Exhibit 1.2
Execution Copy
COMPASS AUTO RECEIVABLES TRUST 1998-A
$127,235,000 CLASS A-1 5.659% ASSET BACKED NOTES
$81,700,000 CLASS A-2 5.709% ASSET BACKED NOTES
$170,445,000 CLASS A-3 5.900% ASSET BACKED NOTES
ASSET BACKED SECURITIES CORPORATION
Company
UNDERWRITING AGREEMENT
----------------------
June 24, 1998
Credit Suisse First Boston Corporation,
as Representative (the "Representative")
of the Several Underwriters named herein
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
1. Introduction. Asset Backed Securities Corporation, a Delaware
corporation (the "Company") has previously filed a registration statement with
the Securities and Exchange Commission relating to the issuance and sale from
time to time of asset backed notes and/or asset backed certificates. The
Company proposes to cause Compass Auto Receivables Trust 1998-A (the "Trust") to
issue and sell $127,235,000 principal amount of its 5.659% Class A-1 Asset
Backed Notes (the "Class A-1 Notes"), $81,700,000 principal amount of its 5.709%
Class A-2 Asset Backed Notes (the "Class A-2 Notes") and $170,445,000 principal
amount of its 5.900% Class A-3 Asset Backed Notes (the "Class A-3 Notes and
together with the Class A-1 Notes and Class A-2 Notes, the "Notes") to the
several underwriters named in Schedule I attached hereto (the "Underwriters").
The Trust will also issue $22,080,879 6.650% Asset Backed Certificates (the
"Certificates" and together with the Notes, the "Securities") which will be
retained by the Compass Auto Receivables Corporation ("Compass Auto"). The
assets of the Trust will include, among other things, a pool of motor vehicle
retail installment sale contracts (the "Receivables") secured by new and used
automobiles and light trucks financed thereby (the "Financed Vehicles"), and
certain monies received thereunder on or after June 1, 1998 (the "Cutoff Date"),
(including payments on the Receivables allocated to principal on and after the
Cutoff Date and payments on the Receivables allocated to interest on and after
July 1, 1998) and the other property and the
proceeds thereof to be conveyed to the Trust pursuant to the Sale and Servicing
Agreement to be dated as of the Closing Date (the "Sale and Servicing
Agreement") among the Trust, the Company, Compass Bank, an Alabama state banking
corporation ("Compass Bank"), as servicer (the "Servicer") and the Indenture
Trustee. Pursuant to the Sale and Servicing Agreement, the Company will sell
the Receivables to the Trust and the Servicer will service the Receivables on
behalf of the Trust. In addition, pursuant to the Sale and Servicing Agreement,
the Servicer will agree to perform certain administrative tasks on behalf of the
Trust imposed on the Trust under the Indenture. The Notes will be issued
pursuant to the Indenture to be dated as of the Closing Date (as amended and
supplemented from time to time, the "Indenture"), between the Trust and The
Chase Manhattan Bank (the "Trustee"). The Certificates, each representing a
fractional undivided interest in the Trust, will be issued pursuant to an
Amended and Restated Declaration of Trust (the "Trust Agreement") to be dated as
the Closing Date, among the Company, Compass Auto and The Bank of New York Trust
Company of Florida, N.A., as owner trustee (the "Owner Trustee").
The Receivables were originated or acquired by Compass Bank, an Alabama
state banking corporation and Compass Bank, a Texas state bank (each a "Seller"
and together, the "Sellers"). The Sellers will transfer the Receivables owned
by it to Compass Auto pursuant to the terms of a First Tier Receivables Purchase
Agreement (the "First Tier Receivables Purchase Agreement") to be dated as of
the Closing Date among the Sellers and Compass Auto. Compass Auto will sell the
Receivables to the Company pursuant to the terms of a Second Tier Receivables
Purchase Agreement (the "Second Tier Receivables Purchase Agreement") dated as
of June 24, 1998 among the Sellers, the Company and Compass Auto.
Capitalized terms used and not otherwise defined herein shall have the
meanings given them in the preliminary prospectus or, if not defined therein, as
defined in the Sale and Servicing Agreement. As used herein, the term "Basic
Documents" refers to the Sale and Servicing Agreement, Indenture, Trust
Agreement, First Tier Receivables Purchase Agreement, Second Tier Receivables
Purchase Agreement and Note Depository Agreement.
