Exhibit 1.1
EXECUTION COPY
NOVASTAR MORTGAGE FUNDING TRUST,
SERIES 1999-1
ASSET BACKED BONDS
SERIES 1999-1
UNDERWRITING AGREEMENT
UNDERWRITING AGREEMENT
First Union Capital Markets
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
January 22, 1999
Dear Sirs:
Residential Asset Funding Corporation (the "Depositor") proposes,
subject to the terms and conditions stated herein and in the attached
Underwriting Agreement Standard Provisions, dated January 22, 1999 (the
"Standard Provisions"), between the Depositor and Wheat First Securities, Inc.,
acting through First Union Capital Markets, a division of Wheat First
Securities, Inc. ("First Union") to issue and sell to you (the "Underwriter")
the securities specified in Schedule I hereto (the "Offered Securities") in the
amounts set forth in Schedule I hereto. The Depositor agrees that each of the
provisions of the Standard Provisions is incorporated herein by reference in its
entirety, and shall be deemed to be a part of this Agreement to the same extent
as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Underwriting Agreement. Each reference to the
"Representative" herein and in the provisions of the Standard Provisions so
incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Standard Provisions are used herein as
therein defined. The Prospectus Supplement and the accompanying Prospectus
relating to the Offered Securities (together, the "Prospectus") are incorporated
by reference herein.
Subject to the terms and conditions set forth herein and in the
Standard Provisions incorporated herein by reference, the Depositor agrees to
cause the Issuer to issue and sell to the Underwriter, and the Underwriter
agrees to purchase from the Depositor, at the time and place and at the purchase
price to the Underwriter and in the manner set forth in Schedule I hereto, the
original principal balance of the Offered Securities.
[Remainder of Page Intentionally Left Blank]
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If the foregoing is in accordance with your understanding, please
sign and return to us two counterparts hereof, and upon acceptance hereof by
you, this letter and such acceptance hereof, including the provisions of the
Standard Provisions incorporated herein by reference, shall constitute a binding
agreement between the Underwriter and the Depositor.
Yours truly,
RESIDENTIAL ASSET FUNDING CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
----------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
Accepted as of the date hereof:
WHEAT FIRST SECURITIES, INC.
acting through FIRST UNION CAPITAL MARKETS,
a division of Wheat First Securities, Inc.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
[Signature Page to Underwriting Agreement]
SCHEDULE I
Issuer: NovaStar Mortgage Funding Trust, Series
1999-1.
Title of Offered NovaStar Mortgage Funding Trust, Series
Securities: 1999-1, Home Equity Loan Asset Backed Bonds,
Series 1999-1, Class A-1, Class A-2, Class
A-3 and Class A-4.
Terms of Offered The Offered Securities shall have the terms
Securities: set forth in the Prospectus and shall conform
in all material respects to the descriptions
thereof contained therein, and shall be
issued pursuant to an Indenture to be dated
as of January 1, 1999 among the Issuer,
First Union National Bank, as Trust
Administrator and The Chase Manhattan Bank,
as Indenture Trustee.
Purchase Commitment: Wheat First Securities, Inc.,acting through
First Union Capital Markets Price, a division
of Wheat First Securities, Inc.: $160,000,000
Purchase Price: The purchase price for the Offered
Securities shall be 100% of the aggregate
principal balance of the Class A-1 Bonds,
Class A-2 Bonds, Class A-3 Bonds and the
Class A-4 Bonds, as of the Closing Date.
Specified funds for Federal Funds (immediately available funds).
payment of Purchase Price:
Required Ratings: Aaa by Xxxxx'x Investors Service, Inc.
AAA by Standard & Poor's Ratings Services.
Closing Date: On or about January 29, 1999 at 10:00 A.M.
eastern standard time or at such other time
as the Depositor and the Underwriter shall
agree.
Closing Location: Offices of Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Representative: Wheat First Securities, Inc., acting through
First Union Capital Markets, a division of
Wheat First Securities, Inc.
Address for Notices, etc.: First Union Capital Markets
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxx Xxxxxxxx
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STANDARD PROVISIONS TO UNDERWRITING AGREEMENT
January 22, 1999
From time to time, Residential Asset Funding Corporation, a North
Carolina corporation (the "Depositor") may enter into one or more underwriting
agreements (each, an "Underwriting Agreement") that provide for the sale of
designated securities to the several underwriters named therein (such
underwriters constituting the "Underwriter" with respect to such Underwriting
Agreement and the securities specified therein). The several underwriters named
in an Underwriting Agreement will be represented by one or more representatives
as named in such Underwriting Agreement (collectively, the "Representative").
The term "Representative" also refers to a single firm acting as sole
Underwriter. The standard provisions set forth herein (the "Standard
Provisions") may be incorporated by reference in any Underwriting Agreement.
This Agreement shall not be construed as an obligation of the Depositor to sell
any securities or as an obligation of any of the Underwriters to purchase such
securities. The obligation of the Depositor to sell any securities and the
obligation of any of the Underwriters to purchase any of the securities shall be
evidenced by the Underwriting Agreement with respect to the securities specified
therein. An Underwriting Agreement shall be in the form of an executed writing
(which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of the communications transmitted. The obligations of
the Underwriters under this Agreement and each Underwriting Agreement shall be
several and not joint. Unless otherwise defined herein, the terms defined in the
Underwriting Agreement are used herein as defined in the Prospectus referred to
below.
