$275,000,000
MORTGAGE-BACKED NOTES, SERIES 2000-4
UNDERWRITING AGREEMENT
December 6, 2000
BEAR, XXXXXXX & CO. INC.
as Representative of the Underwriters
named in Schedule A hereto
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Bear Xxxxxxx Asset Backed Securities, Inc. (the "Depositor"), a Delaware
corporation, has authorized the issuance and sale of Mortgage-Backed Notes,
Series 2000-4, in the original principal amount and with the designation set
forth in Schedule A hereto (the "Notes" or the "Securities"), evidencing
obligations of ABFS Mortgage Loan Trust 2000-4 (the "Issuer" or the "Trust").
The underwriters named in Schedule A hereto (the "Underwriters"), for whom Bear,
Xxxxxxx & Co. Inc. is acting as representative (in such capacity, the
"Representative"), are purchasing all of the Notes at the price or prices set
forth on Schedule A hereto.
The Notes will be issued pursuant to an indenture dated as of December 1,
2000 (the "Indenture"), between the Issuer and The Chase Manhattan Bank, as
indenture trustee (the "Indenture Trustee"). As used herein, the "Basic
Documents" shall mean (i) the unaffiliated seller's agreement dated as of
December 1, 2000 (the "Unaffiliated Seller's Agreement") by and among the
Depositor, ABFS 2000-4, Inc. (the "Unaffiliated Seller"), American Business
Credit, Inc. ("ABC"), HomeAmerican Credit, Inc. d/b/a Upland Mortgage ("Upland")
and New Jersey Mortgage and Investment Corp ("NJMIC" and, collectively with ABC
and Upland, the "Originators"), (ii) the sale and servicing agreement dated as
of December 1, 2000 (the "Sale and Servicing Agreement") among the Issuer, the
Depositor, the Indenture Trustee, The Chase Manhattan Bank, as collateral agent
(in such capacity, the "Collateral Agent"), and ABC, as servicer (in such
capacity, the "Servicer"), (iii) the trust agreement dated as of December 1,
2000 (the "Trust Agreement") between the Depositor, the Unaffiliated Seller and
First Union Trust Company, National Association, as owner trustee (the "Owner
Trustee"), (iv) the Indenture, (v) this Agreement, (vi) the insurance and
indemnity agreement dated as of December 21, 2000 (the "Insurance Agreement")
among Ambac Assurance Corporation (the "Enhancer"), the Issuer, the Unaffiliated
Seller, the Depositor,
the Servicer, the Originators and the Indenture Trustee and (vii) the
indemnification agreement dated December 6, 2000 (the "Indemnification
Agreement") among the Underwriters and the Enhancer.
The Notes are more fully described in the Registration Statement, which the
Depositor has furnished to the Underwriters. Capitalized terms used herein that
are not otherwise defined shall have the meanings ascribed thereto in Appendix I
to the Indenture.
SECTION 1. Representations and Warranties of the Depositor. The Depositor
represents and warrants to, and agrees with you that:
(a) A Registration Statement on Form S-3 (No. 333-43278) has (i) been
prepared by the Depositor in conformity with the requirements of the Securities
Act of 1933, as amended (the "Securities Act"), and the rules and regulations
(the "Rules and Regulations") of the United States Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the Securities Act.
Copies of such Registration Statement have been delivered by the Depositor to
the Underwriters. As used in this Agreement, "Effective Time" means the date and
the time as of which such Registration Statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission. "Effective Date" means the date of the Effective Time. "Registration
Statement" means such registration statement, as amended, at the Effective Time,
including any documents incorporated by reference therein at such time.
"Preliminary Prospectus" means each prospectus included in such Registration
Statement, or amendments thereto, including any preliminary prospectus
supplement that, as completed, is proposed to be used in connection with the
sale of the Notes and any prospectus filed with the Commission by the Depositor
with the consent of the Underwriters pursuant to Rule 424(b) of the Rules and
Regulations. "Prospectus" means the final prospectus dated December 6, 2000 (the
"Basic Prospectus"), as supplemented by the final prospectus supplement dated
December 6, 2000 (the "Prospectus Supplement") relating to the Notes, to be
filed with the Commission pursuant to paragraph (2), (3) or (5) of Rule 424(b)
of the Rules and Regulations. Reference herein to the Prospectus shall be deemed
to refer to and include any documents incorporated by reference therein pursuant
to item 12 of Form S-3 under the Securities Act as of the date of the
Prospectus. Any reference to any amendment or supplement to the Prospectus shall
be deemed to refer to and include any document filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") after the date of the
Preliminary Prospectus, if any, or the Prospectus, as the case may be, and
incorporated by reference in the Preliminary Prospectus, if any, or the
Prospectus, as the case may be. Any reference to any amendment to the
Registration Statement shall be deemed to include any report of the Depositor
filed with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
after the Effective Time that is incorporated by reference in the Registration
Statement. The Commission has not issued any order preventing or suspending the
use of the Preliminary Prospectus, if any, or the Prospectus. There are no
contracts or documents of the Depositor that are required to be filed as
exhibits to the Registration Statement pursuant to the Securities Act or the
Rules and Regulations that have not been so filed or incorporated by reference
therein on or prior to the Effective Date of the Registration Statement. The
conditions for use of Form S-3, as set forth in the General Instructions
thereto, have been satisfied.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations. The Registration Statement, as of the
Effective Date thereof and of any amendment thereto, did 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. The
Prospectus, as of its date and as amended or supplemented as of the Closing
Date, does not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary in
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order to make the statements therein not misleading; provided, however, that no
representation or warranty is made as to (i) information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Depositor in writing by any
Underwriter through the Representative expressly for use therein or (ii)
information contained in or omitted from the Statement of Eligibility and
Qualification on Form T-1 of the Indenture Trustee under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). The only information furnished
by or on behalf of the Underwriters for use in connection with the preparation
of the Registration Statement or the Prospectus is described in Section 8(h)
hereof.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and 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, in the light of the circumstances under which
they were made, not misleading.
(d) Since the respective dates as of which information is given in the
Prospectus, there has not been any material adverse change in the general
affairs, management, financial condition or results of operations of the
Depositor, other than as set forth or contemplated in the Prospectus as
supplemented or amended as of the Closing Date.
(e) The Depositor has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property or the conduct of
its business requires such qualification, and has all power and authority
necessary to own or hold its properties, to conduct the business in which it is
engaged and to enter into and perform its obligations under this Agreement and
the other Basic Documents to which it is a party, and to cause the Notes to be
issued.
(f) There are no actions, proceedings or investigations pending with
respect to which the Depositor has received service of process before, or
threatened by, any court, administrative agency or other tribunal to which the
Depositor is a party or of which any of its properties is the subject (i) that
if determined adversely to the Depositor would have a material adverse effect on
the business or financial condition of the Depositor, (ii) that assert the
invalidity of this Agreement or the other Basic Documents to which it is a
party, (iii) that seek to prevent the issuance of the Notes or the consummation
by the Depositor of any of the transactions contemplated by the other Basic
Documents to which it is a party, or (iv) that might materially and adversely
affect the performance by the Depositor of its obligations under, or the
validity or enforceability of, the other Basic Documents to which it is a party.
(g) This Agreement has been, and the other Basic Documents to which it
is a party, when executed and delivered as contemplated hereby and thereby, will
have been, duly authorized, executed and delivered by the Depositor, and this
Agreement constitutes, and the other Basic Documents to which it is a party,
when executed and delivered as contemplated herein, will constitute, legal,
valid and binding instruments enforceable against the Depositor in accordance
with their respective terms, subject as to enforceability to (i) applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting creditors rights generally, (ii) general principles of equity
(regardless of whether
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enforcement is sought in a proceeding in equity or at law) and (iii) with
respect to rights of indemnity, limitations of public policy under applicable
securities laws.