2. Representations and Warranties of the Company. The Company represents
and warrants to each of the Underwriters as of the date hereof as follows:
(a) A registration statement on Form S-3 (No. 333-359), including a
prospectus and such amendments thereto as may have been required to the
date hereof, relating to the Notes and the offering of asset backed notes
and asset backed certificates from time to time in accordance with Rule 415
under the Securities Act of 1933, as amended (the "Act"), has been filed
with the Securities and Exchange Commission (the "Commission") and such
registration statement, as amended, has become effective. For purposes of
this Agreement, "Effective Time" means the date and time as of which such
registration statement, or the most recent post-effective amendment thereto
(if any) filed prior to the execution and delivery of this Agreement, was
declared effective by the Commission and "Effective Date" means the date of
the Effective Time. Such registration statement, as amended, and the
prospectus and related prospectus supplement that the Company has filed
with the Commission pursuant to Rule 424(b) relating to the sale of the
Notes, as from time to time amended or supplemented (including any
prospectus relating
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to the Notes filed with the Commission pursuant to Rule 424(b) of the rules
and regulations of the Commission promulgated under the Act (the "Rules and
Regulations")), including all documents incorporated therein by reference
relating to the Notes, are respectively referred to as the "Registration
Statement" and the "Base Prospectus"; provided, however, that a supplement
to such Base Prospectus prepared pursuant to Section 5(a) shall be deemed
to have supplemented the Base Prospectus only with respect to the offering
of the Notes (any such supplement for the Notes, together with the Base
Prospectus, the "Prospectus"). The conditions to the use of a registration
statement on Form S-3 under the Act, as set forth in the General
Instructions to Form S-3, and the conditions of Rule 415 under the Act,
have been satisfied with respect to the Registration Statement.
(b) The Registration Statement, on the Effective Date, and the Base
Prospectus, as of the date of the related Prospectus conformed in all
material respects to the requirements of the Act and the Rules and
Regulations, 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, and on the date of this
Agreement, at the time of the filing of the Prospectus pursuant to Rule
424(b) and at the Closing Date such Base Prospectus conforms and will
conform in all material respects to the requirements of the Act and the
Rules and Regulations, and does not include and will not include, any
untrue statement of a material fact and does not omit and will not omit to
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. The Prospectus delivered to the Underwriters was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system,
except to the extent permitted by Regulation S-T. The two immediately
preceding sentences do not apply to statements or omissions from either of
such documents based upon written information (including Computational
Materials (as such term is defined in Section 8(a)) furnished to the
Company by any Underwriter specifically for use therein.
(c) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
full corporate power and authority to own its assets and conduct its
business as described in the Prospectus, is duly qualified as a foreign
corporation in good standing in all jurisdictions in which the ownership or
lease of its property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the Company, and is conducting its business so
as to comply in all material respects with the applicable statutes,
ordinances, rules and regulations of the jurisdictions in which it is
conducting business.
(d) The Basic Documents conform, or will conform as of the Closing
Date, to the description thereof contained in the Registration Statement
and the Prospectus. The Notes, when duly and validly executed by the
Trustee, authenticated and delivered in accordance with the Indenture, and
delivered and paid for pursuant hereto will be validly issued and
outstanding and entitled to the benefits of the Indenture. The
Certificates, when duly and validly executed by the Owner Trustee,
authenticated and delivered in
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accordance with the Trust Agreement will be validly issued and outstanding
and entitled to the benefits of the Trust Agreement.
(e) The execution and delivery by the Company of this Agreement and
the Basic Documents to which it is a party are within the corporate power
of the Company and have been, or will have been on the Closing Date, duly
authorized by all necessary corporate action on the part of the Company;
and neither the execution and delivery by the Company of such instruments,
nor the consummation by the Company of the transactions herein or therein
contemplated, nor the compliance by the Company with the provisions hereof
or thereof, will (i) conflict with or result in a breach of, or constitute
a default under, any of the provisions of the certificate of incorporation
or by-laws of the Company, (ii) conflict with any of the provisions of any
law, governmental rule, regulation, judgment, decree or order binding on
the Company or its properties, (iii) conflict with any of the provisions of
any indenture, mortgage, contract or other instrument to which the Company
is a party or by which it is bound, or (iv) result in the creation or
imposition of any lien, charge or encumbrance upon any of its property
pursuant to the terms of any such indenture, mortgage, contract or other
instrument.
(f) At the date thereof, the Basic Documents to which the Company is a
party will constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with their terms, subject, as
to enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and other similar laws affecting creditors' rights
generally from time to time in effect, and to general principles of equity.
(g) All approvals, authorizations, consents, orders or other actions
of any person, corporation or other organization, or of any court,
governmental agency or body or official (except with respect to the state
securities or Blue Sky laws of various jurisdictions), required in
connection with the valid and proper authorization, issuance and sale of
the Notes pursuant to this Agreement and the Basic Documents has been or
will be taken or obtained on or prior to the Closing Date.
(h) The Company's assignment and delivery of the Receivables to the
Trust on the Closing Date will vest in the Trust all the Sellers' right,
title and interest therein, or will result in a first priority perfected
security interest therein, in either case subject to no prior lien. The
Trust's assignment of the Collateral to the Trustee pursuant to the
Indenture will vest in the Trustee, for the benefit of the Noteholders, a
first priority perfected security interest therein, subject to no prior
lien.
(i) At the Closing Date, the Receivables included in the Trust will
meet the criteria for selection described in the Prospectus, and will
conform in all material respects to the representations and warranties with
respect thereto set forth in the First Tier Receivables Purchase Agreement
and assigned to the Trust pursuant to the Sale and Servicing Agreement.
