UNDERWRITING AGREEMENT
between
EQUIVANTAGE ACCEPTANCE CORP.
and
PRUDENTIAL SECURITIES INCORPORATED,
as Representative of the Underwriters
EquiVantage Home Equity Loan Trust 1997-4
Home Equity Loan Asset-Backed Certificates, Series 1997-4
November 25, 1997
TABLE OF CONTENTS
Page
SECTION I. Representations and Warranties of the Company......................3
SECTION II. Purchase and Sale.................................................7
SECTION III. Delivery and Payment.............................................7
SECTION IV. Offering by the Underwriters......................................8
SECTION V. Covenants of the Company..........................................11
SECTION VI. Conditions to the Underwriters' Obligations......................14
SECTION VII. Payment of Expenses.............................................26
SECTION VIII. Indemnification and Contribution...............................27
SECTION IX. Representations, Warranties and Agreements to Survive Delivery...30
SECTION X. Default by an Underwriter.........................................30
SECTION XI. Termination of Agreement.........................................31
SECTION XII. Notices.........................................................31
SECTION XIII. Persons Entitled to the Benefit of this Agreement..............31
SECTION XIV. Survival........................................................32
SECTION XV. Definition of the Term "Business Day"............................32
SECTION XVI. Governing Law; Submission to Jurisdiction.......................32
SECTION XVII. Counterparts...................................................32
SECTION XVIII. Headings......................................................32
SECTION XIX. Amendments and Waivers..........................................32
November 25, 1997
UNDERWRITING AGREEMENT
Prudential Securities Incorporated
First Union Capital Markets Corp.
c/o Prudential Securities Incorporated,
as Representative of the Underwriters
named in Schedule II hereto
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
EquiVantage Acceptance Corp., a Delaware corporation (the "Company"),
hereby confirms its agreement to sell to Prudential Securities Incorporated and
First Union Capital Markets Group (the "Underwriters") the Home Equity Loan
Asset-Backed Certificates, Series 1997-4, of the classes, and in the respective
original principal amounts or notional amounts, as the case may be, set forth in
Schedule I hereto (the "Offered Certificates"), evidencing fractional, undivided
beneficial ownership interests in the EquiVantage Home Equity Loan Trust 1997-4
(the "Trust") consisting of two segregated pools of fixed-rate and
adjustable-rate closed-end home equity mortgage loans secured by first or junior
mortgages or deeds of trust on one- to four-family residential properties (the
"Home Equity Loans") and related property (collectively, the "Trust Fund"). The
Underwriters are purchasing, severally, only the Offered Certificates set forth
opposite their names in Schedule II, except that the amounts purchased by the
Underwriters may change in accordance with Section X of this Agreement.
Prudential Securities Incorporated is acting as representative of the
Underwriters and in such capacity is hereafter referred to as the
"Representative". The Home Equity Loans will be acquired by the Company from
EquiVantage Inc., a Delaware corporation ("EquiVantage Inc."), pursuant to a
transfer agreement, dated as of December 1, 1997 (the "Master Loan Transfer
Agreement"), and the related conveyance agreement, dated as of December 1, 1997
(the "Conveyance Agreement" and, together with the Master Loan Transfer
Agreement, the "Purchase Agreements"). The Home Equity Loans will be of the
type and will have the characteristics described in the Prospectus Supplement
(hereinafter defined), subject to the variances, ranges, minimums and maximums
set forth in the Prospectus Supplement, and will have the aggregate principal
balance set forth in the Prospectus Supplement, subject to an upward or downward
variance in principal balance not to exceed the percentage set forth in the
Prospectus Supplement, the precise aggregate principal balance within such range
to be determined by the Company in its sole discretion.
The Trust, which will issue the Offered Certificates, together with other
classes of certificates not being sold to the Underwriters hereunder (the
"Private Certificates" and, collectively with the Offered Certificates, the
"Certificates"), will be established under a pooling and servicing agreement,
dated as of December 1, 1997 (the "Pooling and Servicing Agreement"), among the
Company, as seller (in such capacity, the "Seller"), EquiVantage Inc., as
servicer (in such capacity, the "Servicer") and Norwest Bank Minnesota, N.A., as
trustee (the "Trustee"). A form of the Pooling and Servicing Agreement has been
filed as an exhibit to the Registration Statement (hereinafter defined).
The Offered Certificates will have the benefit of a financial guaranty
insurance policy (the "Certificate Insurance Policy") issued by Financial
Guaranty Insurance Company (the "Certificate Insurer"). The Certificate
Insurance Policy will be issued pursuant to the insurance agreement, dated as of
December 1, 1997 (the "Insurance Agreement"), among the Certificate Insurer, the
Company and the Servicer.
The Offered Certificates of each class will be issued in the minimum
denominations and will have the terms set forth in the Prospectus Supplement.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to such terms in the Pooling and Servicing Agreement.
The Company has prepared a registration statement on Form S-3 (No.
333-22343), including a prospectus, and has filed such registration statement
with the Securities and Exchange Commission (the "Commission") and has filed
with, or transmitted for filing to or shall promptly hereafter file with or
transmit for filing to the Commission a prospectus supplement (the "Prospectus
Supplement") specifically relating to the Offered Certificates pursuant to the
Securities Act of 1933, as amended (the "Securities Act") and the rules and
regulations (the "Rules and Regulations") of the Commission thereunder. Copies
of the registration statement have been delivered by the Company to the
Representative. As used herein, the term "Registration Statement" means such
registration statement, including the exhibits thereto, as amended to the date
of this Agreement. The term "Base Prospectus" means the prospectus included in
the Registration Statement. The term "Prospectus" means the Base Prospectus
together with the Prospectus Supplement. As used herein, the terms
"Registration Statement", "preliminary prospectus" or "Prospectus" shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act specifically relating
to the terms of the Certificates or the Trust, which documents were filed under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or
before the date on which the Registration Statement, as amended, became
effective or the issue date of such preliminary prospectus or the date on which
the Prospectus is filed pursuant to Rule 424 of the Rules and Regulations, as
the case may be; and as used herein, the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the date on which the Registration
Statement became effective or the issue date of any preliminary prospectus or
the date on which the Prospectus is filed pursuant
2
to Rule 424 of the Rules and Regulations, as the case may be, deemed to be
incorporated therein by reference.
