EXHIBIT 1.1
UNDERWRITING AGREEMENT
MORTGAGE LENDERS NETWORK HOME EQUITY LOAN TRUST 1999-1
ASSET BACKED NOTES
SERIES 1999-1
UNDERWRITING AGREEMENT
UNDERWRITING AGREEMENT
First Union Capital Markets
as Representative of the several Underwriters
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
May 27, 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 May 27, 1999 (the "Standard
Provisions"), between the Depositor and First Union Capital Markets Corp.
("First Union") as representative of the several underwriters to issue and sell
to you and Prudential Securities Incorporated ("Prudential" and, together with
First Union, the "Underwriters") 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 First Union. 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 Underwriters, and each 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 in the amounts set forth in
Schedule I hereto with respect to each Underwriter.
[Remainder of Page Intentionally Left Blank]
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 Underwriters and the Depositor.
Yours truly,
RESIDENTIAL ASSET FUNDING CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: SVP
Accepted as of the date hereof:
FIRST UNION CAPITAL MARKETS CORP.
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: SVP
[Underwriting Agreement]
2
SCHEDULE I
Issuer: Mortgage Lenders Network Home Equity Loan Trust
1999-1.
Title of Offered Securities: Mortgage Lenders Network Home Equity Loan Trust
0000-0, Xxxxx Backed Notes, Series 1999-1,
Class A-1 and Class A-2.
Terms of Offered Securities: The Offered Securities shall have the terms 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 June
1, 1999 among the Issuer and Norwest Bank
Minnesota, National Association, as indenture
trustee.
Purchase Commitment: First Union Capital Markets Corp.
Class A-1: $70,376,600
Class A-2: $31,200,400
Prudential Securities Incorporated:
Class A-1: $30,161,400
Class A-2: $13,371,600
Purchase Price: The purchase price for the Offered Securities
shall be 100.00% of the aggregate principal
balance of the Notes as of the Closing Date
plus accrued interest at the rate of (i) 6.945%
per annum on the aggregate principal balance of
the Class A-1 Notes from May 1, 1999 to but not
including June 4, 1999 and (ii) 6.995% per
annum on the aggregate principal balance of the
Class A-2 Notes from May 1, 1999 to but not
including June 4, 1999
Specified funds for payment of
Purchase Price: Federal Funds (immediately available funds).
Required Ratings: Aaa by Xxxxx'x Investors Service, Inc.
AAA by Standard & Poor's Ratings Services
Closing Date: On or about June 4, 1999 at 10:00 A.M. eastern
standard time or at such other time as the
Depositor and the Underwriters shall agree.
I-1
Closing Location: Offices of Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Representative: Designated Representative: First Union Capital
Markets Corp.
Address for Notices, etc.: First Union Capital Markets Corp.
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxx Xxxxxxx
I-2
STANDARD PROVISIONS TO UNDERWRITING AGREEMENT
May 27, 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
representative of the Underwriters and to Underwriters who act without any firm
being designated as their representative. 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, two classes of asset backed notes
(the "Securities") representing obligations of the Issuer, which obligations are
secured by a pledge of mortgage loans (the "Mortgage Loans") and certain related
property. The Securities will be issued pursuant to an indenture (the
"Indenture") dated as of June 1, 1999 by and between the Issuer and Norwest Bank
Minnesota, National Association, as indenture trustee (the "Indenture Trustee").
The underlying loans were originated or acquired by Mortgage Lenders Network
USA, Inc. ("MLN"). MLN has conveyed its interest in the Mortgage Loans to the
Depositor which will in turn convey the Mortgage Loans to the Issuer. The
Mortgage Loans are to be serviced pursuant to a Servicing Agreement dated as of
June 1, 1999 by and among the Issuer, MLN, as servicer (in such capacity, the
"Servicer"), Norwest Bank Minnesota, National Association, as master servicer
(in such capacity, the "Master Servicer") and the Indenture Trustee.
The terms and rights of any particular issuance of Securities
shall be as specified in the Underwriting Agreement relating thereto and in or
pursuant to the Indenture identified in such Underwriting Agreement. The
Securities which are the subject of any particular Underwriting Agreement into
which this Agreement is incorporated are herein referred to as the "Offered
Securities."
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 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. The term
"Preliminary Prospectus" means a preliminary prospectus supplement specifically
relating to the Offered Securities together with the Base Prospectus.
SECTION 2. OFFERING BY THE UNDERWRITERS. Upon the execution of
the Underwriting Agreement 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 certified or official bank check or
checks payable to the order of the Depositor in immediately available or next
day funds, 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 the
Servicer made in any certificates 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
2
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.