SECTION 1. THE OFFERED SECURITIES. The Depositor proposes to cause the Issuer to
sell, pursuant to the Underwriting Agreement to the Underwriter or Underwriters
named therein, asset backed bonds (the "Offered Securities") representing
obligations of the Issuer, which obligations are secured by a pledge of mortgage
loans (the "Mortgage Loans") and certain related property. The Offered
Securities will be issued pursuant to an indenture (the "Indenture") dated as of
January 1, 1999 among the Issuer, First Union National Bank, as trust
administrator (the "Trust Administrator") and The Chase Manhattan Bank, a New
York banking corporation, as indenture trustee (the "Indenture Trustee"). The
underlying loans were originated or acquired by NovaStar Mortgage, Inc. ("NMI",
in its capacity as seller, the "Seller", and in its capacity as servicer, the
"Servicer"). The Seller has conveyed its interest in the Mortgage Loans to
NovaStar Mortgage Funding Corporation II, a special purpose corporation and a
wholly-owned subsidiary of the Seller (the "Transferor"). The Transferor, in
turn, will convey the Mortgage Loans to the Depositor pursuant to a purchase
agreement (the "Purchase Agreement") which will in turn convey the Mortgage
Loans to the Issuer pursuant to the Purchase Agreement. The Mortgage Loans are
to be serviced pursuant to a Servicing Agreement dated as of January 1, 1999, by
and among the Issuer, NMI and the Indenture Trustee.
The Depositor has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File No. 333-64775),
including a prospectus relating to the Offered Securities under the Securities
Act of 1933, as amended (the "1933 Act"). The term "Registration Statement"
means such registration statement as amended to the date of the Underwriting
Agreement. The term "Base Prospectus" means the prospectus included in the
Registration Statement. The term "Prospectus" means the Base Prospectus together
with the prospectus supplement specifically relating to the Offered Securities,
as first filed with the Commission pursuant to Rule 424.
SECTION 2. OFFERING BY THE UNDERWRITER. Upon the execution of the Underwriting
Agreement with respect to any Offered Securities and the authorization by the
Representative of the release of such Offered Securities, the several
Underwriters propose to offer for sale to the public the Offered Securities at
the prices and upon the terms set forth in the Prospectus.
SECTION 3. PURCHASE, SALE AND DELIVERY OF THE OFFERED SECURITIES. Unless
otherwise specified in the Underwriting Agreement, payment for the Offered
Securities shall be made by wire transfer of immediately available funds to or
at the direction of the Depositor at the time and place set forth in the
Underwriting Agreement, upon delivery to the Representative for the respective
accounts of the several Underwriters of the Offered Securities registered in
definitive form and in such names and in such denominations as the
Representative shall request in writing not less than five full business days
prior to the date of delivery. The time and date of such payment and delivery
with respect to the Offered Securities are herein referred to as the "Closing
Date."
SECTION 4. CONDITIONS OF THE UNDERWRITER' OBLIGATIONS. The respective
obligations of the several Underwriters pursuant to the Underwriting Agreement
shall be subject, in the discretion of the Representative, to the accuracy in
all material respects of the representations and warranties of the Depositor
contained herein as of the date of the Underwriting Agreement and as of the
Closing Date as if made on and as of the Closing Date, to the accuracy in all
material respects of the statements of the officers of the Depositor and NMI
made in any certificates delivered pursuant to the provisions hereof and of the
Underwriting Agreement, to the performance by the Depositor of its covenants and
agreements contained herein and to the following additional conditions
precedent:
(a) All actions required to be taken and all filings required to be made by or
on behalf of the Depositor under the 1933 Act and the Securities Exchange Act of
1934, as amended (the "1934 Act") prior to the sale of the Offered Securities
shall have been duly taken or made;
(b) (i) No stop order suspending the effectiveness of the Registration Statement
shall be in effect; (ii) no proceedings for such purpose shall be pending before
or threatened by the Commission, or by any authority administering any state
securities or "Blue Sky" laws; (iii) any requests for additional information on
the part of the Commission shall have been complied with to the Representative's
reasonable satisfaction; (iv) since the respective dates as of which information
is given in the Registration Statement and the Prospectus except as otherwise
stated therein, there shall have been no material adverse change in the
condition, financial or otherwise, earnings, affairs, regulatory situation or
business prospects of the Depositor; (v) there are no material actions, suits or
proceedings pending before any court or governmental agency, authority or body
or threatened, affecting the Depositor or the transactions contemplated by the
Underwriting Agreement; (vi) the Depositor is not in violation of its charter or
its by-laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party or by
which it or its properties may be bound, which violations or defaults separately
or in the aggregate would have a material adverse effect on the Depositor; and
(vii) the Representative shall have received, on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Depositor, to
the foregoing effect;
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(c) Subsequent to the execution of the Underwriting Agreement, there shall not
have occurred any of the following: (i) if at or prior to the Closing Date,
trading in securities on the New York Stock Exchange shall have been suspended
or any material limitation in trading in securities generally shall have been
established on such exchange; (ii) if at or prior to the Closing Date, there
shall have been an outbreak or escalation of hostilities between the United
States and any foreign power, or of any other insurrection or armed conflict
involving the United States which results in the declaration of a national
emergency or war, and, in the reasonable opinion of the Representative, makes it
impracticable or inadvisable to offer or sell the Offered Securities; or (iii)
if at or prior to the Closing Date, a general moratorium on commercial banking
activities in New York shall have been declared by either federal or New York
State authorities;
(d) The Representative 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 Xxxxxxxxxx
LLP, counsel for the Representative, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(e) All corporate proceedings and other legal matters relating to the
authorization, form and validity of the Trust Agreement, the Indenture, the
Purchase Agreement, the Servicing Agreement, the Issuer, the Bonds, 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 the Representative and its counsel, 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.