(h) The direction by the Issuer to the Indenture Trustee to execute,
authenticate, issue and deliver the Notes has been duly authorized by the
Depositor, and assuming the Indenture Trustee has been duly authorized to do so,
when executed, authenticated, issued and delivered by the Indenture Trustee in
accordance with the Indenture, the Notes will be validly issued and outstanding
and will be entitled to the benefits provided by the Indenture.
(i) The execution, delivery and performance of this Agreement and the
other Basic Documents to which it is a party by the Depositor and the
consummation of the transactions contemplated hereby and thereby, and the
issuance and delivery of the Notes do not and will not conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Depositor is a party, by which the
Depositor is bound or to which any of the properties or assets of the Depositor
or any of its subsidiaries is subject, which breach or violation would have a
material adverse effect on the business, operations or financial condition of
the Depositor, nor will such actions result in any violation of the provisions
of the certificate of incorporation or by-laws of the Depositor or any statute
or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Depositor or any of its properties or assets, which
breach or violation would have a material adverse effect on the business,
operations or financial condition of the Depositor.
(j) The Depositor has no reason to believe that Deloitte & Touche LLP
are not independent public accountants with respect to the Depositor as required
by the Securities Act and the Rules and Regulations.
(k) As of the Closing Date, the Notes will be duly and validly
authorized and, when duly and validly executed, authenticated and delivered in
accordance with the Indenture, and delivered to you against payment therefor as
provided herein, will be duly and validly issued and outstanding and entitled to
the benefits of the Indenture. The Notes will not be "mortgage related
securities," as such term is defined in the singular in the Exchange Act.
(l) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States is required for the issuance of the Securities and the sale of the Notes
to the Underwriters, or the consummation by the Depositor of the other
transactions contemplated by this Agreement, the other Basic Documents to which
it is a party and any Subsequent Transfer Agreement, except such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities or blue sky laws in connection with the purchase and
distribution of the Notes by the Underwriters or as have been obtained.
(m) The Depositor possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now conducted by
it and as described in the Prospectus, and the Depositor has not received notice
of any proceedings relating to the revocation or modification of any such
license, certificate, authority or permit which if decided adversely to the
Depositor would, singly or in the aggregate, materially and adversely affect the
conduct of its business, operations or financial condition.
(n) At the time of execution and delivery of the Sale and Servicing
Agreement, the Depositor will: (i) be the sole beneficial owner of the Mortgage
Loans conveyed to it by the Unaffiliated Seller, free and clear of any lien,
mortgage, pledge, charge, encumbrance, adverse claim or other security interest
(collectively, "Liens"); (ii) not have assigned to any Person any of its right
or title in the
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Mortgage Loans or in the Sale and Servicing Agreement or in the Notes being
issued pursuant to the Indenture; and (iii) have the power and authority to sell
its interest in the Mortgage Loans to the Trust and to authorize the Trust to
issue the Notes. At the time of execution and delivery of the Sale and Servicing
Agreement, the Depositor will not have assigned to any Person any of its right
or title in the Notes and (iv) have the power and authority to sell the Notes to
the Underwriters. Upon execution and delivery of the Sale and Servicing
Agreement by the Owner Trustee, on behalf of the Issuer, the Trust will have
acquired beneficial ownership of all of the Depositor's right, title and
interest in and to the Mortgage Loans. Upon delivery to the Underwriters of the
Notes, the Underwriters will have good title to the Notes, free and clear of any
Liens.
(o) At the time of execution and delivery of any Subsequent Transfer
Agreement, the Depositor will: (i) be the sole beneficial owner of the
Subsequent Mortgage Loans conveyed by the Unaffiliated Seller, free and clear of
any Liens; (ii) not have assigned to any Person any of its right or title in the
Subsequent Loans, in the Sale and Servicing Agreement or in the Subsequent
Transfer Agreement; and (iii) have the power and authority to sell the
Subsequent Mortgage Loans to the Trust. Upon execution and delivery of each
Subsequent Transfer Agreement by the Trustee, the Trust will have acquired
beneficial ownership of all of the Depositor's right, title and interest in and
to the related Subsequent Mortgage Loans.
(p) As of the Cut-Off Date, each of the Mortgage Loans will meet the
eligibility criteria described in the Prospectus. At the Closing Date, the
Notes, the Basic Documents and each of the Mortgage Loans will conform in all
material respects to the descriptions thereof contained in the Prospectus.
(q) As of any Subsequent Transfer Date, each of the Subsequent Mortgage
Loans will meet the eligibility criteria described in the Prospectus and will
conform in all material respects to the descriptions thereof contained in the
Prospectus.
(r) Neither the Depositor nor the Trust created by the Trust Agreement
is an "investment company" within the meaning of such term under the Investment
Company Act of 1940 (the "1940 Act") and the rules and regulations of the
Commission thereunder.
(s) At the Closing Date, the Notes will have been rated in the highest
rating category by at least two nationally recognized statistical rating
organizations.
(t) Any taxes, fees and other governmental charges in connection with
the execution, delivery and issuance of this Agreement, the other Basic
Documents to which it is a party and the Securities have been paid or will be
paid at or prior to the Closing Date.
(u) At the Closing Date, each of the representations and warranties of
the Depositor set forth in the Sale and Servicing Agreement, the Unaffiliated
Seller's Agreement and the Insurance Agreement will be true and correct in all
material respects.
Any certificate signed by an officer of the Depositor and delivered to the
Underwriters or counsel for the Underwriters in connection with an offering of
the Notes shall be deemed to be a representation and warranty as to the matters
covered thereby to each person to whom the representations and warranties in
this Section 1 are made.
SECTION 2. Purchase and Sale. The commitment of the Underwriters to
purchase the Notes pursuant to this Agreement shall be deemed to have been made
on the basis of the representations and warranties herein contained and shall be
subject to the terms and conditions herein set forth. The
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Depositor agrees to instruct the Issuer to issue the Notes and agrees to sell to
the Underwriters, and the Underwriters agree (except as provided in Section 10)
to purchase from the Depositor the aggregate principal amount of the Notes at
the purchase price or prices set forth in Schedule A.
SECTION 3. Delivery and Payment. Delivery of and payment for the Notes to
be purchased by the Underwriters shall be made at the offices of Xxxxx
Xxxxxxxxxx LLP, 1301 Avenue of the Americas, New York, New York, or at such
other place as shall be agreed upon by the Representative and the Depositor at
10:00 a.m. New York time on or about December 21, 2000 or at such other time or
date as shall be agreed upon in writing by the Representative and the Depositor
(such date being referred to as the "Closing Date"). Payment shall be made to
the Depositor by wire transfer of same day funds payable to the account of the
Depositor. Delivery of the Notes shall be made to, or at the direction of, the
Underwriters against payment of the purchase price thereof. The Notes shall be
in such authorized denominations and registered in such names as the
Representative may request in writing at least two business days prior to the
Closing Date. The Notes will be made available for examination by the
Representative no later than 2:00 p.m. New York City time on the first business
day prior to the Closing Date.
SECTION 4. Offering by the Underwriters. It is understood that, subject to
the terms and conditions hereof, the Underwriters propose to offer the Notes for
sale to the public as set forth in the Prospectus.