(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, or a banking moratorium shall have
been declared by New York or United States authorities; (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 have received, on the Closing
Date, a certificate dated the Closing Date and signed by an executive officer of
the Depositor to the effect that attached thereto is a true and correct 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 and 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
substantially to the effect set forth in Exhibit E hereto[missing exhibit E].
(e) 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.
(f) The Representative shall have received, on the Closing
Date, an opinion of Xxxxx and Xxxx LLP, counsel for MLN, dated the Closing Date,
in form and substance satisfactory to the Representative and counsel for the
Underwriters and containing opinions substantially to the effect set forth in
Exhibit B hereto.
(g) 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
Underwriters and containing opinions substantially to the effect set forth in
Exhibit C hereto.
(h) 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 Underwriters may reasonably require, and the
3
Depositor shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(i) 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 Underwriters as the Representative shall
request.
(j) The Representative shall have received, on or prior to the
date of first use of each of the preliminary prospectus supplement and 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.
(k) 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;
(l) The Servicer shall have furnished or caused to be
furnished to the Representative on the Closing Date a certificate of officers of
the Servicer in form and substance reasonably satisfactory to the
Representative;
(m) The Master Servicer shall have furnished or caused to be
furnished to the Representative on the Closing Date a certificate of officers of
the Master Servicer in form and substance reasonably satisfactory to the
Representative;
(n) The Note Guaranty Insurance Policy (the "Note 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.
(o) The Representative shall have received, on the Closing
Date, an opinion of counsel to MBIA Insurance Corporation. (the "Note Insurer"),
dated the Closing Date, in form and substance satisfactory to the Representative
and counsel for the Underwriters and containing opinions substantially to the
effect set forth in Exhibit D hereto.
(p) 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
Note Insurer's claims paying ability by any "nationally recognized statistical
rating organization," as such term is defined for purposes of the 0000 Xxx.
(q) There has not occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or in
the earnings, business or operations, since December 31, 1997 of the Note
Insurer, that is in the Representative's judgment material and adverse and that
makes it in the Representative's judgment impracticable to market the Offered
Securities on the terms and in the manner contemplated in the Prospectus.
4
(r) 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 Note Insurer to the effect that the
signer of such certificate has carefully examined the Note Insurance Policy, the
Insurance Agreement dated the Closing Date (the "Insurance Agreement") among the
Note Insurer, the Issuer, the Servicer, the Depositor and the Indenture Trustee
and the related documents and that, to the best of his or her knowledge based on
reasonable investigation:
(i) there are no actions, suits or proceedings pending or
threatened against or affecting the Note Insurer which, if
adversely determined, individually or in the aggregate, would
adversely affect the Note Insurer's performance under the Note
Insurance Policy or the Insurance Agreement;
(ii) each person who, as an officer or representative of the
Note Insurer, signed or signs the Note Insurance Policy, 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 NOTE INSURANCE" is true and correct in all
material respects and does not omit to state a material fact
with respect to the description of the Note Insurance Policy
or the ability of the Note Insurer to meet its payment
obligations under the Note Insurance Policy;
(iv) the tables regarding the Note Insurer's capitalization
set forth under the heading "THE NOTE INSURANCE-THE NOTE
INSURER" present fairly the capitalization of the Note Insurer
as of March 31, 1999;
(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 Note 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 Note Insurer as of
December 31, 1998 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 Note Insurer as of such date and
for the period covered by such statements in accordance with
generally accepted accounting principles consistently applied.
5
(vii) to the best knowledge of such officer, since December
31, 1998 no material adverse change has occurred in the
financial position of the Note Insurer other than as set forth
in the Prospectus.
The officer of the Note Insurer certifying to items (v)-(vii)
shall be an officer in charge of a principal financial
function. The Note 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.
(s) The Representative shall have been furnished such further
information, certificates, documents and opinions as the Representative may
reasonably request.
SECTION 5. COVENANTS OF THE DEPOSITOR. In further
consideration of the agreements of the Underwriters 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 Underwriters 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
6
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any order preventing or suspending the use of any
preliminary Prospectus or 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.
(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.
7
(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 of such
Securities, 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 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.
(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 X. Xxxxxx, Peabody & Co., Incorporated, and
Xxxxxx Structured Asset Corporation and the no-action letter
8
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 Underwriting Agreement, the Deposit Trust Agreement,
Loan Sale Agreement and the Mortgage Loan Contribution Agreement, except such as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution by the Underwriters of the Offered Securities; all
such authorizations, approvals, orders, licenses, certificates are in full force
and effect and contain no unduly burdensome provisions; 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.