(f) The Representative shall have received, on the Closing Date, a copy of the
letter from each nationally recognized statistical rating organization (as that
term is defined by the Commission for purposes of Rule 436(g)(2) under the 0000
Xxx) that rated the Offered Securities confirming that, unless otherwise
specified in the Underwriting Agreement, the Offered Securities have been rated
in the highest rating categories by each such organization and that each such
rating has not been rescinded since the date of the applicable letter;
(g) The Representative shall have received, on the Closing Date, an opinion of
Xxxxx Xxxxxxxxxx LLP, special counsel for the Depositor, dated the Closing Date,
in form and substance satisfactory to the Representative and containing opinions
substantially to the effect set forth in Exhibit A hereto;
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(h) The Representative shall have received, on the Closing Date, an opinion of
Xxxxxxx, Mag & Fizzell, P.C., counsel for NMI and the Transferor, dated the
Closing Date, in form and substance reasonably satisfactory to the
Representative and counsel for the Underwriter;
(i) The Representative shall have received, on the Closing Date, an opinion of
counsel for the Indenture Trustee, dated the Closing Date, in form and substance
satisfactory to the Representative and counsel for the Underwriter and
containing opinions substantially to the effect set forth in Exhibit B hereto;
(j) The Representative shall have received, on the Closing Date, an opinion of
counsel for the Trust Administrator, dated the Closing Date, in form and
substance satisfactory to the Representative and counsel for the Underwriter and
containing opinions substantially to the effect set forth in Exhibit B hereto;
(k) The Representative shall have received, on the Closing Date, an opinion of
Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriter, dated the Closing Date, with
respect to the incorporation of the Depositor, the validity of the Offered
Securities, the Registration Statement, the Prospectus and other related matters
as the Underwriter may reasonably require, and the Depositor shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters;
(l) The Representative shall have received, on the Closing Date, such other
opinions of counsel in form and substance satisfactory to the Representative and
counsel to the Underwriter as the Representative shall request;
(m) The Representative shall have received, on or prior to the date of first use
of the Prospectus Supplement relating to the Offered Securities, and on the
Closing Date if requested by the Representative, letters of independent
accountants of the Depositor in the form and reflecting the performance of the
procedures previously requested by the Representative;
(n) The Representative shall have received, on the Closing Date, a copy of the
indemnification side letter agreement (the "Indemnification Side Letter") duly
executed by the Depositor, the Seller and NovaStar Financial, Inc., a Maryland
corporation ("NFI") at or prior to the Closing Date;
(o) The Depositor shall have furnished or caused to be furnished to the
Representative on the Closing Date a certificate of an executive officer of the
Depositor satisfactory to the Representative as to the accuracy of the
representations and warranties of the Depositor herein at and as of such Closing
Date as if made as of such date, as to the performance by the Depositor of all
of its obligations hereunder to be performed at or prior to such Closing Date,
and as to such other matters as the Representative may reasonably request;
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(p) NMI shall have furnished or caused to be furnished to the Representative on
the Closing Date a certificate of officers of NMI in form and substance
reasonably satisfactory to the Representative;
(q) The Bond Guaranty Insurance Policy (the "Bond Insurance Policy") shall have
been duly executed and issued at or prior to the Closing Date and shall conform
in all material respects to the description thereof in the Prospectus
Supplement;
(r) The Representative shall have received, on the Closing Date, an opinion of
counsel to Financial Security Assurance, Inc. (the "Bond Insurer"), dated the
Closing Date, in form and substance satisfactory to the Representative and
counsel for the Underwriter and containing opinions substantially to the effect
set forth in Exhibit C hereto;
(s) On or prior to the Closing Date there shall not have occurred any
downgrading, nor shall any notice have been given of (i) any intended or
potential downgrading or (ii) any review or possible change in rating the
direction of which has not been indicated, in the rating accorded the Bond
Insurer's claims paying ability by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the 1933 Act;
(t) 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 of the Bond Insurer, since [December 31, 1997],
that is in the Representative's judgment material and adverse and that makes it
in the Representative's judgment impracticable to market the Offered Securities
on the terms and in the manner contemplated in the Prospectus;
(u) The Representative shall have received, on the Closing Date, a certificate
dated the Closing Date and signed by the president, a senior vice president or a
vice president of the Bond Insurer to the effect that the signer of such
certificate has carefully examined the Bond Insurance Policy, the Insurance
Agreement, dated the Closing Date, among the Bond Insurer, the Issuer, NMI, the
Depositor and the Indenture Trustee (the "Insurance Agreement"), the
Indemnification Agreement dated as of the Closing Date, among the Bond Insurer,
NovaStar Mortgage, Inc., as Seller and Servicer, the Transferor and Wheat First
Securities, Inc., acting through First Union Capital Markets, a division of
Wheat First Securities, Inc. (the "Indemnification Agreement"), and the related
documents and that, to the best of his or her knowledge based on reasonable
investigation:
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(i) there are no actions, suits or proceedings pending or threatened
against or affecting the Bond Insurer which, if adversely
determined, individually or in the aggregate, would adversely affect
the Bond Insurer's performance under the Bond Insurance Policy, the
Indemnification Agreement or the Insurance Agreement;
(ii) each person who, as an officer or representative of the Bond
Insurer, signed or signs the Bond Insurance Policy, the
Indemnification Agreement, the Insurance Agreement or any other
document delivered pursuant hereto, on the date thereof, or on the
Closing Date, in connection with the transactions described in this
Agreement was, at the respective times of such signing and delivery,
and is now, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such persons
appearing on such documents are their genuine signatures;
(iii) the information contained in the Prospectus under the caption "THE
BOND INSURER" is true and correct in all material respects and does
not omit to state a material fact with respect to the description of
the Bond Insurance Policy or the ability of the Bond Insurer to meet
its payment obligations under the Bond Insurance Policy;
(iv) the tables regarding the Bond Insurer's capitalization set forth
under the heading "THE BOND INSURER" present fairly the
capitalization of the Bond Insurer as of September 30, 1998;
(v) on or prior to the Closing Date, there has been no downgrading, nor
has any notice been given of (i) any intended or potential
downgrading or (ii) any review or possible changes in rating the
direction of which has not been indicated, in the rating accorded
the claims paying ability of the Bond Insurer by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of the 1933 Act;
(vi) the audited balance sheet of the Bond Insurer as of December 31,
1997 and the related statement of income and retained earnings for
the fiscal year then ended, and the accompanying footnotes, together
with an opinion thereon of PricewaterhouseCoopers L.L.P.,
independent certified public accountants, copies of which are
incorporated by reference in the Prospectus, fairly present in all
material respects the financial condition of the Bond Insurer as of
such date and for the period covered by such statements in
accordance with generally accepted accounting principles
consistently applied; and
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(vii) to the best knowledge of such officer, since September 30, 1998 no
material adverse change has occurred in the financial position of
the Bond Insurer other than as set forth in the Prospectus.
