Exhibit 1.1
ASSET BACKED FUNDING CORPORATION
$803,217,000
(Approximate)
Asset Backed Funding Corporation Asset-Backed Certificates,
Series 2006-OPT3
November 13, 2006
UNDERWRITING AGREEMENT
Banc of America Securities LLC
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. Introductory. Asset Backed Funding Corporation, a Delaware
corporation (the "Company"), proposes to sell to Banc of America Securities LLC
(the "Underwriter"), $803,217,000 aggregate Certificate Principal Balance of its
Asset-Backed Certificates identified in Schedule I hereto (the "Offered
Certificates") having the Original Class Certificate Principal Balances set
forth in Schedule I (subject to an upward or downward variance, not to exceed
5%, of the precise Original Class Certificate Principal Balances within such
range to be determined by the Company in its sole discretion). The Offered
Certificates, together with the Class B, Class CE, Class P, Class R and Class
R-X Certificates are collectively referred to herein as the "Certificates" and
evidence the entire ownership interest in the assets of a trust fund consisting
primarily of three pools of fixed and adjustable-rate mortgage loans, as
described in Schedule I (the "Mortgage Loans") to be acquired by the Company
pursuant to a mortgage loan purchase agreement (the "Mortgage Loan Purchase
Agreement"), to be dated as of October 1, 2006, between the Company and Bank of
America, National Association. As of the close of business on the date specified
in Schedule I as the cut-off date (the "Cut-off Date"), the Mortgage Loans will
have the aggregate principal balance set forth in Schedule I. This Underwriting
Agreement shall hereinafter be referred to as the "Agreement." Elections will be
made to treat the segregated pool of assets consisting of the Mortgage Loans and
certain other related assets (exclusive of the arrangements intended to protect
against basis risk for certain of the certificates, the interest rate swap
agreement, the swap account, the cap carryover reserve account and prepayment
charges) as multiple separate real estate mortgage investment conduits (each, a
"REMIC"). The Certificates are to be issued pursuant to a pooling and servicing
agreement, to be dated as of October 1, 2006 (the "Pooling Agreement"), among
the Company, as depositor, Option One Mortgage Corporation, as servicer (the
"Servicer"), and Xxxxx Fargo Bank, N.A., as trustee (the "Trustee"). The Offered
Certificates will be issued in the denominations specified in Schedule I. The
Pooling Agreement, this Agreement, the Mortgage Loan Purchase Agreement and the
purchase agreement, to be dated November 14, 2006, among Banc of America
Securities LLC, as Initial Purchaser and the Company (the "Purchase Agreement")
are collectively referred to herein as the "Basic Documents."
Capitalized terms used herein that are not otherwise defined herein
have the meanings assigned thereto in the Pooling Agreement.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the Underwriter as follows:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"), and has filed
with the Securities and Exchange Commission (the "Commission") a
registration statement on such Form (the file number of which is set
forth in Schedule I hereto), which has become effective, for the
registration under the Act of the Offered Certificates. Such
registration statement, as amended to the date of this Agreement, meets
the requirements set forth in Rule 415(a)(1) under the Act and complies
in all other material respects with said Rule. The Company proposes to
file with the Commission pursuant to Rule 424 under the Act a
supplement to the form of prospectus included in such registration
statement relating to the Offered Certificates and the plan of
distribution thereof and has previously advised the Underwriter of all
further information (financial and other) with respect to the Company
to be set forth therein. Such registration statement, including the
exhibits thereto, as amended to the date of this Agreement, is
hereinafter called the "Registration Statement"; the prospectus first
required to be filed to satisfy the condition set forth in Rule 172(c)
and pursuant to Rule 424(b) under the Act is hereinafter called the
"Basic Prospectus"; and such supplement to the Basic Prospectus, in the
form required to be filed to satisfy the condition set forth in Rule
172(c) and pursuant to Rule 424(b) under the Act, is hereinafter called
the "Prospectus Supplement" and, collectively with the Basic
Prospectus, the "Final Prospectus." Any reference herein to the
Registration Statement, the Basic Prospectus or the Final Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the date of this Agreement, or the issue date of
the Basic Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus or the
Final Prospectus shall be deemed to refer to and include the filing of
any document under the Exchange Act after the date of this Agreement,
or the issue date of the Basic Prospectus or the Final Prospectus, as
the case may be, and deemed to be incorporated therein by reference.
(b) At or prior to the time when sales to investors of the
Offered Certificates were first made (the "Time of Sale"), the Company
had prepared the information (collectively, the "Time of Sale
Information") listed in Schedule II hereto. If, subsequent to the date
of this Agreement, the Company or the Underwriter has determined that
such information included an untrue statement of material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading and have terminated their old purchase
contracts and entered into new purchase contracts with purchasers of
the Offered Certificates, then "Time of Sale Information" will refer to
the information available to purchasers at the time of entry into the
first such new purchase contract, including any information that
corrects such material misstatements or omissions ("Corrective
Information") and "Time of Sale" will refer to the time and date on
which such new purchase contracts were entered into.
(c) As of the date hereof, when the Final Prospectus is first
filed pursuant to Rule 424 under the Act, when, prior to the Closing
Date (as hereinafter defined), any amendment to the Registration
Statement becomes effective (including the filing of any document
incorporated by reference in the Registration Statement), when any
supplement to the Final Prospectus is filed with the Commission and at
the Closing Date, (i) the Registration Statement, as amended as of any
such time, and the Final Prospectus, as amended or supplemented as of
any such time, will comply in all material respects with the Act and
the respective rules thereunder, (ii) the Registration Statement, as
amended as of any such time, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, and (iii) the Final Prospectus, as amended or supplemented
as of any such time, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement or the Final Prospectus or any amendment thereof
or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Underwriter specifically for use in connection with the preparation of
the Registration Statement or the Final Prospectus.
(d) The Time of Sale Information, at the Time of Sale did not,
and at the Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representation and warranty with respect to the
information contained in or omitted from the Time of Sale Information
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of the Underwriter specifically for use in connection with
the preparation of the Time of Sale Information.