SECTION 5. Covenants of the Depositor. The Depositor agrees as follows:
(a) To prepare the Prospectus in a form approved by the Representative
and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the second business day
following the availability of the Prospectus to the Underwriters and to make no
further amendment or any supplement to the Registration Statement or to the
Prospectus prior to the Closing Date except as permitted herein; to advise the
Underwriters, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective
prior to the Closing Date or any supplement to the Prospectus or any amended
Prospectus has been filed prior to the Closing Date and to furnish the
Underwriters with copies thereof, to file promptly all reports and any
definitive proxy or information statements required to be filed by the Depositor
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and, for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Notes to advise the Underwriters promptly of its receipt of notice of the
issuance by the Commission of any stop order or of: (i) any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus; (ii) the
suspension of the qualification of the Notes for offering or sale in any
jurisdiction; (iii) the initiation of or threat of any proceeding for any such
purpose; (iv) any request by the Commission for the amending or supplementing of
the Registration Statement or the Prospectus or for additional information. In
the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, the Depositor promptly shall use its best efforts to
obtain the withdrawal of such order by the Commission.
(b) To furnish promptly to the Underwriters and to counsel for the
Underwriters a signed copy of the Registration Statement as originally filed
with the Commission, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
(c) To deliver promptly to the Underwriters such number of the
following documents as the Underwriters shall reasonably request: (i) conformed
copies of the Registration Statement as originally filed with the Commission and
each amendment thereto (in each case including
6
exhibits); (ii) each Preliminary Prospectus, if any, the Prospectus and any
amended or supplemented Prospectus; and (iii) any document incorporated by
reference in the Prospectus (including exhibits thereto). If the delivery of a
prospectus is required at any time in connection with the offering or sale of
the Notes, and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, the Depositor shall notify the Underwriters
and, upon the request of the Representative, shall file such document and
prepare and furnish without charge to the Underwriters and to any dealer in
securities as many copies as the Underwriters may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which
corrects such statement or omission or effects such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Depositor or the Representative, be required by
the Securities Act or requested by the Commission.
(e) The Depositor will (i) cause any Computational Materials or any
Structural Term Sheet (each as defined below in this subsection) with respect to
the Notes which are delivered by the Underwriters to the Depositor to be filed
with the Commission on Additional Materials 8-K (as defined below) (A) at or
before the time of filing of the Prospectus pursuant to Rule 424(b) under the
Securities Act in the case of Computational Materials or any Structural Term
Sheets provided to investors prior to the availability of such Prospectus, and
(B) within two business days of first use in the case of Computational Materials
or any Structural Term Sheet provided to investors subsequent to the
availability of, but before the sending or giving of, such Prospectus and (ii)
cause any Collateral Term Sheet (as defined below in this subsection) with
respect to the Notes which are delivered by the Underwriters to the Depositor to
be filed with the Commission on an Additional Materials 8-K within two business
days after the date on which the Representative advises the Depositor that such
Collateral Term Sheet was first used; provided, however, that the Depositor
shall have no obligation to file any materials which, in the reasonable
determination of the Depositor after consultation with the Representative, (x)
are not required to be filed pursuant to the Xxxxxx Letters and/or the PSA
Letter (each as defined below) or (y) contain any erroneous information or
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; it
being understood, however, that the Depositor shall have no obligation to review
or pass upon the accuracy or adequacy of, or to correct, any Computational
Materials, Structural Term Sheets or Collateral Term Sheets provided by the
Underwriters to the Depositor as aforesaid. For purposes of this subsection (e),
(1) the term "Computational Materials" shall mean those materials which
constitute "computational materials" within the meaning of the no-action letter
dated May 20, 1994 issued by the Division of Corporation Finance of the
Commission to Xxxxxx, Xxxxxxx Acceptance Corporation I and certain affiliates
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") and the no-action letter dated February 17,
1995 issued by the Division of Corporation Finance to the Public Securities
Association (the "PSA Letter") for which the filing of such material on an
Additional Materials 8-K is a condition of the relief granted in such letters,
(2) the terms "Structural Term Sheet" and "Collateral Term Sheet" shall mean
those materials which constitute "structural term sheets" and "collateral term
sheets" within the meaning of the PSA Letter for which the filing of such
material on an Additional Materials 8-K is a condition of the relief granted in
such letter and (3) the term "Additional Materials 8-K" shall mean a Current
Report on Form 8-K used to file Computational Materials, Structural Term Sheets
and/or Collateral Term Sheets.
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(f) To furnish the Underwriters and counsel for the Underwriters, prior
to filing with the Commission, and to obtain the consent of the Representative
for the filing of the following documents relating to the Securities: any (i)
Preliminary Prospectus, (ii) amendment to the Registration Statement or
supplement to the Prospectus, or document incorporated by reference in the
Prospectus, or (iii) Prospectus pursuant to Rule 424 of the Rules and
Regulations.
(g) To make generally available to holders of the Notes as soon as
practicable, but in any event not later than ninety (90) days after the close of
the period covered thereby, a statement of earnings of the Trust (which need not
be audited) complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Depositor, Rule 158) and covering a
period of at least twelve consecutive months beginning not later than the first
day of the first fiscal quarter following the Closing Date.
(h) To use its best efforts, in cooperation with the Underwriters, to
qualify the Notes for offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States or elsewhere as the
Representative may designate, and maintain or cause to be maintained such
qualifications in effect for as long as may be required for the distribution of
the Notes; provided, however, that in connection therewith, the Depositor shall
not be required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction. The Depositor will file or cause the
filing of such statements and reports as may be required by the laws of each
jurisdiction in which the Notes have been so qualified.
(i) Unless the Representative shall otherwise have given its written
consent, no pass-through certificates backed by home equity loans or other
similar securities representing interest in or secured by other mortgage-related
assets originated or owned by the Depositor or the Unaffiliated Seller shall be
publicly offered or sold nor shall the Depositor or the Unaffiliated Seller
enter into any contractual arrangements that contemplate the public offering or
sale of such securities for a period of seven business days following the
commencement of the offering of the Notes to the public.
(j) So long as the Notes shall be outstanding the Depositor shall cause
the Indenture Trustee, pursuant to the Sale and Servicing Agreement, to deliver
to the Underwriters as soon as such statements are available to be furnished:
(i) the annual statement as to compliance delivered to the Indenture Trustee
pursuant to Section 5.09 of the Sale and Servicing Agreement and (ii) the annual
statement of a firm of independent public accountants furnished to the Trustee
pursuant to Section 5.10 of the Sale and Servicing Agreement.
(k) To apply the net proceeds from the sale of the Notes in the manner
set forth in the Prospectus.
SECTION 6. Conditions to the Underwriters' Obligations. The obligations of
the Underwriters to purchase the Notes pursuant to this Agreement are subject
to: (a) the accuracy on and as of the Closing Date of the representations and
warranties on the part of the Depositor herein contained; (b) the performance by
the Depositor of all of its obligations hereunder; and (c) the following
conditions as of the Closing Date:
(a) The Representative shall have received confirmation of the
effectiveness of the Registration Statement. No stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission. Any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus shall
have been complied with.
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(b) The Prospectus shall have been filed with the Commission pursuant
to Rule 424 not later than the second business day following the date it is
first used after effectiveness in connection with a public offering or sale, or
transmitted by a means reasonably calculated to result in filing with the
Commission by that date.
