EXHIBIT 1.1
XXXXXX XXXXXXX ABS CAPITAL I INC.
MORTGAGE-BACKED NOTES
Series 2001-3
UNDERWRITING AGREEMENT
New York, New York
November 8, 2001
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Pursuant to a Note Purchase Agreement, dated September 26,
2001 (the "Note Purchase Agreement") Xxxxxx Xxxxxxx ABS Capital I Inc., a
Delaware corporation (the "Company"), sold to you, as representative (the
"Representative") of yourself and Bear Xxxxxxx & Co. Inc.(together, the
"Underwriters"), ABFS Mortgage Loan Trust 2001-3 Mortgage-Backed Notes, Series
2001-3 in the original principal amount and with the designation described on
Schedule A attached hereto (the "Notes"). The Notes were issued pursuant to an
indenture dated as of September 1, 2001 (the "Indenture") by and among The Chase
Manhattan Bank, as Indenture Trustee (the "Indenture Trustee") and ABFS Mortgage
Loan Trust 2001-3, as Issuer (the "Issuer"). The Notes will be secured by a
pledge of a trust estate that consists primarily of two pools of mortgage loans
as described in a Prospectus Supplement, dated as of November 6, 2001. Prior to
the execution of this Agreement, the Representative has not made a public
offering of the Notes.
Under the terms of an Unaffiliated Seller's Agreement, dated
as of September 1, 2001 (the "Unaffiliated Seller's Agreement"), by and among
American Business Credit, Inc. ("ABC"), HomeAmerican Credit, Inc. d/b/a Upland
Mortgage ("Upland"), American Business Mortgage Services, Inc. ("ABMS")
(collectively, the "Originators"), ABFS 2001-3, Inc., a limited purpose Delaware
corporation (the "Unaffiliated Seller"), and the Company, each of the
Originators sold, without recourse, to the Unaffiliated Seller all of its right,
title and interest in and to certain specified mortgage loans (the "Mortgage
Loans") (except for their right, title and interest in principal collected and
interest accrued on such Mortgage Loans on or prior to the Cut-Off Date) on the
Closing Date and, pursuant to the terms of the Unaffiliated Seller's Agreement,
the Unaffiliated Seller sold to the Company, without recourse, all of its right,
title and interest in and to the Mortgage Loans on the Closing Date.
The Notes have the benefit of a financial guaranty insurance
policy (the "Credit Enhancement Instrument") issued by MBIA Insurance
Corporation (the "Credit Enhancer"), pursuant to an Insurance and Reimbursement
Agreement, dated as of September 26, 2001 (the "Insurance Agreement"), by and
among the Unaffiliated Seller, the Trust, the Originators, the Company, the
Indenture Trustee, and the Credit Enhancer.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, including a prospectus,
relating to the Notes and has filed with, or mailed for filing to, the
Commission a prospectus supplement specifically relating to the Notes pursuant
to Rule 424 under the Securities Act of 1933 (the "Securities Act"). The term
Registration Statement means such registration statement as amended to the
Closing Date (as defined herein). 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
Notes, as filed with, or mailed for filing to, the Commission pursuant to Rule
424. Any reference in this underwriting agreement (the "Agreement") to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, including
"Computational Materials" (as defined herein), as of the effective date of the
Registration Statement, the date of such preliminary prospectus or the
Prospectus or the Closing Date, as the case may be. Terms not otherwise defined
in this Agreement are used herein as defined in the Appendix I to the Indenture.
Now, therefore, in connection with the Registration Statement,
the Underwriters intend to make a public offering of the Notes, the parties
hereto agree as follows:
I.
The Company represents and warrants to and agrees with the
Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose
are pending before or threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such
part became effective, did not contain, and each such part, as
amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) the
Registration Statement and the Prospectus comply, and, as
amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (iii)
the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
except that the representations and warranties set forth in
this paragraph I(b) do not apply to statements or omissions in
the Registration Statement or the Prospectus based upon and in
conformity with information relating to the Underwriter
furnished to the Company in writing by the Underwriter
expressly for use or incorporation therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
the State of Delaware, has the corporate power and authority
to own its property and to conduct its business as described
in the Prospectus and to enter into and perform its
obligations under this Agreement, the Sale and Servicing
Agreement and the Unaffiliated Seller's Agreement.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
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(e) Each of the Sale and Servicing Agreement and the
Unaffiliated Seller's Agreement has been duly authorized,
executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable in accordance
with its terms except as the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and to general principles of
equity regardless of whether enforcement is sought in a
proceeding in equity or at law.
(f) The direction by the Company to the Indenture Trustee to
execute, authenticate and deliver the Notes has been duly
authorized by the Company, and the Notes, when executed and
authenticated in the manner contemplated in the Indenture, and
delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement, will be validly issued and
outstanding and entitled to the benefits of the Indenture.
(g) Neither the execution and delivery by the Company of, nor
the performance by the Company of its obligations under, this
Agreement, the Sale and Servicing Agreement and the
Unaffiliated Seller's Agreement, will contravene any provision
of applicable law or the certificate of incorporation or
by-laws of the Company or any agreement or other instrument
binding upon the Company that is material to the Company or
any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is
required for the performance by the Company of its obligations
under this Agreement, the Sale and Servicing Agreement and the
Unaffiliated Seller's Agreement, except such as may be
required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Notes.
(h) There has not occurred any material adverse change, or any
development involving a prospective material adverse change,
in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Prospectus.
(i) There are no legal or governmental proceedings pending or
threatened to which the Company is a party or to which any of
the properties of the Company are subject that are required to
be described in the Registration Statement or the Prospectus
and that are not so described, nor are there any statutes,
regulations, contracts or other documents required to be
described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement that are
not described or filed as required.
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(j) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended.
II.
