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EXHIBIT 1.1
FUND AMERICA INVESTORS CORPORATION II
PASS-THROUGH CERTIFICATES
UNDERWRITING AGREEMENT
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June 26, 1998
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
1. Introduction. Fund America Investors Corporation II, a
Delaware corporation (the "Company"), from time to time proposes to issue and
sell Pass-Through Certificates ("Certificates") in various series (each a
"Series"), and, within each Series, in various classes, in one or more
offerings on terms determined at the time of sale. The Certificates of each
series will be issued pursuant to a pooling agreement (each, a "Pooling
Agreement") among the Company, as seller, one or more master servicers which
may include the Company and a third-party trustee (the "Trustee"). Upon
issuance, the Certificates of each series will evidence undivided interests
in the Trust Fund (as defined in the Pooling Agreement) established for such
series containing mortgages or mortgage related securities or, in the event
the Trust Fund, or a portion thereof, constitutes the upper tier of a
two-tier real estate mortgage investment conduit ("REMIC"), the Trust Fund
may contain interests issued by a lower tier trust which will contain
mortgages or mortgage related securities, all as described in the Prospectus
(as defined below). Terms not defined herein which are defined in the
Pooling Agreement shall have the meanings ascribed to them in the Pooling
Agreement.
Whenever the Company determines to make an offering of a Series
of Certificates (an "Offering") through you or an underwriting syndicate
managed or co-managed by you, it will offer to enter into an agreement
("Terms Agreement") providing for the sale of such Certificates to, and the
purchase and offering thereof by, you and such other co-managers and
underwriters, if any, which have been selected by you and have authorized you
to enter into such Terms Agreement and other related documentation on their
behalf (the "Underwriters," which term shall include you whether acting alone
in the sale of Certificates or as a co-manager or as a member of
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an underwriting syndicate). The Terms Agreement relating to each Offering shall
specify the principal amount of Certificates to be issued and their terms not
otherwise specified in the Pooling Agreement, the price at which the
Certificates are to be purchased by each of the Underwriters from the Company
and the initial public offering price or the method by which the price at which
the Certificates are to be sold will be determined. The Terms Agreement, which
shall be substantially in the form of Exhibit A hereto, may take the form of an
exchange of any standard form of written telecommunication between you and the
Company. Each Offering governed by this Agreement, as supplemented by the
applicable Terms Agreement, shall inure to the benefit of and be binding upon
the Company and each of the Underwriters participating in the Offering of such
Certificates.
The Company hereby agrees with the Underwriters as follows:
2. Representations and Warranties of the Company.
The Company represents and warrants to you as of the date hereof, and to the
Underwriters named in the applicable Terms Agreement as of the date of such
Terms Agreement, as follows:
(a) A registration statement, including a prospectus, and such
amendments thereto as may have been required to the date hereof, relating to
the Certificates and the offering thereof from time to time in accordance
with Rule 415 under the Securities Act of 1933, as amended ("Act"), have been
filed with the Securities and Exchange Commission ("Commission") and such
registration statement as amended has become effective. Such registration
statement as amended and the prospectus relating to the sale of Certificates
constituting a part thereof as from time to time amended or supplemented
(including any prospectus filed with the Commission pursuant to Rule 424 of
the rules and regulations of the Commission ("Rules and Regulations") under
the Act, including any documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Act which were filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") on or before the
Effective Date of the Registration Statement or the date of the Prospectus
Supplement, are respectively referred to herein as the "Registration
Statement" and the "Prospectus"; provided, however, that a supplement to the
Prospectus (a "Prospectus Supplement") prepared pursuant to Section 5(a)
hereof shall be deemed to have supplemented the Prospectus only with respect
to the Offering of the Series of Certificates to which it relates. The
conditions of Rule 415 under the Act have been satisfied with respect to the
Company and the Registration Statement.
(b) On the effective date of the Registration Statement, the
Registration Statement and the Prospectus conformed in all material respects
to the requirements of the Act and the Rules and Regulations, and did not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and on the date of each Terms Agreement, the
Registration Statement and the Prospectus will conform in all material
respects to the requirements of the Act and the Rules and Regulations, and
the Prospectus will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they are made, not misleading;
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provided, however, that the foregoing does not apply to (i) statements or
omissions in such documents based upon written information furnished to the
Company by or for the benefit of any Underwriter specifically for use therein or
(ii) any Current Report (as defined in Section 5(b) below) or in any amendment
thereof or supplement thereto, incorporated by reference in such Registration
Statement or such Prospectus (or any amendment thereof or supplement thereto).
(c) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus except as otherwise stated
therein, there has been no material adverse change in the condition,
financial or otherwise, earnings, affairs, regulatory situation or business
prospects of the Company whether or not arising in the ordinary course of
business.
(d) This Agreement has been, and the Pooling Agreement, when
executed and delivered as contemplated hereby and thereby will have been,
duly executed and delivered by the Company and each constitutes, or will
constitute when so executed and delivered, a legal, valid and binding
instrument enforceable against the Company in accordance with its terms,
subject, as to the enforceability of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting the rights of
creditors generally, and to general principles of equity and the discretion
of the court (regardless of whether enforceability of such remedies is
considered in a proceeding in equity or at law), and except that the
provisions relating to indemnification and contribution may be unenforceable
as against public policy.
(e) At the applicable Closing Date, each applicable Terms
Agreement will have been duly authorized, executed and delivered by the
Company and will be a legal, valid and binding obligation of the Company
enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance and other laws
affecting the rights of creditors generally, and to general principles of
equity and the discretion of the court (regardless of whether enforceability
of such remedies is considered in a proceeding in equity or at law), and
except that the provisions relating to indemnification and contribution may
be unenforceable as against public policy.
(f) The issuance of the Certificates has been duly authorized by
the Company and, when such Certificates are executed and authenticated in
accordance with the Pooling Agreement and delivered against payment pursuant
to this Agreement, such Certificates will be validly issued and outstanding;
and the Certificates will be entitled to the benefits provided by the Pooling
Agreement. The Certificates are in all material respects in the form
contemplated by the Pooling Agreement.
(g) Neither the Company nor the Trust Fund is or, as a result of
the offer and sale of the Certificates as contemplated in this Agreement will
become, an "investment company" as defined in the Investment Company Act of
1940, as amended (the "Investment Company Act"), or an "affiliated person" of
any such "investment company" that is registered or is required to be
registered under the Investment Company Act (or an "affiliated person" of any
such "affiliated person"), as such terms are defined in the Investment
Company Act.
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(h) The representations and warranties made by the Company in
the Pooling Agreement and made in any Officer's Certificate of the Company
delivered pursuant to the Pooling Agreement will be true and correct at the
time made and on the Closing Date.
