MORGAN STANLEY ABS CAPITAL I INC. MORTGAGE PASS-THROUGH CERTIFICATES Series 2006-WMC2 UNDERWRITING AGREEMENT
XXXXXX
XXXXXXX ABS CAPITAL I INC.
MORTGAGE
PASS-THROUGH CERTIFICATES
Series
2006-WMC2
UNDERWRITING
AGREEMENT
New
York,
New York
May
25,
2006
Xxxxxx
Xxxxxxx & Co. Incorporated
0000
Xxxxxxxx
New
York,
New York 10036
Dear
Sirs:
Xxxxxx
Xxxxxxx ABS Capital I Inc., a Delaware corporation (the “Company”),
proposes to sell to you, Xxxxxx Xxxxxxx & Co. Incorporated, (the
“Underwriter”)
Xxxxxx
Xxxxxxx ABS Capital I Inc. Trust 2006-WMC2, Mortgage Pass-Through Certificates,
Series 2006-WMC2 in the original principal amount and with the designation
described on Schedule A attached hereto (the “Offered
Certificates”).
The
Offered Certificates will be issued pursuant to a pooling and servicing
agreement dated as of June 1, 2006 (the “Pooling
and Servicing Agreement”)
among
Xxxxxx Xxxxxxx ABS Capital I Inc. (the “Depositor”),
Xxxxx
Fargo Bank, N.A. (“Xxxxx
Fargo”,
the
“Servicer”,
the
“Securities
Administrator”
and
the
“Custodian”),
WMC
Mortgage Corp. (the “Responsible
Party”)
and
Deutsche Bank National Trust Company (the “Trustee”).
In
addition to the Offered Certificates, the Depositor will authorize for issuance
the Mortgage Pass-Through Certificates, Series 2006-WMC2, Class X,
Class P and Class R Certificates pursuant to the Pooling and Servicing
Agreement (together with the Offered Certificates, the “Certificates”).
The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a
registration statement, including information that is contained in the
Prospectus (as defined below) relating to the Offered Certificates and is deemed
to be part of and included in such registration statement, and has filed with,
or mailed for filing to, the Commission a prospectus supplement specifically
relating to the Offered Certificates pursuant to Rule 424 under the Securities
Act of 1933 (the “Securities
Act”).
The
term “Registration
Statement”
means
such registration statement as such registration statement, including the
exhibits thereto and information that is contained in the Prospectus and is
deemed to be part of and included in such registration statement, may have
been
amended or supplemented at the date of the Prospectus. The prospectus first
required to be filed to satisfy the condition set forth in Rule 172(c) and
pursuant to Rule 424(b) under the Securities Act, is hereinafter called the
“Base
Prospectus”;
such
form of supplement to the Base Prospectus relating to the Certificates, in
the
form first required to be filed to satisfy the condition set forth in Rule
172(c) and pursuant to Rule 424(b) under the Securities Act (including the
Base
Prospectus as so supplemented) is hereinafter called the “Prospectus
Supplement”;
and
the Base Prospectus and the Prospectus Supplement, together, are hereinafter
called the “Prospectus”.
Capitalized terms not otherwise defined in this Agreement are used herein as
defined in the Pooling and Servicing Agreement.
At
or
prior to the time when sales to investors of the Offered Certificates were
first
made (the “Time
of Sale”),
the
Company had prepared the following information (collectively, the “Time
of Sale Information”):
the
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2006-WMC2 Free Writing Prospectus,
dated
May 24, 2006, the Company’s Prospectus, dated March 14, 2006, and any other
“free-writing prospectus” (as defined pursuant to Rule 405 under the Securities
Act (as defined herein)) (a “Free
Writing Prospectus”)
listed
on Schedule
B
hereto.
If, subsequent to the date of this Agreement, the Company and the Underwriter
determine that such information included an untrue statement of material fact
or
omitted 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 and have terminated their old purchase contracts and entered into
new
purchase contracts with purchasers of the Offered Certificates, then
“Time
of Sale Information”
will
refer to the information available to purchasers at the time of entry into
the
first such new purchase contract, including any information that corrects such
material misstatements or omissions (“Corrective
Information”)
and
“Time
of Sale”
will
refer to the time and date on which such new purchase contracts were entered
into.
I.
A. The
Company represents and warrants to, and agrees with, the Underwriter
that:
(a) The
Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings
for
such purpose are pending before or threatened by the Commission, and the
Prospectus Supplement and each Free Writing Prospectus required to be filed
by
the Company pursuant to Section III.B.(e) shall have been filed or
transmitted for filing by means reasonably calculated to result in a filing
with
the Commission pursuant to Rule 424(b) under the Securities Act or Rule 433
under the Securities Act, as applicable.
