EXECUTION
$229,000,000 (Approximate)
BEAR XXXXXXX ASSET BACKED SECURITIES, INC.
AMERICAN RESIDENTIAL EAGLE BOND TRUST 1999-1
MORTGAGE-BACKED LIBOR NOTES, CLASS A, SERIES 1999-1
UNDERWRITING AGREEMENT
April 9, 1999
BEAR, XXXXXXX & CO. INC.
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
LIBOR Notes, Class A, Series 1999-1, in the original principal amount and with
the designations set forth in Schedule A hereto (the "Notes"), evidencing
obligations of American Residential Eagle Bond Trust 1999-1 (the "Issuer" or
"Trust"). The Issuer, which is a Delaware statutory business trust, was
created pursuant to a Deposit Trust Agreement, dated as of April 1, 1999 by
and between Wilmington Trust Company, as Owner Trustee (the "Owner Trustee")
and the Depositor. Bear, Xxxxxxx & Co. Inc. (the "Underwriter") is purchasing
all of the Notes from the Depositor at the price set forth on Schedule A
hereto. The Notes, which will be secured primarily by a pool of fixed and
adjustable rate, first lien residential mortgage loans (the "Mortgage Loans"),
will be issued pursuant to an indenture, dated as of April 1, 1999 (the
"Indenture"), by and between the Issuer and Norwest Bank Minnesota, National
Association, as indenture trustee (the "Indenture Trustee").
The Notes are more fully described in the Registration Statement (as
defined below), which the Depositor has furnished to the Underwriter.
CAPITALIZED TERMS USED HEREIN THAT ARE NOT OTHERWISE DEFINED SHALL HAVE THE
MEANINGS ASCRIBED THERETO IN 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. 333-9532) 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 Underwriter. 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, if any, included in such
Registration Statement, or amendments thereto, including a 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 Underwriter pursuant
to Rule 424(b) of the Rules and Regulations. "Prospectus" means the final
prospectus dated June 4, 1998, as supplemented by the final prospectus
supplement dated April 9, 1999 (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
or the Prospectus, as the case may be, and incorporated by reference in
the Preliminary Prospectus 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 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 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 the Underwriter expressly for use therein, (ii) information contained
in or omitted from the Statement of Eligibility and Qualification on Form
T-1 of the Indenture Trustee (the "Form T-1") under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act") or (iii) 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 XxXXXX, the Seller, the Master Servicer or
the Note Insurer, which information is the subject of separate
indemnification and contribution agreements among the Underwriter, the
Depositor and each such above-named party. The only information furnished
by the Underwriter or on behalf of the Underwriter 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 (as defined below) to which it is a party, and to cause the
Notes and the Investor Certificate (collectively, the "Securities") 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, (iii) that seek to prevent the issuance of the
Securities or the consummation by the Depositor of any of the
transactions contemplated by the Basic Documents, or (iv) that might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, the Basic
Documents to which it is a party.
(g) This Agreement has been, and the other Basic Documents to which
the Depositor 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 such
other Basic Documents, 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
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) At the Closing Date, the execution and delivery of the Trust
Agreement and the Mortgage Loan Purchase Agreement will have been duly
authorized by the Depositor and the other parties thereto, and upon due
execution and delivery thereof by the parties thereto, the Trust
Agreement and the Mortgage Loan Purchase Agreement will each constitute a
legal, valid and binding instrument of the Depositor enforceable against
the Depositor in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or
at law). The direction by the Owner Trustee to the Indenture Trustee to
execute, authenticate, issue and deliver the Notes has been duly
authorized by the Depositor (as the initial holder of the Investor
Certificate), 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 by the Depositor of this
Agreement and the other Basic Documents to which it is a party 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 by the Issuer and, when duly and validly executed by the
Issuer, authenticated by the Indenture Trustee 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
be "mortgage related securities," as such term is defined in the singular
in the Exchange Act and in the Secondary Mortgage Market Enhancement Act
of 1984, as amended ("SMMEA").
(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 Underwriter, or the consummation by the Depositor of
the other transactions contemplated by this Agreement, the Trust
Agreement, the Indenture, the Management Agreement, the Initial Mortgage
Loan Purchase Agreement, the Mortgage Loan Purchase Agreement (together
with the Initial Mortgage Loan Purchase Agreement, the "Mortgage Loan
Sale Agreements"), the Master Servicing Agreement, the Insurance
Agreement, the Securities, the Indemnification and Contribution Agreement
(in connection with this Agreement) and the Indemnification Agreement (in
connection with the insurance documents) (collectively, the "Basic
Documents"), 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 Underwriter 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 Trust Agreement and
the Mortgage Loan Purchase Agreement, the Depositor will: (i) be the sole
beneficial owner of the Mortgage Loans conveyed to it by the 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 Mortgage Loans or
in the Mortgage Loan Purchase Agreement and (iii) have the power and
authority to sell its interest in the Mortgage Loans to the Trust without
recourse. At the time of execution and delivery of the Trust Agreement
and the Mortgage Loan Purchase Agreement, the Depositor will not have
assigned to any Person any of its right or title in the Notes and (ii)
have the power and authority to sell the Notes to the Underwriter. Upon
execution and delivery of the Trust Agreement by the Owner Trustee, the
Trust will have acquired beneficial ownership of all of the Depositor's
right, title and interest in and to the Mortgage Loans. Upon execution
and delivery of the Indenture by the Issuer and the Indenture Trustee,
the Indenture Trustee will have a perfected first priority security
interest in the Mortgage Loans. Upon delivery, the Underwriter will have
good title to the Notes, free and clear of any Liens.