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(j) The Trust is not an "investment company" and is not required to
be registered as an "investment company," as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
3. Purchase, Sale and Delivery of Notes. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to cause the Trust to
sell to the Underwriters, and the Underwriters agree, severally and not jointly,
to purchase from the Trust, the principal amount of each class of Notes set
forth opposite the name of such Underwriter on Schedule I hereto at a purchase
price equal to "Price %" as specified on Schedule II hereto.
The Company agrees to cause the Trust to deliver the Notes to the
Representative for the account of the Underwriters, against payment of the
purchase price to or upon the order of the Company by wire transfer or check in
Federal (same day) Funds, at the office Xxxxx, Brown & Xxxxx, Chicago, Illinois,
at 10:00 a.m., Chicago time on June 30 1998, or at such other time not later
than seven full business days thereafter as the Representative and the Company,
on behalf of the Trust, determine, such time being herein referred to as the
"Closing Date." The Notes to be so delivered will be initially represented by
one or more Notes registered in the name of Cede & Co., the nominee of The
Depository Trust Company ("DTC"). The interests of beneficial owners of the
Notes will be represented by book entries on the records of DTC and
participating members thereof. Definitive Notes will be available only under the
limited circumstances specified in the Basic Documents.
4. Offering by Underwriters. It is understood that the Underwriters
propose to offer the Notes for sale to the public (which may include selected
dealers), on the terms set forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with the
several Underwriters that:
(a) Immediately following the execution of this Agreement, the
Company will prepare a supplement to the Base Prospectus setting forth the
amount of Notes and the terms thereof not otherwise specified in the Base
Prospectus, the price at which such Notes are to be purchased by the
Underwriters, from the Company, either the initial public offering price or
the method by which the price at which such Notes are to be sold will be
determined, the selling concessions and reallowances, if any, and such
other information as the Representative and the Company deem appropriate in
connection with the offering of such Notes, but the Company will not file,
for so long as the delivery of a Prospectus is required in connection with
the offering or sale of such Notes, any amendments to the Registration
Statement as in effect with respect to such Notes, or any amendments or
supplements to the related Prospectus, unless it shall first have delivered
copies of such amendments or supplements to the Representative, or if the
Representative shall have reasonably objected thereto promptly after
receipt thereof, the Company will, during such period, immediately advise
the Representative or its counsel (i) when notice is received from the
Commission that any post-effective amendment to the Registration Statement
has become or will become effective and (ii) of any order or communications
suspending or
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preventing, or threatening to suspend or prevent, the offer and sale of the
Notes or of any proceedings or examinations that may lead to such an order
or communication, whether by or of the Commission or any authority
administering any state securities or Blue Sky law, as soon as the Company
is advised thereof, and will use its best efforts to prevent the issuance
of any such order or communication and to obtain as soon as possible its
lifting, if issued.
(b) If, at any time when a Prospectus relating to the Notes is
required to be delivered under the 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 a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend or supplement the Prospectus to comply with
the Act or the Rules and Regulations, the Company will promptly prepare and
file with the Commission, an amendment or supplement that will correct such
statement or omission or an amendment that will effect such compliance;
provided, however, that the Company will not be required to file any such
amendment or supplement with respect to any Computational Materials,
Structural Term Sheets (each as defined in Section 8 below) or Collateral
Term Sheets (as defined in Section 9 below) incorporated by reference in
the Prospectus other than any amendments or supplements of such
Computational Materials or Structural Term Sheets that are furnished to the
Company by the Underwriters pursuant to Section 8(a) hereof or any
amendments or supplements of such Collateral Term Sheets that are furnished
to the Company by the Underwriters pursuant to Section 9(a) hereof which
are required to be filed in accordance therewith.
(c) The Company will cause any Computational Materials and any
Structural Term Sheets with respect to the Notes that are delivered by an
Underwriter to the Company pursuant to Section 8 to be filed with the
Commission on a Current Report on Form 8-K (a "Current Report") pursuant to
Rule 13a-11 under the Exchange Act in accordance with Section 10 on the
business day immediately following the date on which this Agreement is
executed and delivered. The Company will cause any Collateral Term Sheet
with respect to the Notes that is delivered by the Underwriters to the
Company in accordance with the provisions of Section 9 to be filed with the
Commission on a Current Report pursuant to Rule 13a-11 under the Exchange
Act in accordance with Section 10 on the business day immediately following
the day on which such Collateral Term Sheet is delivered to counsel for the
Company by an Underwriter prior to 10:30 a.m. New York time In addition, if
at any time prior to the availability of the related Prospectus, an
Underwriter has delivered to any prospective investor a subsequent
Collateral Term Sheet that reflects, in the reasonable judgment of the
Representative and the Company, a material change in the characteristics of
the Receivables from those on which a Collateral Term Sheet with respect to
the Notes previously filed with the Commission was based, the Company will
cause any such Collateral Term Sheet that is delivered by a Underwriter to
the Company in accordance with the provisions of Section 9 hereof to be
filed with the Commission on a Current Report in accordance with Section
10. Each such Current Report shall be incorporated by reference in the
related Prospectus and the related Registration Statement.
