the Commission), unless such
Computational Materials or ABS Term Sheets are preceded or accompanied by the
delivery of a Prospectus to such investor or prospective investor.
All information included in the Computational Materials and ABS Term Sheets
shall be generated based on substantially the same methodology and assumptions
that are used to generate the information in the Prospectus Supplement as set
forth therein; provided, however, that the Computational Materials and ABS Term
Sheets may include information based on alternative methodologies or assumptions
if specified therein. If any Computational Materials or ABS Term Sheets that are
required to be filed were based on assumptions with respect to the Loans
included in the Trust that differ from the final Pool Information in any
material respect or on Certificate structuring terms that were revised in any
material respect prior to the printing of the Prospectus, the Underwriter shall
prepare revised Computational Materials or ABS Term Sheets, as the case may be,
based on the final Pool Information and structuring assumptions, circulate such
revised Computational Materials and ABS Term Sheets to all recipients of the
preliminary versions thereof that indicated or subsequently indicate orally to
the Underwriter they will purchase all or any portion of the Certificates, and
include such revised Computational Materials and ABS Term Sheets (marked, "as
revised") in the materials delivered to the Depositor pursuant to subsection (d)
above. As used herein, "Pool Information" means information with respect to the
characteristics of the Loans, as provide by or on behalf of the Depositor to the
Underwriter in final form and set forth in the Prospectus Supplement.
The Depositor shall not be obligated to file any Computational Materials or ABS
Term Sheets that have been determined to contain any material error or omission;
provided, however, that, at the request of the Underwriter, the Depositor will
file Computational Materials or ABS Term Sheets that contain a material error or
omission if clearly marked "superseded by materials dated _____" and accompanied
by corrected Computational Materials or ABS Term Sheets that are marked,
"material previously dated _____, as corrected." In the event that, within the
period during which the Prospectus relating to the Certificates is required to
be delivered under the Act, any Computational Materials or ABS
20
Term Sheets are determined, in the reasonable judgment of the Depositor or the
Underwriter, to contain a material error or omission, the Underwriter shall
prepare a corrected version of such Computational Materials or ABS Term Sheets,
shall circulate such corrected Computational Materials and ABS Term Sheets to
all recipients of the prior versions thereof that either indicated orally to the
Underwriter they would purchase all or any portion of the Certificates, or
actually purchased all or any portion thereof, and shall deliver copies of such
corrected Computational Materials and ABS Term Sheets (marked, "as corrected")
to the Depositor for filing with the Commission in a subsequent Form 8-K
submission.
The Depositor and the Underwriter shall receive a letter from
PricewaterhouseCoopers LLP, certified public accountants, satisfactory in form
and substance to the Depositor and the Underwriter, to the effect that such
accountants have performed certain specified procedures agreed to by the
Depositor and the Underwriter, as a result of which they determined that the
specified information that is included in the Computational Materials and ABS
Term Sheets (if any) provided by the Underwriter to the Depositor for filing on
Form 8-K as provided in this Section 9 has been accurately computed or compiled
from the Depositor Provided Information.
If the Underwriter does not provide any Computational Materials or ABS Term
Sheets to the Depositor pursuant to subsection (d) above, the Underwriter shall
be deemed to have represented, as of the Closing Date, that it did not provide
any prospective investors with any information in written or electronic form in
connection with the offering of the Certificates that is required to be filed
with the Commission in accordance with the No-Action Letters.
In the event of any delay in the delivery by the Underwriter to the Depositor of
all Computational Materials and ABS Term Sheets required to be delivered in
accordance with subsection (d) above, or in the delivery of the accountant's
comfort letter in respect thereof pursuant to Section 9(g), the Depositor shall
have the right to delay the release of the Prospectus to investors or to the
Underwriter, to delay the Closing Date and to take other appropriate actions in
each case as necessary in order to allow the Depositor to comply with its
obligation to file the Computational Materials and ABS Term Sheets with the
Commission.
For purposes of this Agreement, as to the Underwriter, the term "Derived
Information" means such portion, if any, of the information that is:
delivered to the Depositor by the Underwriter pursuant to this Section 9 for
filing with the Commission on Form 8-K;
is not contained in the Final Prospectus without taking into account information
incorporated therein by reference; and
does not constitute Seller-Provided Information.
21
"Seller-Provided Information" means any computer tape concerning the assets
comprising the Trust Fund and any other information with respect to the
Certificates or the Loans furnished to the Underwriter by the Depositor for use
as contemplated herein.