(o) As of the Cut-Off Date, each of the Mortgage Loans will meet the
eligibility criteria described in the Prospectus, the Master Servicing
Agreement and the Mortgage Loan Sale Agreements. At the Closing Date, the
Securities, the Basic Documents and each of the Mortgage Loans will
conform in all material respects to the descriptions thereof contained in
the Prospectus.
(p) Neither the Depositor nor the Trust created pursuant to 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.
(q) At the Closing Date, the Notes will have been rated in the
highest rating category by at least two "nationally recognized
statistical rating organizations" as such term is defined in SMMEA.
(r) Any taxes, fees and other governmental charges in connection
with the execution, delivery and issuance of this Agreement or any other
Basic Document have been paid or will be paid at or prior to the Closing
Date.
(s) At the Closing Date, each of the representations and warranties
of the Depositor set forth in the Trust Agreement, the Insurance
Agreement or any other Basic Document to which it is a party will be true
and correct in all material respects.
Any certificate signed by an officer of the Depositor 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 Underwriter 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 Depositor
(as the initial holder of the Investor Certificate) agrees to instruct the
Owner Trustee to issue the Notes and agrees to sell to the Underwriter, and
the Underwriter agrees (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 Underwriter shall be made at the offices of Brown & Wood
LLP, 000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000-0000, or
at such other place as shall be agreed upon by the Underwriter and the
Depositor at 10:00 a.m. Washington, D.C. time on or about April 15, 1999 or at
such other time or date as shall be agreed upon in writing by the Underwriter
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 the
Underwriter for the account of the Underwriter against payment of the purchase
price thereof. The Notes shall be in such authorized denominations and
registered in such names as the Underwriter may request in writing at least
two business days prior to the Closing Date. The Notes will be made available
for examination by the Underwriter 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 Underwriter. It is understood that, subject to
the terms and conditions hereof, the Underwriter proposes to offer the Notes
from time to time to the public in the United States and Europe 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 Underwriter
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
Underwriter 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 Underwriter, 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
Underwriter 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 Underwriter 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 Underwriter and to counsel for the
Underwriter 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 Underwriter such number of the
following documents as the Underwriter shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case including
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
Underwriter and, upon the Underwriter's request, shall file such document
and prepare and furnish without charge to the Underwriter and to any
dealer in securities as many copies as the Underwriter 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 Underwriter,
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 Underwriter 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
Underwriter 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 Underwriter 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 Underwriter,
(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 Underwriter 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.
(f) To furnish the Underwriter and counsel for the Underwriter,
prior to filing with the Commission, and to obtain the consent of the
Underwriter 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 use its best efforts, in cooperation with the Underwriter, 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 Underwriter 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.
(h) Unless the Underwriter shall otherwise have given its written
consent, the Depositor shall not enter into a contractual arrangement
with the Seller which contemplates the public offering or sale of notes
or pass-through certificates backed by residential mortgage loans or
other similar securities representing interests in or secured by other
mortgage-related assets originated or owned by the Seller for a period of
seven business days following the commencement of the offering of the
Notes to the public.
(i) So long as the Notes shall be outstanding the Depositor shall
cause the Master Servicer to deliver to the Underwriter 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 3(j) of
the Master Servicing Agreement and (ii) the annual statement of a firm of
independent public accountants furnished to the Indenture Trustee
pursuant to Section 3(k) of the Master Servicing Agreement.
(j) To apply the net proceeds from the sale of the Notes in the
manner set forth in the Prospectus.
SECTION 6. Conditions to the Underwriter's Obligations. The obligations
of the Underwriter 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:
(i) The Underwriter 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.
(ii) 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.
(iii) The Underwriter 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 Underwriter and its counsel, is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
(iv) All corporate proceedings and other legal matters relating to
the authorization, form and validity of this Agreement, the Securities,
the other Basic Documents, the Registration Statement and the Prospectus,
and all other legal matters relating to this Agreement, the Securities,
the other Basic Documents and the transactions contemplated hereby and
thereby shall be satisfactory in all respects to the Underwriter and its
counsel, and the Depositor shall have furnished to the Underwriter and
its counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(v) Brown & Wood LLP, special counsel to the Depositor (or internal
counsel to the Depositor, in the case of opinions set forth in
sub-paragraphs (2), (4), (6), and (7) below), shall have furnished to the
Underwriter a written opinion, addressed to the Underwriter and dated the
Closing Date, in form and substance satisfactory to the Underwriter, to
the effect that:
(1) 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 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 Mortgage Loan Purchase Agreement, the Trust
Agreement, the Indemnification and Contribution Agreement, the
Insurance Agreement, the Indemnification Agreement and to cause the
Securities to be issued;
(2) The Depositor is not in violation of its certificate of
incorporation or by-laws or to such counsel's knowledge in default
in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument
to which the Depositor is a party or by which it or its properties
may be bound, which default might result in any material adverse
changes in the financial condition, earnings, affairs or business of
the Depositor or which might materially and adversely affect the
properties or assets, taken as a whole, of the Depositor;
(3) This Agreement has been duly authorized, executed and
delivered by the Depositor. The Trust Agreement, the Mortgage Loan
Purchase Agreement, the Indemnification and Contribution Agreements,
the Insurance Agreement and the Indemnification Agreement each have
been duly authorized, 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
valid 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 and insurance laws.
(4) To such counsel's knowledge, the execution, delivery and
performance of this Agreement, the Mortgage Loan Purchase Agreement,
the Trust Agreement, the Indemnification and Contribution
Agreements, the Insurance Agreement and the Indemnification
Agreement by the Depositor, the consummation of the transactions
contemplated hereby and thereby, and the issuance and delivery of
the Securities 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
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.