SECTION I. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters that:
A. The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect and no
proceedings for such purpose are pending or, to the Company's knowledge,
threatened by the Commission.
B. The Registration Statement and the Prospectus, as of the date of the
Prospectus Supplement, conform, and the Registration Statement and the
Prospectus as revised, amended or supplemented and filed with the Commission
prior to the termination of the offering of the Offered Certificates, as of
their respective effective or issue dates, will conform, in all material
respects to the requirements of the Securities Act and the Rules and Regulations
applicable to such documents as of such respective dates; the Registration
Statement and the Prospectus as revised, amended or supplemented and filed with
the Commission as of the Closing Date (as defined herein) will conform in all
material respects to the requirements of the Securities Act and the Rules and
Regulations applicable to such documents as of the date hereof and as of the
Closing Date. The Registration Statement, at the time it became effective, 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 the date of the Prospectus Supplement, and
the Prospectus as revised, amended or supplemented and filed prior to the
Closing Date, as of the Closing Date, will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representation or warranty as to (1) information contained in or omitted from
the Prospectus or any revision or amendment thereof or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company in writing by any Underwriter specifically for use in connection with
the preparation of the Prospectus or any revision or amendment thereof or
supplement thereto and (2) any information in any Computational Materials or ABS
Term Sheets (each as hereinafter defined) required to be provided by any
Underwriter to the Company pursuant to Section IV.B. There are no contracts or
documents of the Company 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 thereof other than such documents or materials,
if any, as any Underwriter delivers to the Company pursuant to Section IV.B
hereof for filing on Form 8-K.
C. Since the respective dates as of which information is given in the
Prospectus, there has not been any material adverse change, or any development
involving a prospective material adverse change, in the general affairs,
management, financial condition or results of
3
operations of the Company, otherwise than as set forth or contemplated in the
Prospectus as supplemented or amended as of the Closing Date.
D. The Company 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; the Company 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, the Pooling and Servicing Agreement, the Insurance Agreement and the
Purchase Agreements and to cause the Certificates to be issued.
E. There are no actions, proceedings or investigations pending with
respect to which the Company has received service of process before or
threatened by any court, administrative agency or other tribunal to which the
Company is a party or of which any of its properties is the subject (a) that if
determined adversely to the Company would have a material adverse effect on the
business or financial condition of the Company, (b) asserting the invalidity of
this Agreement, the Pooling and Servicing Agreement, the Insurance Agreement,
the Purchase Agreements or the Certificates, (c) seeking to prevent the issuance
of the Certificates or the consummation by the Company of any of the
transactions contemplated by this Agreement, the Pooling and Servicing
Agreement, the Insurance Agreement or the Purchase Agreements, as the case may
be, (d) that might individually or in the aggregate materially and adversely
affect the performance by the Company of its obligations under, or the validity
or enforceability of, this Agreement, the Pooling and Servicing Agreement, the
Insurance Agreement, the Purchase Agreements or the Certificates or (e) that
might adversely affect the federal income tax attributes of the Certificates as
described in the Prospectus.
F. This Agreement has been duly authorized, executed and delivered by the
Company. At or prior to the Closing Date, the Pooling and Servicing Agreement,
the Insurance Agreement and the Purchase Agreements will have been duly
authorized, executed and delivered by the Company and will conform in all
material respects to the descriptions thereof contained in the Prospectus.
Assuming the valid execution and delivery thereof by the other parties thereto,
this Agreement constitutes, and the Pooling and Servicing Agreement and the
Insurance Agreement, will constitute, legal, valid and binding instruments
enforceable against the Company 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 under this Agreement and the Insurance Agreement, limitations of
public policy under applicable securities laws.
G. The execution, delivery and performance of this Agreement, the Pooling
and Servicing Agreement, the Insurance Agreement and the Purchase Agreements by
the Company
4
and the consummation of the transactions contemplated hereby and thereby,
compliance with the provisions thereof and the issuance and delivery of the
Certificates 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 Company is a party, by which the Company
is bound or to which any of the properties or assets of the Company 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
Company, nor will such actions result in any violation of the provisions of
the charter documents or the by-laws of the Company or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company 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 Company. The Company is not a party
to, bound by or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order, rule or
regulation of any court, governmental agency or body or other tribunal having
jurisdiction over the Company, which materially and adversely affects, or is
reasonably likely in the future to materially and adversely affect, (i) the
ability of the Company to perform its obligations under this Agreement, the
Pooling and Servicing Agreement and the Insurance Agreement or (ii) the
business, operations, results of operations, financial position, income,
properties or assets of the Company.
H. The Company has no reason to know that KPMG Peat Marwick LLP are not
independent public accountants with respect to the Company as required by the
Securities Act and the Rules and Regulations.
I. The direction by the Company to the Trustee to execute, authenticate,
issue and deliver the Certificates has been duly authorized by the Company and,
assuming the Trustee has been duly authorized to do so, when executed,
authenticated, issued and delivered by the Trustee in accordance with the
Pooling and Servicing Agreement, the Certificates will be validly issued and
outstanding and will be entitled to the benefits provided by the Pooling and
Servicing Agreement.
J. 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 Certificates and the sale of the
Offered Certificates to the Underwriters, or the consummation by the Company of
the other transactions contemplated by this Agreement, the Pooling and Servicing
Agreement, the Insurance Agreement or the Purchase Agreements, 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 Offered Certificates by the Underwriters or as
have been obtained.
K. The Company 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 there are no
5
proceedings pending with respect to which the Company has received service of
process or, to the best knowledge of the Company, threatened relating to the
revocation or modification of any such license, certificate, authority or
permit that if decided adversely to the Company would, singly or in the
aggregate, materially and adversely affect the conduct of its business,
operations or financial condition.