The officer of the Bond Insurer certifying to items (v)-(vii) shall
be an officer in charge of a principal financial function. The Bond
Insurer shall attach to such certificate a true and correct copy of
its certificate or articles of incorporation, as appropriate, and
its bylaws, all of which are in full force and effect on the date of
such certificate.
(viii) The Representative shall have been furnished such further
information, ertificates, documents and opinions as the
Representative mayreasonably request.
SECTION 5. COVENANTS OF THE DEPOSITOR. In further consideration of the
agreements of the Underwriter contained in the Underwriting Agreement, the
Depositor covenants as follows:
(a) To furnish the Representative, without charge, copies of the Registration
Statement and any amendments thereto including exhibits and as many copies of
the Prospectus and any supplements and amendments thereto as the Representative
may from time to time reasonably request.
(b) Immediately following the execution of the Underwriting Agreement, the
Depositor will prepare a prospectus supplement setting forth the principal
amount, notional amount or stated amount, as applicable, of Offered Securities
covered thereby, the price at which the Offered Securities are to be purchased
by the Underwriter from the Depositor, either the initial public offering price
or prices or the method by which the price or prices at which the Offered
Securities are to be sold will be determined, the selling concessions and
reallowances, if any, any delayed delivery arrangements, and such other
information as the Representative and the Depositor deem appropriate in
connection with the offering of the Offered Securities, but the Depositor will
not file any amendment to the Registration Statement or any supplement to the
Prospectus of which the Representative shall not previously have been advised
and furnished with a copy a reasonable time prior to the proposed filing or to
which the Representative shall have reasonably objected. The Depositor will use
its best efforts to cause any amendment to the Registration Statement to become
effective as promptly as possible. During the time when a Prospectus is required
to be delivered under the 1933 Act, the Depositor will comply so far as it is
able with all requirements imposed upon it by the 1933 Act and the rules and
regulations thereunder to the extent necessary to permit the continuance of
sales or of dealings in the Offered Securities in accordance with the provisions
hereof and of the Prospectus, and the Depositor will prepare and file with the
Commission, promptly upon request by the Representative, any amendments to the
Registration Statement or supplements to the Prospectus which may be necessary
or advisable in connection with the distribution of the Offered Securities by
the Underwriter, and will use its best efforts to cause the same to become
effective as promptly as possible. The Depositor will advise the Representative,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement or any amended Registration Statement has become
effective or any supplement to the Prospectus or any amended Prospectus has been
filed. The Depositor will advise the Representative, promptly after it receives
notice or obtains knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or any
order preventing or suspending the use of the Prospectus, or the suspension of
the qualification of the Offered Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any such
purpose, or of any request made by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information, and the Depositor will use its best efforts to prevent the issuance
of any such stop order or any order suspending any such qualification, and if
any such order is issued, to obtain the lifting thereof as promptly as possible.
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(c) If, at any time when a prospectus relating to the Offered Securities is
required to be delivered under the 1933 Act, any event occurs 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 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, or if it is necessary
for any other reason to amend or supplement the Prospectus to comply with the
1933 Act, to promptly notify the Representative thereof and upon their request
to prepare and file with the Commission, at the Depositor's own expense, an
amendment or supplement which will correct such statement or omission or any
amendment which will effect such compliance.
(d) During the period when a prospectus is required by law to be delivered in
connection with the sale of the Offered Securities pursuant to the Underwriting
Agreement, the Depositor will file, on a timely and complete basis, all
documents that are required to be filed by the Depositor with the Commission
pursuant to Sections 13, 14, or 15(d) of the 1934 Act.
(e) To qualify the Offered Securities for offer and sale under the securities or
"Blue Sky" laws of such jurisdictions as the Representative shall reasonably
request and to pay all expenses (including fees and disbursements of counsel) in
connection with such qualification of the eligibility of the Offered Securities
for investment under the laws of such jurisdictions as the Representative may
designate provided that in connection therewith the Depositor shall not be
required to qualify to do business or to file a general consent to service of
process in any jurisdiction.
(f) To make generally available to the Depositor's security holders, as soon as
practicable, but in any event not later than eighteen months after the date on
which the filing of the Prospectus, as amended or supplemented, pursuant to Rule
424 under the 1933 Act first occurs, an earnings statement of the Depositor
covering a twelve-month period beginning after the date of the Underwriting
Agreement, which shall satisfy the provisions of Section 11(a) of the 1933 Act
and the applicable rules and regulations of the Commission thereunder
(including, at the option of the Depositor, Rule 158).
(g) For so long as any of the Offered Securities remain outstanding, to furnish
to the Representative upon request in writing copies of such financial
statements and other periodic and special reports as the Depositor may from time
to time distribute generally to its creditors or the holders of the Offered
Securities and to furnish to the Representative copies of each annual or other
report the Depositor shall be required to file with the Commission.