(b) (i)Each
part
of the Registration Statement, when such part became or was deemed to become
effective, did not contain, and each such part, as amended or supplemented,
if
applicable, will not contain any untrue statement of a material fact or omit
to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and the
Prospectus comply, and, as amended or supplemented, if applicable, will comply,
as of its effective date or deemed effective date pursuant to Rule 430B under
the Securities Act, in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iii) the
Prospectus does not contain and, as amended or supplemented, if applicable,
will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and
warranties set forth in this paragraph I(b) do not apply to the information
contained in the Registration Statement, the Prospectus, the Time of Sale
Information or any revision or amendment thereof or supplement thereto based
upon and in conformity with information furnished in writing to the Company
by
the Underwriter specifically for use in connection with the preparation of
the
Registration Statement, the Prospectus, the Time of Sale Information or any
revision or amendment thereof or supplement thereto (such statements being
collectively referred to as “Underwriter
Statements”).
(c) The
Time
of Sale Information, at the Time of Sale, did not, and at the Closing Date
will
not, contain 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; provided that the
Company makes no representation or warranty with respect to any statements
or
omissions made in reliance upon and in conformity with the Underwriter
Statements.
(d) Other
than the Prospectus, the Company (including its agents and representatives
other
than the Representative in its capacity as such) has not made, used, prepared,
authorized, approved or referred to and will not make, use, prepare, authorize,
approve or refer to any “written communication” (as defined in Rule 405 under
the Securities Act) that constitutes an offer to sell or solicitation of an
offer to buy the Offered Certificates other than (i) any document not
constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities
Act or Rule 134 under the Securities Act, (ii) the Time of Sale
Information, and (iii) each other written communication of the Company or
its agents and representatives approved in writing in advance by the Underwriter
or in any other manner mutually agreed by the Underwriter and the Company (each
such communication referred to in clause (ii) and this clause (iii)
constituting an “issuer free writing prospectus”, as defined in Rule 433(h)
under the Securities Act, being referred to as an “Issuer
Free Writing Prospectus”).
Each
such Issuer Free Writing Prospectus complied or, if used after the date hereof,
will comply in all material respects with the Securities Act, has been filed
or
will be filed in accordance with Section III (to the extent required
thereby) and did not at the Time of Sale, and at the Closing Date will not,
contain any untrue statements of a material fact or (when read in conjunction
with the other Time of Sale Information) 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; provided that the Company makes no
representation and warranty with respect to any statements or omissions made
in
reliance upon and in conformity with any Underwriter Statements.
(e) The
Company has been duly incorporated, is validly existing as a corporation in
good
standing under the laws of the State of Delaware, has the corporate power and
authority to own its property and to conduct its business as described in the
Prospectus and the Time of Sale Information and to enter into and perform its
obligations under this Agreement and the Pooling and Servicing
Agreement.
(f) This
Agreement has been duly authorized, executed and delivered by the
Company.
(g) The
Pooling and Servicing Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company, enforceable
in accordance with its terms except as the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditors’ rights generally
and to general principles of equity regardless of whether enforcement is sought
in a proceeding in equity or at law.
(h) The
direction by the Company to the Securities Administrator to execute,
authenticate and deliver the Offered Certificates has been duly authorized
by
the Company, and the Offered Certificates, when executed and authenticated
in
the manner contemplated in the Pooling and Servicing Agreement, and delivered
to
and paid for by the Underwriter in accordance with the terms of this Agreement,
will be validly issued and outstanding and entitled to the benefits of the
Pooling and Servicing Agreement.
(i) Neither
the execution and delivery by the Company of, nor the performance by the Company
of its obligations under, this Agreement or the Pooling and Servicing Agreement,
will contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other instrument
binding upon the Company that is material to the Company or any judgment, order
or decree of any governmental body, agency or court having jurisdiction over
the
Company or any subsidiary, and no consent, approval, authorization or order
of,
or qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement and the
Pooling and Servicing Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Offered Certificates.
(j) There
has
not occurred any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Prospectus or the Time of Sale
Information.
(k) There
are
no legal or governmental proceedings pending or threatened to which the Company
is a party or to which any of the properties of the Company are subject that
are
required to be described in the Registration Statement, the Prospectus or the
Time of Sale Information or necessary in order to make the statements therein
in
the light of the circumstances under which they were made, not misleading and
that are not so described, nor are there any statutes, regulations, contracts or
other documents required to be described in the Registration Statement, the
Prospectus or the Time of Sale Information or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) Each
preliminary prospectus filed as part of the Registration Statement as originally
filed or as a part of any amendment thereto, or filed pursuant to Rule 424
under
the Securities Act, complied as to form, when so filed, in all material respects
with the Securities Act and the rules and regulations of the Commission
thereunder.