L. At the time of execution and delivery of the Pooling and Servicing
Agreement by the parties thereto, the Company will: (i) have good title to the
Home Equity Loans being conveyed by the Company, in its capacity as Seller
thereunder, to the Trust pursuant to the terms of the Pooling and Servicing
Agreement, free and clear of any lien, mortgage, pledge, charge, encumbrance,
adverse claim or other security interest (collectively, "Liens"), except to the
extent permitted in the Pooling and Servicing Agreement; (ii) not have assigned
to any person any of its right or title in the Home Equity Loans, in the Pooling
and Servicing Agreement or in the Certificates being issued pursuant thereto;
and (iii) have the power and authority, in its capacity as Seller thereunder, to
convey its interest in the Home Equity Loans to the Trust pursuant to the terms
of the Pooling and Servicing Agreement and to sell the Offered Certificates to
the Underwriters. Upon execution and delivery of the Pooling and Servicing
Agreement by the Trustee, the Trust will have acquired beneficial ownership of
all of the Company's right, title and interest in and to the Home Equity Loans
free of Liens other than Liens permitted by the Pooling and Servicing Agreement.
Upon payment by and delivery to the Underwriters of the Offered Certificates,
the Underwriters will have good title to the Offered Certificates, free of any
Liens other than Liens permitted by the Pooling and Servicing Agreement.
M. As of the Cut-off Date, each of the Home Equity Loans will meet the
eligibility criteria described in the Prospectus and will conform to the
descriptions thereof contained in the Prospectus in all material respects.
N. The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as amended, and the Trust created thereby
is not required to be registered thereunder, and the Company is not an
"investment company" as such term is defined, under the Investment Company Act
of 1940, as amended (the "1940 Act").
O. At the Closing Date, the Offered Certificates will conform in all
material respects to the descriptions thereof contained in the Prospectus. The
Offered Certificates will be duly and validly authorized and, when duly and
validly executed, authenticated, issued and delivered in accordance with the
Pooling and Servicing Agreement and sold to the Underwriters as provided herein,
will be validly issued and outstanding and entitled to the benefits of the
Pooling and Servicing Agreement.
P. Any taxes, fees and other governmental charges in connection with the
execution, delivery and issuance of this Agreement, the Pooling and Servicing
Agreement, the Insurance Agreement and the Certificates have been paid or will
be paid at or prior to the Closing Date, except for fees for recording
assignments of the Home Equity Loans to the Trustee pursuant to
6
the Pooling and Servicing Agreement that have not yet been completed, which
fees will be paid by or on behalf of the Company in accordance with the
Pooling and Servicing Agreement.
Q. At the Closing Date, each of the representations and warranties of the
Company set forth in the Pooling and Servicing Agreement and the Insurance
Agreement will be true and correct in all material respects.
R. The transfer of the Home Equity Loans to the Trust at the Closing Date
will be treated by the Company for financial accounting and reporting purposes
as a sale of assets and not as a pledge of assets to secure debt.
S. The Company is not aware of (i) any request by the Commission for any
further amendment of the Registration Statement or the Prospectus or for any
additional information or (ii) any notification with respect to the suspension
of the qualification of the Certificates for sale in any jurisdiction or the
initiating or threatening of any proceeding for such purpose.
Any certificate signed by an officer of the Company and delivered to the
Representative or counsel for the Underwriters in connection with an offering of
the Offered Certificates shall be deemed, and shall state that it is, a
representation and warranty as to the matters covered thereby to each person to
whom the representations and warranties in this Section I are made.
SECTION II. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to instruct the Trustee to issue the Offered Certificates and agrees to
sell, and each Underwriter agrees (except as provided in Sections X and XI
hereof), severally and not jointly, to purchase from the Company, the respective
principal amount of Offered Certificates set forth opposite its name in Schedule
II hereto, at the respective price, plus interest accrued, if any, at the
related pass-through rate on the aggregate original principal amount or notional
amount thereof from the date specified in Schedule I to, but not including, the
Closing Date, for each such class set forth therein.
SECTION III. Delivery and Payment. The Offered Certificates shall be
delivered at the office and on the date and time specified in Schedule I
attached hereto, which place, date and time may be changed by agreement between
the Representative and the Company (such date and time of delivery of and
payment for such Offered Certificates being referred to herein as the "Closing
Date"). Delivery of the Offered Certificates shall be made to the
Representative for the accounts of the Underwriters through The Depository Trust
Company against payment of the purchase price thereof to or upon the order of
the Company by wire transfer in immediately available funds.
7
SECTION IV. Offering by the Underwriters.
A. It is understood that, subject to the terms and conditions hereof, the
Underwriters propose to offer the Offered Certificates for sale as set forth in
the Prospectus and that the Underwriters will not offer, sell or otherwise
distribute the Offered Certificates (except for the sale thereof in exempt
transactions) in any state in which the Offered Certificates are not exempt from
registration under "blue sky" or state securities laws (except where the Offered
Certificates will have been qualified for offering and sale at the
Representative's direction under such "blue sky" or state securities laws).
B. It is understood that the Underwriters may prepare and provide to
prospective investors certain Computational Materials and ABS Term Sheets in
connection with the offering of the Offered Certificates, subject to the
following conditions:
1. In connection with the use of Computational Materials, the
Underwriters shall comply with all applicable requirements 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, Xxxxxx,
Peabody & Co. Incorporated and Xxxxxx Structured Asset Corporation, as made
applicable to other issuers and underwriters by the Division of Corporation
Finance of the Commission in response to the request of the Public
Securities Association ("PSA"), dated May 24, 1994 (collectively, the
"Xxxxxx/PSA Letters"), as well as the PSA Letter referred to below. In
connection with the use of ABS Term Sheets, the Underwriters shall comply
with all applicable requirements of the No-Action Letter, dated February
17, 1995, issued by the Division of Corporation Finance to the Commission
to PSA (the "PSA Letter" and, together with the Xxxxxx/PSA Letters, the
"No-Action Letters").