(c) The Representative shall not have discovered and disclosed to the
Depositor on or prior to the Closing Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact or omits to state a fact which, in the opinion of the Representative
and its counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(d) All corporate proceedings and other legal matters relating to the
authorization, form and validity of this Agreement, the other Basic Documents,
the Securities, the Registration Statement and the Prospectus, and all other
legal matters relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all respects to the Representative and its
counsel, and the Depositor shall have furnished to the Representative and its
counsel all documents and information that they may reasonably request to enable
them to pass upon such matters. (e) Xxxxxx, Xxxxx & Xxxxxxx LLP shall have
furnished to the Underwriters its written opinion, as special counsel to the
Depositor, addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Representative, to the effect that:
(i) The Depositor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware and
has all corporate power and authority necessary to own or hold its properties
and to conduct the business in which it is engaged and to enter into and perform
its obligations under this Agreement, the Sale and Servicing Agreement, the
Unaffiliated Seller's Agreement, the Trust Agreement and the Insurance
Agreement, and to cause the Securities to be issued;
(ii) This Agreement, the Sale and Servicing Agreement, the
Unaffiliated Seller's Agreement, the Trust Agreement and the Insurance Agreement
have been duly authorized, executed and delivered by the Depositor and the
Subsequent Transfer Agreements, if any, have been duly authorized, and when duly
executed and delivered by the Depositor and, assuming the due authorization,
execution and delivery of such agreements by the other parties thereto, such
agreements constitute, and in the case of any Subsequent Transfer Agreement will
constitute, valid, legal and binding obligations, enforceable against the
Depositor in accordance with their respective terms, subject as to
enforceability to (A) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, (B) general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law) and (C) with respect to rights of
indemnity under this Agreement and the Insurance Agreement, limitations of
public policy under applicable securities laws;
(iii) The execution, delivery and performance of this Agreement, the
Sale and Servicing Agreement, the Unaffiliated Seller's Agreement, the Trust
Agreement, the Insurance Agreement and each Subsequent Transfer Agreement, if
any, by the Depositor, the consummation of the transactions contemplated hereby
and thereby, and the issuance and delivery of the Securities to such counsel's
knowledge do not and will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Depositor is a party or by which the Depositor is bound
or to which any of the property or assets of the Depositor or any of its
subsidiaries is subject, which breach or violation would have a material adverse
effect on the business, operations or financial condition of the Depositor, nor
will such actions result in a violation of the provisions of the certificate of
incorporation or
9
by-laws of the Depositor or to such counsel's knowledge any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Depositor or any of its properties or assets, which breach
or violation would have a material adverse effect on the business, operations or
financial condition of the Depositor;
(iv) The direction by the Depositor to the Indenture Trustee to
issue, authenticate and deliver the Securities has been duly authorized by the
Depositor and, assuming that the Indenture Trustee has been duly authorized to
do so, when executed, authenticated and delivered by the Indenture Trustee in
accordance with the Indenture, the Securities will be validly issued and
outstanding and will be entitled to the benefits of the Indenture;
(v) No consent, approval, authorization, order, registration or
qualification with, or notice to, any court or governmental agency or body of
the United States or the State of New York is required for the issuance of the
Securities, the sale of the Notes to the Underwriters, or the consummation by
the Depositor of the other transactions contemplated by this Agreement, the Sale
and Servicing Agreement, the Unaffiliated Seller's Agreement, the Trust
Agreement and the Insurance Agreement, except such which have been previously
obtained;
(vi) There are not, to such counsel's knowledge, any actions,
proceedings or investigations pending with respect to which the Depositor has
received service of process before, or threatened by any court, administrative
agency or other tribunal to which the Depositor is a party or of which any of
its properties is the subject: (a) which, if determined adversely to the
Depositor, would have a material adverse effect on the business, results of
operations or financial condition of the Depositor, (b) which assert the
invalidity of this Agreement, the Sale and Servicing Agreement, the Unaffiliated
Seller's Agreement, the Trust Agreement, the Insurance Agreement or the
Securities; (c) seeking to prevent the issuance of the Securities or the
consummation by the Depositor of any of the transactions contemplated by the
this Agreement, the Sale and Servicing Agreement, the Unaffiliated Seller's
Agreement, the Trust Agreement or the Insurance Agreement, as the case may be;
or (d) which might materially and adversely affect the performance by the
Depositor of its obligations under, or the validity or enforceability of, this
Agreement, the Sale and Servicing Agreement, the Unaffiliated Seller's
Agreement, the Trust Agreement, the Insurance Agreement or the Securities;
(vii) The statements set forth in the Prospectus Supplement under
the captions "Description of the Notes and the Trust Certificates", to the
extent such statements purport to summarize certain provisions of the
Securities, the Indenture, the Sale and Servicing Agreement, the Unaffiliated
Seller's Agreement or the Trust Agreement, are fair and accurate in all material
respects;
(viii) The statements set forth in the Basic Prospectus under the
captions "ERISA Considerations" and "Certain Federal Income Tax Considerations"
and in the Prospectus Supplement under the captions "ERISA Considerations" and
"Certain Federal Income Tax Considerations," to the extent that they constitute
matters of federal law, provide a fair and accurate summary of such law or
conclusions;
(ix) None of the Unaffiliated Seller, the Depositor, the Trust or
the Trust Estate created by the Indenture is required to be registered under the
1940 Act;
(x) The Indenture has been duly qualified under the Trust Indenture
Act, and the Trust Agreement is not required to be so qualified;
(xi) The Registration Statement has become effective under the
Securities Act and to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the
10
Registration Statement or any order directed to any prospectus relating to the
Notes has been issued and not withdrawn and no proceedings for that purpose have
been instituted or threatened and not terminated;
(xii) The Registration Statement and the Prospectus (other than the
financial and statistical data included therein, as to which such counsel is not
called upon to express any opinion), at the time the Registration Statement
became effective, as of the date of execution of this Agreement and as of the
date of the opinion, comply as to form in all material respects with the
requirements of the Securities Act and the rules and regulations thereunder, and
the Exchange Act and the rules and regulations thereunder, and such counsel does
not know of any amendment to the Registration Statement required to be filed, or
of any contracts, indentures or other documents of a character required to be
filed as an exhibit to the Registration Statement or required to be described in
the Registration Statement or the Prospectus, which has not been filed or
described as required;
(xiii) The Unaffiliated Seller's Agreement, upon execution and
delivery, is effective to create (x) either a valid ownership or security
interest in favor of the Unaffiliated Seller in all of each Originator's right,
title and interest in and to the Mortgage Loans transferred to the Unaffiliated
Seller from time to time pursuant to the Unaffiliated Seller's Agreement, and
(y) either a valid ownership or security interest in favor of the Depositor in
all of the Unaffiliated Seller's right, title and interest in and to the
Mortgage Loans transferred to the Depositor from time to time pursuant to the
Unaffiliated Seller's Agreement;
(xiv) The Sale and Servicing Agreement, upon execution and delivery,
is effective to create either a valid ownership or security interest in favor of
the Trust in all of the Depositor's right, title and interest in and to the
Mortgage Loans transferred to the Trust from time to time pursuant to the Sale
and Servicing Agreement;
(xv) The Indenture, upon execution and delivery, is effective to
create a valid and enforceable security interest in favor of the Indenture
Trustee, for the benefit of the Noteholders and the Note Insurer, in all of the
Trust's right, title and interest in the Mortgage Loans;
(xvi) The security interest in favor of the Indenture Trustee, for
the benefit of the Noteholders and the Note Insurer, will constitute a first
perfected security interest upon the delivery of the Mortgage Files to the
Collateral Agent, on behalf of the Indenture Trustee, and the recording of
instruments of assignment in accordance with the provisions of the Sale and
Servicing Agreement; provided, however, that such counsel expresses no opinion
(a) as to the continuation of a security interest in the Mortgage Loans in the
event the Collateral Agent relinquishes possession of the Mortgage Notes, (b) as
to the continuation of a security interest in the Mortgage Notes or the
Mortgages in the event the related Originator or the Unaffiliated Seller
discharges or releases the Mortgage Notes or the Mortgages prior to delivery of
the Mortgage Notes to the Collateral Agent and the recording of instruments of
assignment in respect of the Mortgages in the appropriate recording offices, (c)
as to title in any Mortgaged Property or the existence of priority in any lien
with respect to such property or as to the enforceability of any remedy that may
be dependent on that title or such lien, or (d) as to the priority of any
security interest against any liens, claims or other interest that by operation
of law that take priority over previously perfected security interests
(including, in certain circumstances, certain federal and state tax liens, liens
arising under the ERISA, and certain claims of the United States Government);
and
(xvii) The Notes will be treated as indebtedness, and the Trust will
not be classified as an association or a publicly traded partnership taxable as
a corporation or as a taxable mortgage pool within the meaning of Section
7701(i) of the Code.