(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 Deposit Trust Agreement, dated as of
June 1, 1999, among the Depositor, the Owner Trustee and MLN Capital Corporation
I (the "Deposit Trust Agreement"), Mortgage Loan Sale Agreement, dated as of
June 1, 1999, between MLN and the Depositor (the "Loan Sale Agreement) and the
Mortgage Loan Contribution Agreement, dated as of June 1, 1999, between the
Depositor and the Issuer (the "Mortgage Loan Contribution Agreement)
(collectively, the "Depositor Agreements") are within the corporate power of the
Depositor and neither the
9
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
Underwriters.
(h) The Underwriting Agreement has been, and at the Closing
Date the Deposit Trust Agreement, the Loan Sale Agreement and the Mortgage Loan
Contribution Agreement 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).
(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 Underwriters.
(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.
10
(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) At the Closing Date, the representations and warranties
made by the Depositor in such Mortgage Loan Contribution Agreement will be true
and correct.
(o) At the time of execution and delivery of the Mortgage Loan
Contribution Agreement, the Depositor will have good and marketable title to the
Mortgage Loans being transferred to the Issuer pursuant to the Mortgage Loan
Contribution Agreement, free and clear of any lien, mortgage, pledge, charge,
encumbrance, adverse claim or other security interest claiming through the
Depositor (collectively, "Liens"), and will not have assigned to any person any
of its right, title or interest in such Mortgage Loans or in such Mortgage Loan
Contribution Agreement, the Depositor will have the power and authority to
transfer such Mortgage Loans to the Issuer and to cause the Issuer to transfer
the Offered Securities to each of the Underwriters, and upon execution and
delivery to the Issuer of the Mortgage Loan Contribution Agreement and delivery
to each of the Underwriters of the Offered Securities, the Issuer will have good
and marketable title to the Mortgage Loans, and each of the Underwriters will
have good and marketable title to the Offered Securities, in each case free and
clear of any Liens claiming through the Depositor.
(p) The Indenture has been duty 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.
(q) 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.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION. (a) The Depositor
agrees to indemnify and hold harmless each Underwriter (including First Union
Capital Markets Corp., 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, any Preliminary Prospectus, 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, any Preliminary Prospectus,
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 the MLN or the
11
Mortgage Loans, except to the extent that the Depositor has been indemnified by
MLN or (3) information supplied by the Note 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, any Preliminary
Prospectus, 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, any Preliminary
Prospectus or the Prospectus, and each of the several Underwriters represents
and warrants that such statements are correct as to it.
(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
12
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.
(d) The parties hereto agree that the first sentence of
Section 6 of the Indemnification Agreement (the "Indemnification Agreement")
dated as of the Closing Date among the Note Insurer, MLN, First Union Capital
Markets Corp. and Prudential Securities Incorporated, shall not be construed as
limiting the Depositor's right to enforce its rights under Section 7 of this
Agreement. The parties further agree that, as between the parties hereto, to the
extent that the provisions of Section 5 of the Indemnification Agreement
conflict with Section 7 hereof, the provisions of Section 7 hereof shall govern.
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.
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
defaults in its obligation to purchase Offered Securities which it has agreed to
purchase under the Underwriting Agreement and the aggregate principal amount of
the Offered Securities which such defaulting Underwriter 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 Underwriter
shall be obligated severally in proportion to their respective commitments under
the Underwriting Agreement to purchase the
13
Offered Securities which such defaulting Underwriter agreed but failed to
purchase. If any Underwriter so defaults and the aggregate principal amount of
the Offered Securities with respect to which such default 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 Underwriter
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.
SECTION 11. EXPENSES. The Depositor agrees with the several
Underwriter 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, any Preliminary Prospectus,
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 Underwriters 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.
14
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.
SECTION 13. REPRESENTATIVE OF UNDERWRITERS. 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 Underwriter.
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
of 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]
15
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:
Title:
Accepted as of the date hereof:
FIRST UNION CAPITAL MARKETS CORP.
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------
Name:
Title:
[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 Notes, 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 Documents or the offer, issuance,
sale or delivery of the Notes 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
Exchange 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.
(6) The statements in the Prospectus Supplement set forth
under the caption "DESCRIPTION OF THE NOTES," to the extent such statements
purport to summarize certain provisions of the Notes or of the Indenture, are
fair and accurate in all material respects.