2. The term "Computational Materials" as used herein shall have the
meaning given to such term in the No-Action Letters, but shall include only
those Computational Materials that have been prepared or delivered to
prospective investors by or at the direction of the Underwriters. The
terms "ABS Term Sheets", "Collateral Term Sheets" and "Structural Term
Sheets" as used herein shall have the meanings given to such terms in the
PSA Letter, but shall include only those ABS Term Sheets, Collateral Term
Sheets or Structural Term Sheets that have been prepared or delivered to
prospective investors by or at the direction of the Underwriters.
3. All Computational Materials and ABS Term Sheets provided to
prospective investors that are required to be filed pursuant to the
No-Action Letters shall bear a legend on each page in a form previously
agreed upon by the Company and the Underwriters.
4. Any Computational Materials and ABS Term Sheets are subject to
review by and approval of the Company prior to their distribution to any
prospective investors
8
and a copy of such Computational Materials and ABS Term Sheets as are
delivered to prospective investors shall, in addition to the foregoing
delivery requirements, to be delivered to the Company simultaneously with
delivery to prospective investors.
5. The Underwriters shall provide to the Company, for filing on Form
8-K as provided in Section V.N, five copies (in such format as required by
the Company) of all Computational Materials and ABS Term Sheets that are
required to be filed with the Commission pursuant to the No-Action Letters.
Each delivery of Computational Materials or ABS Term Sheets to the Company
pursuant to this paragraph shall be effected by delivering four copies of
such material to counsel for the Company on behalf of the Company and one
copy of such materials to the Company. The Underwriters may provide copies
of the foregoing in a consolidated or aggregate form that includes all
information required to be filed. All Computational Materials and ABS Term
Sheets described in this Section must be provided to the Company not later
than 10:00 a.m. New York time on the Business Day before the date on which
filing thereof is required pursuant to the terms of this Agreement. Each
Underwriter agrees that it will not provide to any investor or prospective
investor in the Offered Certificates any Computational Materials or ABS
Term Sheets on or after the day on which Computational Materials and ABS
Term Sheets are required to be provided to the Company pursuant to this
Section (other than copies of Computational Materials or ABS Term Sheets
previously submitted to the Company in accordance with this Section for
filing pursuant to Section V.N), unless such Computational Materials or ABS
Term Sheets are preceded or accompanied by the delivery of a Prospectus to
such investor or prospective investor.
6. All information included in the Computational Materials and ABS
Term Sheets shall be generated based on substantially the same methodology
and assumptions that are used to generate the information in the Prospectus
Supplement as set forth therein; provided, however, that the Computational
Materials and ABS Term Sheets may include information based on alternative
methodologies or assumptions specified therein. If any Computational
Materials or ABS Term Sheets that are required to be filed were based on
assumptions with respect to the Home Equity Loans that are incorrect, that
differ from the final information about the Mortgage Pool in any material
respect or on Certificate structuring terms that were revised in any
material respect prior to the printing of the Prospectus, to the extent the
Prospectus does not specifically correct such inaccuracies, the
Underwriters shall prepare revised Computational Materials or ABS Term
Sheets, as the case may be, based on the final information about the
Mortgage Pool and structuring assumptions, circulate such revised
Computational Materials or ABS Term Sheets, as the case may be, to all
recipients of the preliminary versions thereof that indicated orally to an
Underwriter that they would purchase all or any portion of the Offered
Certificates and include such revised Computational Materials or ABS Term
Sheets (marked "as revised") in the materials delivered to the Company
pursuant to Section IV.B.5.
9
7. The Company shall not be obligated to file any Computational
Materials or ABS Term Sheets that (i) in the reasonable determination of
the Company and the Underwriters are not required to be filed pursuant to
the No-Action Letters or (ii) have been determined to contain any material
error or omission, provided that, at the request of an Underwriter, the
Company will file Computational Materials or ABS Term Sheets that contain a
material error or omission if clearly marked "superseded by materials dated
_________" and accompanied by corrected Computational Materials or ABS Term
Sheets that are marked "material previously dated ____________, as
corrected". In the event that at any time when a prospectus relating to
the Offered Certificates is required to be delivered under the Securities
Act, any Computational Materials or ABS Term Sheets are determined, in the
reasonable judgement of the Company or the Underwriters to contain a
material error or omission, the applicable Underwriter shall prepare a
corrected version of such Computational Materials or ABS Term Sheets, shall
circulate such corrected version of such Computational Materials or ABS
Term Sheets to all recipients of the prior version thereof that either
indicated orally to such Underwriter that they would purchase all or any
portion of the Offered Certificates, or actually purchased all or any
portion thereof, and shall deliver copies of such corrected Computational
Materials or ABS Term Sheets (marked "as corrected") to the Company for
filing with the Commission in a subsequent Form 8-K submission (subject to
the Company's obtaining an accountant's comfort letter in respect of such
corrected Computational Materials or ABS Term Sheets, which shall be at the
expense of the applicable Underwriter or Underwriters).
C. Each Underwriter represents and warrants and agrees with the Company
that, as of the date hereof and as of the Closing Date, that: (i) the
Computational Materials and ABS Term Sheets furnished to the Company pursuant to
Section IV.B.5 constitute (either in original, aggregated or consolidated form)
all of the materials furnished to prospective investors by the Underwriter prior
to the time of delivery thereof to the Company that are required to be filed
with the Commission with respect to the Offered Certificates in accordance with
the No-Action Letters, and such Computational Materials and ABS Term Sheets
comply with the requirements of the No-Action Letters; (ii) on the date any such
Computational Materials and ABS Term Sheets with respect to such Certificates
(or any written or electronic materials furnished to prospective investors on
which the Computational Materials and ABS Term Sheets are based) were last
furnished to each prospective investor and on the date of delivery thereof to
the Company pursuant to Section IV.B.5 and on the related Closing Date, such
Computational Materials and ABS Term Sheets (or materials) were accurate in all
material respects when read in conjunction with the Prospectus (taking into
account the assumptions explicitly set forth in the Computational Materials),
except to the extent of any errors therein that are caused by errors in the
Mortgage Pool information provided to the Underwriters by the Company; (iii) the
Underwriters have not and will not represent to potential investors that any
Computational Materials or ABS Term Sheets were prepared or disseminated on
behalf of the Company; and (iv) all Computational Materials and ABS Term Sheets
(or underlying materials distributed to prospective investors on which the
Computational Materials and ABS Term Sheets were based)
10
contained and will contain the legend in the form previously agreed upon by
the Company and the Underwriters as required by Section IV.B.3.