The Company hereby agrees to sell the Notes to the
Underwriters, and the Underwriters, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees to purchase the Notes from the Company, for a purchase price which is the
sum of 99.72317% of the original principal amount of the Notes, together with
accrued interest to, but not including the Closing Date.
III.
The Underwriters propose to make a public offering of the
Notes as soon as this Agreement is entered into. The terms of the public
offering of the Notes are set forth in the Prospectus.
IV.
Payment for the Notes were made to the order of the Company in
immediately available funds at the office of Xxxxxx Xxxxxxx & Co. Incorporated,
1585 Broadway, New York, New York 10036, at 10:00 A.M., local time, on September
26, 2001. Payment for the Notes were made upon delivery to the Representative of
the Notes registered in such names and in such denominations as the Underwriters
had requested in writing not less than two full business days prior to the date
of delivery. The time and date of such payment and delivery with respect to the
Notes are herein referred to as the "Closing Date."
V.
The obligations of the Underwriters hereunder are subject to
the following conditions:
A. Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have 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 Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus, that in the
judgment of the Underwriter, is material and adverse and that
makes it, in the judgment of the Underwriter, impracticable to
market the Notes on the terms and in the manner contemplated
in the Prospectus; and
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(ii) the Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an
executive officer of the Company, to the effect set forth in
clause (i) above and to the effect that the representations
and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the Company
has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied on or
before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
B. The Underwriters shall have received on the Closing
Date an opinion of counsel for the Company, dated the Closing Date, to
the effect set forth in Exhibit A.
C. The Underwriters shall have received on the Closing
Date an opinion of counsel to the Underwriters in
form and substance acceptable to them.
D. The Underwriters shall have received on the Closing
Date an opinion of counsel to the Indenture Trustee in form and
substance acceptable to them.
E. The Underwriters shall have received on the Closing
Date an opinion of counsel to the Credit Enhancer in form and substance
acceptable to them.
F. The Underwriters shall have received on the Closing
Date an opinion of counsel to the Company, with respect to certain
matters relating to the transfer of the Mortgage Loans to the Trust,
and such counsel shall have consented to reliance on such opinion by
the Rating Agencies as though such opinion had been addressed to them.
G. The Credit Enhancement Instrument shall have been
issued by the Credit Enhancer and shall have been duly authenticated by
an authorized agent of the Credit Enhancer, if so required under
applicable state law or regulations.
H. The Notes shall have been rated "AAA" by Standard &
Poor's, a division of The XxXxxx-Xxxx Companies, Inc. and "Aaa" by
Xxxxx'x Investors Service, Inc.
I. The Underwriters shall have received on the Closing
Date a letter of Deloitte & Touche, dated the date of this Agreement in
form and substance satisfactory to the Underwriters, regarding certain
specified procedures performed thereby with respect to information set
forth in the Prospectus.
VI.
In further consideration of the agreements of the Underwriters
contained in this Agreement, the Company covenants as follows:
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A. To furnish the Underwriters, without charge, a
signed copy of the Registration Statement and any amendments thereto,
including exhibits, and, during the period mentioned in paragraph C.
below, as many copies of the Prospectus and any supplements and
amendments thereto as the Underwriters may reasonably request.
B. Before amending or supplementing the Registration
Statement or the Prospectus with respect to the Notes, to furnish the
Underwriters a copy of each such proposed amendment or supplement and
not to file any such proposed amendment or supplement to which the
Underwriters reasonably objects.
C. If, during such period after the first date of the
public offering of the Notes, as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by the Underwriters, any event shall occur or
condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement
the Prospectus to comply with law, forthwith to prepare and furnish, at
its own expense, to the Underwriters, either amendments or supplements
to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so
that the Prospectus will comply with law.
D. To endeavor to qualify the Notes for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the
Underwriters shall reasonably request and to pay all expenses
(including fees and disbursements of counsel) in connection with such
qualification and in connection with the determination of the
eligibility of the Notes for investment under the laws of such
jurisdictions as the Underwriters may designate.
E. To file in a timely manner with the Commission in
current reports on Form 8-K under the Securities and Exchange Act of
1934 (the "Exchange Act") all information with respect to the Notes
which constitutes "Computational Materials" as defined in 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, the No-Action Letter of May 27, 1994
issued by the Commission to the Public Securities Association and the
No-Action Letter of March 9, 1995 issued by the Commission to the
Public Securities Association, in accordance with and in the time
frames set forth in such letters.
VII.
This Agreement shall be subject to termination in the
Underwriters' absolute discretion, by notice given to the Company, if (a) after
the execution and delivery of this Agreement and prior to the Closing Date: (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities, or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Underwriters, is
material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event singly or together with any other such
event, makes it, in the judgment of the Underwriters, impracticable to market
the Notes on the terms and in the manner contemplated in the Prospectus.
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VIII.
If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters for all out-of-pocket
expenses (including the fees and disbursements of its counsel) reasonably
incurred by the Underwriters in connection with the Notes.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
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This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Very truly yours,
XXXXXX XXXXXXX ABS CAPITAL I INC.
By:
-------------------------------------
Name:
Title:
Accepted and agreed to by:
XXXXXX XXXXXXX & CO. INCORPORATED
By:
-----------------------------------------------
Name:
Title:
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SCHEDULE A
Principal Principal
Amount of Amount of
Underwriter Class A-1 Notes Class A-2 Notes
----------- --------------- ---------------
Xxxxxx Xxxxxxx & Co.
Incorporated $228,420,000 $46,980,000
Bear, Xxxxxxx & Co. Inc. $25,380,000 $5,220,000
Total $253,800,000 $52,200,000
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EXHIBIT A
OPINION OF XXXXX XXXXXXXXXX LLP, COUNSEL FOR THE COMPANY
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