11
Opinions of such counsel set forth in paragraphs (xiii), (xiv) and (xv)
regarding the creation and validity of security interests are governed by the
Uniform Commercial Code as in effect in the State of New York, and the opinion
set forth in paragraph (xvi) regarding the priority of security interests is
governed by the Uniform Commercial Code as in effect in the State of Texas. With
respect to the opinion set forth in paragraph (xvi), such counsel shall have
reviewed the relevant Sections of Article 9 of the Uniform Commercial Code as in
effect in the State of Texas (which review may be limited to a compilation
contained in the Uniform Commercial Code Reporting Service) and have assumed
them to be interpreted in a manner identical to the Uniform Commercial Code as
in effect in the State of New York.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Representative, to the effect that no facts have
come to the attention of such counsel which lead them to believe that: (i) the
Registration Statement, at the time such Registration Statement became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading (except as to financial or statistical data
contained in the Registration Statement); or (ii) the Prospectus, as of its date
and as of the Closing Date, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(f) Counsel for the Unaffiliated Seller, the Originators and the
Servicer, shall have furnished to the Underwriters a written opinion, addressed
to the Underwriters and the Depositor and dated the Closing Date, in form and
substance satisfactory to the Representative, to the effect that:
(i) Each of the Unaffiliated Seller, the Originators and the
Servicer is a corporation duly organized, subsisting and in good standing under
the corporation law of the state of its incorporation;
(ii) Each of the Originators, the Servicer and the Unaffiliated
Seller have duly authorized the execution, delivery and performance of the Basic
Documents to which it is a party and when duly authorized, executed and
delivered by the Issuer, the Indenture Trustee, the Depositor and the Enhancer,
as applicable, such agreements will constitute the valid and legally binding
agreement of each of the Originators, the Servicer and the Unaffiliated Seller,
enforceable against each of them in accordance with their terms except to the
extent that the enforceability thereof may be limited under bankruptcy,
insolvency, moratorium, reorganization or others similar laws, judicial
decisions and principles of equity relating to or affecting the enforcement of
creditors' rights or contractual obligations generally;
(iii) Neither the transfer of the Mortgage Loans to the Depositor,
nor the execution, delivery or performance by each of the Originators, the
Servicer and the Unaffiliated Seller of the Basic Documents to which it is a
party (A) conflicts or will conflict with or results or will result in a breach
of, or constitutes or will constitute a default under or violates or will
violate, (i) any term or provision of the Articles of Incorporation or By-laws
of such party; (ii) to such counsel's knowledge and in reliance on the officer's
certificates of the Originators, the Servicer and the Unaffiliated Seller, any
term or provision of any material agreement, contract, instrument or indenture,
to which such party or any of its subsidiaries is a party or is bound; or (iii)
to such counsel's knowledge and in reliance on the certificates of the
Originators, the Servicer and the Unaffiliated Seller, any order, judgment,
writ, injunction or decree of any court or governmental agency or body or other
tribunal having jurisdiction over such party or any of its properties; or (B)
results in, or will result in the creation or imposition of any lien, charge or
encumbrance upon the Trust Estate or upon the Notes, except as otherwise
contemplated by the Basic Documents to which it is a party;
12
(iv) The endorsement and delivery of each Mortgage Note, and the
preparation, delivery and recording of an Assignment of Mortgage with respect to
each Mortgage is sufficient fully to transfer to the Depositor and its assignees
all right, title and interest of the Originators and the Servicer, as
applicable, in the Mortgage Note and Mortgage, as noteholder and mortgagee or
assignee thereof;
(v) No consent, approval, authorization or order of, registration or
qualification of or with or notice to, any court, governmental agency or body or
other tribunal is required under the laws of Pennsylvania, for the execution,
delivery and performance by each of the Originators, the Servicer and the
Unaffiliated Seller of the Basic Documents to which it is a party or the
consummation of any other transaction contemplated thereby by the Originators,
the Servicer and the Unaffiliated Seller, except such which have been obtained;
and
(vi) To the knowledge of such counsel and in reliance on the
certificate of the Originators, the Servicer and the Unaffiliated Seller there
are no legal or governmental suits, proceedings or investigations pending or
threatened against the Originators, the Servicer and the Unaffiliated Seller
before any court, governmental agency or body or other tribunal (A) which, if
determined adversely to the Originators, the Servicer or the Unaffiliated
Seller, would individually or in the aggregate have a material adverse effect on
(i) the consolidated financial position, business prospects, stockholders'
equity or results of operations of such party; (ii) such party's ability to
perform its obligations under, or the validity or enforceability of the Basic
Documents to which the Originators, the Servicer and the Unaffiliated Seller is
a party; (iii) any Mortgage Note or Mortgaged Property, or the title of any
Mortgagor to any Mortgaged Property; or (B) which have not otherwise been
disclosed in the Basic Documents or the Registration Statement and to the best
of such counsel's knowledge, no such proceedings or investigations are
threatened or contemplated by governmental authorities or threatened by others.
(g) The Underwriters shall have received the favorable opinion of
counsel to the Indenture Trustee, dated the Closing Date, addressed to the
Underwriters and in form and scope satisfactory to the Representative and
counsel to the Representative, to the effect that:
(i) The Indenture Trustee is a banking corporation validly existing
under the laws of the State of New York and has the power and authority to enter
into, and to take all action required of it under, the Sale and Servicing
Agreement or the Indenture.
(ii) The Sale and Servicing Agreement and the Indenture have been
duly authorized, executed and delivered by the Indenture Trustee and, assuming
due authorization, execution and delivery thereof by the other parties thereto,
constitutes a valid and binding obligation of the Indenture Trustee, enforceable
against the Indenture Trustee in accordance with its terms, subject, as to
enforceability, to limitations of bankruptcy, insolvency, moratorium, fraudulent
conveyance and other laws relating to or affecting creditors' rights generally
and court decisions with respect thereto, and to general principles of equity.
(iii) The Notes have been duly executed by the Indenture Trustee and
authenticated and delivered by the Indenture Trustee in accordance with the
terms of the Indenture and the Sale and Servicing Agreement.
(iv) The execution and delivery by the Indenture Trustee of the Sale
and Servicing Agreement and the Indenture and the performance by the Indenture
Trustee of the terms thereof do not conflict with or result in a violation of
(A) any law or regulation of the State of New York governing the banking or
trust powers of the Indenture Trustee or (B) the charter or by-laws of the
Indenture Trustee.