Notwithstanding the foregoing, the Underwriters make no representation
or warranty as to whether any Computational Materials or ABS Term Sheets (or any
written or electronic materials furnished to prospective investors on which the
Computational Materials or ABS Term Sheets are based) included or will include
any inaccurate statement resulting directly from any error contained in the
Mortgage Pool information provided to the Underwriters by the Company.
D. Each Underwriter that delivers any Computational Materials and ABS
Term Sheets to the Company shall deliver to the Company a certificate, dated as
of the date hereof, to the effect that the representations and warranties of the
Underwriter contained in this Section IV are true and correct as of such date.
If an Underwriter does not provide any Computational Materials or ABS Term
Sheets to the Company pursuant to Section IV.B.4, 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 Offered Certificates that is required to be
filed with the Commission in accordance with the No-Action Letters, and the
Underwriter shall provide the Company with a certification to that effect on the
Closing Date.
SECTION V. Covenants of the Company. The Company agrees as follows:
A. To prepare the Prospectus in a form approved by the Underwriters and
to transmit such Prospectus to the Commission for filing pursuant to Rule 424(b)
of the Rules and Regulations by means reasonably calculated to result in filing
with the Commission pursuant to said rule and, if necessary, within 15 days
after the initial issuance of the Offered Certificates or, in the case of a
series of Certificates including a "forward purchase commitment," within 15 days
of the end of the related acquisition period, to transmit for filing with the
Commission a report on Form 8-K for purposes of filing the Pooling and Servicing
Agreement, and will promptly advise the Underwriters when the Prospectus is so
filed.
B. 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 Company or the Underwriters, be required by the Securities Act
or requested by the Commission, but to make no further amendment or any revision
of or supplement to the Registration Statement or to the Prospectus prior to the
Closing Date (other than any such amendment, revision or supplement that does
not relate to the Offered Certificates), except as otherwise permitted herein.
C. To furnish the Representative and counsel for the Underwriters, prior
to filing with the Commission, and to obtain the consent of the Representative
for the filing of the following documents relating to the Certificates: (i)
amendment to the Registration Statement or
11
supplement to the Prospectus, or document incorporated by reference in the
Prospectus, or (ii) the Prospectus pursuant to Rule 424 of the Rules and
Regulations.
D. Prior to the termination of the offering of the Offered Certificates,
to promptly advise the Representative (i) when any amendment to the Registration
Statement has been filed or has become effective or any revision of or
supplement to the Prospectus has been so filed (unless such amendment, revision
or supplement does not relate to the Offered Certificates), (ii) of any request
by the Commission of any amendment of the Registration Statement or the
Prospectus or for any additional information (unless such request for additional
information does not relate to the Offered Certificates), (iii) of any written
notification received by the Company of the suspension of qualification of the
Offered Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or, to the knowledge of the Company, the
threatening of any proceeding for that purpose. The Company will use its best
efforts to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
E. To file promptly all reports and any definitive proxy or information
statements required to be filed by the Company 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 Offered Certificates.
F. To furnish promptly to the Underwriters and to counsel for the
Underwriters, without charge, conformed copies of the Registration Statement as
originally filed with the Commission and of each amendment thereto filed with
the Commission (including exhibits) and, so long as delivery of a prospectus
relating to the Offered Certificates is required under the Securities Act, as
many copies of the Prospectus and any revisions or amendments thereof or
supplements thereto as may be reasonably requested.
G. If at any time when a prospectus relating to the Offered Certificates
is required to be delivered under the Securities Act (i) any event occurs 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 (ii)
it shall be necessary to revise, 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, the Rules and Regulations or the
Exchange Act, to notify the Underwriters and, upon an Underwriter's request, to
prepare and file with the Commission a revision, amendment or supplement that
will correct such statement or omission or effect such compliance, and to
furnish without charge to the Underwriters as many copies as the Underwriters
may from time to time reasonably request of an amended Prospectus or a
12
supplement to the Prospectus that corrects such statement or omission or effects
such compliance.
H. To make generally available to holders of the Offered Certificates as
soon as practicable, but in any event not later than 90 days after the close of
the period covered thereby, a statement of earnings of the Trust (which need not
be audited) complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Company, Rule 158) and covering a
period of at least twelve consecutive months beginning not later than the first
day of the first fiscal quarter following the Closing Date.
I. To use its best efforts, in cooperation with the Underwriters, to
qualify the Offered Certificates for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States or
elsewhere as the Underwriters 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 Offered Certificates. The Company will file or cause the
filing of such statements and reports as may be required by the laws of each
jurisdiction in which the Offered Certificates have been so qualified.
J. So long as the Offered Certificates shall be outstanding, to cause the
Trustee, pursuant to the Pooling and Servicing Agreement, to deliver to the
Underwriters as soon as such statements are furnished to the Trustee: (i) the
annual statement as to compliance delivered to the Trustee pursuant to the
Pooling and Servicing Agreement; (ii) the annual statement of a firm of
independent public accountants furnished to the Trustee pursuant to the Pooling
and Servicing Agreement; (iii) each report of the Company regarding the Offered
Certificates filed with the Commission under the Exchange Act or mailed to the
holders of the Offered Certificates; and (iv) from time to time, any other
information concerning the Trust filed with any government or regulatory
authority that is otherwise publicly available, as the Representative may
reasonably request.