(e) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Delaware and
has corporate and other power and authority to own its properties and
conduct its business, as now conducted by it, and to enter into and
perform its obligations under this Agreement and the other Basic
Documents to which it is a party.
(f) The Company is not aware of (i) any request by the
Commission for any further amendment of the Registration Statement or
the Basic Prospectus or for any additional information or (ii) the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement.
(g) This Agreement has been duly authorized, executed and
delivered by the Company, and each of the other Basic Documents to
which the Company is a party, when delivered by the Company, will have
been duly authorized, executed and delivered by the Company, and will
constitute a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject,
as to the enforcement of remedies, to applicable bankruptcy,
insolvency, reorganization, moratorium, receivership and similar laws
affecting creditors' rights generally and to general principles of
equity (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law), and except as rights
to indemnity and contribution hereunder may be limited by federal or
state securities laws or principles of public policy.
(h) The Company is not, and on the date on which the first
bona fide offer of the Offered Certificates is made will not be, an
"ineligible issuer," as defined in Rule 405 under the Act.
(i) On the Closing Date, the Basic Documents will conform to
the description thereof contained in the Registration Statement, the
Final Prospectus and the Time of Sale Information; the Offered
Certificates will have been duly and validly authorized and, when such
Offered Certificates are duly and validly executed, issued and
delivered in accordance with the Pooling Agreement, and sold to the
Underwriter as provided herein, will be validly issued and outstanding
and entitled to the benefits of the Pooling Agreement.
(j) As of the Closing Date, the representations and warranties
of the Company set forth in the Pooling Agreement will be true and
correct.
(k) Neither the execution and delivery by the Company of this
Agreement or any other of the Basic Documents nor the consummation by
the Company of the transactions contemplated herein or therein, nor the
issuance of the Offered Certificates or the public offering thereof as
contemplated in the Final Prospectus or the Time of Sale Information
will conflict in any material respect with or result in a material
breach of, or constitute a material default (with notice or passage of
time or both) under, or result in the imposition of any lien, pledge,
charge, of the property or assets of the Company (except as required or
permitted pursuant thereto or hereto), pursuant to any material
mortgage, indenture, loan agreement, contract or other instrument to
which the Company is party or by which it is bound, nor will such
action result in any violation of any provisions of any applicable law,
administrative regulation or administrative or court decree, the
certificate of incorporation or by-laws of the Company. The Company is
not in violation of its certificate of incorporation, in default in any
material respect in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease, trust agreement,
transfer and servicing agreement or other instrument to which a party
or by which it may be bound, or to which any material portion of its
property or assets is subject.
(l) No legal or governmental proceedings are pending to which
the Company is a party or of which any property of the Company is
subject, which if determined adversely to the Company would,
individually or in the aggregate, have a material adverse effect on the
financial position, stockholders' equity or results of operations of
the Company; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(m) Since the date of which information is given in the
Registration Statement, there has not been any material adverse change
in the business or net worth of the Company.
(n) Any taxes, fees and other governmental charges in
connection with the execution and delivery of the Basic Documents and
the execution, delivery and sale of the Offered Certificates have been
or will be paid at or prior to the Closing Date.
(o) No consent, approval, authorization or order of, or
registration, filing or declaration with, any court or governmental
agency or body is required, or will be required, in connection with (i)
the execution and delivery by the Company of any Basic Document or the
performance by the Company of any of its obligations under the Basic
Documents or (ii) the offer, sale or delivery of the Offered
Certificates except such as shall have been obtained or made, as the
case may be, or will be obtained or made, as the case may be, prior to
the Closing Date, or will not materially adversely affect the ability
of the Company to perform its obligations under any Basic Document.
(p) The Company possesses, and will possess, 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 Final Prospectus and the Time of Sale Information, except to the
extent that the failure to have such licenses, certificates,
authorities or permits does not have a material adverse effect on the
Offered Certificates or the financial condition of the Company, and the
Company has not received, nor will it have received as of the Closing
Date, any notice of proceedings relating to the revocation or
modification of any such license, certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
conduct of its business, operations or financial condition.
(q) On the Closing Date, (i) the Company will have good and
marketable title to the related Mortgage Loans being transferred by it
to the Trust pursuant thereto, free and clear of any lien, (ii) the
Company will not have assigned to any person any of its right, title or
interest in such Mortgage Loans or in the Pooling Agreement, and (iii)
the Company will have the power and authority to sell such Mortgage
Loans to the Trust, and upon execution and delivery of the Pooling
Agreement by the Trustee, the Company and the Servicer, the Trust will
have good and marketable title thereto, in each case free of liens.
(r) The properties and businesses of the Company conform, and
will conform, in all material respects, to the descriptions thereof
contained in the Final Prospectus and the Time of Sale Information.
(s) The Trust Fund (as defined in the Pooling Agreement) is
not required to be registered under the Investment Company Act of 1940,
as amended.
(t) It is not necessary in connection with the offer, sale and
delivery of the Offered Certificates in the manner contemplated by this
Agreement to qualify the Pooling Agreement under the Trust Indenture
Act of 1939, as amended.
(u) Other than the Final Prospectus, the Company (including
its agents and representatives other than the Underwriter) has not
made, used, prepared, authorized, approved or referred to and will not
make, use, prepare, authorize, approve or refer to any "written
communication" (as defined in Rule 405 under the Act) that constitutes
an offer to sell or solicitation of an offer to buy the Offered
Certificates other than (i) information included in the Time of Sale
Information, (ii) any document not constituting a prospectus pursuant
to Section 2(a)(10)(a) of the Act or Rule 134 under the Act or (iii)
other written communication approved in writing in advance by the
Underwriter.
(v) Any Issuer Free Writing Prospectus (as defined in Section
11(e)(i)) included in the Time of Sale Information complied in all
material respects with the Act and has been, or will be filed in
accordance with Rule 433 under the Act (to the extent required
thereby).
SECTION 3. Purchase, Sale and Delivery of Offered Certificates. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, the aggregate Certificate Principal Balance of the Offered
Certificates at a purchase price set forth in Schedule I hereto.