(5) The direction by the Depositor (on behalf of the Issuer) to
the Indenture Trustee to issue, authenticate and deliver the Notes
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 Notes will be validly issued and outstanding
and will be entitled to the benefits of the Indenture.
(6) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of
the United States is required in connection with the issuance of the
Securities, the sale of the Notes to the Underwriter, or the
consummation by the Depositor of the other transactions contemplated
by the Basic Documents, except such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Securities Act or state securities or "blue sky" laws in
connection with the purchase and distribution of the Notes by the
Underwriter and as have been previously obtained.
(7) 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 Trust Agreement, the Mortgage
Loan Purchase Agreement, the Indemnification and Contribution
Agreement, the Insurance Agreement, the Indemnification 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 any of the foregoing agreements; or (d)
which might materially and adversely affect the performance by the
Depositor of its obligations under, or the validity or
enforceability of any of the foregoing agreements.
(8) The Securities have been duly and validly authorized and
issued and, immediately prior to the sale of the Notes to the
Underwriter, such Securities are owned by the Depositor, free and
clear of all Liens.
(9) The conditions to the use a registration statement on Form
S-3 under the Securities Act, as set forth in the General
Instructions to Form S-3, have been satisfied with respect to the
Registration Statement and the Prospectus.
(10) The Registration Statement and any amendments thereto have
become effective under the Securities Act; to the best of such
counsel's knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued and not withdrawn and no
proceedings for that purpose have been instituted or threatened and
not terminated; and the Registration Statement, the Prospectus and
each amendment or supplement thereto, as of their respective
effective or issue dates (other than the financial and statistical
information contained therein and the Form T-1 as to which such
counsel need express no opinion), complied as to form in all
material respects with the applicable requirements of the Securities
Act and the Rules and Regulations.
(11) To the best of such counsel's knowledge, there are no
material contracts, indentures or other documents of a character
required to be described or referred to in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement other than those described or referred to
therein or filed or incorporated by reference as exhibits thereto.
(12) The statements set forth in the Basic Prospectus under the
captions "Description of the Securities" and "The Agreements" and in
the Prospectus Supplement under the captions "Description of the
Notes" to the extent such statements purport to summarize certain
provisions of the Securities, the Trust Agreement or the Indenture
are fair and accurate in all material respects.
(13) The statements set forth in the 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," and "Legal Investment Considerations" to the extent
that they constitute matters of federal law, provide a fair and
accurate summary of such law or conclusions.
(14) Neither the Depositor nor the Trust is an "investment
company" or under the "control" of an "investment company" as such
terms are defined in the 1940 Act.
(15) The Notes will constitute "mortgage related securities"
under the SMMEA for so long as the Notes are rated in one of the two
highest rating categories by one or more nationally recognized
statistical rating agencies.
(16) The Indenture is qualified under the Trust Indenture Act
of 1939, as amended.
Such counsel shall also have furnished to the Underwriter a written
statement, addressed to the Underwriter and dated the Closing Date, in form
and substance satisfactory to the Underwriter, 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 the Form T-1 and 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 required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except as to financial and statistical data contained in
the Prospectus and statements set forth in the Prospectus Supplement under the
captions "Servicing of the Mortgage Loans -- Advanta", and "The Note Insurer"
with respect to which no opinion need be expressed).
(vi) Xxxxx & Xxxxx, Counsel for the Seller and AmREIT, shall have
furnished to the Underwriter a written opinion, addressed to the
Underwriter and the Depositor and dated the Closing Date, in form and
substance satisfactory to the Underwriter, to the effect that:
(1) Each of the Seller and AmREIT has been duly incorporated
and is validly existing and in good standing as a corporation under
the laws of the jurisdiction of its incorporation and has duly
authorized all actions contemplated in the Basic Documents to be
taken by it.
(2) AmREIT has full power and authority to sell the Mortgage
Loans to the Seller and the Seller has full power and authority to
serve in the capacity of "Seller" of the Mortgage Loans and to
transfer the Mortgage Loans to the Depositor as contemplated in the
Mortgage Loan Sale Agreements.
(3) The Mortgage Loan Sale Agreements, the Indemnification and
Contribution Agreement (in connection with this Agreement), the
Insurance Agreement, the Indemnification Agreement (in connection
with the insurance documents) and any other Basic Document to which
either the Seller or AmREIT is a party have been duly authorized,
executed and delivered by the Seller or AmREIT, as applicable, and,
assuming the due authorization, execution and delivery of such
agreements by the other parties thereto, constitute the legal, valid
and binding agreements of the Seller or AmREIT, as applicable,
enforceable against such parties in accordance with their terms,
subject as to enforceability to (A) bankruptcy, insolvency,
reorganization, moratorium, receivership or other similar laws now
or hereafter in effect relating to creditors' rights generally and
(B) the qualification that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion, with respect to such
remedies, of the court before which any proceedings with respect
thereto may be brought and (C) with respect to rights of indemnity
under the Indemnification and Contribution Agreement, the
Indemnification Agreement and the Insurance Agreement, limitations
of public policy under applicable securities and insurance laws.
(4) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body
having jurisdiction over the Seller or AmREIT is required for the
consummation by the Seller or AmREIT, as applicable, of the
transactions contemplated by the Basic Documents except such
consents, approvals, authorizations, registrations and
qualifications as have been obtained.