(m) The
Company is not an “investment company” or an entity “controlled” by an
“investment company,” as such terms are defined in the Investment Company Act of
1940, as amended.
(n) The
Company is not, and on the date on which the first bona fide offer of the
Offered Certificates is made (within the meaning of Rule 164(h)(2) under the
Securities Act) will not be, an “ineligible issuer”, as defined in Rule 405
under the Securities Act.
II.
The
Company hereby agrees to sell the Offered Certificates to the Underwriter,
and
the Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to purchase
the Offered Certificates from the Company, for a purchase price which is 99.70%
of the sum of the original principal amounts of the Offered Certificates as
set
forth on Schedule A hereto.
III.
A. The
Underwriter proposes to make a public offering of the Offered Certificates
as
soon as this Agreement is entered into. The terms of the public offering of
the
Offered Certificates are set forth in the Prospectus and the Time of Sale
Information.
B. In
connection with the offering of the Certificates, the Underwriter may prepare
and provide to prospective investors Free Writing Prospectuses (as defined
below), or portions thereof, which the Company is required to file with the
Commission in electronic format and will use reasonable efforts to provide
to
the Company such Free Writing Prospectuses, or portions thereof, in either
Microsoft Word® or Microsoft Excel® format and not in a PDF, except to the
extent that the Company, in its sole discretion, waives such requirements,
subject to the following conditions (to which such conditions the Underwriter
agrees):
(a) Unless
preceded or accompanied by the Prospectus, the Underwriter shall not convey
or
deliver any written communication to any person in connection with the initial
offering of the Offered Certificates, unless such written communication
(1) is made in reliance on Rule 134 under the Securities Act,
(2) constitutes a prospectus satisfying the requirements of Rule 430B under
the Securities Act or (3) constitutes Time of Sale Information or a Free
Writing Prospectus that does not constitute Time of Sale Information. Without
the Company’s prior written consent, the Representative shall not convey or
deliver in connection with the initial offering of the Offered Certificates
any
“ABS informational and computational material,” as defined in Item 1101(a) of
Regulation AB under the Securities Act (“ABS
Informational and Computational Material”),
in
reliance upon Rules 167 and 426 under the Securities Act.
(b) The
Underwriter shall deliver to the Company, no later than two business days prior
to the date of first use thereof or such later date as may be agreed to by
the
Company, (a) any Free Writing Prospectus that was prepared by or on behalf
of the Underwriter (an “Underwriter
Free Writing Prospectus”)
and
contains any “issuer information”, as defined in Rule 433(h) under the
Securities Act and footnote 271 of the Commission’s Securities Offering Reform
Release No. 33-8591 (“Issuer
Information”),
and
(b) any Free Writing Prospectus or portion thereof that contains only a
description of the final terms of the Offered Certificates. Notwithstanding
the
foregoing, any Free Writing Prospectus that contains only ABS Informational
and
Computational Materials may be delivered by the Underwriter to the Company
not
later than the later of (A) two business days prior to the due date for
filing of the Prospectus pursuant to Rule 424(b) under the Securities Act or
(B) the date of first use of such Free Writing Prospectus.
(c) The
Underwriter represents and warrants to the Company that the Free Writing
Prospectuses to be furnished to the Company by the Underwriter pursuant to
Section III.B.(b) will constitute all Free Writing Prospectuses of the type
described therein that were furnished to prospective purchasers of Offered
Certificates by the Underwriter in connection with its offer and sale of the
Offered Certificates.
(d) The
Underwriter represents and warrants to the Company that each Free Writing
Prospectus required to be provided by it to the Company pursuant to
Section III.B.(b), when read in conjunction with the Time of Sale
Information, did not, as of the Time of Sale, and will not as of the Closing
Date, include any untrue statement of a material fact or omit any material
fact
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading; provided however,
that
the Underwriter makes no representation to the extent such misstatements or
omissions were the result of any inaccurate Issuer Information, which
information was not corrected by Corrective Information subsequently supplied
by
the Company to the Underwriter within a reasonable period of time prior to
the
Time of Sale.
(e) The
Company agrees to file with the Commission the following: (A) any Issuer
Free Writing Prospectus; (B) any Free Writing Prospectus or portion thereof
delivered by the Underwriter to the Company pursuant to Section III.B.(b);
and (C) any Free Writing Prospectus for which the Company or any person
acting on its behalf provided, authorized or approved information that is
prepared and published or disseminated by a person unaffiliated with the Company
or any other offering participant that is in the business of publishing, radio
or television broadcasting or otherwise disseminating communications.