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(d) The Company will cause the Trust to furnish or make available,
within a reasonable time after the end of each calendar year, to each
holder of a Notes (each, a "Noteholder") at any time during such year, such
information as the Company deems necessary or desirable to assist
Noteholders in preparing their federal income tax returns.
(e) The Company will furnish to the Representative copies of the
Registration Statement (two of which will be signed and will include all
documents and exhibits thereto or incorporated by reference therein), each
related preliminary prospectus, the Prospectus and all amendments and
supplements to such documents relating to the Notes, in each case as soon
as available, and in such quantities as the Representative reasonably
requests.
(f) The Company will arrange for the qualification of the Notes for
sale and the determination of their eligibility for investment under the
laws of such jurisdictions as the Representative designates and will
continue such qualifications in effect so long as required for the
distribution of the Notes; provided, however, that neither the Company, the
Sellers, nor the Trust shall be required to do business in any jurisdiction
where it is now not qualified or to take any action which would subject it
to general or unlimited service of process in any jurisdiction in which it
is now not subject to service of process.
(g) The Company will, while the Notes are outstanding, furnish to the
Representative, and upon request of each other Underwriter, information
with respect to the Trust or the Receivables, as the Representative or any
such Underwriter may reasonably request, including but not limited to
information necessary or appropriate to the maintenance of a secondary
market in the Notes.
(h) The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Representative
and the Underwriters for any expenses (including fees and disbursements of
its counsel) incurred by them in connection with the offering and the
qualification of the Notes and determination of their eligibility for
investment under the laws of such jurisdictions as the Representative may
designate and the reproduction of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Notes and, to
the extent previously agreed upon with the Representative, the expenses
incurred in distributing any preliminary prospectuses, the Prospectus or
any amendments or supplements thereto to the Underwriters.
(i) The Company will file, or cause the Trustee to file on behalf of
the Trust, on a timely and complete basis, all documents that are required
by the Trust with the Commission pursuant to Sections 13, 14 or 15(d) of
the Exchange Act.
6. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase and pay for the Notes subject to this Agreement
will be subject to the accuracy of the representations and warranties on the
part of the Company as of the date hereof and the Closing Date, to the accuracy
of the statements of the Company made pursuant to the
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provisions thereof, to the performance by the Company in all material respects
of its obligations hereunder and to the following additional conditions
precedent:
(a) The Representative shall have received letters dated the date of
this Agreement, in form and substance acceptable to the Representative and
its counsel, prepared by independent certified public accountants
acceptable to the Representative and its counsel, (i) regarding the
numerical information contained in the Prospectus and (ii) relating to
certain agreed upon procedures as specified by the Representative.
(b) The Representative and each Underwriter shall have received a
copy of the Prospectus.
(c) All actions required to be taken and all filings required to be
made by the Company under the Act prior to the sale of the Notes shall have
been duly taken or made; and prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted, or
to the knowledge of the Company or any Underwriter, shall be contemplated
by the Commission.
(d) The Class A-1 Notes shall be rated "P-1" by Xxxxx'x Investors
Service, Inc. ("Xxxxx'x") and "A-1+" by Standard & Poor's Ratings Group, a
division of The McGraw Hill Companies, Inc. ("S&P" and, together with
Xxxxx'x, the "Rating Agencies"). The Class A-2 and Class A-3 Notes shall be
rated "Aaa" by Moody's and "AAA" by S&P.
(e) The Representative shall have received an opinion of counsel or
counsels for the Company, dated the Closing Date, substantially to the
effect that:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and is duly qualified to do business as a foreign corporation in the
State of New York.
(ii) The Company has requisite corporate power and corporate
authority to enter into this Agreement and the Basic Documents to
which it is a party.
(iii) The execution, delivery and performance of this Agreement
and the Basic Documents to which the Company is a party do not
conflict with the Certificate of Incorporation or the By-laws of the
Company and, to the knowledge of such counsel, (A) do not conflict
with or violate or constitute a material breach of, or constitute a
default under, any material written contract, indenture, undertaking,
or other agreement or instrument by which the Company is now bound or
to which it is now a party, and (B) do not conflict with or violate
any order, writ, injunction or decree of any court or governmental
authority against the Company.
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(iv) This Agreement and the Basic Documents to which the
Company is a party have been authorized by all necessary corporate
action on the part of the Company and have been fully executed and
delivered by the Company.
(v) To the knowledge of such counsel, no authorization,
consent, approval of or other filing with any New York State or
federal governmental authority, that has not been obtained or made, is
required for the execution of, delivery of or performance by the
Company of any material obligation under the Basic Documents to which
it is a party or the Securities; provided however that, such counsel
need not express an opinion with respect to (i) any authorization,
consent, approval or any filing which may be required under the
Securities Act of 1933, as amended, or any state securities laws, or
(ii) the creation or perfection of any security interest in the
Receivables or the Financed Vehicles.