13
(v) No approval, authorization, or other action by, or filing with,
any governmental authority having jurisdiction over the banking or trust powers
of the indenture Trustee is required in connection with the execution and
delivery by the Indenture Trustee of the Sale and Servicing Agreement and the
Indenture or the Insurance Agreement or the performance by the Indenture Trustee
of the transactions contemplated thereby.
(h) The Underwriters shall have received the favorable opinion or
opinions, dated the date of the Closing Date, of Xxxxxx, Xxxxx & Xxxxxxx LLP, as
counsel for the Underwriters, with respect to the issue and sale of the Notes,
the Registration Statement, this Agreement, the Prospectus and such other
related matters as the Underwriters may reasonably require.
(i) The Underwriters shall have received the favorable opinion or
opinions, dated the date of the Closing Date, of counsel to the Owner Trustee
with respect to the Trust Agreement and the issuance of the Notes and such other
matters as the Underwriters may reasonably require.
(j) The Underwriters shall have received the favorable opinion dated
the Closing Date, from counsel to the Enhancer in form and scope satisfactory to
the Representative and counsel to the Representative, to the effect that:
(i) The Enhancer is a corporation validly existing, in good standing
and licensed to transact the business of surety and financial guaranty insurance
under the laws of the State of Wisconsin.
(ii) The Enhancer has the corporate power to execute and de1iver,
and to take all action required of it, under the Policy and the Insurance
Agreement
(iii) Except as have already been obtained, no authorization,
consent, approval, license, formal exemption, or declaration from, nor any
registration or filing with, any court or governmental agency or body of the
United States of America or the State of Wisconsin, which if not obtained would
affect or impair the validity or enforceability of the Policy or the Insurance
Agreement against the Enhancer, is required in connection with the execution and
delivery by the Enhancer of the Policy or the Insurance Agreement, or in
connection with the Enhancer's performance of its obligations thereunder.
(iv) The Policy, the Insurance Agreement and the Indemnification
Agreement have been duly authorized, executed and delivered by the Enhancer and
the Policy and, assuming due authorization, execution and delivery of the
Insurance Agreement and the Indemnification Agreement by the parties thereto
(other than the Enhancer), the Insurance Agreement and the Indemnification
Agreement constitute the legally valid and binding obligations of the Enhancer,
enforceable in accordance with their respective terms, subject, as to
enforcement, to (a) bankruptcy, reorganization, insolvency, moratorium and other
similar laws relating to or affecting the enforcement of creditors' rights
generally, including, without limitation, laws relating to fraudulent transfers
or conveyances, preferential transfers and equitable subordination, presently or
from time to time in effect and general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law), as
such laws may be applied in any such proceeding with respect to the Enhancer,
(b) the qualification that the remedy of specific performance may be subject to
equitable defenses and the discretion of the court before which any proceedings
with respect thereto may be brought, and (c) the enforceability of rights to
indemnification may be subject to limitations of public policy under applicable
securities law.
14
(v) To the extent the Policy constitutes a security within the
meaning of Section 2(1) of the Securities Act, it is a security that is exempt
from the registration requirements of the Act.
(k) Xxxxx Xxxxxxxxxx LLP shall have furnished to the Underwriters its
written statement, addressed to the Underwriters and dated the Closing Date, in
form and substance satisfactory to the Representative, to the effect that no
facts have come to the attention of such counsel which lead them to believe that
the Prospectus, as of its date and as of the Closing Date, contained or contains
an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(l) The Depositor shall have furnished to the Underwriters a
certificate, dated the Closing Date and signed by the Chairman of the Board, the
President or a Vice President of the Depositor, stating as it relates to such
entity:
(i) The representations and warranties made by the Depositor in this
Agreement, the Sale and Servicing Agreement (excluding the representations and
warranties relating to the Mortgage Loans), the Unaffiliated Seller's Agreement,
the Trust Agreement and the Insurance Agreement are true and correct as of the
Closing Date; and the Depositor has complied with all agreements contained
herein which are to have been complied with on or prior to the Closing Date.
(ii) Nothing has come to his or her attention that would lead such
officer to believe that the Registration Statement or the Prospectus includes
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein not misleading.
(iii) There has been no amendment or other document filed affecting
the Certificate of Incorporation or by-laws of the Depositor since June 2, 1995
and no such amendment has been authorized. No event has occurred since December
1, 2000 which has affected the good standing of such entity under the laws of
the State of Delaware.
(iv) 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 such
entity from September 30, 2000.
(m) Each of the Originators, the Servicer and the Unaffiliated Seller
shall have furnished a certificate, dated the Closing Date, signed by the
Chairman of the Board, the President or a Vice President of such entity and
addressed to the Underwriters in form in substance reasonably satisfactory to
the Representative, with respect to incorporation of such entity, the
representations and warranties made by such entity in certain Basic Documents,
and as to such other matters as the Underwriters may reasonably request.
(n) The Indenture Trustee shall have furnished to the Underwriters a
certificate of the Indenture Trustee, signed by one or more duly authorized
officers of the Indenture Trustee, dated the Closing Date, as to the due
authorization, execution and delivery of the Sale and Servicing Agreement and
the Indenture by the Indenture Trustee, and the acceptance by the Indenture
Trustee of the trusts created thereby and the due execution., authentication and
delivery of the Securities by the Indenture Trustee thereunder and such other
matters as the Underwriters shall reasonably request.
(o) The Policy and the Insurance Agreement shall have been issued by
the Enhancer and shall have been duly authenticated by an authorized agent of
the Enhancer, if so required under applicable state law or regulations.
15
(p) The Notes shall have been rated "AAA" by Standard & Poor's and
"Aaa" by Xxxxx'x.
(q) The Depositor shall have furnished to the Underwriters such further
information, Securities and documents as the Underwriters may reasonably have
requested not less than three full business days prior to the Closing Date.
(r) Prior to the Closing Date, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained, and
all proceedings taken by the Depositor in connection with the issuance and sale
of the Notes as herein contemplated shall be satisfactory in form and substance
to the Representative and counsel for the Representative.
(s) Subsequent to the execution and delivery of this Agreement none of
the following shall have occurred: (A) trading in securities generally on the
New York Stock Exchange, the American Stock Exchange or the over-the-counter
market shall have been suspended or minimum prices shall have been established
on either of such exchanges or such market by the Commission, by such exchange
or by any other regulatory body or governmental authority having jurisdiction;
(B) a banking moratorium shall have been declared by federal or state
authorities; (C) the United States shall have become engaged in hostilities,
there shall have been an escalation of hostilities involving the United States
or there shall have been a declaration of a national emergency or war by the
United States; or (D) there shall have occurred such a material adverse change
in general economic, political or financial conditions (or the effect of
international conditions on the financial markets of the United States shall be
such) as to make it in each of the instances set forth in clauses (A) through
(D) herein, in the judgment of the Representative, impractical or inadvisable to
proceed with the public offering or delivery of the Notes on the terms and in
the manner contemplated in the Prospectus.
(t) The Underwriters shall have received from Deloitte & Touche LLP, a
letter dated the date hereof and satisfactory in form and substance to the
Representative and its counsel, to the effect that they have performed certain
specified procedures, all of which have been agreed to by the Representative, as
a result of which they determined that certain information of an accounting,
financial or statistical nature set forth in the Prospectus Supplement agrees
with the records of the Seller and the Servicer excluding any questions of legal
interpretation. The Underwriters shall have received from Deloitte & Touche,
LLP, a letter dated the Closing Date and satisfactory in form and substance to
the Representative and its counsel, confirming as of such date the information
set forth in the letter provided pursuant to this clause (t).