3. Purchase, Sale and Delivery of Certificates. Subject to the
terms and conditions hereof, the delivery of the applicable mortgage loans or
mortgage related securities and in reliance upon the representations and
warranties set forth herein, the Company agrees to sell to the Underwriters
and the Underwriters agree to purchase the Certificates. Delivery of and
payment for the Certificates shall be made at your office or at such other
location as you shall make known at such time as shall be specified in the
applicable Terms Agreement, each such time being herein referred to as a
"Closing Date." Delivery of the Certificates shall be made by the Company to
the Underwriters against payment of the purchase price specified in the
applicable Terms Agreement in Federal Funds by wire or check. Unless
delivery is made through the facilities of the Depository Trust Company, the
Certificates so to be delivered will be in definitive, fully registered form,
in such denominations and registered in such names as you request, and will
be made available for inspection and packaging at your office at least
twenty-four hours prior to the applicable Closing Date.
4. Offering by Underwriters. It is understood that the
Underwriters propose to offer the Certificates for sale to the public as set
forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees
with you and the several Underwriters participating in the Offering of any
Series of Certificates that:
(a) In connection with the execution of each Terms Agreement,
the Company will prepare a Prospectus Supplement to be filed under the Act
setting forth the principal amount of Certificates covered thereby and their
terms not otherwise specified in the Prospectus, the price at which the
Certificates are to be purchased by the Underwriters from the Company, either
the initial public offering price or the method by which the price at which
the Certificates are to be sold will be determined, the selling concession
and reallowance, if any, any delayed delivery arrangements, and such other
information as you and the Company deem appropriate in connection with the
offering of the Certificates, but the Company will not file any amendments to
the Registration Statement or any amendments or supplements to the
Prospectus, unless it shall first have delivered copies of such amendments or
supplements to you, and you shall not have objected thereto promptly after
receipt thereof. The Company will advise you or your counsel promptly (i)
when notice is received from the Commission that any post-effective amendment
to the Registration Statement has become or will become effective, and (ii)
of any order or communication suspending or preventing, or threatening to
suspend or prevent, the offer and sale of the Certificates, or of any
proceedings or examinations that may lead to such an order or communication,
whether by or of the Commission or any authority administering any state
securities or Blue Sky law, as soon as the Company is advised thereof, and
will use its best efforts to prevent the issuance of any such order or
communication and to obtain as soon as possible its lifting, if issued.
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(b) The Company will cause any Computational Materials and any
Structural Term Sheets (each as defined in Section 8 below) with respect to
each Series of Certificates that are delivered by the Underwriters to the
Company pursuant to Section 8 to be filed with the Commission on a Current
Report on Form 8-K (a "Current Report") pursuant to Rule 13a-11 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") on the
business day immediately following the day on which such Computational
Materials and Structural Term Sheets are delivered to counsel for the Company
by any of the Underwriters prior to 10:30 a.m. (and will use its best efforts
to cause such Computational Materials and Structural Term Sheets to be so
filed prior to 2:00 p.m., New York time, on such business day), and will
promptly advise you when such Current Report has been so filed. The Company
will cause one Collateral Term Sheet (as defined in Section 9 below) with
respect to an Offering of a Series that is delivered by any of the
Underwriters to the Company in accordance with the provisions of Section 9 to
be filed with the Commission on a Current Report pursuant to Rule 13a-11
under the Exchange Act on the business day immediately following the day on
which such Collateral Term Sheet is delivered to counsel for the Company by
any of the Underwriters prior to 10:30 a.m. In addition, if at any time
prior to the availability of the related Prospectus Supplement, any of the
Underwriters has delivered to any prospective investor a subsequent
Collateral Term Sheet that reflects, in the reasonable judgment of such
Underwriter and the Company, a material change in the characteristics of the
mortgage loans or mortgage related securities for the related Series from
those on which a Collateral Term Sheet with respect to the related Series
previously filed with the Commission was based, the Company will cause any
such Collateral Term Sheet that is delivered by such Underwriter to the
Company in accordance with the provisions of Section 9 to be filed with the
Commission on a Current Report on the business day immediately following the
day on which such Collateral Term Sheet is delivered to counsel for the
Company by such Underwriter prior to 2:00 p.m. In each case, the Company
will promptly advise you when such Current Report has been so filed.
Notwithstanding the four preceding sentences, the Company shall have no
obligation to file any materials provided by any of the Underwriters pursuant
to Sections 8 and 9 which (i) in the reasonable determination of the Company
are not required to be filed pursuant to the ▇▇▇▇▇▇ Letters or the PSA Letter
(each as defined in Section 8 below), or (ii) contain erroneous information
or contain any untrue statement of a material fact or, when read in
conjunction with the Prospectus and Prospectus Supplement, omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; it being understood, however, that the
Company shall have no obligation to review or pass upon the accuracy or
adequacy of, or to correct, any Computational Materials or ABS Term Sheets
(as defined in Section 9 below) provided by such Underwriter to the Company
pursuant to Section 8 or Section 9 hereof. The Company shall give notice to
you and such Underwriter of its determination not to file any materials
pursuant to clause (i) of the preceding sentence and agrees to file such
materials if such Underwriter or you reasonably object to such determination
within one business day after receipt of such notice.
(c) If at any time when a prospectus relating to the
Certificates is required to be delivered under the Act any event occurs as a
result of which in the opinion of counsel for the Company or the Underwriters
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary to
make the
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statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Act, the Company promptly will prepare and file with the
Commission an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance; provided, however,
that (i) the Company will not be required to file any such amendment or
supplement with respect to any Computational Materials, Structural Term Sheets
or Collateral Term Sheets incorporated by reference in the Prospectus other than
any amendments or supplements of such Computational Materials or Structural Term
Sheets that are furnished to the Company by the Underwriter pursuant to Section
8(e) hereof or any amendments or supplements of such Collateral Term Sheets that
are furnished to the Company by the Underwriter pursuant to Section 9(d) hereof
which are required to be filed in accordance therewith and (ii) any such
amendment or update prepared at the request of the Underwriters or as required
by applicable securities laws more than nine months after the Closing Date shall
be at the expense of the Underwriters.
(d) With respect to each Series of Certificates, the Company
will make generally available to the holders of the Certificates and will
deliver to you, in each case as soon as practicable, an earnings statement
covering the twelve-month period beginning after the date of the Terms
Agreement in respect of such series of Certificates, which will satisfy the
provisions of Section 11(a) of the Act with respect to the Certificates.
(e) The Company will furnish to you copies of the Registration
Statement (two of which will be signed and will include all documents and
exhibits thereto or incorporated by reference therein), each related
preliminary prospectus, the Prospectus, and all amendments and supplements to
such documents, in each case as soon as available and in such quantities as
you request.