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(h) For so long as any of the Offered Securities remain outstanding, the
Depositor will, or will cause the Servicer to, furnish to the Representative, as
soon as available, a copy of (i) the annual statement of compliance delivered by
the Servicer to the Indenture Trustee under the Servicing Agreement, (ii) the
annual independent public accountants' servicing report furnished to the
Indenture Trustee pursuant to the Servicing Agreement, (iii) each report
regarding the Offered Securities mailed to the holders thereof, and (iv) from
time to time, such other information concerning such securities as the
Representative may reasonably request.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The Depositor
represents and warrants to, and agrees with, each Underwriter, as of the date of
the Underwriting Agreement, as follows:
(a) The Registration Statement including a prospectus relating to the mortgage
backed securities and the offering thereof from time to time in accordance with
Rule 415 under the 1933 Act has been filed with the Commission and such
Registration Statement, as amended to the date of the Underwriting Agreement,
has become effective. No stop order suspending the effectiveness of such
Registration Statement has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission. A prospectus supplement
specifically relating to the Offered Securities will be filed with the
Commission pursuant to Rule 424 under the 1933 Act; provided, however, that a
supplement to the Prospectus prepared pursuant to Section 5(b) hereof shall be
deemed to have supplemented the Base Prospectus only with respect to the Offered
Securities to which it relates. The conditions to the use of a registration
statement on Form S-3 under the 1933 Act, as set forth in the General
Instructions on Form S-3, and the conditions of Rule 415 under the 1933 Act,
have been satisfied with respect to the Depositor and the Registration
Statement. There are no contracts or documents of the Depositor that are
required to be filed as exhibits to the Registration Statement pursuant to the
1933 Act or the rules and regulations thereunder that have not been so filed.
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(b) On the effective date of the Registration Statement, the Registration
Statement and the Base Prospectus conformed in all material respects to the
requirements of the 1933 Act and the rules and regulations thereunder, and did
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; on the date of the Underwriting Agreement and as of the
Closing Date, the Registration Statement and the Prospectus conform, and as
amended or supplemented, if applicable, will conform in all material respects to
the requirements of the 1933 Act and the rules and regulations thereunder, and
on the date of the Underwriting Agreement and as of the Closing Date, neither of
such documents, any Computational Materials nor any ABS Term Sheets includes any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
and neither of such documents as amended or supplemented, if applicable, will
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the foregoing does not apply to
statements or omissions in any of such documents based upon written information
furnished to the Depositor by any Underwriter specifically for use therein.
"Computational Materials" shall mean those materials delivered 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
and the no-action letter dated May 27, 1994 issued by the Division of
Corporation Finance of the Commission to the Public Securities Association for
which the filing of such material is a condition of the relief granted in such
letters. "ABS Term Sheet" shall mean those materials delivered in the form of
"Structural Term Sheets" or "Collateral Term Sheets," in each case within the
meaning of the no-action letter dated February 13, 1995 issued by the Division
of Corporation Finance of the Commission to the Public Securities Association
for which the filing of such material is a condition of the relief granted in
such letter.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein,
there has been no material adverse change in the condition, financial or
otherwise, earnings, affairs, regulatory situation or business prospects of the
Depositor, whether or not arising in the ordinary course of the business of the
Depositor.
(d) The Depositor has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of North Carolina.
(e) The Depositor has all requisite power and authority (corporate and other)
and all requisite authorizations, approvals, orders, licenses, certificates and
permits of and from all government or regulatory officials and bodies to own its
properties, to conduct its business as described in the Registration Statement
and the Prospectus and to execute, deliver and perform this Agreement, the Trust
Agreement, dated January 29, 1999, among the Transferor, the Depositor,
Wilmington Trust Company, as the Owner Trustee, The Chase Manhattan Bank, as
trust paying agent (the "Trust Agreement"), the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement, dated as of January 1, 1999,
between the Depositor and the Issuer (the "Purchase Agreement"), and the
Indemnification Side Letter, except such as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution by
the Underwriter of the Offered Securities; all such authorizations, approvals,
orders, licenses, and certificates are in full force and effect; and, except as
set forth or contemplated in the Registration Statement or the Prospectus, there
are no legal or governmental proceedings pending or, to the best knowledge of
the Depositor, threatened that would result in a material modification,
suspension or revocation thereof.
10
(f) The Offered Securities have been duly authorized, and when the Offered
Securities are issued and delivered pursuant to the Underwriting Agreement, the
Offered Securities will have been duly executed, issued and delivered and will
be entitled to the benefits provided by the Indenture, subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting the rights of creditors generally, and to
general principles of equity (regardless of whether the entitlement to such
benefits is considered in a proceeding in equity or at law), and will conform in
substance to the description thereof contained in the Registration Statement and
the Prospectus, and will in all material respects be in the form contemplated by
the Indenture.
(g) The execution and delivery by the Depositor of this Agreement, the
Underwriting Agreement, the Trust Agreement, the Purchase Agreement, the
Insurance Agreement, the Indemnification Agreement and the Indemnification Side
Letter (collectively, the "Depositor Agreements") are within the corporate power
of the Depositor and neither the execution and delivery by the Depositor of the
Depositor Agreements, nor the consummation by the Depositor of the transactions
therein contemplated, nor the compliance by the Depositor with the provisions
thereof, will conflict with or result in a breach of, or constitute a default
under, the charter or the by-laws of the Depositor or any of the provisions of
any law, governmental rule, regulation, judgment, decree or order binding on the
Depositor or its properties, or any of the provisions of any indenture,
mortgage, contract or other instrument to which the Depositor is a party or by
which it is bound, or will result in the creation or imposition of a lien,
charge or encumbrance upon any of its property pursuant to the terms of any such
indenture, mortgage, contract or other instrument, except such as have been
obtained under the 1933 Act and 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
Securities by the Underwriter.
(h) The Underwriting Agreement has been, and at the Closing Date the Trust
Agreement, the Purchase Agreement, the Insurance Agreement, the Indemnification
Agreement and the Indemnification Side Letter will have been, duly authorized,
executed and delivered by the Depositor.
(i) At the Closing Date, each of the Depositor Agreements will constitute a
legal, valid and binding obligation of the Depositor, enforceable against the
Depositor, in accordance with its terms, subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium and
other laws affecting the rights of creditors generally, and to general
principles of equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or at law).