(5) Neither the transfer of the Mortgage Loans by AmREIT to the
Seller, or by the Seller to the Depositor, pursuant to the Mortgage
Loan Sale Agreements, nor the execution, delivery or performance by
either AmREIT or the Seller of the Basic Documents to which either
are a party and the transactions contemplated therein (A) conflict
with or result in a breach of, or constitute a default under, (1)
any term or provision of their respective incorporation documents;
(2) to the best of such counsel's knowledge, any term or provision
of any material agreement, deed of trust, mortgage loan agreement,
contract, instrument or indenture, or other agreement to which
either is bound or to which any of their respective property or
assets (including property or assets of their respective
subsidiaries) is subject; (3) to the best of such counsel's
knowledge, any order, judgment, writ, injunction or decree of any
court or governmental authority having jurisdiction over the Seller
or AmREIT or (4) to the best of such counsel's knowledge, any law,
rule or regulations applicable to the Seller or AmREIT, or (B) to
the best of such counsel's knowledge, results in the creation or
imposition of any lien, charge or encumbrance upon the corpus of the
Trust or upon the Securities.
(6) There are no actions, proceedings or investigations pending
with respect to which the Seller or AmREIT has received service of
process, nor, to the best of such counsel's knowledge, are there any
actions, proceedings or investigations threatened against the Seller
or AmREIT by any court, administrative agency or other tribunal (a)
contesting the validity of any of the Basic Documents, (b) seeking
to prevent the consummation of any of the transactions contemplated
by any of the Basic Documents or (c) which would materially and
adversely affect the performance by either the Seller or AmREIT, as
applicable, of its obligations under, or the validity or
enforceability of, the Basic Documents to which they are a party.
Such counsel shall also have furnished to the Underwriter a written
statement, addressed to the Underwriter and dated the Closing Date, in form
and substance satisfactory to the Underwriter, 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 the Form T-1 and 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 required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except as to financial and statistical data contained in
the Prospectus and statements set forth in the Prospectus Supplement under the
captions" "Servicing of the Mortgage Loans -- Advanta" and "The Note Insurer,"
with respect to which no opinion need be expressed).
(vii) Xxxxxx & Xxxxxxxx, counsel to the Indenture Trustee, and/or
internal counsel to the Indenture Trustee, shall have furnished to the
Underwriter a written opinion, addressed to the Underwriter and the
Depositor and dated the Closing Date, in form and substance satisfactory
to the Underwriter, to the effect that:
(1) The Indenture Trustee is duly incorporated and as a
national banking association validly existing and has the power and
authority to enter into, and to take all action required of it
under, the Indenture, the Master Servicing Agreement and the other
Basic Documents to which it is a party.
(2) Each of the Indenture, the Master Servicing Agreement and
any other Basic Documents to which the Indenture Trustee is a party
has 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.
(3) No consent, approval, authorization or order of any
Minnesota or federal court or governmental agency or body is
required for the consummation of the Indenture Trustee of the
transactions contemplated by the terms of the Indenture, the Master
Servicing Agreement or any other Basic Document to which it is a
party, except any such as may be required under the blue sky laws of
any jurisdiction in connection with the offering, sale or
acquisition of the Notes, and any approvals as have been obtained.
(4) The consummation of the transactions contemplated by the
terms of the Indenture, the Master Servicing Agreement and the other
Basic Documents to which it is a party do not, to such counsel's
knowledge, conflict with or result in a breach or violation of any
material term or provision of, or constitute a default under, the
articles of incorporation or bylaws of the Indenture Trustee, an
indenture or other agreement or instrument to which the Indenture
Trustee is a party or by which it is bound, any Minnesota or federal
statute or regulation applicable to the Indenture Trustee or any
order of any Minnesota or federal court, regulatory body,
administrative agency or governmental body having jurisdiction over
the Indenture Trustee.
(5) To the best of such counsel's knowledge after due inquiry,
there are no legal or governmental actions, investigations or
proceedings pending to which the Indenture Trustee is a party, or
threatened against the Indenture Trustee (a) asserting the
invalidity of the Indenture, the Master Servicing Agreement or any
other Basic Document to which it is a party or (b) which might
materially and adversely affect the performance by the Indenture
Trustee of its obligations under, or the validity or enforceability
of, the Indenture, the Master Servicing Agreement or any other Basic
Document to which it is a party.
(viii) Xxxxxxxx, Xxxxxx & Finger, counsel to the Owner Trustee,
shall have furnished to the Underwriter a written opinion, addressed to
the Underwriter and the Depositor and dated the Closing Date, in form and
substance satisfactory to the Underwriter and their counsel, to the
effect that:
(1) The Owner Trustee is duly incorporated and validly existing
as a banking corporation under the laws of the State of Delaware and
has the power and authority to execute and deliver the Trust
Agreement.
(2) The Trust Agreement has been duly authorized, executed and
delivered by the Owner Trustee and is the legal, valid and binding
agreement of the Owner Trustee, enforceable against the Owner
Trustee in accordance with its terms.
(3) Neither the execution, delivery and performance by the
Owner Trustee of the Trust Agreement, nor the consummation of the
transactions contemplated thereby, nor compliance with the terms
thereof, will conflict with or result in a breach of, or constitute
a default under the charter or bylaws of the Owner Trustee.
(4) No consent, approval or other authorization of, or
registration, declaration or filing with, any court or governmental
agency or commission of the State of Delaware is required by or with
respect to the Owner Trustee for the valid execution and delivery of
the Trust Agreement, or for the validity or enforceability thereof,
other than the filing of the Certificate of Trust.
(ix) Xxxxxxxx, Xxxxxx & Finger, Delaware counsel to the Issuer,
shall have furnished to the Underwriter a written opinion, addressed to
the Underwriter and the Depositor and dated the Closing Date, in form and
substance satisfactory to the Underwriter and their counsel, to the
effect that:
(1) The Trust Agreement is the legal, valid and binding
agreement of the Depositor and the Owner Trustee, enforceable
against the Depositor and the Owner Trustee, in accordance with its
terms.