(f) The Company will use its best efforts arrange for the
qualification of the Certificates for sale and the determination of their
eligibility for investment under the laws of such jurisdictions as you
reasonably designate and will continue such qualifications in effect so long
as reasonably required for the distribution; provided, however, that the
Company shall not be required to qualify to do business in any jurisdiction
where it is not qualified on the date of the related Terms Agreement or to
take any action which would subject it to general or unlimited service of
process in any jurisdiction in which it is not, on the date of the related
Terms Agreement, subject to such service of process; and provided further
that the Underwriters will pay all costs and expenses associated therewith.
(g) The Company will pay all expenses incidental to the
performance of its obligations under this Agreement and any Terms Agreement
and will reimburse the Underwriters for any expenses (including fees and
disbursements of counsel and accountants) incurred by them in connection with
qualification of the Certificates and determination of their eligibility for
investment under the laws of such jurisdictions as you designate and the
printing of memoranda relating thereto, for any fees charged by the
nationally recognized statistical rating agencies for the rating of the
Certificates, for the filing fee of the National Association of Securities
Dealers,
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Inc. relating to the Certificates, if applicable, and for expenses incurred in
distributing preliminary prospectuses to the Underwriters.
(h) During the period when a prospectus is required by law to be
delivered in connection with the sale of the Certificates pursuant to this
Agreement, the Company will file or cause to be filed, on a timely and
complete basis, all documents that are required to be filed by the Company
with the Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(i) So long as the Certificates of a Series shall be
outstanding, the Company will deliver to you the annual statement of
compliance delivered to the Trustee pursuant to the Pooling Agreement and the
annual statement of a firm of independent public accountants furnished to the
Trustee pursuant to the Pooling Agreement as soon as such statements are
furnished to the Trustee.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters named in any Terms Agreement to purchase and
pay for the Certificates will be subject to the accuracy of the
representations and warranties on the part of the Company as of the date
hereof, the date of the applicable Terms Agreement and the applicable Closing
Date, to the accuracy of the statements made in any officers' certificates
(each an "Officer's Certificate") pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a)(i) At the time the applicable Terms Agreement is executed,
Deloitte & Touche and/or any other firm of certified independent public
accountants acceptable to you shall have furnished to you a letter, addressed
to you, and in form and substance satisfactory to you in all respects,
stating in effect that using the assumptions and methodology used by the
Company, all of which shall be described in such letter or the Prospectus
Supplement, they have recalculated such numbers, percentages and weighted
average lives set forth in the Prospectus as you may reasonably request,
compared the results of their calculations to the corresponding items in the
Prospectus, and found each such number, percentage, and weighted average life
set forth in the Prospectus to be in agreement with the results of such
calculations. To the extent historical financial delinquency or related
information is included with respect to one or more master servicers, such
letter or letters shall also relate to such information.
(a)(ii) At the Closing Date, Deloitte & Touche and/or any other
firm of certified independent public accountants acceptable to you shall have
furnished to you a letter, addressed to you, and in form and substance
satisfactory to you in all respects, relating to the extent such information
is not covered in the letter or letters provided pursuant to clause (a)(i),
to a portion of the information set forth on the Schedule attached to the
Pooling Agreement and the characteristics of the mortgage loans or mortgage
related securities, as presented in the Prospectus Supplement or the Form 8-K
relating thereto, or if a letter relating to the same information is provided
to the Trustee, indicating that you are entitled to rely upon its letter to
the Trustee.
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(b) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there shall not
have been any change, or any development involving a prospective change, in
or affecting the business or properties of the Company or any of its
affiliates the effect of which, in any case, is, in your judgment, so
material and adverse as to make it impracticable or inadvisable to proceed
with the Offering or the delivery of the Certificates as contemplated by the
Registration Statement and the Prospectus. All actions required to be taken
and all filings required to be made by the Company under the Act and the
Exchange Act prior to the sale of the Certificates shall have been duly taken
or made; and prior to the applicable Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted, or to the knowledge
of the Company or you, shall be contemplated by the Commission or by any
authority administering any state securities or Blue Sky law.
(c) Unless otherwise specified in any applicable Terms Agreement
for a Series, the Certificates shall be rated in one of the four highest
grades by one or more nationally recognized statistical rating agencies
specified in said Terms Agreement.
(d) You shall have received the opinion of counsel, dated the
applicable Closing Date, to the effect that:
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its assets and conduct
its business as described in the Prospectus. The Company has no subsidiaries.
2. The Underwriting Agreement, the Terms Agreement, and the
Purchase Agreement have been duly authorized, executed and delivered by the
Company and assuming due and valid authorization and execution by the
Underwriter, each constitutes a legal, valid and binding obligation of the
Company.
3. The Pooling Agreement has been duly and validly authorized,
executed and delivered by the Company and assuming due and valid
authorization and execution by the other parties thereto, constitutes the
valid and binding agreement of the Company, enforceable in accordance with
its terms.
4. Upon due execution and authentication by the Trustee of the
Certificates in accordance with the Pooling Agreement, and delivery to, and
payment for the Certificates by the Underwriter, as provided in the
Underwriting Agreement and the Terms Agreement, the Certificates will be
validly issued and entitled to the benefits of the Pooling Agreement.
5. The Registration Statement has become effective under the
Securities Act, and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act.
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6. The statements in the Prospectus under the heading "Certain
Federal Income Tax Consequences" and in the Prospectus Supplement under the
heading "Certain Federal Income Tax Considerations," to the extent that they
constitute matters of law or legal conclusions have been prepared or reviewed
by us and provide a fair summary of such law or conclusions.
7. The Pooling Agreement is not required to be qualified under
the Trust Indenture Act of 1939, as amended, and neither the Company nor the
Trust is required to be registered under the Investment Company Act of 1940,
as amended.
Each opinion also shall relate to such other matters as may be
specified in the related Terms Agreement or as to which you reasonably may
request. In rendering any such opinion, counsel for the Company may rely on
certificates of responsible officers of the Company, the Trustee, and public
officials or, as to matters of law other than Delaware or Federal law, on
opinions of other counsel (copies of which opinions shall be delivered to
you), provided that, in cases of opinions of other counsel, counsel for the
Company shall include in its opinion a statement of its belief that both it
and you are justified in relying on such opinions.
(e) You shall have received from counsel for the Company a
letter, dated as of the Closing Date, stating that you may rely on the
opinions delivered by such firm under the Pooling Agreement and to the rating
agency or agencies rating the Certificates as if such opinions were addressed
directly to you (copies of which opinions shall be delivered to you).
(f) You shall have received from counsel for the Underwriters,
if such counsel is different from counsel to the Company, such opinion or
opinions, dated as of the Closing Date, with respect to the validity of the
Certificates, the Registration Statement, the Prospectus and other related
matters as the Underwriters may require, and the Company shall have furnished
to such counsel such documents as they may have requested from it for the
purpose of enabling them to pass upon such matters.