11
(j) No filing or registration with, notice to, or consent, approval,
non-disapproval, authorization or order or other action of, any court or
governmental authority or agency is required for the consummation by the
Depositor of the transactions contemplated by the Depositor Agreements, except
such as have been obtained and except such as may be required under the 1933
Act, the rules and regulations thereunder, or state securities or "Blue Sky"
laws, in connection with the purchase and distribution of the Offered Securities
by the Underwriter.
(k) The Depositor owns or possesses or has obtained all material governmental
licenses, permits, consents, orders, approvals and other authorizations
necessary to lease, own or license, as the case may be, and to operate, its
properties and to carry on its business as presently conducted and has received
no notice of proceedings relating to the revocation of any such license, permit,
consent, order or approval, which singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would materially adversely affect
the conduct of the business, results of operations, net worth or condition
(financial or otherwise) of the Depositor.
(l) Other than as set forth or contemplated in the Prospectus, there are no
legal or governmental proceedings pending to which the Depositor is a party or
of which any property of the Depositor is the subject which, if determined
adversely to the Depositor would individually or in the aggregate have a
material adverse effect on the condition (financial or otherwise), earnings,
affairs, or business or business prospects of the Depositor and, to the best of
the Depositor's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(m) Each of the Offered Securities will, when issued, be a "mortgage related
security" as such term is defined in Section 3(a)(41) of the 1934 Act.
(n) The Indenture has been duly qualified under the Trust Indenture Act of 1939,
as amended, and the Issuer is not required to be registered under the Investment
Company Act of 1940, as amended.
(o) Any taxes, fees and other governmental charges in connection with the
execution and delivery of the Depositor Agreements, and issuance of the Offered
Securities have been or will be paid at or prior to the Closing Date.
12
SECTION 7. INDEMNIFICATION AND CONTRIBUTION. (a) The Depositor agrees to
indemnify and hold harmless each Underwriter (including Wheat First Securities,
Inc., acting through First Union Capital Markets, a division of Wheat First
Securities, Inc., acting in its capacity as Representative and as one of the
Underwriters), and each person, if any, who controls any Underwriter within the
meaning of the 1933 Act, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such controlling person may
become subject under the 1933 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 or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, any Computational
Materials, any ABS Term Sheets, or any amendment 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 will reimburse each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Depositor will not 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 untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Prospectus or any amendment or supplement
thereto in reliance upon and in conformity with (1) written information
furnished to the Depositor by any Underwriter through the Representative
specifically for use therein or (2) information regarding NovaStar Mortgage,
Inc., or the Mortgage Loans, except to the extent that the Depositor has been
indemnified by NovaStar Mortgage, Inc., or (3) information supplied by the Bond
Insurer. This indemnity agreement will be in addition to any liability which the
Depositor may otherwise have.
(b)Each Underwriter will indemnify and hold harmless the Depositor,
each of the Depositor's directors, each of the Depositor's officers who signed
the Registration Statement and each person, if any, who controls the Depositor,
within the meaning of the 1933 Act, against any losses, claims, damages or
liabilities to which the Depositor, or any such director, officer or controlling
person may become subject, under the 1933 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 or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, any
Computational Materials, any ABS Term Sheets or any amendment or supplement
thereto, or any other prospectus relating to the Offered Securities, 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, in each case to the extent, but only to the extent, that
such untrue statements or alleged untrue statements or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Depositor by any Underwriter through the Representative
specifically for use therein; and each Underwriter will reimburse any legal or
other expenses reasonably incurred by the Depositor or any such director,
officer or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity agreement will be
in addition to any liability which such Underwriter may otherwise have. The
Depositor acknowledges that the statements set forth under the caption
"UNDERWRITING" in the Prospectus Supplement constitute the only information
furnished to the Depositor by or on behalf of any Underwriter for use in the
Registration Statement, the Prospectus, and each of the several Underwriters
represents and warrants that such statements are correct as to it.
13
(c)In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the preceding
parts of this Section 7 is for any reason held to be unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
such losses, claims, damages or liabilities (or actions in respect thereof);
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by the
Depositor on the one hand, and the Underwriter on the other, from the offering
of the Offered Securities (taking into account the portion of the proceeds of
the offering realized by each), the Depositor's and the Underwriter's relative
knowledge and access to information concerning the matter with respect to which
the claim was asserted, the opportunity to correct and prevent any statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Depositor and the Underwriter agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation (even if the Underwriter were treated as one entity for such
purpose). No Underwriter or person controlling such Underwriter shall be
obligated to make contribution hereunder which in the aggregate exceeds the
total underwriting fee of the Offered Securities purchased by such Underwriter
under the Underwriting Agreement, less the aggregate amount of any damages which
such Underwriter and its controlling persons have otherwise been required to pay
in respect of the same or any substantially similar claim. The Underwriter's
obligation to contribute hereunder are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 7, each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter, and
each director of the Depositor, each officer of the Depositor who signed the
Registration Statement, and each person, if any, who controls the Depositor
within the meaning of Section 15 of the 1933 Act, shall have the same rights to
contribution as the Depositor.
SECTION 8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
representations, warranties, agreements, covenants, indemnities and other
statements of the Depositor, its officers and the several Underwriters set forth
in, or made pursuant to, the Underwriting Agreement shall remain in full force
and effect, regardless of any investigation, or statement as to the result
thereof, made by or on behalf of any Underwriter, the Depositor, or any of the
officers or directors or any controlling person of any of the foregoing, and
shall survive the delivery of and payment for the Offered Securities.
14
SECTION 9. TERMINATION. (a) The Underwriting Agreement may be terminated by the
Depositor by notice to the Representative in the event that a stop order
suspending the effectiveness of the Registration Statement shall have been
issued or proceedings for that purpose shall have been instituted or threatened.
(b)The Underwriting Agreement may be terminated by the
Representative by notice to the Depositor in the event that the Depositor shall
have failed, refused or been unable to perform all obligations and satisfy all
conditions to be performed or satisfied hereunder by the Depositor at or prior
to the Closing Date.