(vi) The Registration Statement (except information of an
accounting, financial or statistical nature included therein, as to
which we do not express any opinion) and the Prospectus comply as to
form in all material respects with the requirements of the Act and the
rules and regulations promulgated thereunder. In passing upon the form
of the Registration Statement, such counsel may assume the correctness
and completeness of the statements made therein and take no
responsibility therefor, except insofar as such statements relate to
them.
(vii) The conditions to the use of a registration statement on
Form S-3 under the Act, as set forth in the General Instructions to
Form S-3, and the conditions of Rule 415 under the Act, have been
satisfied with respect to the Registration Statement.
(viii) The Registration Statement, on the day it became
effective, and the Base Prospectus, as of the date of the Prospectus
Supplement conformed in all material respects to the requirements of
the Act and the Rules and Regulations.
(f) The Representative shall have received an opinion of counsel to
the Sellers, addressed to the Underwriters and the Company, dated the
Closing Date, substantially to the effect that the statements in the
Prospectus Supplement do not contain any untrue statement of a material
fact or omit 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 (it being
understood that such counsel need not render any opinion with respect to
any financial or statistical information contained therein).
(g) The Representative shall have received from Stroock & Stroock &
Xxxxx LLP, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the existence of the Company, the
Registration Statement, the Prospectus and other related matters as the
Underwriters may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
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(h) The Representative shall have received a certificate or
certificates signed by such of the principal executive, financial and
accounting officers of the Company as the Representative may request, dated
the Closing Date, in which such officers, to the best of their knowledge
after reasonable investigation, shall state that (i) the representations
and warranties of the Company in this Agreement are true and correct; (ii)
the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to the Closing Date;
(iii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated; (iv) subsequent to the respective dates as
of which information is given in the Prospectus, and except as otherwise
set forth in or contemplated by the Prospectus, there has not been any
material adverse change in the general affairs, capitalization, financial
condition or results of operations of the Company; and (v) except as
otherwise stated in the Prospectus, there are no material actions, suits or
proceedings pleading before any court or governmental agency, authority or
body or, to their knowledge, threatened, affecting the Company or the
transactions contemplated by this Agreement.
(i) The Representative shall have received letters dated the Closing
Date from counsel rendering opinions to either Rating Agency, to the effect
that the Representative may rely upon their opinion to such rating
organization, as if such opinion were rendered to the Representative.
(j) The Representative shall have received copies of all documents,
certificates, legal opinions and accountant's letters delivered to the
Company pursuant to the Second Tier Receivables Purchase Agreement in form
and substance satisfactory to the Representative and with the legal
opinions and accountant's letters addressed to the Representative or
accompanied by a letter entitling the Representative to rely thereon.
(k) The Company will furnish the Representative with such copies of
such other opinions, certificates, letters and documents as the
Representative reasonably requests.
7. Indemnification.
(a) The Company will indemnify and hold harmless the Representative
and each Underwriter and each person, if any, who controls the
Representative or such Underwriter within the meaning of the Act or the
Exchange Act, against any losses, claims, damages or liabilities, joint or
several, to which the Representative or such Underwriter or such
controlling person may become subject, under the Act or the Exchange Act or
other Federal or State statutory law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or the Prospectus 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 the Representative and each Underwriter and
each such
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controlling person for any legal or other expenses reasonably incurred by
the Representative or such Underwriter and each such controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided however, that the Company 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 such untrue statement or
alleged untrue statement in or omission or alleged omission made in any of
such documents (A) in reliance upon and in conformity with written
information furnished to the Company by the Representative or the relevant
Underwriter specifically for use therein, or (B) in any Computational
Materials or ABS Term Sheets furnished to prospective investors by the
Underwriters or any Current Report or any amendment or supplement thereof,
except to the extent that any untrue statement or alleged untrue statement
therein or omission therefrom results directly from an error (a "Receivable
Pool Error") in the information concerning the characteristics of the
Receivables furnished by the Seller or the Company to the Representative or
any Underwriter in writing or by electronic transmission that was used in
the preparation of either (x) any Computational Materials or ABS Term
Sheets (or amendments or supplements thereof) included in such Current
Report (or amendment or supplement thereof) or (y) any written or
electronic materials furnished to prospective investors on which the
Computational Materials (or amendments or supplements) were based. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter agrees, severally, and not jointly, to indemnify
and hold harmless the Company, each of its directors, each of its officers
who signed the Registration Statement and each person, if any, who controls
the Company within the meaning of the Act or the Exchange Act to the same
extent as the foregoing indemnities from the Company to each Underwriter,
but only with reference to (A) written information furnished to the Company
by or on behalf of such Underwriter through the Representative specifically
for use in the preparation of the documents referred to in the foregoing
indemnity (the "Underwriter Information"), or (B) any Computational
Materials or ABS Term Sheets (or amendments or supplements thereof)
delivered to prospective investors by such Underwriter, including any
Computational Materials or ABS Term Sheets that are furnished to the
Company by such Underwriter pursuant to Section 8 and incorporated by
reference in such Registration Statement, or the related Prospectus or any
amendment or supplement thereof (except that no such indemnity shall be
available for any losses, claims, damages or liabilities, or actions in
respect thereof, resulting from any Receivable Pool Error, other than a
Receivable Pool Error that had been corrected and such corrected
information had been provided to the Underwriters); provided, however, that
in no event shall an Underwriter be liable to the Company under this
paragraph (b) with respect to the material described in clause (B) in an
amount in excess of the underwriting discounts and commissions received by
such Underwriter in connection with the offering of the Notes. This
indemnity agreement will be in addition to any liability that the
Representative or such Underwriter may otherwise have. The Company
acknowledges that, for purposes of this Section, the statements set forth
in the Prospectus regarding stabilization allocation of Notes between
Underwriters and concessions, under the heading "Underwriting" with respect
to the Notes to be purchased by the Underwriters, constitute
11
the only information furnished to the Company by the Underwriters for
inclusion in the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party
will not relieve the indemnifying party from any liability which the
indemnifying party may have to any indemnified party hereunder except to
the extent such indemnifying party has been prejudiced thereby. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may elect by
written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party). After notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened action in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on
the other from the offering of the Notes or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one hand
and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or
12
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified in connection with investigating or
defending any action or claim which is the subject to this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the Notes underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion
to their respective underwriting obligations and not joint.