The Company will deliver the Offered Certificates to the Underwriter,
against payment of the purchase price therefor in same day funds wired to such
bank as may be designated by the Company, or by such other manner of payment as
may be agreed upon by the Company and the Underwriter, at the offices of
Cadwalader, Xxxxxxxxxx & Xxxx LLP, New York, New York at 10:00 A.M., Eastern
time, on November 14, 2006, or at such other place or time not later than seven
full business days thereafter as the Underwriter and the Company determine, such
time being referred to herein as the "Closing Date."
The Offered Certificates so to be delivered will be in such
denominations and registered in such names as the Underwriter requests two full
business days prior to the Closing Date and will be made available at the office
of Banc of America Securities LLC, Charlotte, North Carolina or, upon the
Underwriter's request, through the facilities of The Depository Trust Company.
SECTION 4. Offering by the Underwriter.
(a) It is understood that the Underwriter proposes to offer
the Offered Certificates subject to this Agreement for sale to the
public (which may include selected dealers) on the terms as set forth
in the Final Prospectus.
(b) The Underwriter represents and warrants to, and agrees
with, the Company, that:
(i) In relation to each Member State of the European
Economic Area which has implemented the Prospectus Directive (each, a
"Relevant Member State"), it has not made and will not make an offer of
Certificates to the public in that Relevant Member State prior to the
publication of a prospectus in relation to the Offered Certificates
which has been approved by the competent authority in that Relevant
Member State or, where appropriate, approved in another Relevant Member
State and notified to the competent authority in that Relevant Member
State, all in accordance with the Prospectus Directive, except that it
may, with effect from and including the relevant implementation date,
make an offer of Certificates to the public in that Relevant Member
State at any time:
(A) to legal entities which are authorized
or regulated to operate in the financial markets or, if not so
authorized or regulated, whose corporate purpose is solely to
invest in securities;
(B) to any legal entity which has two or
more of (1) an average of at least 250 employees during the
last financial year; (2) a total balance sheet of more than
(euro)43,000,000 and (3) an annual net turnover of more than
(euro)50,000,000, as shown in its last annual or consolidated
accounts; or
(C) in any other circumstances which do not
require the publication by the issuer of a prospectus pursuant
to Article 3 of the Prospectus Directive.
For the purposes of this representation, the expression an "offer of
Certificates to the public" in relation to any Offered Certificates in
any Relevant Member State means the communication in any form and by
any means of sufficient information on the terms of the offer and the
Certificates to be offered so as to enable an investor to decide to
purchase or subscribe the Certificates, as the same may be varied in
that Member State by any measure implementing the Prospectus Directive
in that Member State and the expression "Prospectus Directive" means
the European Commission Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State.
(ii) It has only communicated or caused to be
communicated and will only communicate or cause to be communicated an
invitation or inducement to engage in investment activity (within the
meaning of Section 21 of the United Kingdom Financial Services and
Markets Act 2000 (the "FSMA")) received by it in connection with the
issue or sale of the Certificates in circumstances in which Section
21(1) of the FSMA does not apply to the issuer.
(iii) It has complied and will comply with all
applicable provisions of the FSMA with respect to anything done by it
in relation to the Offered Certificates in, from or otherwise involving
the United Kingdom.
SECTION 5. Covenants of the Company. The Company hereby covenants and
agrees with the Underwriter that:
(a) Prior to the termination of the offering of the Offered
Certificates, the Company will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus)
to the Basic Prospectus unless the Company has furnished the
Underwriter a copy for its review prior to filing and will not file any
such proposed amendment or supplement to which the Underwriter
reasonably objects. Subject to the foregoing sentence, the Company will
cause the Final Prospectus to be filed with the Commission pursuant to
Rule 424. The Company will advise the Underwriter promptly (i) when the
Final Prospectus shall have been filed with the Commission pursuant to
Rule 424, (ii) when any amendment to the Registration Statement
relating to the Offered Certificates shall have become effective, (iii)
of any request by the Commission for any amendment of the Registration
Statement or amendment of or supplement to the Final Prospectus or for
any additional information, (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that
purpose and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Offered
Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Offered
Certificates is required to be delivered under the Act, any event
occurs as a result of which the Final Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend or supplement the
Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will prepare and file
with the Commission, subject to the first sentence of paragraph (a) of
this Section 5, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance
and will use its best efforts to cause any required post-effective
amendment to the Registration Statement containing such amendment to be
made effective as soon as possible.
(c) The Company will furnish to the Underwriter and counsel
for the Underwriter, without charge, executed copies of the
Registration Statement (including exhibits thereto) and each amendment
thereto which shall become effective on or prior to the Closing Date
and, so long as delivery of a prospectus by the Underwriter or dealers
may be required by the Act, as many copies of the Final Prospectus and
any amendments thereof and supplements thereto as the Underwriter may
reasonably request. The Company will pay the expenses of printing all
documents relating to the initial offering.
(d) The Company will furnish such information as may be
required and otherwise cooperate in qualifying the Offered Certificates
for sale under the laws of such jurisdictions as the Underwriter may
reasonably designate and to maintain such qualifications in effect so
long as required for the distribution of the Offered Certificates;
provided, however, that the Company shall not be required to qualify to
do business in any jurisdiction where it is not now so qualified or to
take any action which would subject it to general or unlimited service
of process in any jurisdiction where it is not now so subject.
SECTION 6. Conditions to the Obligations of the Underwriter. The
obligation of the Underwriter to purchase the Offered Certificates shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein as of the date hereof, as of the date of the
effectiveness of any amendment to the Registration Statement filed prior to the
Closing Date (including the filing of any document incorporated by reference
therein) and as of the Closing Date, to the accuracy of the statements of the
Company made in any certificates delivered pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Underwriter shall have received from Deloitte & Touche
LLP a letter, dated the date hereof, confirming that they are
independent public accountants within the meaning of the Act and the
rules and regulations of the Commission promulgated thereunder and
otherwise in form and substance reasonably satisfactory to the
Underwriter and counsel to the Underwriter.