(g) You shall have received Officer's Certificates signed by
such of the principal executive, financial and accounting officers of the
Company as you may request, dated as of the Closing Date, in which such
officers, to the best of their knowledge after reasonable investigation,
shall state that the representations and warranties of the Company in this
Agreement are true and correct; that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date; that no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated; that,
subsequent to the respective dates as of which information is given in the
Prospectus, and except as set forth or contemplated in the Prospectus, there
has not been any material adverse change in the general affairs, business,
key personnel, capitalization, financial condition or results of operations
of the Company; and that except as otherwise stated in the Prospectus, there
are no material actions, suits or proceedings pending before any court or
governmental agency, authority or body or, to
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their knowledge, threatened, affecting the Company or the transactions
contemplated by this Agreement.
The Company will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects with respect to a particular
Offering when and as provided in this Agreement and the related Terms
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement and the related Terms Agreement shall not be in
all material respects reasonably satisfactory in form and substance to you,
this Agreement (with respect to the related Offering) and the related Terms
Agreement and all obligations of the Underwriters hereunder (with respect to
the related Offering) and thereunder may be canceled at, or at any time prior
to, the related Closing Date by the Underwriter. Notice of such cancellation
shall be given to the Company in writing, or by telephone or telegraph
confirmed in writing.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act against
any and all losses, claims, damages, liabilities and expenses whatsoever
(including but not limited to attorneys' fees and any and all expenses
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange 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
Registration Statement relating to the applicable Series of Certificates (the
"Applicable Registration Statement") as it became effective or in any
amendment or supplement thereof, or in the Applicable Registration Statement
or the related Prospectus, or in any amendment thereof, or arise out of or
are based upon the omission or alleged omission (in the case of any
Computational Materials or ABS Term Sheets in respect of which the Company
agrees to indemnify the Underwriters, as set forth below, when such are read
in conjunction with the related Prospectus and Prospectus Supplement) to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that (i) the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein (A) in reliance upon and in conformity with written information
furnished to the Company as herein stated by or on behalf of the Underwriters
specifically for use in connection with the preparation thereof or (B) in any
Current Report or any amendment or supplement thereof, except to the extent
that any untrue statement or alleged untrue statement therein or omission
therefrom results (or is alleged to have resulted) directly from an error (a
"Mortgage Pool Error") in the information concerning the characteristics of
the mortgage loans or mortgage related securities furnished by the Company to
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the Underwriters in writing or by electronic transmission that was used in
the preparation of either (x) any Computational Materials or ABS Term Sheets
(or amendments or supplements thereof) included in such Current Report (or
amendment or supplement thereof) or (y) any written or electronic materials
furnished to prospective investors on which the Computational Materials (or
amendments or supplements) were based, (ii) such indemnity with respect to
any Corrected Statement (as defined below) in such Prospectus (or Prospectus
Supplement thereto) shall not inure to the benefit of the Underwriters (or
any person controlling any Underwriter) from whom the person asserting any
loss, claim, damage or liability purchased the Certificates of the related
Series that are the subject thereof if such person did not receive a copy of
a Prospectus Supplement to such Prospectus at or prior to the confirmation of
the sale of such Certificates and the untrue statement or omission of a
material fact contained in such Prospectus (or Prospectus Supplement thereto)
was corrected (a "Corrected Statement") in such other supplement and such
supplement was furnished by the Company to the Underwriters prior to the
delivery of such confirmation, and (iii) such indemnity with respect to any
Mortgage Pool Error shall not inure to the benefit of the Underwriters (or
any person controlling any Underwriter) from whom the person asserting any
loss, claim, damage or liability received any Computational Materials (or any
written or electronic materials on which the Computational Materials are
based) or ABS Term Sheets that were prepared on the basis of such Mortgage
Pool Error, if, prior to the time of confirmation of the sale of the
applicable Series of Certificates to such person, the Company notified the
Underwriters in writing of the Mortgage Pool Error or provided in written or
electronic form information superseding or correcting such Mortgage Pool
Error (in any such case, a "Corrected Mortgage Pool Error"), and the
Underwriters failed to notify such person thereof or to deliver to such
person corrected Computational Materials (or underlying written or electronic
materials) or ABS Term Sheets. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) The Underwriters severally, and not jointly, agree to
indemnify and hold harmless the Company, each of the directors of the
Company, each of the officers of the Company who shall have signed the
Registration Statement, and each other person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any losses, claims, damages, liabilities and expenses
whatsoever (including but not limited to attorneys' fees and any and all
expenses reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several,
to which they or any of them may become subject under the Act, the Exchange
Act or otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon (A)
any untrue statement or alleged untrue statement of a material fact contained
in the Applicable Registration Statement, as originally filed or any
amendment thereof, or any related preliminary prospectus or the Prospectus,
or in any amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that any such
loss, claim, damage, liability or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance
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upon and in conformity with written information furnished to the Company, by or
on behalf of such Underwriter expressly for use therein; or (B) any
Computational Materials or ABS Term Sheets (or amendments or supplements
thereof) furnished to the Company by such Underwriter pursuant to Section 8 and
incorporated by reference in such Registration Statement or the related
Prospectus, Prospectus Supplement or any amendment or supplement thereof (except
that no such indemnity shall be available for any losses, claims, damages or
liabilities, or actions in respect thereof resulting from any Mortgage Pool
Error, other than a Corrected Mortgage Pool Error). This indemnity will be in
addition to any liability which the Underwriters may otherwise have. The Company
acknowledges that, unless otherwise set forth in the applicable Terms Agreement,
the statements set forth in the last paragraph of the cover page and under the
caption "Method of Distribution" and the stabilization legend required by Item
502(d)(1) under Regulation S-K of the Act included in the Prospectus Supplement
relating to a Series of Certificates constitute the only information furnished
in writing by or on behalf of any Underwriter expressly for use in the
Applicable Registration Statement or the Prospectus or in any amendment thereof
or supplement thereto, as the case may be (other than any Computational
Materials or ABS Term Sheets (or amendments or supplements thereof) furnished to
the Company by such Underwriter), and each Underwriter confirms, on its behalf,
that such statements are correct.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but
the failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory
to such indemnified party. Notwithstanding the foregoing, the indemnified
party or parties shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the
expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action,
or (iii) such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are different from
or additional to those available to one or all of the indemnifying parties
(in which case the indemnifying parties shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the indemnifying
parties. Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim or
action effected without its written consent; provided, however, that such
consent was not unreasonably withheld.