(2) The Trust has been duly formed and is validly existing as a
business trust under the Delaware Business Trust Act, 12 Del. C. ss.
3801 et seq. (the "Act").
(3) The Trust has the power and authority under the Act and the
Trust Agreement, and the Trust Agreement authorizes the Owner
Trustee to execute, deliver and perform its obligations under the
Basic Documents.
(x) Counsel to the Master Servicer (which may include in-house
counsel) shall have furnished to the Underwriter a written opinion,
addressed to the Underwriter and the Depositor and dated the Closing
Date, in form and substance satisfactory to the Underwriter and their
counsel, to the effect that:
(1) The Master Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware.
(2) The Master Servicer has full power and authority to serve
as Master Servicer as contemplated in the Master Servicing
Agreement.
(3) The Master Servicing Agreement and any other Basic Document
to which the Master Servicer is a party has been duly authorized,
executed and delivered by the Master Servicer.
(4) The Master Servicing Agreement and any other Basic Document
to which the Master Servicer is a party each constitutes the legal,
valid and binding agreement of the Master Servicer, enforceable
against the Master Servicer in accordance with its terms, subject 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.
(5) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body
having jurisdiction over the Master Servicer is required for the
consummation by the Master Servicer of the transactions contemplated
by the Master Servicing Agreement or any other Basic Document to
which the Master Servicer is a party, except such consents,
approvals, authorizations, registrations and qualification as have
been obtained.
(6) The execution, delivery and performance of the Master
Servicing Agreement and any other Basic Document to which the Master
Servicer is a party by the Master Servicer and the consummation of
the transactions contemplated thereby do not and will not (a)
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 Master Servicer is a party or by which the
Master Servicer is bound or to which any of the property or assets
of the Master Servicer or any of its subsidiaries is subject or (b)
result in any violation of the provisions of the charter or by-laws
of the Master Servicer or any statute or any order, rule or
regulation of any court or government agency or body having
jurisdiction over the Master Servicer or any of its properties or
assets.
(7) To the best of such counsel's knowledge after due inquiry,
there are no legal or governmental actions, investigations or
proceedings pending to which the Master Servicer is a party (other
than these disclosed in the Prospectus Supplement) to which the
Master Servicer is a party, or threatened against the Master
Servicer (a) asserting the invalidity of the Master Servicing
Agreement or any other of the Basic Documents to which the Master
Servicer is a party or (b) which might materially and adversely
affect the performance by the Master Servicer of its obligations
under the Master Servicing Agreement or any other Basic Document to
which it is a party.
(8) The statements contained in the Prospectus Supplement under
the heading "Servicing of the Mortgage Loans -- Advanta", insofar as
such statements constitute summaries of the matters referred to
therein, accurately reflect and fairly present the information
purported to be shown and, insofar as such statements describes the
Master Servicer, fairly and accurately describe the Master Servicer,
other than any financial or statistical information contained or
incorporated by reference therein, as to which such counsel need
express no opinion.
(xi) Counsel to the Note Insurer (which may be internal counsel),
shall have furnished to the Underwriter a written opinion, addressed to
the Underwriter and the Depositor and dated the Closing Date, in form and
substance satisfactory to the Underwriter and their counsel, to the
effect that:
(1) The Note Insurer is a monoline insurance company duly
organized, validly existing and authorized to transact a financial
guaranty insurance business under the laws of the State of New York.
(2) The Insurance Policy and the other insurance documents have
been duly authorized, executed and delivered by the Note Insurer.
(3) The Insurance Policy and the other insurance documents
constitute valid and binding obligations of the Note Insurer,
enforceable against the Note Insurer in accordance with their terms,
subject, as to the enforcement of remedies, to bankruptcy,
insolvency, reorganization, rehabilitation, moratorium and other
similar laws affecting the enforceability of creditors' rights
generally applicable in the event of the bankruptcy or insolvency of
the Note Insurer and to the application of general principles of
equity and subject, in the case of the Indemnification Agreement, to
principles of public policy limiting the right to enforce the
indemnification provisions contained therein insofar as they relate
to indemnification for liabilities arising under applicable
securities laws.
(4) The Insurance Policy is exempt from registration under the
Securities Act.
(5) Neither the execution or delivery by the Note Insurer of
the Insurance Policy or the other insurance documents, nor
performance by the Note Insurer of its obligations thereunder, will
conflict with any provision of the certificate of incorporation or
the by-laws of the Note Insurer or, to the best knowledge of such
counsel, result in breach of, or constitute a default under, any
agreement or other instrument to which the Note Insurer is a party
or by which it or any of its property is bound or, to the best
knowledge of such counsel, violate any judgment, order or decree
applicable to the Note Insurer of any governmental or regulatory
body, administrative agency, court or arbitrator having jurisdiction
over the Note Insurer (except that in the published opinion of the
Commission the indemnification provisions of the Indemnification
Agreement, insofar as they relate to indemnification for liabilities
arising under the Securities Act, are against public policy as
expressed in the Securities Act and are therefore unenforceable).
In addition, such counsel shall have reviewed the description
of the Note Insurer under the caption "The Note Insurer" in the
Prospectus Supplement and shall have delivered his written statement
that although the information provided in the Prospectus Supplement
with respect to the Note Insurer is limited and does not purport to
provide the scope of disclosure required to be included in a
prospectus with respect to a registrant under the Securities Act in
connection with a public offering and sale of securities of such
registrant, within such limited scope of disclosure, however, there
has not come to the attention of such counsel any information which
would cause such counsel to believe that the description of the Note
Insurer referred to above, as of the date of the Prospectus
Supplement or as of the date of this opinion, contained or contains
any untrue statement of material fact or omitted or omits to state a
material fact necessary to make statements therein, in the light of
the circumstances under which they were made, not misleading (except
that such counsel need express no opinion with respect to any
financial statements or other financial information contained or
referred to therein).