(b) All actions required to be taken and all filings required
to be made by the Company under the Act prior to the sale of the
Offered Certificates shall have been duly taken and made. At and prior
to the Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted, or to the knowledge of the
Company or the Underwriter, shall have been contemplated by the
Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting
particularly the business or properties of the Company or the Servicer
which, in the reasonable judgment of the Underwriter, materially
impairs the investment quality of the Offered Certificates; (ii) any
downgrading in the rating of the Servicer by any "nationally recognized
statistical rating organization" (as such term is defined for purposes
of Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of the
Servicer (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of
such rating); (iii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange; (iv) any banking
moratorium declared by federal, North Carolina or New York authorities;
or (v) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any
other substantial national or international calamity or emergency if,
in the reasonable judgment of the Underwriter, the effects of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of
and payment for the Offered Certificates.
(d) On or before the Closing Date, the Underwriter shall have
received evidence satisfactory to it that each class of Offered
Certificates has been given the ratings set forth on Schedule I hereto.
(e) The Underwriter shall have received a favorable opinion of
Xxxxxxxxxx, Xxxxxxxxxx & Xxxx LLP, special tax counsel for the Company,
addressed to the Underwriter and dated the Closing Date and reasonably
satisfactory in form and substance to the Underwriter and counsel to
the Underwriter.
(f) The Underwriter shall have received a favorable opinion of
Xxxxxxxxxx, Xxxxxxxxxx & Xxxx LLP, special counsel for the Company,
addressed to the Underwriter and dated the Closing Date and reasonably
satisfactory in form and substance to the Underwriter, with respect to
the validity of the Certificates, ERISA matters and such other related
matters as the Underwriter shall require, and the Company shall have
furnished or caused to be furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass
upon such matters.
(g) The Underwriter shall have received copies of any opinions
of counsel for the Company that the Company is required to deliver to
any Rating Agency. Any such opinions shall be dated the Closing Date
and addressed to the Underwriter or accompanied by reliance letters
addressed to the Underwriter.
(h) The Underwriter shall have received an opinion of counsel
to the Trustee, dated the Closing Date, in form and substance
satisfactory to the Underwriter and its counsel.
(i) The Underwriter shall have received a certificate dated
the Closing Date of the President, any Vice President or the Secretary
of the Company in which the officer shall state that, to the best of
his or her knowledge after reasonable investigation, (i) the
representations and warranties of the Company with respect to the
Mortgage Loans contained in any Basic Document are true and correct,
(ii) the representations and warranties of the Company in this
Agreement are true and correct, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, (iv) no stop order
suspending the effectiveness of the Registration Statement has been
issued, (v) no proceedings for that purpose have been instituted or are
contemplated by the Commission, and (vi) there has been no amendment or
other document filed affecting the Certificate of Incorporation or
bylaws of the Company, and no such amendment has been authorized.
(j) At the Closing Date, the Certificates and the Pooling
Agreement will conform in all material respects to the descriptions
thereof contained in the Final Prospectus.
(k) The Underwriter shall not have discovered and disclosed to
the Company on or prior to the Closing Date that the Registration
Statement or the Final 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 counsel to the Underwriter, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(l) The Underwriter shall have received from Cadwalader,
Xxxxxxxxxx & Xxxx LLP, special counsel for the Underwriter, a letter
dated the Closing Date with respect to the Final Prospectus, in form
and substance satisfactory to the Underwriter.
(m) All corporate proceedings and other legal matters relating
to the authorization, form and validity of this Agreement, the Pooling
Agreement, the Mortgage Loan Purchase Agreement, the Certificates, the
Registration Statement and the Final Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby, shall be reasonably satisfactory in all respects to counsel for
the Underwriter, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to
enable them to pass upon such matters.
(n) The Underwriter shall have received a certificate (upon
which Cadwalader, Xxxxxxxxxx & Xxxx LLP shall be entitled to rely in
rendering its opinions and letters under the Basic Documents) dated the
Closing Date of an officer of the Trustee in which such officer shall
state that, to the best of such officer's knowledge after reasonable
investigation: (i) the Trustee is not an affiliate of any other entity
listed as a transaction party in the Prospectus Supplement, (ii) the
information in the Prospectus Supplement related to the Trustee (the
"Trustee Disclosure") includes (a) the Trustee's correct name and form
of organization and (b) a discussion of the Trustee's experience
serving as trustee for asset-backed securities transactions involving
mortgage loans; and (iii) the Trustee Disclosure is true and correct in
all material respects and nothing has come to his or her attention that
that would lead such officer to believe that the Trustee Disclosure
contains any untrue statement of material fact or omits to state a
material fact necessary to make the statements therein not misleading.
(o) The Underwriter shall have received a certificate (upon
which Cadwalader, Xxxxxxxxxx & Xxxx LLP shall be entitled to rely in
rendering its opinions and letters under the Basic Documents) dated the
Closing Date of an officer of Option One Mortgage Corporation (the
"Originator") in which such officer shall state that, to the best of
such officer's knowledge after reasonable investigation: (i) except as
disclosed, the Originator is not an affiliate of any other entity
listed as a transaction party in the Prospectus Supplement; (ii) the
information in the Prospectus Supplement related to the Originator (the
"Originator Disclosure") includes the Originator's correct name, form
of organization and length of time originating mortgage loans; (iii)
the description of the Originator's origination program includes (a)
experience in originating mortgage loans, (b) size and composition of
the Originator's origination portfolio, and (c) the Originator's
credit-granting or underwriting criteria for the mortgage loans; (iv)
except as set forth in the Originator Disclosure, no additional
information regarding the Originator's origination program could have a
material adverse affect in the performance of the pool assets or the
Offered Certificates; and (v) the Originator Disclosure is true and
correct in all material respects and nothing has come to his or her
attention that that would lead such officer to believe that the
Originator Disclosure contains any untrue statement of material fact or
omits to state a material fact necessary to make the statements therein
not misleading.