(c)Termination of the Underwriting Agreement pursuant to this
Section 9 shall be without liability of any party to any other party other than
as provided in Sections 7 and 11 hereof.
SECTION 10. DEFAULT OF UNDERWRITER. If any Underwriter or Underwriter defaults
or default in their obligation to purchase Offered Securities which it or they
have agreed to purchase under the Underwriting Agreement and the aggregate
principal amount of the Offered Securities which such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate principal amount, notional amount or stated amount, as applicable, of
the Offered Securities to be sold under the Underwriting Agreement, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments under the Underwriting Agreement to purchase the
Offered Securities which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters so defaults or default
and the aggregate principal amount of the Offered Securities with respect to
which such default or defaults occurs or occur is more than ten percent of the
aggregate principal amount, notional amount or stated amount, as applicable, of
Offered Securities to be sold under the Underwriting Agreement, as the case may
be, and arrangements satisfactory to the Representative and the Depositor for
the purchase of such Offered Securities by other persons (who may include one or
more of the non-defaulting Underwriters including the Representative) are not
made within 36 hours after any such default, the Underwriting Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Depositor except for the expenses to be paid or reimbursed by the Depositor
pursuant to Section 11 hereof. As used in the Underwriting Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10. Nothing herein shall relieve a defaulting Underwriter from liability
for its default.
15
SECTION 11. EXPENSES. The Depositor agrees with the several Underwriters that:
(a) whether or not the transactions contemplated in the Underwriting Agreement
are consummated or the Underwriting Agreement is terminated, the Depositor will
pay all fees and expenses incident to the performance of its obligations under
the Underwriting Agreement, including, but not limited to, (i) the Commission's
registration fee, (ii) the expenses of printing and distributing the
Underwriting Agreement and any related underwriting documents, the Registration
Statement, the Prospectus, any amendments or supplements to the Registration
Statement or the Prospectus, and any Blue Sky memorandum or legal investment
survey and any supplements thereto, (iii) fees and expenses of rating agencies,
accountants and counsel for the Depositor, (iv) the expenses referred to in
Section 5(e) hereof, and (v) all miscellaneous expenses referred to in Item 30
of the Registration Statement;
(b) all out-of-pocket expenses, including counsel fees, disbursements and
expenses, reasonably incurred by the Underwriter in connection with
investigating, preparing to market and marketing the Offered Securities and
proposing to purchase and purchasing the Offered Securities under the
Underwriting Agreement will be borne and paid by the Depositor if the
Underwriting Agreement is terminated by the Depositor pursuant to Section 9(a)
hereof or by the Representative on account of the failure, refusal or inability
on the part of the Depositor to perform all obligations and satisfy all
conditions on the part of the Depositor to be performed or satisfied hereunder;
and
(c) the Depositor will pay the cost of preparing the certificates for the
Offered Securities.
Except as otherwise provided in this Section 11, the Underwriters
agree to pay all of their expenses in connection with investigating, preparing
to market and marketing the Offered Securities and proposing to purchase and
purchasing the Offered Securities under the Underwriting Agreement, including
the fees and expenses of their counsel and any advertising expenses incurred by
them in making offers and sales of the Offered Securities.
SECTION 12. NOTICES. All communications under the Underwriting Agreement shall
be in writing and, if sent to the Underwriter, shall be mailed, delivered or
telegraphed and confirmed to the Representative at the address and to the
attention of the person specified in the Underwriting Agreement, and, if sent to
the Depositor, shall be mailed, delivered or telegraphed and confirmed to
Residential Asset Funding Corporation, One First Union Center, 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: Managing Director -
Asset Finance Group; provided, however, that any notice to any Underwriter
pursuant to the Underwriting Agreement shall be mailed, delivered or telegraphed
and confirmed to such Underwriter at the address furnished by it.
16
SECTION 13. REPRESENTATIVE OF UNDERWRITER. Any Representative identified in the
Underwriting Agreement will act for the Underwriters of the Offered Securities
and any action taken by the Representative under the Underwriting Agreement will
be binding upon all of such Underwriters.
SECTION 14. SUCCESSORS. The Underwriting Agreement shall inure to the benefit of
and shall be binding upon the several Underwriters and the Depositor and their
respective successors and legal representatives, and nothing expressed or
mentioned herein or in the Underwriting Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of the Underwriting Agreement, or any provisions herein
contained, the Underwriting Agreement and all conditions and provisions hereof
being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the
representations and warranties of the Depositor contained herein or in the
Underwriting Agreement shall also be for the benefit of any person or persons
who controls or control any Underwriter within the meaning of Section 15 of the
1933 Act, and (ii) the indemnities by the several Underwriters shall also be for
the benefit of the directors of the Depositor, the officers of the Depositor who
have signed the Registration Statement and any person or persons who control the
Depositor within the meaning of Section 15 of the 1933 Act. No purchaser of the
Offered Securities from any Underwriter shall be deemed a successor because of
such purchase. This Agreement and each Underwriting Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
SECTION 15. TIME OF THE ESSENCE. Time shall be of the essence in each
Underwriting Agreement.
SECTION 16. GOVERNING LAW. This Agreement and each Underwriting Agreement shall
be governed by and construed in accordance with the laws of the State of New
York.
[Signature Page Follows]
17
If the foregoing is in accordance with your understanding, please
sign and return two counterparts hereof.
Yours truly,
RESIDENTIAL ASSET FUNDING CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
Accepted as of the date hereof:
WHEAT FIRST SECURITIES, INC.
acting through FIRST UNION CAPITAL MARKETS,
a division of Wheat First Securities, Inc.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
[Signature Page to Underwriting Agreement Standard Provisions]
Exhibit A
Opinions of Xxxxx Xxxxxxxxxx LLP,
special counsel for the Depositor
(1) Each of the Depositor Documents constitutes the valid, legal and
binding agreement of the Depositor, and is enforceable against the Depositor in
accordance with its terms.