(xii) Xxxxxxx, Xxxxxx, Xxxxx & Xxxx, LLP , special tax counsel to
the Seller, the Depositor and the Underwriter, shall have furnished to
the Underwriter a written opinion, addressed to the Underwriter, the
Depositor and the Seller and dated the Closing Date, in form and
substance satisfactory to the Underwriter and the Seller to the effect
that:
(1) The statements set forth in the Prospectus Supplement under
the caption "Certain Federal Income Tax Consideration", to the
extent that they constitute matters of law, provide a fair and
accurate summary of such law or conclusions.
(2) For federal income tax purposes, the Notes will be
characterized as indebtedness and the Trust will not be
characterized as an association (or a publicly traded partnership)
taxable as a corporation or as a taxable mortgage pool with the
meaning of Section 7701(c) of the Code.
(xiii) The Underwriter shall have received the favorable opinion or
opinions, dated the date of the Closing Date, of Brown & Wood LLP, as
counsel for the Underwriter, or Xxxxx & Xxxxx, counsel for AmREIT and the
Seller, with respect to bankruptcy matters in connection with the sale of
the Mortgage Loans (including the perfected first priority interest of
the Trust and the Indenture Trustee in the Mortgage Loans) as may be
required by the Rating Agencies or the Note Insurer, and such other
related matters as the Underwriter may reasonably require.
(xiv) The Depositor shall have furnished to the Underwriter 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:
(1) The representations and warranties made by the Depositor in
this Agreement, the Trust Agreement, the Mortgage Loan Purchase
Agreement (excluding the representations and warranties made with
respect to the Mortgage Loans), the Insurance Agreement, the
Indemnification Agreement and any other Basic Document to which it
is a party, 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.
(2) 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.
(3) 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 the date of the most
recently received certificate of good standing with respect to the
Depositor as certified by the Secretary of State of Delaware which
has affected the good standing of such entity under the laws of the
State of Delaware.
(4) 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 April 1, 1999.
(xv) The Seller and XxXXXX shall have furnished a certificate, dated
the Closing Date, signed by their respective Chairman of the Board, the
President or a Vice President and addressed to the Underwriter and
counsel to the Underwriter, stating as it relates to such entity:
(1) The representations and warranties made by AmREIT and the
Seller in the Mortgage Loan Sale Agreements (excluding the
representations and warranties relating to the Mortgage Loans) and
any other Basic Document to which it is a party are true and correct
as of the Closing Date; and AmREIT and the Seller has complied with
all agreements contained herein which are to have been complied with
on or prior to the Closing Date.
(2) Nothing has come to his or her attention that would lead
such officer to believe that the Registration Statement or the
Prospectus (except as to financial or statistical data contained in
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.
(3) There are no actions, proceedings or investigations pending
with respect to which the Seller or AmREIT, as applicable, nor has
either such entity received service of process before, nor are there
any actions, proceedings or investigations threatened by, any court,
administrative agency or other tribunal to which the Seller or
AmREIT is a party or of which any of its properties is the subject
(A) which if determined adversely to the Seller or AmREIT would have
a material adverse effect on the business or financial condition of
the Seller or AmREIT (B) which assert the invalidity of any Basic
Document, (C) which seek to prevent the issuance of the Securities
or the consummation by the Seller or AmREIT of any of the
transactions contemplated by the Basic Documents, or (D) which might
materially and adversely affect the performance by the Seller or
AmREIT of their respective obligations under, or the validity or
enforceability of, any Basic Documents to which they are a party.
(4) The Mortgage Loan Sale Agreements, the Indemnification and
Contribution Agreement, the Insurance Agreement, the Indemnification
Agreement and any other Basic Document to which either the Seller or
AmREIT is a party, when executed and delivered as contemplated
thereby, will have been, duly authorized, executed and delivered by
the Seller or AmREIT, as applicable, and the Mortgage Loan Sale
Agreements, the Indemnification and Contribution Agreement, the
Insurance Agreement, the Indemnification Agreement and any other
Basic Document to which either the Seller or AmREIT is a party, when
executed and delivered as contemplated herein, will constitute,
legal, valid and binding instruments enforceable against the Seller
or AmREIT, as applicable, in accordance with their respective terms,
subject as to enforceability to (x) applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally, (y) general principles of
equity (regardless of whether enforcement is sought in a proceeding
in equity or at law), and (z) with respect to rights of indemnity
and contribution under the Indemnification and Contribution
Agreement, the Indemnification Agreement and the Insurance
Agreement, limitations of public policy under applicable securities
or insurance laws.
(5) The execution, delivery and performance of the Mortgage
Loan Sale Agreements, the Indemnification and Contribution
Agreement, the Insurance Agreement, the Indemnification Agreement
and any other Basic Document to which the Seller or AmREIT is a
party, by the Seller or AmREIT, as applicable, and the consummation
of the transactions contemplated thereby, 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 Seller or AmREIT is a party or by which the
Seller or AmREIT is bound or to which any of the properties or
assets of the Seller or AmREIT (or their respective subsidiaries) is
subject, which breach or violation would have a material adverse
effect on the business, operations or financial condition of the
Seller or AmREIT, nor will such actions result in any violation of
the provisions of the articles of incorporation or by-laws of the
Seller or AmREIT or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over
the Seller or AmREIT or any of their respective properties or
assets, which breach or violation would have a material adverse
effect on the business, operations or financial condition of the
Seller or AmREIT.