(p) The Underwriter shall have received a certificate (upon
which Cadwalader, Xxxxxxxxxx & Xxxx LLP shall be entitled to rely in
rendering its opinions and letters under the Basic Documents) dated the
Closing Date of an officer of the Servicer in which such officer shall
state that, to the best of such officer's knowledge after reasonable
investigation: (i) except as disclosed in the Prospectus Supplement,
the Servicer is not an affiliate of any other entity listed as a
transaction party in the Prospectus Supplement; (ii) the information in
the Prospectus Supplement related to the Servicer (the "Servicer
Disclosure") includes (a) the Servicer's correct name and form of
organization, (b) the correct length of time that the Servicer has been
servicing mortgage loans; and (c) a discussion of the Servicer's
experience in servicing mortgage loans; (iii) except as set forth in
the Servicer Disclosure, (a) there are no other servicers responsible
for calculating or making distributions to the holders of the Offered
Certificates, performing work-outs or foreclosures, or any other
material aspect of servicing the mortgage loans, (b) there have been no
material changes to the Servicer's servicing policies and procedures
during the last three years, (c) no additional information regarding
the Servicer's financial condition could have a material affect on
performance of the Mortgage Loans or the Offered Certificates, (d) no
commingling of funds on deposit in collection accounts will be
permitted by the Servicer, (e) no additional information with respect
to any special or unique factors involved in servicing the mortgage
loans could have a material affect on performance of the Offered
Certificates, and (f) no additional information with respect to the
Servicer's process for handling delinquencies, losses, bankruptcies and
recoveries could have a material affect on performance of the Offered
Certificates; (iv) for each other servicer identified in the Prospectus
Supplement as responsible for calculating or making distributions to
the holders of the Offered Certificates, performing work-outs or
foreclosures, or any other material aspect of servicing the mortgage
loans, the certifications in clauses (ii) and (iii) above are made with
respect to such servicer; and (v) the Servicer Disclosure is true and
correct in all material respects and nothing has come to his or her
attention that that would lead such officer to believe that the
Servicer Disclosure contains any untrue statement of material fact or
omits to state a material fact necessary to make the statements therein
not misleading.
The Company will provide or cause to be provided to the Underwriter
such conformed copies of such opinions, certificates, letters and documents as
the Underwriter may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement 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 Underwriter.
If any condition specified in this Section 6 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriter by notice to the Company 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.
SECTION 7. Reimbursement of the Underwriter's Expenses. If the sale of
the Offered Certificates provided for herein is not consummated because any
condition to the obligations of the Underwriter set forth in Section 6 hereof is
not satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Underwriter, the Company will reimburse
the Underwriter upon demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been reasonably incurred by
it in connection with the proposed purchase and sale of the Offered
Certificates.
SECTION 8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Underwriter
and any person who controls the Underwriter within the meaning of either the Act
or the Exchange Act against any and all losses, claims, damages or liabilities
to which it may become subject under the Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the
registration of the Offered Certificates as originally filed or in any amendment
thereof, or in the Basic Prospectus or the Final Prospectus or the Time of Sale
Information, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
any Issuer Free Writing Prospectus (as defined in Section 11(e)(i) or any Issuer
Information (as defined in Section 11(b)) contained in any Free Writing
Prospectus prepared by or on behalf of the Underwriter or in any Free Writing
Prospectus which is required to be filed pursuant to Section 11(e) or Section
11(g), or the omission or alleged omission to state a material fact required to
make the statements therein, in light of the circumstances under which they were
made, not misleading, which was not corrected by Corrective Information
subsequently supplied by the Company to the Underwriter within a reasonable
period of time prior to the Time of Sale, and (iii) any breach of the
representation and warranty in Section 2(h), and agrees to reimburse the
Underwriter and any such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Underwriter specifically for use in
connection with the preparation thereof. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who signs the Registration Statement
and each person who controls the Company within the meaning of either the Act or
the Exchange Act, to the same extent as the foregoing indemnity from the Company
to the Underwriter, but only with reference to (i) any untrue statements or
alleged untrue statements of a material fact, or omissions or alleged omissions
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, in the
information furnished in writing to the Company by the Underwriter specifically
for use in connection with the preparation of the Registration Statement, the
Prospectus, the Time of Sale Information or any revision or amendment thereof or
supplement thereto and (ii) any untrue statements or alleged untrue statements
of a material fact in any Free Writing Prospectus prepared by or on behalf of
the Underwriter, or omissions or alleged omissions to state a material fact
necessary to make the statements therein (when read in conjunction with the Time
of Sale Information), in the light of the circumstances under which they were
made, not misleading; provided, that the Underwriter shall not be obligated to
so indemnify and hold harmless to the extent such loss, liability, claim, damage
or expense is caused by a misstatement or omission resulting from an error or
omission in any Issuer Information which was not corrected by Corrective
Information subsequently supplied by the Company to the Underwriter within a
reasonable period of time prior to the Time of Sale.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and, to the extent
that it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Underwriter in the case of
subparagraph (a), representing the indemnified parties under subparagraph (a)
who are parties to such action), (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party; and
except that if clause (i) or (iii) is applicable, such liability shall be only
in respect of the counsel referred to in such clause (i) or (iii).
(d) To provide for just and equitable contribution in circumstances in
which the indemnification provided for in paragraphs (a) or (b) of this Section
8 is due in accordance with its terms but is for any reason held by a court to
be unavailable from the Company or the Underwriter on the grounds of policy or
otherwise, the Company or the Underwriter shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) to which
the Company or the Underwriter may be subject, as follows:
(i) in the case of any losses, claims, damages and liabilities
(or actions in respect thereof) which do not arise out of or are not
based upon any untrue statement or omission of a material fact in any
Free Writing Prospectus, in such proportion as is appropriate to
reflect the relative benefit received by each of the Company and the
Underwriter; and
(ii) in the case of any losses, claims, damages and
liabilities (or actions in respect thereof) which arise out of or are
based upon any untrue statement or omission of a material fact in any
Free Writing Prospectus, in such proportion as is appropriate to
reflect the relative fault of the Company and the Underwriter in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof)
as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact in such Free
Writing Prospectus results from information prepared by the Company or
the Underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
Notwithstanding anything to the contrary in this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls the Underwriter within the meaning of either the Act or the Exchange
Act shall have the same rights to contribution as the Underwriter and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, and each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the preceding
sentence of this paragraph (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
SECTION 9. Representations and Indemnities to Survive; No Fiduciary
Duty.