-12-
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(d) In order to provide for contribution in circumstances in
which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable, on grounds of public policy or otherwise, from the
Company or the Underwriters or is insufficient to hold harmless a party
indemnified thereunder, the Company and the Underwriters shall contribute to
the aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but
after deducting in the case of losses, claims, damages, liabilities and
expenses suffered by the Company any contribution received by the Company
from persons, other than the Underwriters, who may also be liable for
contribution, including persons who control the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, officers of the
Company who signed the Applicable Registration Statement and directors of the
Company) to which the Company and the Underwriters may be subject (i) in the
case of any losses, claims, damages and liabilities (or actions in respect
thereof) which do not arise out of or are not based upon any untrue statement
or omission of a material fact in any Computational Materials or ABS Term
Sheets (or any amendments or supplements thereof), in such proportions as is
appropriate to reflect the relative benefits received by the Company on one
hand and the Underwriters on the other from the Offering of the Certificates
as to which such loss, liability, claim, damage or expense is claimed to
arise or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 7(c) hereof, in such proportion
as is appropriate to reflect not only the relative benefits referred to above
but also the relative fault of the Company on one hand and the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations or (ii) in the case of any losses, claims,
damages and liabilities (or actions in respect thereof) which arise out of or
are based upon any untrue statement or omission of a material fact in any
Computational Materials or ABS Term Sheets (or any amendments or supplements
thereof) or in any written or electronic materials distributed to prospective
investors on which the Computational Materials are based, in such proportion
as is appropriate to reflect the relative fault of the Company on the one
hand and the Underwriter that furnished such Computational Materials or ABS
Term Sheets on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable considerations;
provided, however, that in no case shall such Underwriter be responsible
under this subparagraph (ii) for any amount in excess of the aggregate
Purchase Price for the Offered Certificates.
The relative benefits received by the Company on one hand
and the Underwriters on the other shall be deemed to be in the same
proportion as (x) the total proceeds from the Offering (net of underwriting
discounts and commissions but before deducting expenses) received by the
Company and (y) the underwriting discounts and commissions received by the
Underwriters, respectively, in each case as set forth in the Terms Agreement
in respect of the Offering of the Certificates as to which such loss,
liability, claim, damage or expense is claimed to arise. The relative fault
of the Company on one hand and the Underwriters
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on the other shall be determined by reference to, among other things, (A) in the
case of clause (i) of the preceding paragraph, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on one hand or
the Underwriters on the other, (B) in the case of clause (ii) of the preceding
paragraph, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to any untrue
statement or omission of a material fact in any Computational Materials or ABS
Term Sheets (or any amendments or supplements thereof) or in any written or
electronic materials distributed by the applicable Underwriter to prospective
investors on which the Computational Materials are based, and (C) in the case of
either clause (i) or clause (ii) of the preceding paragraph, the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7(d)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 7(d), (x) except as otherwise
provided in Section 7(d)(ii), in no case shall the Underwriters be liable or
responsible for any amount in excess of the underwriting discount set forth in
the Terms Agreement relating to the Certificates as to which such losses,
claims, damages, liabilities or expenses are claimed to arise, and (y) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 7(d), each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the Applicable
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) of this Section 7(d). Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section 7(d), notify such party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 7(d) or
otherwise. No party shall be liable for contribution with respect to any action
or claim settled without its consent; provided, however, that such consent was
not unreasonably withheld.
8. Computational Materials and Structural Term Sheets. (a) Not
later than 2:00 p.m., New York time, on the business day before the date on
which the Current Report relating to the Certificates of a Series is required
to be filed by the Company with the Commission pursuant to Section 5(b)
hereof, you and any other applicable Underwriter shall deliver to the
Company, and unless otherwise agreed to by the Company, in a form reasonably
convertible to an ▇▇▇▇▇ filing format, a copy of all materials provided by
the Underwriters to prospective investors in such Certificates which
constitute (i) "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 ▇▇▇▇▇▇, Peabody Acceptance Corporation I, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
Co.
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Incorporated, and ▇▇▇▇▇▇ Structured Asset Corporation and the no-action letter
dated May 27, 1994 issued by the Division of Corporation Finance of the
Commission to the Public Securities Association (together, the "▇▇▇▇▇▇ Letters")
and the filing of such material is a condition of the relief granted in such
letter (such materials being the "Computational Materials"), and (ii)
"Structural Term Sheets" within the meaning of the no-action letter dated
February 17, 1995 issued by the Division of Corporation Finance of the
Commission to the Public Securities Association (the "PSA Letter") and the
filing of such material is a condition of the relief granted in such letter
(such materials being the "Structural Term Sheets"). Each delivery of
Computational Materials and Structural Term Sheets to the Company by you and any
other applicable Underwriter pursuant to this paragraph (a) shall be effected by
delivering a copy of such materials to counsel for the Company on behalf of the
Company at the address specified by the Company and one copy of such materials
to the Company.
(b) You and each other Underwriter, by virtue of its having
executed and delivered the related Terms Agreement, which shall incorporate
this Section 8(b) by reference, represents and warrants to and agrees with
the Company, as of the date of the related Terms Agreement and as of the
Closing Date, that:
(i) the Computational Materials furnished to the
Company pursuant to Section 8(a) constitute (either in
original, aggregated or consolidated form) all of the
materials furnished to prospective investors by such
Underwriter prior to the time of delivery thereof to the
Company that are required to be filed with the Commission
with respect to the Offering of the Certificates in
accordance with the ▇▇▇▇▇▇ Letters, and such Computational
Materials comply with the requirements of the ▇▇▇▇▇▇
Letters;
(ii) the Structural Term Sheets furnished to the
Company pursuant to Section 8(a) constitute all of the
materials furnished to prospective investors by such
Underwriter prior to the time of delivery thereof to the
Company that are required to be filed with the Commission
as "Structural Term Sheets" with respect to the related
Offering of the Certificates in accordance with the PSA
Letter, and such Structural Term Sheets comply with the
requirements of the PSA Letter;
(iii) on the date any such Computational
Materials or Structural Term Sheets with respect to the
Offering of the Certificates (or any written or electronic
materials furnished to prospective investors on which the
Computational Materials are based) were last furnished to
each prospective investor and on the date of delivery
thereof to the Company pursuant to Section 8(a) and on the
related Closing Date, such Computational Materials (or such
other materials) or Structural Term Sheets did not and will
not include any untrue statement of a material fact or,
when read in conjunction with the related Prospectus and
Prospectus
-15-
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Supplement, omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and
(iv) all Computational Materials (or underlying
materials distributed to prospective investors on which the
Computational Materials were based) or Structural Term
Sheets furnished to prospective investors contained and
will contain a legend, prominently displayed on the first
page thereof, to the effect that the Company has not
prepared, reviewed or participated in the preparation of
such materials and is not responsible for the accuracy
thereof.
Notwithstanding the foregoing, you and each such Underwriter make no
representation or warranty as to whether any Computational Materials or
Structural Term Sheets (or any written or electronic materials on which the
Computational Materials are based) included or will include any untrue
statement resulting directly from any Mortgage Pool Error (except any
Corrected Mortgage Pool Error, with respect to materials prepared after the
receipt by the Underwriters from the Company of notice of such Corrected
Mortgage Pool Error or materials superseding or correcting such Corrected
Mortgage Pool Error).