(6) The Seller and AmREIT each 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
Prospectus, and the Seller and AmREIT 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 Seller or AmREIT would, singly or in the aggregate,
materially and adversely affect the conduct of its business,
operations or financial condition.
(7) At the time of execution and delivery of the Mortgage Loan
Purchase Agreement, the Seller will: (A) be the sole beneficial
owner of the Mortgage Loans conveyed by the Seller to the Depositor,
free and clear of any Lien; (B) not have assigned to any Person any
of its right or title in the Mortgage Loans; and (C) have the power
and authority to sell its interest in the Mortgage Loans to the
Depositor. Upon execution and delivery of the Mortgage Loan Purchase
Agreement by the Depositor, the Depositor will have acquired
beneficial ownership of all of the Seller's right, title and
interest in and to the Mortgage Loans.
(8) The Seller is not an "investment company" within the
meaning of such term under the 1940 Act and the rules and
regulations of the Commission thereunder.
(xvi) The Owner Trustee shall have furnished to the Underwriter a
certificate of the Owner Trustee, signed by one or more duly authorized
officers of the Owner Trustee, dated the Closing Date, as to the due
authorization, execution and delivery by the Owner Trustee of the Trust
Agreement and the other Basic Documents to which it is a party and the
acceptance by the Owner Trustee of the trusts created by the Trust
Agreement and the due execution, authentication and delivery of the
Investor Certificate by the Owner Trustee thereunder and such other
matters as the Underwriter shall reasonably request.
(xvii) The Indenture Trustee shall have furnished to the Underwriter
a certificate of the Indenture Trustee, signed by one or more authorized
officers of the Indenture Trustee, dated the Closing Date, as to the due
authorization, execution and delivery by the Indenture Trustee of the
Indenture and the other Basic Documents to which it is a party and the
acceptance by the Indenture Trustee of the trusts created by the
Indenture and the due execution, authentication and delivery of the Notes
by the Indenture Trustee thereunder and such other matters as the
Underwriter shall reasonably request.
(xviii) The Master Servicer shall have furnished to the Underwriter
a certificate of the Master Servicer, signed by one or more duly
authorized officers of the Master Servicer, dated the Closing Date, as to
the due authorization, execution and delivery by the Master Servicer of
the Master Servicing Agreement and any other Basic Document to which it
is a party.
(xix) The Insurance Policy and the Insurance Agreement shall have
been issued by the Note Insurer and shall have been duly authenticated by
an authorized agent of the Note Insurer, if so required under applicable
state law or regulations.
(xx) The Interest Rate Agreement shall have been issued by Bear
Xxxxxxx Financial Products Inc. and shall be in full force and effect.
(xxi) The Notes shall have been rated "AAA" by Standard & Poor's and
"Aaa" by Xxxxx'x.
(xxii) The Depositor shall have furnished to the Underwriter such
further information and documents as the Underwriter may reasonably have
requested not less than three full business days prior to the Closing
Date.
(xxiii) Prior to the Closing Date, counsel for the Underwriter shall
have been furnished with such documents, opinions and certifications as
they may reasonably require for the purpose of enabling them to pass upon
the issuance and sale of the Notes 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
Underwriter and counsel for the Underwriter.
(xxiv) 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 reasonable judgment of the
Underwriter, 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.
(xxv) The Underwriter shall have received from Deloitte & Touche
LLP, a letter dated the date hereof and satisfactory in form and
substance to the Underwriter and its counsel, to the effect that they
have performed certain specified procedures, all of which have been
agreed to by the Underwriter, 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,
the Servicers and/or the Master Servicer excluding any questions of legal
interpretation. The Underwriter shall have received from Deloitte &
Touche LLP, a letter dated the Closing Date and satisfactory in form and
substance to the Underwriter and its counsel, confirming as of such date
the information set forth in the letter provided pursuant to this clause
(xx).
(xxvi) The Underwriter shall have received from Deloitte & Touche
LLP, certified public accountants, a letter dated the date hereof and
satisfactory in form and substance to the Underwriter 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 entitled "Percentage
of Note Balance Outstanding" under the caption "Certain Prepayment and
Yield Considerations".
(xxvii) The Underwriter shall have received from Xxxxxx Xxxxxxxx,
independent certified public accountants, a letter dated the date hereof
and satisfactory in form and substance to the Underwriter, to the effect
they have performed certain procedures and representations as a result of
which they have confirmed the information set forth in the Prospectus
under the caption "Servicing of the Mortgage Loans -- Advanta."
(xxviii) The Underwriter shall have received the consent of
PricewaterhouseCoopers LLP to the incorporation by reference in the
Prospectus of their report with respect to the consolidated financial
statements of the Note Insurer.
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
Underwriter 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 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.
SECTION 7. Payment of Expenses. By executing the acknowledgment on the
execution page of this Agreement, American Residential Investment Trust, Inc.
has agreed to pay the following costs and expenses in connection with the
offering of the Securities: (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 Prospectus and any amendments and
exhibits to the Registration in connection therewith; (c) the costs of
distributing 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 or any
other Basic Document; (e) the fees and expenses of qualifying the Securities
under the securities laws of the several jurisdictions as provided in Section
5(g) hereof; (f) any fees charged by securities rating services for rating the
Notes; (g) all fees, expenses and charges of (i) Financial Security Assurance,
Inc. in connection with obtaining the financial guaranty insurance policy with
respect to the Notes and (ii) Commonwealth Mortgage Assurance Company in
connection with obtaining the primary Mortgage Insurance policy with respect
to certain of the Mortgage Loans; (h) the cost of any accountants' procedure
or comfort letters relating to the collateral and other financial and
statistical disclosure in the Prospectus or to any Computational Materials,
Structural Term Sheets or Collateral Term Sheets (each as defined in Section
5(e) hereof); and (i) the fees and expenses of counsel to the Underwriter.