Notwithstanding the foregoing, the Company shall not be required to file
(1) Issuer Information contained in any Underwriter Free Writing Prospectus
or Free Writing Prospectus of any other offering participant other than the
Company, if such information is included or incorporated by reference in a
prospectus or Free Writing Prospectus previously filed with the Commission
that
relates to the offering of the Offered Certificates, or (2) any Free
Writing Prospectus or portion thereof that contains a description of the Offered
Certificates or the offering of the Offered Certificates which does not reflect
the final terms thereof.
(f) Any
Free
Writing Prospectus required to be filed pursuant to Section III.B.(e) by
the Company shall be filed with the Commission not later than the date of first
use of the Free Writing Prospectus, except that: (A) any Free Writing
Prospectus or portion thereof required to be filed that contains only the
description of the final terms of the Offered Certificates shall be filed by
the
Company with the Commission within two days of the later of the date such final
terms have been established for all classes of Offered Certificates and the
date
of first use; (B) any Free Writing Prospectus or portion thereof required
to be filed that contains only ABS Informational and Computational Material
shall be filed by the Company with the Commission not later than the later
of
the due date for filing the final Prospectus relating to the Offered
Certificates pursuant to Rule 424(b) under the Securities Act or two business
days after the first use of such Free Writing Prospectus; and (C) any Free
Writing Prospectus required to be filed pursuant to Section III.B.(e)(C)
shall, if no payment has been made or consideration has been given by or on
behalf of the Company for the Free Writing Prospectus or its dissemination,
be
filed by the Company with the Commission not later than four business days
after
the Company becomes aware of the publication, radio or television broadcast
or
other dissemination of the Free Writing Prospectus.
(g) The
Underwriter shall file with the Commission any Free Writing Prospectus that
is
used or referred to by it and distributed by or on behalf of the Underwriter
in
a manner reasonably designed to lead to its broad, unrestricted dissemination
not later than the date of the first use of such Free Writing Prospectus.
Notwithstanding the foregoing, the Underwriter shall file with the Commission
any Free Writing Prospectus for which the Underwriter or any person acting
on
its behalf provided, authorized or approved information that is prepared and
published or disseminated by a person unaffiliated with the Company or any
other
offering participant that is in the business of publishing, radio or television
broadcasting or otherwise disseminating written communications and for which
no
payment was made or consideration given by or on behalf of the Company or any
other offering participant, not later than four business days after the
Underwriter becomes aware of the publication, radio or television broadcast
or
other dissemination of the Free Writing Prospectus.
(h) Notwithstanding
the provisions of Sections III.B.(e) and III.B.(g), neither the Company nor
the Underwriter shall be required to file any Free Writing Prospectus that
does
not contain substantive changes from or additions to a Free Writing Prospectus
previously filed with the Commission, and the Underwriter shall not be required
to file any Free Writing Prospectus to the extent that the information contained
therein is included in a prospectus or Free Writing Prospectus previously filed
that relates to the offering of the Offered Certificates.
(i) The
Company and the Underwriter each agree that any Free Writing Prospectuses
prepared by it shall contain the following legend, or substantially equivalent
legend that complies with Rule 433 of the Securities Act:
The
depositor has filed a registration statement (including a prospectus) with
the
SEC for the offering to which this communication relates. Before you invest,
you
should read the prospectus in that registration statement and other documents
the depositor has filed with the SEC for more complete information about the
depositor, issuing entity and this offering. You may get these documents for
free by visiting XXXXX on the SEC web site at xxx.xxx.xxx. Alternatively, the
depositor or the underwriter or any dealer participating in the offering will
arrange to send you the prospectus if you request it by calling Toll-free
0-000-000-0000.
(j) In
the
event that the Company becomes aware that, as of the Time of Sale, any Issuer
Free Writing Prospectus contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained therein (when read in conjunction with the Time of Sale Information),
in light of the circumstances under which they were made, not misleading (a
“Defective
Issuer Free Writing Prospectus”),
the
Company shall notify the Underwriter thereof within one business day after
discovery and the Company shall, if requested by the Underwriter, prepare and
deliver to the Underwriter a Free Writing Prospectus that corrects the material
misstatement or omission in the Defective Issuer Free Writing Prospectus (such
corrected Issuer Free Writing Prospectus, a “Corrected
Issuer Free Writing Prospectus”).
(k) In
the
event that the Underwriter becomes aware that, as of the Time of Sale, any
Underwriter Free Writing Prospectus delivered to an investor in any Certificates
contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements contained therein (when read
in
conjunction with the Time of Sale Information), in light of the circumstances
under which they were made, not misleading, when considered in conjunction
with
the Time of Sale Information (together with a Defective Issuer Free Writing
Prospectus, a “Defective
Free Writing Prospectus”),
the
Underwriter shall notify the Company thereof within one business day after
discovery.