K. To apply the net proceeds from the sale of the Offered Certificates in
the manner set forth in the Prospectus.
L. During a period of seven calendar days from the Closing Date, neither
the Company nor any trust established, directly or indirectly, by the Company
will, without the Representative's prior written consent (which consent shall
not be unreasonably withheld), offer or sell mortgage pass-through certificates
backed by mortgage loans, except pursuant to this Agreement.
M. To enter into the applicable agreements to which it is a party
pursuant to the Pooling and Servicing Agreement, on or prior to the Closing
Date, and to cause to be delivered to the Trustee the Insurance Policy issued by
the Certificate Insurer.
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N. To cause any Computational Materials with respect to the Certificates
that are delivered to the Company as provided in Section IV.B.5 to be filed with
the Commission on a Current Report on Form 8-K at or before the time of filing
of the Prospectus pursuant to Rule 424(b) under the Securities Act; to cause any
ABS Term Sheets with respect to the Certificates that are delivered to the
Company as provided in Section IV.B.5 to be filed with the Commission on one or
more Current Reports on Form 8-K (i) at or before the time of filing of the
Prospectus pursuant to Rule 424(b) of the Rules and Regulations in the case of
Structural Term Sheets, and (ii) within two Business Days of first use in the
case of Collateral Term Sheets. Prior to any such filing of Computational
Materials or ABS Term Sheets (other than any Collateral Term Sheets that are not
based on Mortgage Pool information provided to the Underwriters by the Company)
by the Company, however, the Underwriters must comply with their obligations
pursuant to Section IV.B and the Company must receive a letter from KPMG Peat
Marwick LLP, certified public accountants, satisfactory in form and substance to
the Company and its counsel, to the effect that such accountants have performed
certain specified procedures, all of which have been agreed to by the Company,
as a result of which they determined that all information that is included in
the Computational Materials and ABS Term Sheets (if any) provided by the
Underwriters to the Company for filing on Form 8-K, as provided in Section IV.B
and this Section V.N, is accurate except as to such matters that are not deemed
by the Company to be material. The foregoing letter shall be at the expense of
the Company. The Company shall file any corrected Computational Materials or
ABS Term Sheets described in Section IV.B.7 as soon as practicable following
receipt thereof.
SECTION VI. Conditions to the Underwriters' Obligations. The obligations
of the Underwriters to purchase the Offered Certificates pursuant to this
Agreement are subject to: (i) the accuracy in all material respects of the
representations and warranties on the part of the Company herein contained as of
the date hereof and as of the Closing Date; (ii) the performance in all material
respects by the Company of all of its obligations hereunder; (iii) the accuracy
of the statements of the Company made in any certificate or other document
delivered pursuant to the provisions hereof; and (iv) the following conditions
as of the Closing Date:
A. The Underwriters 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, to the Company's
knowledge, 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. The Prospectus shall have been filed
or transmitted for filing by means reasonably calculated to result in a filing
with the Commission pursuant to Rule 424(b) of the Rules and Regulations.
B. The Underwriters shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement or any
amendment or supplement thereto contains an untrue statement of a fact or omits
to state a fact that, in the opinion of counsel for the Underwriters, is
material and is required to be stated therein or is necessary
14
to make the statements therein not misleading, and the Underwriters shall not
have discovered and disclosed to the Company on or prior to the Closing Date
that the Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact or omits to state a fact that, in the opinion of counsel
for the Underwriters, is material and is necessary to make the statements
therein not misleading in light of the circumstances under which they were
made.
C. All corporate proceedings and other legal matters relating to the
authorization, form and validity of this Agreement, the Pooling and Servicing
Agreement, the Insurance Agreement, the Purchase Agreements, the Certificates,
the Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby, shall be
satisfactory in all respects to counsel for the Underwriters; the Company shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters. The Representative
shall have received the Pooling and Servicing Agreement and the Offered
Certificates in form and substance satisfactory to the Representative, duly
executed by all signatories required pursuant to the respective terms thereof.
D. The Company shall have furnished to the Underwriters a written
opinion, dated the Closing Date, of Xxxxxxx & Xxxxx L.L.P., counsel to the
Company, addressed to the Underwriters, in form and substance satisfactory to
the Underwriters, to the effect that:
1. The Pooling and Servicing Agreement, the Insurance Agreement and
the Purchase Agreements, assuming the due authorization, execution and
delivery by parties thereto other than the Company and the Servicer,
constitute the legal, valid and binding obligations of the Company and the
Servicer, as applicable, enforceable against the Company and the Servicer,
as applicable, in accordance with their respective terms, except as
enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, liquidation, receivership, moratorium or other similar laws
relating to or affecting creditors' rights generally or (b) general
principles of equity or public policy, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
2. The execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company.
3. Each Offered Certificate, when duly executed and authenticated as
specified in the Pooling and Servicing Agreement and delivered pursuant to
the Pooling and Servicing Agreement, will be validly issued and outstanding
and entitled to the benefits of the Pooling and Servicing Agreement
afforded by such Offered Certificate.
4. To the best knowledge of such counsel, no consent, approval,
authorization or order of, registration or filing with, or notice to, any
governmental
15
authority or court is required to be obtained for the
execution, delivery and performance of this Agreement or any of the Pooling
and Servicing Agreement, the Insurance Agreement or the Purchase Agreements
or the consummation of any of the transactions contemplated thereby by the
Company or the Servicer, as the case may be, except such as may be required
under the "blue sky" or state securities laws of any jurisdiction in
connection with the offering, sale or acquisition of the Offered
Certificates, any recordations of the assignment of the Home Equity Loans
to the Trustee (to the extent such recordations are required pursuant to
the Pooling and Servicing Agreement) that have not yet been completed and
such other approvals as have been obtained.
5. The conditions to the use by the Company of 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.
6. 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
Computational Materials, any ABS Term Sheets and any financial and
statistical data included or incorporated by reference in the Registration
Statement and the Prospectus, 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, and such
counsel does not know of any amendment to the Registration Statement
required to be filed.