(c) Each Underwriter delivering Computational Materials shall
cause a firm of public accountants to furnish to the Company a letter, dated
as of the date on which such Underwriter delivers any Computational Materials
(which term shall be deemed to include, for purposes of this paragraph (c),
calculated statistical information delivered to prospective investors in the
form of a Structural Term Sheet) to the Company pursuant to Section 8(a), in
form and substance satisfactory to the Company, stating in effect that they
have verified the mathematical accuracy of any calculations performed by such
Underwriter and set forth in such Computational Materials.
(d) The Underwriters acknowledge and agree that the Company has
not authorized and will not authorize the distribution of any Computational
Materials (or any written or electronic materials on which the Computational
Materials are based) or Structural Term Sheets to any particular prospective
investor, and agrees that any Computational Materials or Structural Term
Sheets with respect to any Series of Certificates furnished to prospective
investors shall include a disclaimer in the form described in paragraph (b)
(iv) above. The Underwriters agree that they will not represent to
prospective investors that any Computational Materials or Structural Term
Sheets were prepared or disseminated on behalf of the Company.
(e) If, at any time when a prospectus relating to the
Certificates of a Series is required to be delivered under the Act, it shall
be necessary to amend or supplement the related Prospectus or Prospectus
Supplement as a result of an untrue statement of a material fact contained in
any Computational Materials or Structural Term Sheets provided by an
Underwriter pursuant to this Section 8 or the omission to state therein a
material fact required, when considered in conjunction with the related
-16-
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Prospectus and Prospectus Supplement, to be stated therein or necessary to
make the statements therein, when read in conjunction with the related
Prospectus and Prospectus Supplement, not misleading, or if it shall be
necessary to amend or supplement any Current Report relating to any
Computational Materials or Structural Term Sheets to comply with the Act or
the rules thereunder, such Underwriter promptly will prepare and furnish to
the Company for filing with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will effect
such compliance. Such Underwriter will deliver an Officer's Certificate to
the Company representing and warranting to the Company that, as of the date
of delivery of such amendment or supplement to the Company, such amendment or
supplement will not include any untrue statement of a material fact or, when
read in conjunction with the related Prospectus and Prospectus Supplement,
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that such
Underwriter will make no representation or warranty as to whether any such
amendment or supplement will include any untrue statement resulting directly
from any Mortgage Pool Error (except any Corrected Mortgage Pool Error, with
respect to any such amendment or supplement prepared after the receipt by
such Underwriter from the Company of notice of such Corrected Mortgage Pool
Error or materials superseding or correcting such Corrected Mortgage Pool
Error). The Company shall have no obligation to file such amendment or
supplement if (i) the Company determines that such amendment or supplement
contains any untrue statement of a material fact or, when read in conjunction
with the related Prospectus and Prospectus Supplement, omits 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
Company shall have no obligation to review or pass upon the accuracy or
adequacy of, or to correct, any such amendment or supplement provided by such
Underwriter to the Company pursuant to this paragraph (e) or (ii) the Company
reasonably determines that such filing is not required under the Act and such
Underwriter does not object as provided below. The Company shall give notice
to such Underwriter of its determination not to file an amendment or
supplement pursuant to clause (ii) of the preceding sentence and agrees to
file such amendment or supplement if such Underwriter reasonably objects to
such determination within one business day after receipt of such notice.
9. Collateral Term Sheets. (a) Prior to the delivery of any
"Collateral Term Sheet" within the meaning of the PSA Letter, the filing of
which material is a condition of the relief granted in such letter (such
material being the "Collateral Term Sheets"), to a prospective investor in
the Certificates, the applicable Underwriter shall notify the Company and its
counsel by telephone of its intention to deliver such materials and the
approximate date on which the first such delivery of such materials is
expected to occur. Not later than 10:30 a.m., New York time, on the business
day immediately following the date on which any Collateral Term Sheet was
first delivered to a prospective investor in the Certificates of an offered
series, such applicable Underwriter shall deliver to the Company, and unless
otherwise agreed to by the Company, in a form reasonably convertible to an
▇▇▇▇▇ format, a complete copy of all materials provided by such Underwriter
to prospective investors in such Certificates which constitute "Collateral
Term Sheets." Each delivery of a Collateral Term Sheet to the Company
pursuant to this paragraph (a) shall be effected by delivering a copy of such
materials to counsel for the Company on behalf of the Company at the address
specified by the Company and one copy of such materials to the Company.
(Collateral Term Sheets and Structural Term Sheets are, together, referred to
herein
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as "ABS Term Sheets.") At the time of each such delivery, such Underwriter shall
indicate in writing that the materials being delivered constitute Collateral
Term Sheets, and, if there has been any prior such delivery with respect to the
related Series, shall indicate whether such materials differ in any material
respect from any Collateral Term Sheets previously delivered to the Company with
respect to such Series pursuant to this Section 9(a) as a result of the
occurrence of a material change in the characteristics of the related Mortgage
Loans.
(b) You and each other Underwriter, by virtue of its having
executed and delivered the related Terms Agreement, which shall incorporate
this Section 9(b) by reference, represents and warrants to and agrees with
the Company as of the date of the related Terms Agreement and as of the
Closing Date, that:
(i) The Collateral Term Sheets furnished to the Company
pursuant to Section 9(a) constitute all of the materials
furnished to prospective investors by such Underwriter prior to
time of delivery thereof to the Company that are required to be
filed with the Commission as "Collateral Term Sheets" with
respect to the related Offering of the Certificates in accordance
with the PSA Letter, and such Collateral Term Sheets comply with
the requirements of the PSA Letter;
(ii) On the date any such Collateral Term Sheets with
respect to the Offering of the Certificates were last furnished
to each prospective investor and on the date of delivery thereof
to the Company pursuant to Section 9(a) and on the related
Closing Date, such Collateral Term Sheets did not and will not
include any untrue statement of a material fact or, when read in
conjunction with the Prospectus and Prospectus Supplement, omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(iii) such Underwriter has not represented to any
prospective investor that any Collateral Term Sheets with respect
to any Series were prepared or disseminated on behalf of the
Company, and, except as otherwise disclosed by such Underwriter
to the Company in writing prior to the date hereof, all
Collateral Term Sheets previously furnished to prospective
investors included a disclaimer to the effect set forth in
Section 8(b)(iv).
Notwithstanding the foregoing, you and each such Underwriter make no
representation or warranty as to whether any Collateral Term Sheet included
or will include any untrue statement or material omission resulting directly
from any Mortgage Pool Error (except any Corrected Mortgage Pool Error, with
respect to materials prepared after the receipt by such Underwriter from the
Company of notice of such Corrected Mortgage Pool Error or materials
superseding or correcting such Corrected Mortgage Pool Error).