(2) The Bonds, assuming the due execution by the Indenture Trustee
and due authentication by the Indenture Trustee and payment therefor pursuant to
the Underwriting Agreement, are validly issued and outstanding and are entitled
to the benefits of the Indenture.
(3) No consent, approval, authorization or order of, registration or
filing with, or notice to, any governmental authority or court is required under
federal laws or the laws of the State of New York for the execution, delivery
and performance of the Depositor Documents or the offer, issuance, sale or
delivery of the Bonds or the consummation of any other transaction contemplated
thereby by the Depositor, except such which have been obtained.
(4) The Registration Statement and the Prospectus (other than the
financial and statistical data included therein, as to which we are not called
upon to express any opinion), at the time the Registration Statement became
effective, as of the date of execution of the Underwriting Agreement and as of
the date hereof comply as to form in all material respects with the requirements
of the 1933 Act and the rules and regulations thereunder, and the 1934 Act and
the rules and regulations thereunder, and we do not know of any amendment to the
Registration Statement required to be filed, or of any contracts, indentures or
other documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration Statement
or the Prospectus, which has not been filed or described as required.
(5) The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended and the Issuer is not required to be registered under
the Investment Company Act of 1940.
A-1
(6) The statements in the Prospectus Supplement set forth under the
caption "DESCRIPTION OF THE BONDS," to the extent such statements purport to
summarize certain provisions of the Bonds or of the Indenture, are fair and
accurate in all material respects.
(7) Neither the Depositor nor the Issuer is an "investment company"
or under the "control" of an "investment company" as such terms are defined in
the 0000 Xxx.
(8) For federal income tax purposes, the Bonds will be treated as a
"Real Estate Mortgage Investment Conduit."
Such counsel shall also have furnished to the Representative a
written statement, addressed to the Representative and dated the Closing Date,
in form and substance satisfactory to the Representative 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 statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading (except as to financial or statistical data
contained in the Registration Statement); (b) the Prospectus, as of its date and
as of the Closing Date, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (c) any document
incorporated by reference in the Prospectus or any further amendment or
supplement to any such incorporated document made by the Depositor prior to the
Closing Date 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.
A-2
Exhibit B
Opinions of Counsel to
the Indenture
Trustee
--------------------
(1) The Indenture Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of New York
and has the power and authority to enter into and to take all actions required
of it under the Indenture.
(2) The Indenture has been duly authorized, executed and delivered
by the Indenture Trustee and the Indenture constitutes the legal, valid and
binding obligation of the Indenture Trustee, enforceable against the Indenture
Trustee in accordance with its terms, except as enforceability thereof may be
limited by (A) bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally, as such laws would
apply in the event of a bankruptcy, insolvency or reorganization or similar
occurrence affecting the Indenture Trustee, and (B) general principles of equity
regardless of whether such enforcement is sought in a proceeding at law or in
equity.
(3) No consent, approval, authorization or other action by any
governmental agency or body or other tribunal is required on the part of the
Indenture Trustee in connection with its execution and delivery of the Indenture
or the performance of its obligations thereunder.
(4) The Bonds have been duly executed, authenticated and delivered
by the Indenture Trustee.
(5) The execution and delivery of, and performance by the Indenture
Trustee of its obligations under, the Indenture do not conflict with or result
in a violation of any statute or regulation applicable to the Indenture Trustee,
or the charter or bylaws of the Indenture Trustee, or to the best knowledge of
such counsel, any governmental authority having jurisdiction over the Indenture
Trustee or the terms of any indenture or other agreement or instrument to which
the Indenture Trustee is a party or by which it is bound.
B-1
Exhibit C
Opinions of Counsel
to the Bond Insurer
(1) The Bond Insurer is a stock insurance corporation, duly
incorporated and validly existing under the laws of the State of New York. The
Bond Insurer is validly licensed and authorized to issue the Note Insurance
Policy and perform its obligations under the Bond Insurance Policy in accordance
with the terms thereof, under the laws of the State of New York.
(2) The execution and delivery by the Bond Insurer of the Bond
Insurance Policy, the Insurance Agreement and the Indemnification Agreement are
within the corporate power of the Bond Insurer and have been authorized by all
necessary corporate action on the part of the Bond Insurer; the Bond Insurance
Policy has been duly executed and is the valid and binding obligation of the
Bond Insurer enforceable in accordance with its terms except that the
enforcement of the Bond Insurance Policy may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium, receivership and other
similar laws affecting creditors' rights generally and by general principles of
equity.
(3) The Bond Insurer is authorized to deliver the Indemnification
Agreement and the Insurance Agreement, and the Indemnification Agreement and the
Insurance Agreement have been duly executed and are the valid and binding
obligations of the Bond Insurer enforceable in accordance with their terms
except that the enforcement thereof may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium, receivership and other
similar laws affecting creditors' rights generally and by general principles of
equity and by public policy considerations relating to indemnification for
securities law violations.
(4) No consent, approval, authorization or order of any state or
federal court or governmental agency or body is required on the part of the Bond
Insurer, the lack of which would adversely affect the validity or enforceability
of the Bond Insurance Policy; to the extent required by applicable legal
requirements that would adversely affect validity or enforceability of the Bond
Insurance Policy, the form of each Bond Insurance Policy has been filed with,
and approved by, all governmental authorities having jurisdiction over the Bond
Insurer in connection with such Bond Insurance Policy.
(5) To the extent the Bond Insurance Policy constitutes a security
within the meaning of Section 2(1) of the 1933 Act, it is a security that is
exempt from the registration requirements of the 0000 Xxx.
(6) The information set forth under the captions "THE INSURANCE
POLICY" and "THE BOND INSURER" in the Prospectus insofar as such statements
constitute a description of the Bond Insurance Policy, accurately summarizes the
Bond Insurance Policy.
C-1