(l) The
Underwriter shall, if requested by the Company:
(i) if
the
Defective Free Writing Prospectus was an Underwriter Free Writing Prospectus,
prepare a Free Writing Prospectus which corrects the material misstatement
in or
omission from the Defective Free Writing Prospectus (together with a Corrected
Issuer Free Writing Prospectus, a “Corrected
Free Writing Prospectus”);
(ii) deliver
the Corrected Free Writing Prospectus to each investor which received the
Defective Free Writing Prospectus prior to entering into a contract of sale
with
such investor;
(iii) notify
such investor in a prominent fashion that the prior contract of sale with the
investor has been terminated, and of the investor’s rights as a result of
termination of such agreement;
(iv) provide
such investor with an opportunity to affirmatively agree to purchase the
Certificates on the terms described in the Corrected Free Writing Prospectus;
and
(v) comply
with any other requirements for reformation of the original contract of sale
with such investor, as described in Section IV.A.2.c of the Commission’s
Securities Offering Reform Release No. 33-8591.
(m) In
the
event that the Defective Free Writing Prospectus was an Issuer Free Writing
Prospectus, and the Underwriter shall in good faith incur any costs to an
investor in connection with the reformation of the contract of sale with the
investor, the Company agrees to reimburse the Underwriter for such costs;
provided that, before incurring such costs, the Underwriter first permits the
Company access to the applicable investor and an opportunity to attempt to
mitigate such costs through direct negotiation with such investor.
(n) The
Underwriter covenants with the Company that after the final Prospectus is
available the Underwriter shall not distribute any written information
concerning the Offered Certificates that contains Issuer Information to a
prospective purchaser of Offered Certificates unless such information is
preceded or accompanied by the final Prospectus.
C. The
Underwriter represents and warrants to, and agrees with, the Company, that:
(a) In
relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a “Relevant
Member State”),
the
Underwriter has not made and will not make an offer of Certificates to the
public in that Relevant Member State prior to the publication of a prospectus
in
relation to the Offered Certificates which has been approved by the competent
authority in that Relevant Member State or, where appropriate, approved in
another Relevant Member State and notified to the competent authority in that
Relevant Member State, all in accordance with the Prospectus Directive, except
that it may, with effect from and including the relevant implementation date,
make an offer of Certificates to the public in that Relevant Member State at
any
time:
(A) to
legal
entities which are authorized or regulated to operate in the financial markets
or, if not so authorized or regulated, whose corporate purpose is solely to
invest in securities;
(B) to
any
legal entity which has two or more of (1) an average of at least 250
employees during the last financial year; (2) a total balance sheet of more
than €43,000,000 and (3) an annual net turnover of more than €50,000,000,
as shown in its last annual or consolidated accounts; or
(C) in
any
other circumstances which do not require the publication by the issuer of a
prospectus pursuant to Article 3 of the Prospectus Directive.
For
the
purposes of this provision, the expression an “offer of Certificates to the
public” in relation to any certificates in any Relevant Member State means the
communication in any form and by any means of sufficient information on the
terms of the offer and the Certificates to be offered so as to enable an
investor to decide to purchase or subscribe the Certificates, as the same may
be
varied in that Member State by any measure implementing the Prospectus Directive
in that Member State and the expression “Prospectus Directive” means the
European Commission Directive 2003/71/EC and includes any relevant implementing
measure in each Relevant Member State.
(b) The
Underwriter has only communicated or caused to be communicated and will only
communicate or cause to be communicated an invitation or inducement to engage
in
investment activity (within the meaning of Section 21 of the United Kingdom
Financial Services and Markets Act 2000 (the “FSMA”))
received by it in connection with the issue or sale of the Certificates in
circumstances in which Section 21(1) of the FSMA does not apply to the
issuer.
(c) The
Underwriter has complied and will comply with all applicable provisions of
the
FSMA with respect to anything done by it in relation to the Certificates in,
from or otherwise involving the United Kingdom.
IV.
Payment
for the Offered Certificates shall be made to the order of the Company in
immediately available funds at the office of Xxxxxx Xxxxxxx & Co.
Incorporated, 1585 Broadway, New York, New York 10036, at 10:00 A.M., local
time, on June 28, 2006, or at such other time or place on the same or such
other
date, not later than five business days after the date of this Agreement, or
as
may be agreed to by the Company and Xxxxxx Xxxxxxx & Co. Incorporated.
Payment for the Offered Certificates shall be made upon delivery to the
Underwriter of the Offered Certificates registered in such names and in such
denominations as the Underwriter shall request in writing not less than two
full
business days prior to the date of delivery. The time and date of such payment
and delivery with respect to the Offered Certificates are herein referred to
as
the “Closing
Date.”
V.