A-1
Exhibit B
Form of Opinions of Counsel to
Mortgage Lenders Network, USA, Inc.
-----------------------------------
(1) Mortgage Lenders Network, USA, Inc. (the "Company") has
been duly organized and is validly existing as a corporation in good standing
under the State of Delaware and is duly qualified to transact business in all
states in which the conduct of its business requires such qualification.
(2) The Company has the requisite power and authority to
execute and deliver, engage in the transactions contemplated by, and perform and
observe the conditions of, the Basic Documents (as defined in the Indenture) to
which it is a party (collectively referred to herein as the "Company
Agreements").
(3) The Company Agreements have been duly and validly
authorized, executed and delivered by the Company, all requisite corporate
action having been taken with respect thereto, and each constitutes the valid,
legal and binding agreement of the Company, and are enforceable against the
Company in accordance with their respective terms.
(4) Neither the transfer of the Mortgage Loans to the
Depositor, nor the execution, delivery or performance by the Company of the
Company Agreements conflicts or will conflict with or results or will result in
a breach of, or constitutes or will constitute a default under or violates or
will violate, (i) any term or provision of the Articles of Incorporation or
By-laws of the Company; (ii) any term or provision of any material agreement,
contract, instrument or indenture, to which the Company or any of its
subsidiaries is a party or is bound; or (iii) any order, judgment, writ,
injunction or decree of any court or governmental agency or body or other
tribunal having jurisdiction over the Company or any of its properties.
(5) The endorsement and delivery of each Mortgage Note, and
the preparation, delivery and recording of an Assignment of Mortgage with
respect to each Mortgage is sufficient fully to transfer to the Depositor and
its assignees all right, title and interest of the Company in the Mortgage Note
and Mortgage, as noteholder and mortgagee or assignee thereof.
(6) No consent, approval, authorization or order of,
registration or qualification of or with or notice to, any courts, governmental
agency or body or other tribunal is required under the laws of New York or
Delaware, for the execution, delivery and performance of the Company Agreements
or the consummation of any other transaction contemplated thereby by the
Company, except such which have been obtained.
(7) There are no legal or governmental suits, proceedings or
investigations pending or, to such counsel's knowledge, threatened against the
Company before any court, governmental agency or body or other tribunal (A)
which, if determined adversely to the Company, would individually or in the
aggregate have a material adverse effect on (i) the consolidated financial
position, business prospects, stockholders' equity or results of operations of
the Company; (ii) the Company's ability to perform its obligations under, or the
validity or enforceability of, the Company Agreements; (iii) any Mortgage Note
or Mortgaged Property, or the title of any Mortgagor to any Mortgaged Property;
or (B) which have not otherwise been disclosed in the
B-1-1
Registration Statement and to the best of such counsel's knowledge, no such
proceedings or investigations are threatened or contemplated by governmental
authorities or threatened by others.
B-2
Exhibit C
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 Notes 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.
Exhibit D
Opinions of Counsel
to the Note Insurer
-------------------
(1) The Note Insurer is a stock insurance corporation, duly
incorporated and validly existing under the laws of the State of New York. The
Note Insurer is validly licensed and authorized to issue the Note Insurance
Policy and perform its obligations under the Note Insurance Policy in accordance
with the terms thereof, under the laws of the State of New York.
(2) The execution and delivery by the Note Insurer of the Note
Insurance Policy, and the Indemnification Agreement are within the corporate
power of the Note Insurer and have been authorized by all necessary corporate
action on the part of the Note Insurer; the Note Insurance Policy has been duly
executed and is the valid and binding obligation of the Note Insurer enforceable
in accordance with its terms except that the enforcement of the Note 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 Note Insurer is authorized to deliver the
Indemnification Agreement, and the Indemnification Agreement has been duly
executed and is the valid and binding obligation of the Note Insurer enforceable
in accordance with its 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
Note Insurer, the lack of which would adversely affect the validity or
enforceability of the Note Insurance Policy; to the extent required by
applicable legal requirements that would adversely affect validity or
enforceability of the Note Insurance Policy, the form of each Note Insurance
Policy has been filed with, and approved by, all governmental authorities having
jurisdiction over the Note Insurer in connection with such Note Insurance
Policy.
(5) To the extent the Note 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 Act.
(6) The information set forth under the captions "THE NOTE
INSURANCE" in the Prospectus insofar as such statements constitute a description
of the Note Insurance Policy, accurately summarizes the Note Insurance Policy.