(c) Each Underwriter delivering Collateral Term Sheets
acknowledges and agrees that any Collateral Term Sheets with respect to any
Series of Certificates furnished to prospective investors from and after the
date hereof shall include a disclaimer to the effect set forth in Section
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8(d) hereof, and to the effect that the information contained in such
materials supersedes the information contained in any prior Collateral Term
Sheet with respect to such Series of Certificates being offered and will be
superseded by the description of the related Mortgage Loans in the related
Prospectus Supplement. The Underwriters agree that they will not represent
to any prospective investors that any Collateral Term Sheets were prepared or
disseminated on behalf of the Company.
(d) If, at any time when a prospectus relating to the
Certificates of a Series is required to be delivered under the Act, it shall
be necessary to amend or supplement the related Prospectus as a result of an
untrue statement of a material fact contained in any Collateral Term Sheets
provided by an Underwriter pursuant to this Section 9 or the omission to
state therein a material fact required, when considered in conjunction with
the related Prospectus and Prospectus Supplement, to be stated therein or
necessary to make the statements therein, when read in conjunction with the
related Prospectus and Prospectus Supplement, not misleading, or if it shall
be necessary to amend or supplement any Current Report relating to any
Collateral Term Sheets to comply with the Act or the rules thereunder, such
Underwriter promptly will prepare and furnish to the Company for filing with
the Commission an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance. Such
Underwriter will deliver an Officer's Certificate to the Company representing
and warranting to the Company that, as of the date of delivery of such
amendment or supplement to the Company, such amendment or supplement will not
include any untrue statement of a material fact or, when read in conjunction
with the related Prospectus and Prospectus Supplement, omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, such Underwriter will
make no representation or warranty as to whether any such amendment or
supplement will include any untrue statement resulting directly from any
Mortgage Pool Error (except any Corrected Mortgage Pool Error, with respect
to any such amendment or supplement prepared after the receipt by such
Underwriter from the Company of notice of such Corrected Mortgage Pool Error
or materials superseding or correcting such Corrected Mortgage Pool Error).
The Company shall have no obligation to file such amendment or supplement if
the Company determines that (i) such amendment or supplement contains any
untrue statement of a material fact or, when read in conjunction with the
related Prospectus and Prospectus Supplement, omits 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 Company shall have no
obligation to review or pass upon the accuracy or adequacy of, or to correct,
any such amendment or supplement provided by such Underwriter to the Company
pursuant to this paragraph (d) or (ii) such filing is not required under the
Act. The Company shall give notice to such Underwriter of its determination
not to file an amendment or supplement pursuant to clause (ii) of the
preceding sentence.
10. Default of Underwriters. If any Underwriter or Underwriters
participating in an Offering of Certificates default in their obligations to
purchase Certificates hereunder and under the Terms Agreement and the
aggregate purchase price of Certificates which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the
aggregate purchase price of the Certificates then being purchased, you may
make arrangements
-19-
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satisfactory to the Company for the purchase of such Certificates by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective total commitments as set forth in
the applicable Terms Agreement (for all classes of Certificates), to purchase
the Certificates which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters so default and the
aggregate purchase price of Certificates with respect to which such default or
defaults occur is more than 10% of the aggregate purchase price of Certificates
then being purchased, and arrangements satisfactory to you and the Company for
the purchase of such Certificates by other persons are not made within 36 hours
after such default, the Terms Agreement as to which such offering relates will
terminate without liability on the part of any non-defaulting Underwriter or the
Company, except as provided in Section 11. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
11. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties, and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the result
thereof, made by or on behalf of any Underwriter or the Company or any of its
officers or directors or any controlling person, and will survive delivery of
and payment for the Certificates and any termination of this Agreement or any
Terms Agreement, including any termination pursuant to Section 10.
12. Termination. You shall have the right to terminate any
Terms Agreement at any time prior to the applicable Closing Date if any
domestic or international event or act or occurrence has materially
disrupted, or in your opinion will in the immediate future materially
disrupt, securities markets; or if trading on the New York or American Stock
Exchanges shall have been suspended, or minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required on the New York or American Stock Exchanges by the New York or
American Stock Exchanges or by order of the Commission or any other
governmental authority having jurisdiction; or if the United States shall
have become involved in a war or major hostilities; or if a banking
moratorium has been declared by a state or Federal authority, or if a banking
moratorium in foreign exchange trading by major international banks or
persons has been declared; or if any new restriction materially and adversely
affecting the distribution of the Series of Certificates as to which such
Terms Agreement relates shall have become effective; or if there shall have
been such change in the market for securities in general or in political,
financial or economic conditions as in your judgment would be so materially
adverse as to make it inadvisable to proceed with the Offering, sale and
delivery of the Series of Certificates as to which such Terms Agreement
relates on the terms contemplated in such Terms Agreement. Any notice of
termination pursuant to this Section 12 shall be by telephone, telex, or
telegraph, confirmed in writing by letter.
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13. Notices. All communications hereunder will be in writing,
and, if sent to the Underwriters, will be mailed, delivered or telegraphed
and confirmed to you at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
General Counsel or if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at Plaza Tower One, Suite 1200, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇; provided, however, that any notice to an Underwriter pursuant to
Section 7 will be mailed, delivered or telegraphed to such Underwriter at the
address furnished by it.
14. Successors. This Agreement and the Terms Agreement will
inure to the benefit of and be binding upon the parties hereto and thereto,
and their respective successors and the officers and directors and
controlling persons referred to in Section 7, and no other person will have
any right or obligation hereunder or thereunder.
15. Representation of Underwriters. You will act for the
several Underwriters in connection with each Offering of Certificates
governed by this Agreement, and any action under this Agreement and any Terms
Agreement taken by you will be binding upon all the Underwriters identified
in such Terms Agreement.
16. Construction. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York,
without giving effect to principles of conflict of laws.
-21-
22
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof,
whereupon it will become a binding agreement among the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
FUND AMERICA INVESTORS CORPORATION II
By: ---------------------------------
Name:
Title:
The foregoing Underwriting Agreement
hereby is confirmed and accepted
as of the date first above written.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: ----------------------
Title:
-22-
23
EXHIBIT A
FUND AMERICA INVESTORS CORPORATION II
Pass-Through Certificates
FORM OF TERMS AGREEMENT
-----------------------
Dated: _________, 199_
To: FUND AMERICA INVESTORS CORPORATION II [AND _____________]
Re: Underwriting Agreement dated June __, l998
Series Designation: Series 19 __ - __
Class Designation Schedule:
Terms of the Certificates:
-------------------------
Original
Principal Interest Price to
Class Amount Rate Public(1)(2)
----- --------- -------- ------------
----------------------------
(1) Do not include if the Certificates will be offered from time to time by
the Underwriter in negotiated transactions at varying prices to be determined
at the time of sale.