The
obligations of the Underwriter hereunder are subject to the following
conditions:
A. Subsequent
to the execution and delivery of this Agreement and prior to the Closing
Date:
(i) there
shall not have occurred any downgrading, nor shall any notice have been given
of
any intended or potential downgrading, or any review for a possible change,
that
does not indicate the direction of the possible change, in the rating accorded
any of the Company’s securities by any “nationally recognized statistical rating
organization,” as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) there
shall not have occurred any change, or any development involving a prospective
change, in the condition, financial or otherwise, or in the earnings, business
or operations, of the Company and its subsidiaries, taken as a whole, from
that
set forth in the Prospectus, that in the judgment of the Underwriter, is
material and adverse and that makes it, in the judgment of the Underwriter,
impracticable to market the Offered Certificates on the terms and in the manner
contemplated in the Prospectus; and
(iii) the
Underwriter shall have received on the Closing Date a certificate, dated the
Closing Date and signed by an executive officer of the Company, to the effect
set forth in clause (i) above and to the effect that the representations
and warranties of the Company contained in this Agreement are true and correct
as of the Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be performed
or
satisfied on or before the Closing Date.
The
officer signing and delivering such certificate may rely upon the best of his
knowledge as to proceedings threatened.
B. The
Underwriter shall have received on the Closing Date one or more opinions of
counsel for the Company, dated the Closing Date, to the effect set forth in
Exhibit A.
C. The
Underwriter shall have received on the Closing Date an opinion of counsel to
the
Underwriter in form and substance acceptable to the Underwriter.
D. The
Underwriter shall have received on the Closing Date an opinion of in-house
counsel to Xxxxx Fargo in form and substance acceptable to the
Underwriter.
E. The
Underwriter shall have received on the Closing Date an opinion of counsel to
the
Securities Administrator and the Custodian in form and substance acceptable
to
the Underwriter.
F. The
Underwriter shall have received on the Closing Date an opinion of counsel to
the
Trustee in form and substance acceptable to the Underwriter.
G. The
Underwriter shall have received on the Closing Date an opinion of counsel to
the
Responsible Party in form and substance acceptable to the
Underwriter.
H. The
Underwriter shall have received on the Closing Date an opinion of counsel to
the
Company with respect to certain matters relating to the transfer of the Mortgage
Loans to the Depositor and from the Depositor to the Trustee, and such counsel
shall have consented to reliance on such opinion by the Rating Agencies as
though such opinion had been addressed to them.
I. The
Offered Certificates will be rated not lower than the ratings set forth in
the
Prospectus Supplement under the heading “Ratings”.
J. The
Underwriter shall have received on the Closing Date a letter of Xxxxx &
Xxxxx, dated the date of the Free Writing Prospectus in form and substance
satisfactory to the Underwriter, regarding certain specified procedures
performed thereby with respect to information set forth in the Free Writing
Prospectus.
K. The
Underwriter shall have received on the Closing Date a letter of Xxxxx &
Xxxxx, dated the date of this Agreement in form and substance satisfactory
to
the Underwriter, regarding certain specified procedures performed thereby with
respect to information set forth in the Prospectus Supplement.
VI.
In
further consideration of the agreements of the Underwriter contained in this
Agreement, the Company covenants as follows:
A. To
furnish the Underwriter, without charge, a signed copy of the Registration
Statement and any amendments thereto, including exhibits, and each Issuer Free
Writing Prospectus and, during the period mentioned in paragraph (C) below,
as many copies of the Prospectus and each Issuer Free Writing Prospectus and
any
supplements and amendments thereto as the Underwriter may reasonably
request.
B. Subject
to the other provisions of this Section VI, the Company will cause the
Issuer Free Writing Prospectus to be transmitted for filing pursuant to Rule
433
under the Securities Act by means reasonably calculated to result in filing
with
the Commission pursuant to said rule.
C. If,
during such period after the first date of the public offering of the Offered
Certificates, as in the opinion of counsel for the Underwriter, the Prospectus
is required by law to be delivered in connection with sales by the Underwriter,
any event shall occur or condition exist as a result of which it is necessary
to
amend or supplement the Prospectus in order to make the statements therein,
in
the light of the circumstances when the Prospectus is delivered to an investor
in the Offered Certificates, not misleading, or if it is necessary to amend
or
supplement the Prospectus to comply with law, forthwith to prepare and furnish,
at its own expense, to the Underwriter, either amendments or supplements to
the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the Prospectus
is
delivered to a purchaser, be misleading or so that the Prospectus will comply
with law.
D. To
endeavor to qualify the Offered Certificates for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Underwriter shall
reasonably request and to pay all expenses (including fees and disbursements
of
counsel) in connection with such qualification and in connection with the
determination of the eligibility of the Offered Certificates for investment
under the laws of such jurisdictions as the Underwriter may
designate.