(u) The Underwriters shall have received from Deloitte & Touche LLP,
certified public accountants, a letter dated the date hereof and satisfactory in
form and substance to the Representative and its counsel, to the effect that
they have performed certain specified procedures and recomputations as a result
of which they have confirmed the information set forth in the Prospectus
Supplement in the table or tables entitled "Percent of Term Note Balance".
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriters by notice to the Depositor at any time at or prior to the Closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Section 7.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement
16
shall be deemed to be in compliance with the provisions hereof only if they are
in form and substance reasonably satisfactory to counsel for the Underwriters.
SECTION 7. Payment of Expenses. The Depositor agrees to pay: (a) the costs
incident to the authorization, issuance, sale and delivery of the Securities and
any taxes payable in connection therewith; (b) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement and any amendments and exhibits thereto; (c) the costs of distributing
the Registration Statement as originally filed and each amendment thereto and
any post-effective amendments thereof (including, in each case, exhibits), the
Preliminary Prospectus, if any, the Prospectus and any amendment or supplement
to the Prospectus or any document incorporated by reference therein, all as
provided in this Agreement; (d) the costs of reproducing and distributing this
Agreement; (e) the fees and expenses of qualifying the Securities under the
securities laws of the several jurisdictions as provided in Section 5(h) hereof
and of preparing, printing and distributing a Blue Sky Memorandum and a Legal
Investment Survey (including related fees and expenses of counsel to the
Underwriters); (f) any fees charged by securities rating services for rating the
Notes; and (g) all other costs and expenses incident to the performance of the
obligations of the Depositor (including costs and expenses of your counsel);
provided that, except as provided in this Section 7, the Underwriters shall pay
their own costs and expenses, including the costs and expenses of its counsel,
any transfer taxes on the Notes that they may sell and the expenses of
advertising any offering of the Notes made by the Underwriters, and the
Underwriters shall pay the cost of any accountants' comfort letters relating to
any Computational Materials, Structural Term Sheets or Collateral Term Sheets
(each as defined in Section 5(e) hereof).
If this Agreement is terminated by the Underwriters in accordance with the
provisions of Section 6 or Section 10, the Depositor shall cause the
Underwriters to be reimbursed for all reasonable out-of-pocket expenses,
including fees and disbursements of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the
Underwriters.
SECTION 8. Indemnification and Contribution.
(a) The Depositor agrees to indemnify and hold harmless the
Underwriters and each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Securities Act from and against any and all loss,
claim, damage or liability, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability or action relating to purchases
and sales of the Notes), to which the Underwriters or any such controlling
persons may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment thereof or supplement
thereto, (ii) the omission or alleged omission to state in the Registration
Statement or any amendment thereof or supplement thereto a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iii) any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus, or any amendment thereof or supplement
thereto, or (iv) the omission or alleged omission to state in the Prospectus or
any amendment thereof or supplement thereto a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and shall reimburse the
Underwriters and each such controlling person promptly upon demand for any legal
or other expenses reasonably incurred by the Underwriters or such controlling
persons in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Depositor shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in the Prospectus, or any amendment thereof or
supplement thereto, or the Registration Statement, or any amendment thereof or
supplement thereto, in reliance upon and in conformity with (i) written
information furnished to the
17
Depositor by or on behalf of any Underwriter through the Representative
specifically for inclusion therein, it being understood that the only
information furnished by the Underwriters or on behalf of the Underwriters for
use in connection with the preparation of the Registration Statement or the
Prospectus is described in Section 8(h) hereof, (ii) Seller-Provided Information
or (iii) Enhancer-Provided Information; and provided further, however, that the
Depositor will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any Preliminary
Prospectus that was eliminated or remedied in the Prospectus, if a copy of the
Prospectus was not sent or given with or prior to the written confirmation of
the sale of any Security to the person asserting the loss, claim, damage or
liability, if required by the Act. The foregoing indemnity agreement is in
addition to any liability which the Depositor may otherwise have to the
Underwriters or any controlling person of an Underwriter.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Depositor, each of its directors, each of the officers of
the Depositor who signed the Registration Statement, and each person, if any,
who controls the Depositor within the meaning of Section 15 of the Securities
Act against any and all loss, claim, damage or liability, or any action in
respect thereof, to which the Depositor or any such director, officer or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereof or
supplement thereto, (ii) the omission or alleged omission to state in the
Registration Statement or any amendment thereof or supplement thereto a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (iii) any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus, or any amendment thereof or
supplement thereto, or (iv) the omission or alleged omission to state in the
Prospectus, or any amendment thereof or supplement thereto a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, but
in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Depositor by or on behalf
of any Underwriter through the Representative specifically for inclusion
therein, and shall reimburse the Depositor and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Depositor or any director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which the Underwriters may
otherwise have to the Depositor or any such director, officer or controlling
person. The only information furnished by the Underwriters or on behalf of the
Underwriters for use in connection with the preparation of the Registration
Statement or the Prospectus is described in Section 8(h) hereof.
(c) Promptly after receipt by any indemnified party under this Section
8 of notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying
18
party to the indemnified party of its election to assume the defense of such
claim or action, except to the extent provided in the next following paragraph,
the indemnifying party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
Any indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to one local counsel per jurisdiction) at any time for all such
indemnified parties, which firm shall be designated in writing by the
Representative, if the indemnified parties under this Section 8 consist of the
Underwriters or any of its controlling persons, or the Depositor, if the
indemnified parties under this Section 8 consist of the Depositor or any of the
Depositor's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 8(a) and (b), shall use its best efforts to cooperate with
the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing paragraph, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, 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.
(d) The Underwriters agree to provide the Depositor, with a copy to the
Unaffiliated Seller, for filing with the Commission on an Additional Materials
8-K (1) no later than two (2) Business Days prior to the day on which the
Prospectus Supplement is required to be filed pursuant to Rule 424 with a copy
of any Computational Materials and Structural Term Sheets (each as defined in
Section 5(e) hereof) distributed by the Underwriters and (ii) no later than one
(1) business day after first use with a copy of any Collateral Term Sheets (as
defined in Section 5(e) hereof) distributed by the Underwriters. If the
Underwriters do not provide any Computational Materials, Structural Term Sheets
and Collateral Term Sheets to the Depositor and the Unaffiliated Seller pursuant
to this Section, the Underwriters shall be deemed to have represented, as of the
Closing Date, that they did not provide any prospective investors with any
information in written or electronic form in connection with the offering of the
Notes that is required to be filed with the Commission in accordance with the
Xxxxxx Letters and the PSA Letter.
19
(e) The Underwriters agree, assuming all Seller-Provided Information
(as defined in Section 8(g)) and information contained in the Prospectus
(without taking into account information incorporated therein by reference
through an Additional Materials 8-K) are accurate and complete in all material
respects, to indemnify and hold harmless the Depositor each of the its officers
and directors and each person who controls the Depositor within the meaning of
Section 15 of the Securities Act against any and all losses, claims, damages or
liabilities, joint or several, or any action in respect thereof, to which they
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Computational Materials, Structural Term Sheets
and Collateral Term Sheets provided by the Underwriters or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by him,
her or it in connection with investigating or defending or preparing to defend
any such loss, claim, damage, liability or action as such expenses are incurred.
The obligations of the Underwriters under this Section 8(e) shall be in addition
to any liability which the Underwriters may otherwise have.
The procedures set forth in Section 8(c) shall be equally applicable to
this paragraph.