TERMINATION. THIS AGREEMENT SHALL BE SUBJECT TO TERMINATION IN THE ABSOLUTE
DISCRETION OF THE UNDERWRITER, BY NOTICE GIVEN TO THE DEPOSITOR AND EQUITY ONE
PRIOR TO DELIVERY OF AND PAYMENT FOR THE CERTIFICATES, IF PRIOR TO SUCH TIME (I)
TRADING IN SECURITIES GENERALLY ON THE NEW YORK STOCK EXCHANGE SHALL HAVE BEEN
SUSPENDED OR LIMITED OR MINIMUM PRICES SHALL HAVE BEEN ESTABLISHED ON SUCH
EXCHANGE, (II) A BANKING MORATORIUM SHALL HAVE BEEN DECLARED EITHER BY FEDERAL
OR NEW YORK STATE AUTHORITIES OR (III) THERE SHALL HAVE OCCURRED ANY OUTBREAK OR
MATERIAL ESCALATION OF HOSTILITIES, DECLARATION BY THE UNITED STATES OF A
NATIONAL EMERGENCY OR WAR OR OTHER CALAMITY OR CRISIS THE EFFECT OF WHICH ON THE
FINANCIAL MARKETS OF THE UNITED STATES IS SUCH AS TO MAKE IT, IN THE JUDGMENT OF
THE UNDERWRITER, IMPRACTICABLE OR INADVISABLE TO PROCEED WITH THE OFFERING OR
DELIVERY OF THE CERTIFICATES AS CONTEMPLATED BY THE FINAL PROSPECTUS (EXCLUSIVE
OF ANY SUPPLEMENT THERETO).
REPRESENTATIONS AND INDEMNITIES TO SURVIVE. THE RESPECTIVE AGREEMENTS,
REPRESENTATIONS, WARRANTIES, INDEMNITIES AND OTHER STATEMENTS OF EQUITY ONE OR
THE DEPOSITOR OR THEIR RESPECTIVE OFFICERS AND OF THE UNDERWRITER SET FORTH IN
OR MADE PURSUANT TO THIS AGREEMENT WILL REMAIN IN FULL FORCE AND EFFECT,
REGARDLESS OF ANY INVESTIGATION MADE BY OR ON BEHALF OF THE UNDERWRITER, EQUITY
ONE OR THE DEPOSITOR OR ANY OF THE OFFICERS, DIRECTORS OR CONTROLLING PERSONS
REFERRED TO IN SECTION 8 HEREOF, AND WILL SURVIVE DELIVERY OF AND PAYMENT FOR
THE CERTIFICATES. THE PROVISIONS OF SECTIONS 7 AND 8 HEREOF SHALL SURVIVE THE
TERMINATION OR CANCELLATION OF THIS AGREEMENT.
NOTICES. ALL COMMUNICATIONS HEREUNDER WILL BE IN WRITING AND EFFECTIVE ONLY ON
RECEIPT, AND, IF SENT TO THE UNDERWRITER, WILL BE MAILED, DELIVERED OR
TELEGRAPHED AND CONFIRMED TO XXXXXXX XXXXX XXXXXX INC, SEVEN WORLD TRADE CENTER,
NEW YORK, NEW YORK 10048; OR, IF SENT TO THE DEPOSITOR OR EQUITY ONE, WILL BE
MAILED, DELIVERED OR TELEGRAPHED AND CONFIRMED TO EQUITY ONE AT EQUITY ONE,
INC., 000 XXXXXXXXXX XXXX, XXXXX 000, XX. LAUREL, NEW JERSEY 08054, ATTENTION:
TREASURER, AND TO THE DEPOSITOR AT 000 XXXXXXXX XXXXXXXX, 0000 XXXXXXXXXX XXXX,
XXXXXXXXXX, XXXXXXXX 00000, ATTENTION: TREASURER.
SUCCESSORS. THIS AGREEMENT WILL INURE TO THE BENEFIT OF AND BE BINDING UPON THE
PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS
22
AND THE OFFICERS AND DIRECTORS AND CONTROLLING PERSONS REFERRED TO IN SECTION 8
HEREOF, AND NO OTHER PERSON WILL HAVE ANY RIGHT OR OBLIGATION HEREUNDER.
APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, EACH
OF WHICH WILL BE DEEMED TO BE AN ORIGINAL, BUT ALL SUCH COUNTERPARTS WILL
TOGETHER CONSTITUTE ONE AND THE SAME AGREEMENT.
23
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among Equity One,
the Depositor and the Underwriter.
Very truly yours,
EQUITY ONE ABS, INC.
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
EQUITY ONE, INC.
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written
XXXXXXX XXXXX XXXXXX INC
By: /s/ Xxxx Xxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxx
Title: Associate
24
SCHEDULE I
TO
UNDERWRITING
AGREEMENT
Mortgage Pass-Through
Certificates, Series 1998-1 Principal Amount Purchase Price
--------------------------- ---------------- --------------
Class A-1 $100,027,563 99.681977%
Class A-2 $ 25,002,775 99.694699%
25