The respective agreements, representations, warranties, indemnities and
other statements of the Company and its respective officers and of the
Underwriter set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriter or the Company or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Offered Certificates. The provisions of Sections 7 and 8 hereof
and this Section 9 shall survive the termination or cancellation of this
Agreement.
SECTION 10. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
This Agreement shall be subject to termination in the absolute
discretion of the Underwriter, by notice given to the Company prior to delivery
of and payment for the Offered Certificates, if prior to such time (i) trading
in securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such Exchange, (ii)
a banking moratorium shall have been declared by federal authorities or (iii)
there shall have occurred any outbreak or material escalation of hostilities or
other calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the reasonable judgment of the
Underwriter, impracticable to market the Offered Certificates.
SECTION 11. Offering Communications; Free Writing Prospectuses.
(a) Unless preceded or accompanied by a prospectus satisfying the
requirements of Section 10(a) of the Act, the Underwriter shall not convey or
deliver any written communication to any person in connection with the initial
offering of the Certificates, unless such written communication (i) is made in
reliance on Rule 134 under the Act, (ii) constitutes a prospectus satisfying the
requirements of Rule 430B under the Act or (iii) constitutes a "free writing
prospectus," as defined in Rule 405 under the Act (a "Free Writing Prospectus").
Without limitation thereby, without the prior written consent of the Company
(which consent may be withheld for any reason), the Underwriter shall not convey
or deliver in connection with the initial offering of the Certificates any "ABS
informational and computational material," as defined in Item 1101(a) of
Regulation AB under the Act ("ABS Informational and Computational Material"), in
reliance upon Rules 167 and 426 under the Act.
(b) (i) The Underwriter shall deliver to the Company, no later than two
business days prior to the date of first use thereof, (A) any Free Writing
Prospectus prepared by or on behalf of the Underwriter that contains any "issuer
information," as defined in Rule 433(h) under the Act and footnote 271 of the
Commission's Securities Offering Reform Release No. 33-8591 ("Issuer
Information"), and (B) any Free Writing Prospectus or portion thereof that
contains only a description of the final terms of the Certificates.
(ii) Notwithstanding the provisions of Section (b)(i), any
Free Writing Prospectus described therein that contains only ABS Informational
and Computational Material may be delivered by the Underwriter to the Company
not later than the later of (a) two business days prior to the due date for
filing of the Prospectus pursuant to Rule 424(b) under the Act or (b) the date
of first use of such Free Writing Prospectus.
(c) The Underwriter represents and warrants to the Company that the
Free Writing Prospectuses to be furnished to the Company by the Underwriter
pursuant to Section 11(b)(i) or (ii) will constitute all Free Writing
Prospectuses of the type described therein that were furnished to prospective
investors by the Underwriter in connection with its offer and sale of the
Certificates.
(d) The Underwriter represents and warrants to the Company that each
Free Writing Prospectus required to be provided by it to the Company pursuant to
Section 11(b), when read in conjunction with the Time of Sale Information, did
not, as of the Time of Sale, include any untrue statement of a material fact or
omit any material fact required to be stated therein necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading; provided however, that the Underwriter makes no
representation to the extent such misstatements or omissions were the result of
any inaccurate Issuer Information supplied by the Company to the Underwriter
which information was not corrected by Corrective Information subsequently
supplied by the Company to the Underwriter within a reasonable period of time
prior to the Time of Sale.
(e) The Company agrees to file with the Commission the following:
(i) Any Free Writing Prospectus that constitutes an "issuer
free writing prospectus," as defined in Rule 433(h) under the Act (an "Issuer
Free Writing Prospectus");
(ii) Any Free Writing Prospectus or portion thereof delivered
by the Underwriter to the Company pursuant to Section 11(b) hereof; and
(iii) Any Free Writing Prospectus for which the Company or any
person acting on its behalf provided, authorized or approved information that is
prepared and published or disseminated by a person unaffiliated with the Company
or any other offering participant that is in the business of publishing, radio
or television broadcasting or otherwise disseminating communications.
(f) Any Free Writing Prospectus required to be filed pursuant to
Section 11(e) by the Company shall be filed with the Commission not later than
the date of first use of the Free Writing Prospectus, except that:
(i) any Free Writing Prospectus or portion thereof required to
be filed that contains only the description of the final terms of the
Certificates may be filed by the Company within two days of the later of the
date such final terms have been established for all classes of Certificates and
the date of first use;
(ii) any Free Writing Prospectus or portion thereof required
to be filed that contains only ABS Informational and Computational Material may
be filed by the Company with the Commission not later than the later of the due
date for filing the final Prospectus relating to the Certificates pursuant to
Rule 424(b) under the Act or two business days after the first use of such Free
Writing Prospectus;
(iii) any Free Writing Prospectus required to be filed
pursuant to Section 11(e)(iii) may, if no payment has been made or consideration
has been given by or on behalf of the Company for the Free Writing Prospectus or
its dissemination, be filed by the Company with the Commission not later than
four business days after the Company becomes aware of the publication, radio or
television broadcast or other dissemination of the Free Writing Prospectus; and
(iv) the Company shall not be required to file (A) Issuer
Information contained in any Free Writing Prospectus of an offering participant
other than the Issuer, if such information is included or incorporated by
reference in a prospectus or Free Writing Prospectus previously filed with the
Commission that relates to the offering of the Certificates, or (B) any Free
Writing Prospectus or portion thereof that contains a description of the
Certificates or the offering of the Certificates which does reflect the final
terms thereof.
(g) The Underwriter shall file with the Commission any Free Writing
Prospectus that is used or referred to by it and distributed by or on behalf of
the Underwriter in a manner reasonably designed to lead to its broad,
unrestricted dissemination not later than the date of the first use of such Free
Writing Prospectus.