8. Computational Materials and Structural Term Sheets.
(a) Each Underwriter agrees to provide to the Company no less than
two business days prior to the date on which the Prospectus is proposed to
be filed pursuant to Rule 424(b) under the Act, for the purpose of
permitting the Company to comply with the filing requirement set forth in
Section 5(a), all information (in such written or electronic format as
required by the Company) with respect to the Notes which constitutes
"Computational Materials", as defined in the Commission's No-Action Letter,
dated May 20, 1994, addressed to Xxxxxx, Xxxxxxx Acceptance Corporation I,
Xxxxxx, Xxxxxxx & 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
(together, the "Xxxxxx Letters"), the filing of which material is a
condition of the relief granted in such letters (such materials being the
"Computational Materials"), and (ii) "Structural Term Sheets" within the
meaning of the no-action letter dated February 17, 1995 issued by the
Division of Corporation Finance of the Commission to the Public Securities
Association (the "PSA Letter") and the filing of such material is a
condition of the relief granted in such letter (such materials being the
"Structural Term Sheets"), such delivery to be made not later than 10:30
a.m. New York on the business day immediately following the date on which
such Computational Materials or Structural Term Sheets was first delivered
to a prospective investors in the Notes. Each delivery of Computational
Materials and Structural Term Sheets to the Company pursuant to this
paragraph (a) shall be effected in accordance with Section 10.
(b) Each Underwriter represents and warrants to and agrees with the
Company, as of the date hereof and as of the Closing Date, that:
(i) the Computational Materials furnished to the Company by such
Underwriter pursuant to Section 8(a) constitute (either in original,
aggregated or consolidated form) all of the materials furnished to
prospective investors by such Underwriter prior to the time of
delivery thereof to the Company that are required
13
to be filed with the Commission with respect to the Notes in
accordance with the Xxxxxx Letters, and such Computational Materials
comply with the requirements of the Xxxxxx Letters;
(ii) the Structural Term Sheets furnished to the Company by such
Underwriter pursuant to Section 8(a) constitute all of the materials
furnished to prospective investors by such Underwriter prior to the
time of delivery thereof to the Company that are required to be filed
with the Commission as "Structural Term Sheets" with respect to the
related Notes in accordance with the PSA Letter, and such Structural
Term Sheets comply with the requirements of the PSA Letter; and
(iii) on the date any such Computational Materials or Structural Term
Sheets with respect to the Notes (or any written or electronic
materials furnished to prospective investors on which the
Computational Materials are based) were last furnished to each
prospective investor by such Underwriter and on the date of delivery
thereof to the Company pursuant to Section 8(a) and on the Closing
Date, such Computational Materials (or such other materials) or
Structural Term Sheets did not and will not include any untrue
statement of a material fact or, when read in conjunction with the
Prospectus and Prospectus Supplement, omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
Notwithstanding the foregoing, each Underwriter makes no representation or
warranty as to whether any Computational Materials or Structural Term Sheets (or
any written or electronic materials on which the Computational Materials are
based) included or will include any untrue statement resulting directly from any
Receivable Pool Error.