E. If
required, subject to Section III, to file any Issuer Free Writing
Prospectus to the extent required by Rule 433 under the Securities Act. The
Company will advise the Underwriter promptly of any such filing pursuant to
Rule
433.
VII.
The
Company agrees to indemnify and hold harmless the Underwriter and each person,
if any, who controls the Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities caused
by
(A) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (if used within the
period set forth in paragraph C. of Article VI and as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (B) any untrue statement or alleged untrue
statement of a material fact contained in any Issuer Free Writing Prospectus
or
any Issuer Information contained in any Underwriter Free Writing Prospectus,
or
any omission or alleged omission to state therein a material fact required
to be
stated therein or necessary to make the statements therein not misleading,
which
was not corrected by Corrective Information subsequently supplied by the Company
to the Underwriter within a reasonable period of time prior to the Time of
Sale,
or (C) any breach of the representation and warranty in
Section I.A.(n), in each case except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission
or
alleged untrue statement or omission as to which the Underwriter has agreed
to
indemnify the Company pursuant to the immediately succeeding
paragraph.
The
Underwriter agrees to indemnify and hold harmless the Company and its directors
and officers who sign the Registration Statement and any person controlling
the
Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Company to the Underwriter, but only with reference to
(i) any untrue statements or alleged untrue statements of a material fact,
or omissions or alleged omissions to state a material fact necessary to make
the
statements therein, in the light of the circumstances under which they were
made, not misleading, in the Underwriter Statements furnished to the Company
by
the Underwriter and (ii) any untrue statements or alleged untrue statements
of a material fact furnished by the Underwriter for use in any Underwriter
Free
Writing Prospectus, or omissions or alleged omissions to state a material fact
necessary to make the statements therein (when read in conjunction with the
Time
of Sale Information), in the light of the circumstances under which they were
made, not misleading; provided, that the Underwriter shall not be obligated
to
so indemnify and hold harmless (A) to the extent such loss, liability,
claim, damage or expense is caused by a misstatement or omission resulting
from
an error or omission in the Issuer Information which was not corrected by
Corrective Information subsequently supplied by the Company to the Underwriter
within a reasonable period of time prior to the Time of Sale or (B) with
respect to information that is also contained in the Time of Sale Information.
In
case
any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the “indemnified
party”)
shall
promptly notify the person against whom such indemnity may be sought (the
“indemnifying
party”)
in
writing and the indemnifying party, upon request of the indemnified party,
shall
retain counsel reasonably satisfactory to the indemnified party to represent
the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related
to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall
be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention
of
such counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed
as
they are incurred. Such firm shall be designated in writing by the Underwriter
in the case of parties indemnified pursuant to the first paragraph of this
Section VII and by the Company in the case of parties indemnified pursuant
to the second paragraph of this Section VII. The indemnifying party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the third sentence of this
paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding 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 claims
that are the subject matter of such proceeding.
To
the
extent the indemnification provided for in this Section VII is unavailable
to an indemnified party under the first or second paragraph of this
Section VII or is insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand, and the Underwriter
on the other, from the offering of the Offered Certificates 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 of the Underwriter 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 Underwriter
on the other, in connection with the offering of the Offered Certificates shall
be deemed to be in the same proportions that the total net proceeds from the
offering of the Offered Certificates (before deducting expenses) received by
the
Company and the total underwriting discounts and commissions received by the
Underwriter in respect thereof respectively, bear to the aggregate public
offering price of the Offered Certificates. The relative fault of the Company
on
the one hand, and of the Underwriter on the other, 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 by the Underwriter and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The
Company and the Underwriter agree that it would not be just and equitable if
contribution pursuant to this Section VII were determined by pro rata
allocation or by any other method of allocation that does not take account
of
the considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section VII, the Underwriter shall
not be required to contribute any amount in excess of the amount by which the
total underwriting discounts and commissions received by the Underwriter in
connection with the Offered Certificates underwritten and distributed to the
public by the Underwriter exceeds the amount of any damages that the 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 Securities
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
The
indemnity and contribution agreements contained in this Section VII and the
representations and warranties of the Company in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of the
Underwriter or any person controlling the Underwriter or by or on behalf of
the
Company, its directors or officers or any person controlling the Company and
(iii) acceptance of any payment for any of the Offered
Certificates.
VIII.
This
Agreement shall be subject to termination in the Underwriter’s absolute
discretion, by notice given to the Company, if (a) after the execution and
delivery of this Agreement and prior to the Closing Date: (i) trading
generally shall have been suspended or materially limited on or by, as the
case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade,
(ii) trading of any securities of the Company shall have been suspended on
any exchange or in any over-the-counter market, (iii) a general moratorium
on commercial banking activities in New York shall have been declared by
either Federal or New York State authorities, or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Underwriter,
is
material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event singly or together with any other
such event makes it, in the judgment of the Underwriter, impracticable to market
the Offered Certificates on the terms and in the manner contemplated in the
Time
of Sale Information and the Prospectus.