(h) Notwithstanding the provisions of Section 11(g), the Underwriter
shall file with the Commission any Free Writing Prospectus for which the
Underwriter or any person acting on its behalf provided, authorized or approved
information that is prepared and published or disseminated by a person
unaffiliated with the Company or any other offering participant that is in the
business of publishing, radio or television broadcasting or otherwise
disseminating written communications and for which no payment was made or
consideration given by or on behalf of the Company or any other offering
participant, not later than four business days after the Underwriter becomes
aware of the publication, radio or television broadcast or other dissemination
of the Free Writing Prospectus.
(i) Notwithstanding the provisions of Sections 11(e) and 11(g), neither
the Company nor the Underwriter shall be required to file any Free Writing
Prospectus that does not contain substantive changes from or additions to a Free
Writing Prospectus previously filed with the Commission.
(j) The Company and the Underwriter each agree that any Free Writing
Prospectuses prepared by the Underwriter shall contain the following legend:
The depositor has filed a registration statement (including a
prospectus) with the SEC for the offering to which this
communication relates. Before you invest, you should read the
prospectus in that registration statement and other documents
the depositor has filed with the SEC for more complete
information about the issuer and this offering. You may get
these documents for free by visiting XXXXX on the SEC Web site
at xxx.xxx.xxx. Alternatively, the depositor, any underwriter
or any dealer participating in the offering will arrange to
send you the prospectus if you request it by calling toll-free
0-000-000-0000 or you e-mail a request to
xx.xxxxxxxxxx_xxxxxxxxxxxx@xxxxxxxxxxxxxx.xxx. The securities
may not be suitable for all investors. Banc of America
Securities LLC and its affiliates may acquire, hold or sell
positions in these securities, or in the related derivatives,
and may have an investment or commercial banking relationship
with the depositor.
Because the asset-backed securities are being offered on a
"when, as and if issued" basis, any contract of sale will
terminate, by its terms, without any further obligation or
liability between us, if the securities themselves, or the
particular class to which the contract relates, are not
issued. Because the asset-backed securities are subject to
modification or revision, any such contract also is
conditioned upon the understanding that no material change
will occur with respect to the relevant class of securities
prior to the closing date. If a material change does occur
with respect to such class, our contract will terminate, by
its terms, without any further obligation or liability between
us (the "Automatic Termination"). If an Automatic Termination
occurs, we will provide you with revised offering materials
reflecting the material change and give you an opportunity to
purchase such class. To indicate your interest in purchasing
the class, you must communicate to us your desire to do so
within such timeframe as may be designated in connection with
your receipt of the revised offering materials.
This free writing prospectus is being delivered to you solely
to provide you with information about the offering of the
securities referred to in this free writing prospectus and to
solicit an offer to purchase the securities, when, as and if
issued. Any such offer to purchase made by you will not be
accepted and will not constitute a contractual commitment by
you to purchase any of the securities until we have accepted
your offer to purchase securities. You may withdraw your offer
to purchase securities at any time prior to our acceptance of
your offer.
The information in this free writing prospectus supersedes
information contained in any prior similar free writing
prospectus relating to these securities prior to the time of
your commitment to purchase.
This free writing prospectus is not an offer to sell or
solicitation of an offer to buy these securities in any state
where such offer, solicitation or sale is not permitted.
The Company and the Underwriter each agree that any Free Writing
Prospectus prepared by the Underwriter and that is not an Issuer Free Writing
Prospectus or that does not contain Issuer Information shall also contain the
following legend:
Neither the issuer of the securities nor any of its affiliates
prepared, provided, approved or verified any statistical or
numerical information presented herein, although that
information may be based in part on loan level data provided
by the issuer or its affiliates.
(k) In the event that the Company becomes aware that, as of the Time of
Sale, any Issuer Free Writing Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein (when read in conjunction with the Time of Sale
Information), in light of the circumstances under which they were made, not
misleading (a "Defective Issuer Free Writing Prospectus"), the Company shall
notify the Underwriter within one business day after discovery and the Company
shall, if requested by the Underwriter, prepare and deliver to the Underwriter a
Free Writing Prospectus that corrects the material misstatement or omission in
the Defective Issuer Free Writing Prospectus (such corrected Issuer Free Writing
Prospectus, a "Corrected Issuer Free Writing Prospectus").
(l) In the event that the Underwriter become aware that, as of the Time
of Sale, any Free Writing Prospectus prepared by or on behalf of the Underwriter
delivered to an investor in any Certificates contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained therein (when read in conjunction with the Time of Sale
Information), in light of the circumstances under which they were made, not
misleading, when considered in conjunction with the Time of Sale Information
(together with a Defective Issuer Free Writing Prospectus, a "Defective Free
Writing Prospectus"), the Underwriter shall notify the Company thereof within
one business day after discovery.
(m) The Underwriter shall, if requested by the Company:
(i) if the Defective Free Writing Prospectus was a Free
Writing Prospectus prepared by or on behalf of the Underwriter, prepare
a Free Writing Prospectus which corrects the material misstatement in
or omission from the Defective Free Writing Prospectus (together with a
Corrected Issuer Free Writing Prospectus, a "Corrected Free Writing
Prospectus");
(ii) deliver the Corrected Free Writing Prospectus to each
investor which received the Defective Free Writing Prospectus prior to
entering into a contract of sale with such investor;
(iii) notify such investor in a prominent fashion that the
prior contract of sale with the investor has been terminated, and of
the investor's rights as a result of termination of such agreement;
(iv) provide such investor with an opportunity to
affirmatively agree to purchase the Certificates on the terms described
in the Corrected Free Writing Prospectus; and
(v) comply with any other requirements for reformation of the
original contract of sale with such investor, as described in Section
IV.A.2.c of the Commission's Securities Offering Reform Release No.
33-8591.
(n) The Company and the Underwriter agree to retain all Free Writing
Prospectuses that they have used and that are not required to be filed pursuant
to this Section 11 for a period of three years following the initial bona fide
offering of the Certificates.