9. Collateral Term Sheets.
(a) Prior to the delivery of any "Collateral Term Sheet" within the
meaning of the PSA Letter, the filing of which material is a condition of
the relief granted in such letter (such material being the "Collateral Term
Sheets"), to a prospective investor in the Notes, the Underwriters shall
notify the Company and its counsel by telephone of their intention to
deliver such materials and the approximate date on which the first such
delivery of such materials is expected to occur. Not later than 10:30 a.m.,
New York time, on the business day immediately following the date on which
any Collateral Term Sheet was first delivered to a prospective investor in
the Notes, the Underwriters shall deliver to the Company one complete copy
of all materials provided by the Underwriters to prospective investors in
such Notes which constitute "Collateral Term Sheets." Each delivery of a
Collateral Term Sheet to the Company pursuant to this paragraph (a) shall
be effected in accordance with Section 10. (Collateral Term Sheets and
Structural Term Sheets are, together, referred to herein as "ABS Term
Sheets.") At the time of each such delivery, the Underwriter making such
delivery shall indicate in writing that the materials being delivered
constitute Collateral Term Sheets, and, if there has been any prior such
delivery with respect to the Notes, shall indicate whether such materials
differ in any material respect from any
14
Collateral Term Sheets previously delivered to the Company with respect to
the Notes pursuant to this Section 9(a) as a result of the occurrence of a
material change in the characteristics of the related Receivables.
(b) Each Underwriter represents and warrants to and agrees with the
Company as of the date of this Agreement and as of the Closing Date, that:
(i) The Collateral Term Sheets furnished to the Company by
such Underwriter pursuant to Section 9(a) constitute all of the
materials furnished to prospective investors by such Underwriter prior
to time of delivery thereof to the Company that are required to be
filed with the Commission as "Collateral Term Sheets" with respect to
the Notes in accordance with the PSA Letter, and such Collateral Term
Sheets comply with the requirements of the PSA Letter; and
(ii) On the date any such Collateral Term Sheets with respect
to the Notes were last furnished to each prospective investor by such
Underwriter and on the date of delivery thereof to the Company
pursuant to Section 9(a) and on the Closing Date, such Collateral Term
Sheets did not and will not include any untrue statement of a material
fact or, when read in conjunction with the Prospectus, omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
Notwithstanding the foregoing, each Underwriter makes no
representation or warranty as to whether any Collateral Term Sheet
included or will include any untrue statement or material omission
resulting directly from any Receivable Pool Error.
(c) If, at any time when a Prospectus relating to the Notes is
required to be delivered under the Act, it shall be necessary to amend or
supplement the related Prospectus as a result of an untrue statement of a
material fact contained in any Collateral Term Sheets provided by any
Underwriter pursuant to this Section 9 or the omission to state therein a
material fact required, when considered in conjunction with the related
Prospectus, to be stated therein or necessary to make the statements
therein, when read in conjunction with the related Prospectus, not
misleading, or if it shall be necessary to amend or supplement any Current
Report relating to any Collateral Term Sheets to comply with the Act or the
rules thereunder, such Underwriter promptly will prepare and furnish to the
Company for filing with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will effect
such compliance. Each Underwriter represents and warrants to the Company,
as of the date of delivery of such amendment or supplement to the Company,
that such amendment or supplement will not include any untrue statement of
a material fact or, when read in conjunction with the related Prospectus,
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, each such
Underwriter makes no representation or warranty as to whether any such
15
amendment or supplement will include any untrue statement resulting
directly from any Receivable Pool Error.
10. Delivery and Filing of Current Reports, Collateral Term Sheets,
Structural Term Sheets.
(a) Any Current Report, Collateral Term Sheet or Structural Term
Sheet that is required to be delivered by the Underwriter to the Company
hereunder shall be effected by the delivery of one copy to counsel for the
Company and, if requested, one copy in computer readable format to the
Financial Printer on or prior to 10:30 a.m. on the date so specified
herein.
(b) The Company shall cause its counsel or the Financial Printer to
file with the Commission any such Current Report, Collateral Term Sheet or
Structural Term Sheet within one business day immediately following the
delivery thereof pursuant to the preceding subsection. The Company shall
use its best efforts to cause any such Current Report, Collateral Term
Sheet or Structural Term Sheet to be so filed prior to 4:00 p.m., New York
time, on such business day and will promptly advise the Representative of
such filing.
11. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase the Notes hereunder and the aggregate principal
amount of such Notes which such defaulting Underwriter or Underwriters agreed,
but failed, to purchase does not exceed 10% of the total principal amount of the
Notes, the Representative may make arrangements satisfactory to the Company for
the purchase of such Notes by other persons, including any of the Underwriters
participating in such offering, but regardless of whether such arrangements are
made the non-defaulting Underwriters shall remain obligated severally to
purchase the Notes which they committed to purchase in accordance with the terms
hereunder. If any Underwriter or Underwriters so default and the aggregate
principal amount of Notes with respect to which such default or defaults occur
is more than 10% of the total principal amount of the Notes and arrangements
satisfactory to the Representative and the Company for the purchase of such
Notes by other persons are not made, this Agreement will terminate without
liability on the part of any nondefaulting Underwriter, except as provided in
Section 10. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
12. Termination of the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Notes on the Closing Date shall be terminable
by the Underwriters if at any time on or prior to the Closing Date (a) any of
the conditions set forth in Section 6 are not satisfied when and as provided
therein; (b) there shall have been the entry of a decree or order by a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Seller or the Company, or for the winding up
or liquidation of the affairs of the Seller or the Company; (c) there shall have
been the consent by the Seller or the Company to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar
16
proceedings of or relating to the Seller or the Company or of or relating to
substantially all of the property of the Seller or the Company; (d) any purchase
and assumption agreement with respect to the Sellers, Compass Auto or the
Company of substantially all of the assets and properties of the Seller or the
Company shall have been entered into; or (e) a Termination Event (as defined
below) shall have occurred. The termination of the Company's obligations
hereunder shall not terminate the Company's rights hereunder or its right to
exercise any remedy available to it at law or inequity.