7. The statements set forth in the Base Prospectus under the
captions "Description of the Securities" and "The Pooling and Servicing
Agreement" and in the Prospectus Supplement under the captions "Description
of the Certificates" and "The Pooling and Servicing Agreement," to the
extent such statements purport to summarize certain provisions of the
Certificates or of the Pooling and Servicing Agreement, are fair and
accurate in all material respects.
8. The statements set forth in the Base Prospectus and the
Prospectus Supplement, as the case may be, under the captions "ERISA
Considerations," "Material Federal Income Tax Consequences," "Legal
Investment Matters" and "Certain Legal Aspects of Mortgage Loans and
Related Matters," to the extent that they constitute matters of federal law
or legal conclusions with respect thereto, provide a fair and accurate
summary of such law or legal conclusions.
16
9. The Pooling and Servicing Agreement, the Certificates and the
Purchase Agreements conform in all material respects to the description
thereof contained in the Prospectus.
10. The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended, and the Trust
is not required to be registered under the 0000 Xxx.
11. To the best of such counsel's knowledge, there are no actions,
proceedings or investigations pending that would adversely affect the
status of the Trust as a REMIC.
12. Assuming that the Trustee causes certain assets of the Trust, as
the Trustee has covenanted to do in the Pooling and Servicing Agreement, to
be treated as one or more "real estate mortgage investment conduits"
("REMICs"), as such term is defined in the Internal Revenue Code of 1986,
as amended (the "Code"), and the parties to the Pooling and Servicing
Agreement comply with the terms thereof, such assets of the Trust will be
treated as one or more REMICs, the Offered Certificates will be treated as
the "regular interests" in a REMIC and a specified class of the Private
Certificates will be treated as the "residual interest" in a REMIC.
Neither the Trust nor certain assets and accounts are subject to tax upon
its income or assets by any taxing authority of the State of New York or
the City of New York.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Underwriters, to the effect that no facts have
come to the attention of such counsel that lead them to believe that: (a) 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 misleading (except as to the financial, numerical,
statistical and quantitative information included in the Registration Statement
or incorporated by reference therein, as to which such counsel need not make any
statement); (b) the Prospectus, as of its date and as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(except as to the Computational Materials, ABS Term Sheets and the financial,
numerical, statistical and quantitative information included in the Prospectus
or incorporated by reference therein and statements in the Prospectus with
respect to the Certificate Insurer, as to which such counsel need not make any
statement); or (c) any document incorporated by reference in the Prospectus or
any further amendment or supplement to any such incorporated document made by
the Company prior to the Closing Date (other than any document filed at the
request of an Underwriter to the extent such document relates to Computational
Materials or ABS Term Sheets) contained, as of the time it became effective or
was filed with the Commission, as the case may be, an untrue statement of a
material fact or omitted to state a
17
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering such opinion or making such statement, such counsel may rely,
as to matters of fact, on certificates of responsible officers of the Company.
Such opinions and written statements may also assume the due authorization,
execution and delivery of the instruments and documents referred to therein by
the parties thereto other than the Company. Such opinion may be qualified as an
opinion only on the corporate laws of the State of Delaware, the laws of the
State of New York and the federal laws of the United States.
E. The Underwriters shall have received the favorable opinion, dated the
Closing Date, of Xxxxxxx & Xxxxx L.L.P., counsel to the Company, addressed to
the Company and satisfactory to the Certificate Insurer, the nationally
recognized statistical rating organizations named in the Prospectus Supplement
(the "Rating Agencies") and the Underwriters, with respect to certain matters
relating to the transfer of the Home Equity Loans to the Company and from the
Company to the Trust, and such counsel shall have consented to reliance on such
opinion by the Certificate Insurer, the Rating Agencies and the Underwriters as
though such opinion had been addressed to each such party.
F. Xxxxx X. Xxxxxxxx, Esq., counsel to the Servicer, shall have furnished
to the Underwriters her written opinion, as counsel to the Servicer, addressed
to the Underwriters and the Company and dated the Closing Date, in form and
substance satisfactory to the Underwriters, to the effect that:
1. The Servicer is validly existing in good standing as a
corporation under the laws of the State of Delaware.
2. The Servicer has full corporate power and authority to serve in
the capacity of servicer of the related Home Equity Loans as contemplated
in the Pooling and Servicing Agreement.
3. The Pooling and Servicing Agreement and the Insurance Agreement
have been duly authorized, executed and delivered by the Servicer 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 Servicer, enforceable against it in accordance with their
terms, except as enforcement thereof may be limited by (x) bankruptcy,
insolvency, reorganization, moratorium, receivership or other similar laws
now or hereafter in effect relating to creditors' rights generally and (y)
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.
18
4. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body having
jurisdiction over the Servicer is required for the consummation by the
Servicer of the transactions contemplated by the Pooling and Servicing
Agreement and the Insurance Agreement, except such consents, approvals,
authorizations, registrations and qualifications as have been obtained.
5. The execution, delivery or performance by the Servicer of the
Pooling and Servicing Agreement or the Insurance Agreement and the
transactions contemplated thereby do not (A) conflict with or result in a
breach of, or constitute a default under, (i) any term or provision of the
charter documents or the by-laws of the Servicer; (ii) any term or
provision of any material agreement, deed of trust, mortgage loan
agreement, contract, instrument or indenture, or other agreement to which
the Servicer is a party or is bound or to which any of the property or
assets of the Servicer or any of its subsidiaries is subject; (iii) to the
best of such counsel's knowledge, without independent investigation, any
order, judgment, writ, injunction or decree of any court or governmental
authority having jurisdiction over the Servicer; or (iv) any law, rule or
regulation applicable to the Servicer; or (B) to the best of such counsel's
knowledge, without independent investigation, result in the creation or
imposition of any lien, charge or encumbrance upon the Trust or upon the
Certificates.