Except as provided in this Section 7, the Underwriter shall pay its own costs
and expenses, including the costs and expenses of its counsel (but not to
exceed $25,000), any transfer taxes on the Notes which it may sell and the
expenses of advertising any offering of the Notes made by the Underwriter.
If this Agreement is terminated by the Underwriter in accordance with the
provisions of Section 6 or Section 10, the Depositor shall cause the
Underwriter to be reimbursed for all reasonable out-of-pocket expenses,
including fees and disbursements of Brown & Wood LLP, counsel for the
Underwriter.
SECTION 8. Indemnification and Contribution.
(a) The Depositor agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of
Section 15 of the Securities Act from and against any and all loss, claim,
damage or liability, joint or several, 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 Underwriter or any
such 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 and shall reimburse the Underwriter and each such
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by the Underwriter or such 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;
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 written information furnished to the Depositor by or on behalf of the
Underwriter specifically for inclusion therein, it being understood that the
only information furnished by the Underwriter or on behalf of the Underwriter
for use in connection with the preparation of the Registration Statement or
the Prospectus is described in Section 8(i) hereof; 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 Underwriter or any
controlling person of the Underwriter.
(b) The Underwriter agrees 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 the Underwriter
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 Underwriter may otherwise have to the Depositor or any such
director, officer or controlling person. The only information furnished by the
Underwriter or on behalf of the Underwriter 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 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
Underwriter, if the indemnified parties under this Section 8 consist of the
Underwriter 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 Underwriter agrees to provide the Depositor, with a copy to
Seller, for filing with the Commission on an Additional Materials 8-K (i)
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 Underwriter 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 Underwriter. If the Underwriter does not provide any Computational
Materials, Structural Term Sheets and Collateral Term Sheets to the
Depositor and the Seller pursuant to this Section, the Underwriter shall
be deemed to have represented, as of the Closing Date, that it 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.
(e) The Underwriter agrees, assuming all Seller-Provided Information
(as defined in Section 8(g)) is accurate and complete in all material
respects, to indemnify and hold harmless the Depositor, the Seller each
of the their officers and directors and each person who controls the
Depositor or the Seller 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 Underwriter 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 Underwriter under this Section 8(e)
shall be in addition to any liability which the Underwriter 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, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Depositor on
the one hand and the Underwriter 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 Underwriter 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 Underwriter 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 Underwriter
from time to time in negotiated sales of the related Securities.
The relative fault of the Underwriter 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 Underwriter, 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 Underwriter agree that it would not be just and
equitable if contributions pursuant to this paragraph were to be determined by
pro rata allocation (even if the Underwriter were treated as one entity for
such purposes) 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 as 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.
For purposes of this Section, in no case shall the Underwriter be
responsible for any amount in excess of (i) the amount received by the
Underwriter in connection with its resale of the Notes over (ii) the amount
paid by the Underwriter to the Depositor for the Notes by the Underwriter
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 Underwriter 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 Underwriter by or on behalf of the Seller concerning the assets
comprising the Trust, (ii) the information describing the characteristics of
the Mortgage Loans under the captions "Summary of Terms", "Risk Factors" and
"The Mortgage Pool" in the Prospectus Supplement and (iii) the information
contained in the Prospectus Supplement under the heading "The Seller".
(h) The Underwriter confirms that the information set forth in the
penultimate paragraph of the cover page, the information regarding the
Underwriter set forth under the caption "Underwriting" 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 Underwriter 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 Underwriter or
controlling persons thereof, or by or on behalf of the Depositor and shall
survive delivery of any Notes to the Underwriter.
SECTION 10. Termination of Agreement. The Underwriter 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(xxiv) of this Agreement shall occur and be continuing. In the event of any
such termination, the covenant set forth in Section 5(g), the provisions of
Section 7, the indemnity agreement set forth in Section 8, and the provisions
of Sections 9 and 15 shall remain in effect.
SECTION 11. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriter, shall be delivered or sent by mail, telex
or facsimile transmission to Bear, Xxxxxxx & Co. Inc., 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 Seller, shall be delivered or sent by mail, telex or
facsimile transmission to American Residential Holdings, Inc., 000 Xxxxxx
Xxxx Xxxxxx, Xxxxx 000, Xxx Xxx, Xxxxxxxxxx 00000.
SECTION 12. Persons Entitled to the Benefit of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriter
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 Underwriter 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 12, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
SECTION 13. Survival. The respective indemnities, representations,
warranties and agreements of the Depositor and the Underwriter 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
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 14. 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 15. 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 16. 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 17. 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.
* * *
If the foregoing correctly sets forth the agreement between the Depositor
and the Underwriter, please indicate your acceptance in the space provided for
the purpose below.
Very truly yours,
BEAR XXXXXXX ASSET BACKED
SECURITIES, INC.
By: /s/ Xxxxxxxx Xxxxxxxxx
----------------------
CONFIRMED AND ACCEPTED, as
of the date first above written:
BEAR, XXXXXXX & CO. INC.
By: /s/ Xxxxxxxx Xxxxxxxxx
---------------------------
ACKNOWLEDGED AND AGREED,
as of the date first above written,
but solely for the purpose of
Section 7 hereof:
AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.
By: /s/ Xxx X. Xxxxxx
--------------------------------------
SCHEDULE A
Mortgage Backed LIBOR Notes
Underwriter Principal Purchase Price
----------- --------- --------------
Bear, Xxxxxxx & Co. Inc. $229,000,000 100%