(f) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a), (b) or (e) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (1) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Depositor on the one hand and the Underwriters on the other from
the offering of the related Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law or if the indemnified party
failed to give the notice required under Section 8(c), 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 Depositor on the one hand and the
Underwriters on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations.
The relative benefits of the Underwriters and the Depositor shall be deemed
to be in such proportion as the total net proceeds from the offering (before
deducting expenses) received by the Depositor bear to the total underwriting
discounts and commissions received by the related Underwriters from time to time
in negotiated sales of the related Securities.
The relative fault of the Underwriters and the Depositor shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Depositor or by the Underwriters, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission and other equitable
considerations.
The Depositor and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this paragraph were to be determined by
pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party is a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this paragraph
shall be deemed to include, for purposes of this paragraph, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
20
For purposes of this Section, in no case shall the Underwriters be
responsible for any amount in excess of (i) the amount received by the
Underwriters in connection with their resale of the Notes over (ii) the amount
paid by the Underwriters to the Depositor for the Notes by the Underwriters
hereunder. 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.
(g) For purposes of this Section (except as otherwise provided) the
terms "Computational Materials", "Structural Term Sheets" and "Collateral Term
Sheets" mean such portion, if any, of the information delivered to the Depositor
by the Underwriters pursuant to Section 8(d) for filing with the Commission on
an Additional Materials 8-K as:
(i) is not contained in the Prospectus without taking into account
information incorporated therein by reference through an Additional Materials
8-K; and
(ii) does not constitute Seller-Provided Information.
"Seller-Provided Information" means (i) the information and data set forth
on any computer tape (or other electronic or printed medium) furnished to the
Underwriters by or on behalf of the Originators concerning the assets comprising
the Trust Estate and (ii) the information contained in the Prospectus Supplement
under the captions "Summary - The Mortgage Loans," "The Mortgage Loan Pool,"
"The Originators, the Seller and the Servicer," "Description of the Notes and
the Trust Certificates - Representations and Warranties of the Seller" and
"Servicing of the Mortgage Loans".
"Enhancer-Provided Information" means the information contained in the
Prospectus Supplement under the captions "The Policy," and "The Note Insurer".
(h) The Underwriters confirm that the information set forth in the last
paragraph of the cover page of the Prospectus Supplement, the information
regarding the Underwriters set forth under the caption "Plan of Distribution" in
the Prospectus Supplement and the Computational Materials, Structural Term
Sheets and Collateral Term Sheets (excluding in each case Seller-Provided
information) are correct, and the parties hereto acknowledge that such
information constitutes the only information furnished in writing by or on
behalf of the Underwriters for use in connection with the preparation of the
Registration Statement or the Prospectus.
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Depositor submitted pursuant hereto
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriters or controlling persons
thereof, or by or on behalf of the Depositor and shall survive delivery of any
Notes to the Underwriters.
SECTION 10. Termination of Agreement. The Underwriters may terminate this
Agreement immediately upon notice to the Depositor, at any time at or prior to
the Closing Date if any of the events or conditions described in Section 6(r) of
this Agreement shall occur and be continuing. In the event of any such
termination, the covenant set forth in Section 5(e), the provisions of Section
7, the indemnity agreement set forth in Section 8, and the provisions of
Sections 9 and 14 shall remain in effect.
SECTION 11. Default by One or More Underwriters. If one of the Underwriters
shall fail at the Closing Date to purchase the Notes that it is obligated to
purchase hereunder (the "Defaulted Notes"), then the non-defaulting Underwriter
shall have the right, but not the obligation, within 24 hours thereafter, to
make arrangements to purchase all, but not less than all, of the Defaulted Notes
in such amounts as
21
may be agreed upon and upon the terms herein set forth. If; however, the
non-defaulting Underwriter has not completed such arrangements within such
24-hour period, then:
(a) if the aggregate principal amount of Defaulted Notes does not
exceed 10% of the aggregate principal amount of the Notes to be purchased
pursuant to this Agreement, the non-defaulting Underwriter shall be obligated to
purchase the full amount thereof, or
(b) if the aggregate principal amount of Defaulted Notes exceeds 10% of
the aggregate principal amount of the Notes to be purchased pursuant to this
Agreement, this Agreement shall terminate, without any liability on the part of
the non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability with respect to any default of such Underwriter under
this Agreement.
In the event of a default by an Underwriter as set forth in this Section
that does not result in a termination of this Agreement, either the
non-defaulting Underwriter or the Depositor shall have the right to postpone the
C1osing Date for a period of time not exceeding seven days in order that any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements may be effected.
SECTION 12. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to the Representative, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 Attention: Asset Backed Securities Group (Fax: 000-000-0000);
(b) if to the Depositor, shall be delivered or sent by mail, telex or
facsimile transmission to care of Bear Xxxxxxx Asset Backed Securities, Inc.,
000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Counsel
(Fax: 000-000-0000); and
(c) if to the Unaffiliated Seller, shall be delivered or sent by mail,
telex or facsimile transmission to 0000 Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxxx Xxxxx, Executive Vice President (with a copy to the
Servicer c/o American Business Financial Services, Inc., Xxxxxxxxx Xxxxxx
Xxxxxx, 000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000,
Attention: General Counsel).
SECTION 13. Persons Entitled to the Benefit of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriters and
the Depositor and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
the representations, warranties, indemnities and agreements contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control the Underwriters within the meaning of Section 15 of the
Securities Act, and for the benefit of directors of the Depositor, officers of
the Depositor who have signed the Registration Statement and any person
controlling the Depositor within the meaning of Section 15 of the Securities
Act. Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section 13, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
SECTION 14. Survival. The respective indemnities, representations,
warranties and agreements of the Depositor and the Underwriters contained in
this Agreement, or made by or on behalf of them, respectively, pursuant to the
shall survive the delivery of and payment for the Securities and shall remain
22
in full force and effect, regardless of any investigation made by or on behalf
of any of them or any person controlling any of them.
SECTION 15. Definition of the Term "Business Day". For purposes of this
Agreement, "Business Day" means any day on which the New York Stock Exchange is
open for trading.
SECTION 16. Governing Law; Submission to Jurisdiction. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York without giving effect to the conflict of law rules thereof.
The parties hereto hereby submit to the jurisdiction of the United States
District Court for the Southern District of New York and any court in the State
of New York located in the City and County of New York, and appellate court from
any thereof, in any action, suit or proceeding brought against it or in
connection with this Agreement or any of the related documents or the
transactions contemplated hereunder or for recognition or enforcement of any
judgment, and the parties hereto hereby agree that all claims in respect of any
such action or proceeding may be heard or determined in New York State court or,
to the extent permitted by law, in such federal court.
SECTION 17. Counterparts. This Agreement may be executed in counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
SECTION 18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
* * *
23
If the foregoing correctly sets forth the agreement between the Depositor
and the Underwriters, please indicate your acceptance in the space provided for
the purpose below.
Very truly yours,
BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.,
Depositor
By:
----------------------------------
CONFIRMED AND ACCEPTED, as
of the date first above written:
BEAR, XXXXXXX & CO. INC.,
as Representative of the Underwriters
named in Schedule A hereto
By:
-------------------------------
Xxxxxxxx Xxxxxxxxx
Managing Director
24
SCHEDULE A
Principal Amount of Class A Notes
UNDERWRITER PURCHASED PURCHASE PRICE
----------- --------- --------------
Bear, Xxxxxxx & Co. Inc. $247,500,000 99.74149%
Xxxxxx Xxxxxxx & Co. Incorporated $27,500,000 99.74149%