(o) The Underwriter covenants with the Company that after the final
Prospectus is available the Underwriter shall not distribute any written
information concerning the Offered Certificates to a prospective purchaser of
Offered Certificates unless such information is preceded or accompanied by the
final Prospectus.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to Banc of America Securities LLC, 000 Xxxxx Xxxxx
Xxxxxx, XX0-027-21-04, Charlotte, North Carolina 28255, Attention: Xxxxxx X.
Xxxxxxx; and notices to the Company shall be directed to it at Asset Backed
Funding Corporation, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Associate General Counsel, with a copy to the Treasurer.
SECTION 13. Parties. This Agreement shall inure to the benefit of and
be binding upon the Company, the Underwriter, any controlling persons referred
to herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of Offered Certificates from the Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 14. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW (BUT WITH
REFERENCE TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH BY
ITS TERMS APPLIES TO THIS AGREEMENT).
SECTION 15. No Advisory or Fiduciary Responsibility. The Company
acknowledges and agrees that: (i) the purchase and sale of the Offered
Certificates pursuant to this Agreement, including the determination of the
public offering price of the Offered Certificates and any related discounts and
commissions, is an arm's-length commercial transaction between the Company, on
the one hand, and the Underwriter on the other hand, and the Company is capable
of evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement; (ii) in
connection with each transaction contemplated hereby and the process leading to
such transaction the Underwriter is and has been acting solely as a principal
and is not the agent or fiduciary of the Company or its affiliates,
stockholders, creditors or employees or any other party; (iii) the Underwriter
has not assumed, nor will it assume, an advisory or fiduciary responsibility in
favor of the Company with respect to any of the transactions contemplated hereby
or the process leading thereto (irrespective of whether the Underwriter has
advised or is currently advising the Company on other matters) or any other
obligation to the Company except the obligations expressly set forth in this
Agreement; (iv) the Underwriter and its affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Company and that the Underwriter has no obligation to disclose any of such
interests by virtue of any fiduciary or advisory relationship; and (v) the
Underwriter has not provided any legal, accounting, regulatory or tax advice
with respect to the offering contemplated hereby and the Company has consulted
its own legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.
The Company hereby waives and releases, to the fullest extent permitted
by law, any claims that the Company may have against the Underwriter with
respect to any breach or alleged breach of fiduciary duty.
SECTION 16. Miscellaneous.
(a) This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Underwriter with respect
to the subject matter hereof.
(b) Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated except by a writing signed by the party against whom
enforcement of such change, waiver, discharge or termination is sought.
(c) This Agreement may be signed in any number of counterparts each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
(d) The headings of the Sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed a part of this
Agreement.
SECTION 17. Non-Petition.
The Underwriter hereby agrees not to cause or participate in the filing
of a petition in bankruptcy against the Company for the non-payment to the
Underwriter of any amounts provided by this Agreement or otherwise until one
year and one day after the payment in full of all amounts due on the
Certificates in accordance with the terms of the Pooling Agreement.
If the foregoing is in accordance with your understanding of our agreement,
please sign this Agreement and return it to us.
Very truly yours,
ASSET BACKED FUNDING
CORPORATION
By: /s/ Xxxxx X. Good
-------------------------------------
Name: Xxxxx X. Xxxx
-------------------------------
Title: Principal
------------------------------
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above.
BANC OF AMERICA SECURITIES LLC
By: /s/ Xxxxxxx X. Xxxxx-Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx-Xxxxxx
-------------------------------
Title: Vice President
------------------------------
SCHEDULE I
Offered Certificates: Class A-1, Class A-2, Class A-3A, Class A-3B, Class A-3C,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8 and Class M-9.
Registration Statement File Number: 333-130524
Original Class Certificate Principal Balance of the Offered Certificates:
Original Class Certificate
Class Principal Balance
----------------------------------------------------------------
Class A-1 $114,273,000
Class A-2 $114,343,000
Class A-3A $236,422,000
Class A-3B $165,145,000
Class A-3C $5,469,000
Class M-1 $35,032,000
Class M-2 $32,078,000
Class M-3 $18,572,000
Class M-4 $16,039,000
Class M-5 $15,617,000
Class M-6 $13,928,000
Class M-7 $13,507,000
Class M-8 $12,240,000
Class M-9 $10,552,000
Purchase Price: $[______________]
Classes of Book-Entry Class A-1, Class A-2, Class A-3A, Class
Certificates: A-3B, Class A-3C, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8 and
Class M-9
Description of Mortgage Loans: A pool of fixed and adjustable rate,
first lien sub-prime mortgage loans
having an aggregate principal balance as
of the Cut-off Date of approximately
$844,159,460.73.
Denominations: The Offered Certificates will be issued
in book-entry form. Each such Class of
Certificates will be evidenced by one or
more certificates registered in the name
of Cede & Co. in the aggregate amount
equal to the Original Class Certificate
Principal Balance of such Class.
Interests in such Classes of Offered
Certificates may be purchased by
investors in minimum denominations of
$25,000 and integral multiples of $1.
Cut-off Date: October 1, 2006.
Certificate Ratings:
Class Fitch Xxxxx'x
--------------------------------------------------------------------------------
Class A-1 AAA Aaa
Class A-2 AAA Aaa
Class A-3A AAA Aaa
Class A-3B AAA Aaa
Class A-3C AAA Aaa
Class M-1 AA+ Aa1
Class M-2 AA Aa2
Class M-3 AA- Aa3
Class M-4 A+ A1
Class M-5 A A2
Class M-6 A- A3
Class M-7 BBB+ Baa1
Class M-8 BBB Baa2
Class M-9 BBB- Baa3
SCHEDULE II
TIME OF SALE INFORMATION
1. Free Writing Prospectus, in the form of a RMBS New Issue Term Sheet,
filed with the Commission on October 31, 2006, with a filing date of November 1,
2006 and accession number 0000914121-06-003370.
2. Free Writing Prospectus, filed and accepted by the Commission on
November 11, 2006 with an accession number 0000914121-06-003384.
3. Free Writing Prospectus, in the form of spreadsheets containing
information on the Mortgage Loans in the form of collateral tape information,
filed and accepted by the Commission on November 14, 2006 and accession number
of 0000914121-06-003475.