IX.
If
this
Agreement shall be terminated by the Underwriter because of any failure or
refusal on the part of the Company to comply with the terms or to fulfill any
of
the conditions of this Agreement, or if for any reason the Company shall be
unable to perform its obligations under this Agreement, the Company will
reimburse the Underwriter for all out-of-pocket expenses (including the fees
and
disbursements of its counsel) reasonably incurred by the Underwriter in
connection with the Offered Certificates.
All
communications hereunder shall be in writing and effective only upon receipt
and, if sent to the Company or Xxxxxx Xxxxxxx & Co. Incorporated, will be
mailed, hand delivered, couriered or sent by facsimile transmission to it at
0000 Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Securitized Products Group,
with a copy to 0000 Xxxxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx Xxxxx.
This
Agreement may be signed in any number of counterparts, each of which shall
be an
original, with the same effect as if the signatures thereto and hereto were
upon
the same instrument.
[SIGNATURE
PAGE FOLLOWS]
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
|
Very
truly yours,
|
|||||||||||||
|
XXXXXX
XXXXXXX ABS CAPITAL I INC.
|
|||||||||||||
|
By:
|
/s/
Xxxxxx Xxxxxxx
|
||||||||||||
|
Name:
|
Xxxxxx
Xxxxxxx
|
||||||||||||
|
Title:
|
Managing
Director
|
||||||||||||
|
Accepted
and agreed to by:
|
||||||
|
XXXXXX
XXXXXXX & CO. INCORPORATED
|
||||||
|
By:
|
/s/
Xxxxxx Xxxxxxx
|
|||||
|
Name:
|
Xxxxxx
Xxxxxxx
|
|||||
|
Title:
|
Managing
Director
|
|||||
SCHEDULE
A
Underwriting
Agreement dated May 25, 2006.
As
used
in this Agreement, the term “Registration
Statement”
refers
to the Registration Statement on Form S-3, File No. 333-130694 which was
declared effective on March 14, 2006.
Closing
Date: June 28, 2006.
Approximate
Preliminary Pool Balance: $2,602,987,087
of
Mortgage Loans.
Cut-Off
Date: June
1,
2006.
Title
and
Description of Underwritten Certificates:
Xxxxxx
Xxxxxxx ABS Capital I Inc. Trust 2006-WMC2, Mortgage Pass-Through Certificates,
Series 2006-WMC2, Classes designated below:
|
Class
|
Class Principal
Balance
|
Pass-Through
Rate
|
Initial
Note Ratings
|
|||
|
S&P
|
Fitch
|
Xxxxx’x
|
||||
|
A-1
|
$
|
581,960,000.00
|
Variable
|
AAA
|
AAA
|
Aaa
|
|
A-2fpt
|
$
|
500,000,000.00
|
Variable
|
AAA
|
AAA
|
Aaa
|
|
A-2a
|
$
|
340,525,000.00
|
Variable
|
AAA
|
AAA
|
Aaa
|
|
A-2b
|
$
|
115,885,000.00
|
Variable
|
AAA
|
AAA
|
Aaa
|
|
A-2c
|
$
|
335,030,000.00
|
Variable
|
AAA
|
AAA
|
Aaa
|
|
A-2d
|
$
|
242,825,000.00
|
Variable
|
AAA
|
AAA
|
Aaa
|
|
M-1
|
$
|
89,803,000.00
|
Variable
|
AA+
|
AA+
|
Aa1
|
|
M-2
|
$
|
72,884,000.00
|
Variable
|
AA
|
AA
|
Aa2
|
|
M-3
|
$
|
45,552,000.00
|
Variable
|
AA-
|
AA-
|
Aa3
|
|
M-4
|
$
|
41,648,000.00
|
Variable
|
A+
|
A+
|
A1
|
|
M-5
|
$
|
40,346,000.00
|
Variable
|
A
|
A
|
A2
|
|
M-6
|
$
|
36,442,000.00
|
Variable
|
A-
|
A-
|
A3
|
|
B-1
|
$
|
35,140,000.00
|
Variable
|
BBB+
|
BBB+
|
Baa1
|
|
B-2
|
$
|
27,331,000.00
|
Variable
|
BBB
|
BBB
|
Baa2
|
|
B-3
|
$
|
26,030,000.00
|
Variable
|
BBB-
|
BBB-
|
Baa3
|
SCHEDULE
B
Free
Writing Prospectus
Available
upon request
EXHIBIT
A
OPINIONS
OF XXXXXXX XXXXXXXX & XXXX LLP,
COUNSEL
FOR THE COMPANY
Available
Upon Request