(2) Plus accrued interest, if any, at the applicable rate from _____________ .
Distribution Dates: The __th day of each month or, if such __th day is not a
business day, the next succeeding business day commencing ________________ .
-23-
24
Certificate Rating:
------------------
Mortgage Assets: The initial amounts to be included in any Reserve Fund and
other accounts are as set forth, and the Mortgage Loans to be included in the
Trust Fund are as described, in Annex A hereto.
Purchase Price: The aggregate purchase price payable by the Underwriter for the
Certificates covered by this Agreement will be $_________________. [Purchase
price may also be separately stated by class.]
Credit Enhancement:
[Include pool policies, letters of credit, bonds, subordination and similar
arrangements.]
Closing Date: ______, 19__, ____ a.m., N.Y. Time
------------
The undersigned, agrees, subject to the terms and provisions of the
above-referenced Underwriting Agreement, which is incorporated herein in its
entirety and made a part hereof, to purchase the respective principal amounts of
the Classes of the above-referenced Series of Certificates set forth [herein]
[on Schedule I attached hereto].
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
------------------------
Senior Managing Director
[ADDITIONAL UNDERWRITERS]
By:
--------------------------
--------------------------
Title:
Accepted:
FUND AMERICA INVESTORS CORPORATION II
By:
-------------------------
-2-
25
Schedule I (for Multiple Underwriters)
--------------------------------------
Underwriters
Name Class Class Class Class Class
---- ----- ----- ----- ----- -----
Bear, ▇▇▇▇▇▇▇ $ $ $ $ $
& Co. Inc.
[Other
Underwriters]
----- ----- ----- ----- -----
Total ===== ===== ===== ===== ======
-3-
26
FUND AMERICA INVESTORS CORPORATION II
Pass-Through Certificates
TERMS AGREEMENT
---------------
Dated: June 26, 1998
To: FUND AMERICA INVESTORS CORPORATION II
Re: Underwriting Agreement dated June 26, 1998
Series Designation: Series 1998-B
Class Designation Schedule: Class 1A, Class 2A
Terms of the Certificates:
-------------------------
Original Principal Pass-Through
Class Amount Interest Rate
----- ------------------ -------------
1A $ 24,651,553 (1)
2A $ 26,051,553 (1)
---------------------
(1) The effective per annum interest rate borne by either Class of
Certificates during each Interest Accrual Period with respect to a
Distribution Date will equal a fraction, expressed as a percentage
truncated at the fourth decimal place, the numerator of which is equal to
the aggregate amount in respect of interest paid on the Pooled
Certificates relating to each Class the related Interest Accrual Period
multiplied by 12, and the denominator of which is the principal amount of
such Class of the Certificates immediately prior to such Distribution
Date. Under certain circumstances, the principal amount of either Class of
the Certificates could be paid in full while interest would remain
payable, in which case, the calculation of the effective per annum
interest rate borne by the Certificates would not be meaningful.
27
Distribution Dates: With respect to each month, beginning in July 1998, the
25th day of such month, or, if such is not a Business Day, then on the first
Business Day (as defined herein) after the 25th day of each month. A
"Business Day" means a day other than a Saturday, a Sunday or a day on which
banking institutions in New York, New York or the city in which the corporate
trust office of the Trustee is located are authorized or obligated by law or
executive order to be closed.
Certificate Rating: "Aaa" by ▇▇▇▇▇'▇ Investors Service, Inc. and "AAA" by
Fitch IBCA, Inc.
Form of Certificates: Book-entry (The Depository Trust Company).
Trust Fund Assets: The Pooled Certificates to be included in the Trust Fund
are as described in Schedule A hereto.
Purchase Price: The aggregate purchase price payable by the Underwriter for
the Certificates covered by this Agreement will be 110.0% of the principal
balance of the Certificates plus accrued interest from June 1, 1998 to, but
not including, the Closing Date.
Closing Date: June 30, 1998, 9:00 a.m., New York time
Computational Materials and Term Sheets: The Underwriter has not prepared
Computational Materials, ABS Term Sheets, and/or Structural Term Sheets which
would be required to be filed by Fund America Investors Corporation II with
the Securities and Exchange Commission on
Form 8-K.
Expenses: Notwithstanding anything to the contrary in the Underwriting
Agreement, the Underwriter will pay all expenses in connection with the
offering of the Securities, including, but not limited to, all the expenses
included in Section 5(g) of the Underwriting Agreement.
Information Furnished by the Underwriter: The Underwriter confirms that it
has furnished the information set forth in Schedule A hereto for use in the
applicable Prospectus Supplement.
Miscellaneous Matters: (a) The Pooling Agreement and the Schedule referred
to in the Underwriting Agreement shall be deemed to be references to the
Pooling Agreement dated as of June 1, 1998 between Fund America Investors
Corporation II, as seller, and U.S. Bank Trust National Association, as
trustee, and Schedule A (attached thereto), respectively;
(b) Notices to the Underwriter shall be to the attention of ▇▇▇▇▇▇▇
▇▇▇▇▇ and notices to the Company shall be to the attention of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇.
2
28
The undersigned, as sole Underwriter, agrees, subject to the terms and
provisions of the above-referenced Underwriting Agreement, which is
incorporated herein in its entirety and made a part hereof, to purchase the
principal amount of the Class of the above-referenced Series of Certificates
set forth herein.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
-----------------------------------
Name:
Title:
Accepted:
FUND AMERICA INVESTORS CORPORATION II
By:
-----------------------------------
Name:
Title:
3
29
SCHEDULE A
POOLED CERTIFICATES
Current Principal or
Full Name of Series % of Class Notional Balance
--------------------------------------- ---------- --------------------
POOLED ▇▇▇▇▇▇▇ MAC CERTIFICATES
Multiclass Mortgage Securities, 13.00% $10,384,920
Series G063, Class A
Multiclass Mortgage Securities, 100.00% $3,788,841
Series 2008, Class SE
POOLED ▇▇▇▇▇▇ ▇▇▇ CERTIFICATES
Guaranteed REMIC Pass-Through 100.00% $6,090,962
Certificates, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Trust 98-23, Class SG
Guaranteed REMIC Pass-Through 100.00% $1,823,068
Certificates,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ Trust 1997-78,
Class SK
Guaranteed REMIC Pass-Through 100.00% $5,000,000
Certificates,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ Trust 1998-42,
Class Z
POOLED ▇▇▇▇▇▇ MAE CERTIFICATES
Guaranteed REMIC Pass-Through 100.00% $6,400,000
Securities, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ Trust
98-14, Class Z
POOLED NON-AGENCY CERTIFICATES
Bear ▇▇▇▇▇▇▇ Mortgage Securities, 72.56% $33,691,197
Inc.
Pass-Through Certificates, Series
1997-3
4