A "Termination Event" means the existence of any one or more of the
following conditions:
(a) a stop order suspending the effectiveness of the Registration
Statement shall have been issued or a proceeding for that purpose shall have
been initiated or threatened by the Commission; or
(b) subsequent to the execution and delivery of this Agreement, there
shall have occurred an adverse change in the condition, financial or otherwise,
in the earnings, regulatory situation or business prospects of either Seller or
the Company reasonably determined by the Representative to be material; or
(c) subsequent to the date of this Agreement there shall have
occurred any of the following: (i) any suspension or limitation of trading in
securities generally on the New York Stock Exchange or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of Compass Bancshares Inc. on any exchange or in the over-the-counter
market; (ii) a general moratorium on commercial banking activities in New York
declared by either Federal or New York State authorities; or (iii) the
engagement by the United States in hostilities, or the escalation of such
hostilities, or any calamity or crisis, if the effect of any such event
specified in this clause (iii) in the reasonable judgment of the Representative
makes it impracticable or inadvisable to proceed with the public offering or the
delivery of the Notes on the terms and in the manner contemplated in the
Prospectus.
13. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements by the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriters, the Company or any of its officers or directors or any
controlling person, and will survive delivery of and payment for Notes.
If this Agreement is terminated pursuant to Section 9 or if for any reason
the purchase of the Notes by the Underwriters is not consummated, the Company
shall remain responsible for the expenses to be paid or reimbursed by them
pursuant to Section 5(g), and the obligations of the Company and the
Underwriters pursuant to Sections 7 and 8 shall remain in effect.
14. Notices. All communications hereunder will be in writing and, if sent
to an Underwriter will be mailed, delivered or telegraphed and confirmed to the
Representative at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or if sent the
Company, will be mailed, delivered
17
or telegraphed and confirmed to it at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 Attention: President; provided, however, that any notice to an Underwriter
pursuant to Section 7 will be mailed, delivered or telegraphed to such
Underwriter at the address furnished by it.
15. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers,
directors and controlling persons referred to in Sections 7 and 8, and their
successors and assigns, and no other person will have any right or obligations
hereunder.
16. Third-party beneficiary. Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless Compass Auto and the Sellers to the
extent, and subject to the same procedures, that the Company is indemnifying
Compass Auto and the Sellers pursuant to Section 4.3 of the Second Tier
Receivables Purchase Agreement, provided that such indemnification shall be
limited to untrue statements or alleged untrue statements of any material fact
contained in the Prospectus Supplement that constitute Underwriter Information.
The parties agree that Compass Auto and the Sellers are intended third-party
beneficiaries of this Section 16.
17. Representation of Underwriters. The Representative will act for the
several Underwriters in connection with the transactions described in this
Agreement and any action taken by the Representative under this Agreement will
be binding upon all the Underwriters for.
18. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
18
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon, it will
become a binding agreement among the Company, the Representative and the other
Underwriters, in accordance with its terms.
Very truly yours,
ASSET BACKED SECURITIES CORPORATION,
as Company
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION,
as Representative
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
19
SCHEDULE I
Initial Principal
Balance of
Underwriter Class A-1 Notes
Credit Suisse First Boston Corporation........... $ 63,618,000
Xxxxxxx, Xxxxx & Co.............................. 63,617,000
------------
Total $127,235,000
Initial Principal
Balance of
Underwriter Class A-2 Notes
Credit Suisse First Boston Corporation........... $ 40,850,000
Xxxxxxx, Xxxxx & Co.............................. 40,850,000
------------
Total $ 81,700,000
Initial Principal
Balance of
Underwriter Class A-3 Notes
Credit Suisse First Boston Corporation........... 85,223,000
Xxxxxxx, Xxxxx & Co.............................. 85,222,000
------------
Total $170,445,000
20
SCHEDULE II
Original
Principal Investor Investor
Security Balance $ Price % Price $ Price % Price $ Rate %
Class A-1 Notes 127,235,000 100% $127,235,000.00 99.85% $127,064,147.50 5.659%
Class A-2 Notes 81,700,000 100% $ 81,700,000.00 99.65% $ 81,414,050.00 5.709%
Class A-3 Notes 170,445,000 99.875% $170,231,943.75 99.375% $169,379,718.75 5.900%
Total Price to Public: $379,166,943.75
Total Price to Seller: 377,837,916.25
Underwriting Discounts
and Commissions: $ 1,329,027.50
21