6. There are no actions, proceedings or investigations pending with
respect to which the Servicer has received service of process before, or to
the best of such counsel's knowledge, without independent investigation,
threatened against the Servicer by any court, administrative agency or
other tribunal (a) asserting the invalidity of the Pooling and Servicing
Agreement, the Insurance Agreement or the Certificates, (b) seeking to
prevent the consummation of any of the transactions contemplated by the
Pooling and Servicing Agreement or (c) that would materially adversely
affect the performance by the Servicer of its obligations under, or the
validity or enforceability of, the Pooling and Servicing Agreement or the
Insurance Agreement.
G. Xxxxx X. Xxxxxxxx, Esq., counsel to the Company, shall have furnished
to the Underwriters such counsel's written opinion, addressed to the
Underwriters and dated the Closing Date, in form and substance satisfactory to
the Underwriters, to the effect that:
1. The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and is
duly qualified to do business in, and is in good standing as a foreign
corporation under the laws of, each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification (except where any such failure would not have a material
adverse effect on the Company's ability to perform its obligations under
this Agreement, the Pooling and Servicing Agreement or the Insurance
Agreement); the Company has all 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,
19
the Pooling and Servicing Agreement, the Insurance Agreement and the
Purchase Agreements, and to cause the Certificates to be issued.
2. The Company is not in violation of its charter documents or the
by-laws or 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 Company is a party or by which it or its properties may be bound,
which default might result in any material adverse change in the financial
condition of the Company or that might materially and adversely affect the
properties or assets, taken as a whole, of the Company.
3. This Agreement, the Pooling and Servicing Agreement, the
Insurance Agreement and the Purchase Agreements have been duly authorized,
executed and delivered by the Company 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 Company, in accordance with their respective terms, except as
enforcement thereof may be limited by (x) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to 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 under this Agreement
and the Insurance Agreement, limitations of public policy under applicable
securities laws.
4. The execution, delivery and performance of this Agreement, the
Pooling and Servicing Agreement, the Insurance Agreement and the Purchase
Agreements by the Company, the consummation of the transactions
contemplated hereby and thereby and the issuance and delivery of the
Certificates do not and will not (i) 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 Company is a party or by which the
Company is bound or to which any of the property or assets of the Company
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 Company, (ii) result in a violation of the provisions of
the charter documents or the by-laws of the Company or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company 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 Company, or (iii) result
in the creation or imposition of any lien, charge or encumbrance upon the
Trust or upon the Certificates, except as otherwise contemplated by the
Pooling and Servicing Agreement.
5. The direction by the Company to the Trustee to execute, issue,
authenticate and deliver the Certificates has been duly authorized by the
Company and, assuming that the Trustee has been duly authorized to do so,
when executed by the
20
Company and authenticated and delivered by the Trustee in accordance
with the Pooling and Servicing Agreement, the Certificates will be
validly issued and outstanding and will be entitled to the benefits of
the Pooling and Servicing Agreement.
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 for the issuance of the Certificates, and the
sale of the Offered Certificates to the Underwriters, or the consummation
by the Company of the other transactions contemplated by this Agreement,
the Pooling and Servicing Agreement and the Insurance Agreement, 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 Offered
Certificates by the Underwriters or as have been previously obtained.
7. There are no actions, proceedings or investigations pending with
respect to which the Company has received service of process before or, to
the best of such counsel's knowledge, without independent investigation,
threatened by any court, administrative agency or other tribunal to which
the Company is a party or of which any of its properties is the subject:
(a) that if determined adversely to the Company would have a material
adverse effect on the business, results of operations or financial
condition of the Company; (b) asserting the invalidity of the Pooling and
Servicing Agreement, the Insurance Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation by
the Company of any of the transactions contemplated by the Pooling and
Servicing Agreement, the Insurance Agreement or this Agreement, as the case
may be; or (d) that might materially and adversely affect the performance
by the Company of its obligations under, or the validity or enforceability
of, the Pooling and Servicing Agreement, the Insurance Agreement, this
Agreement or the Certificates.
8. The Certificates have been duly and validly authorized and
issued, and, immediately prior to the sale of the Offered Certificates to
the Underwriters, such Certificates are owned by the Company, free and
clear of all Liens.
H. The Underwriters shall have received the favorable opinion of counsel
(which may be in-house counsel) to the Trustee, dated the Closing Date,
addressed to the Underwriters and in form and scope satisfactory to counsel to
the Underwriters, to the effect that:
1. The Trustee is a national banking association duly incorporated
and validly existing under the laws of the United States of America.
2. The Trustee has the full power to execute, deliver and perform
its obligations under the Pooling and Servicing Agreement and to execute,
countersign and deliver the Certificates.
21
3. The execution and delivery by the Trustee of the Pooling and
Servicing Agreement and the performance by the Trustee of its obligations
under the Pooling and Servicing Agreement have been duly authorized by all
necessary actions of the Trustee.
4. The Pooling and Servicing Agreement is a valid and legally
binding obligation of the Trustee, enforceable against the Trustee, in
accordance with its terms, except as enforcement thereof may be limited by
(a) bankruptcy, insolvency, reorganization, liquidation, receivership,
moratorium or other similar laws relating to or affecting creditors' rights
generally or (b) general principles of equity or public policy, regardless
of whether such enforceability is considered in a proceeding in equity or
at law.
5. The execution and delivery by the Trustee of the Pooling and
Servicing Agreement does not (a) violate the charter documents or the
by-laws of the Trustee, (b) to such counsel's knowledge, violate any
judgment, decree or order of any state or federal court or other state or
federal governmental authority by which the Trustee is bound or (c)
assuming the non-existence of any judgment, decree or order of any court or
other governmental authority that would be violated by such execution and
delivery, violate any state or federal statute, rule or regulation or
require any consent, approval or authorization of any state or federal
court or other state or federal governmental authority to which the Trustee
is bound.
6. The Certificates have been duly authenticated, executed and
delivered by the Trustee.
7. If the Trustee were acting in the stead of the Servicer under the
Pooling and Servicing Agreement as of the date of such opinion, the Trustee
would have full power and authority to perform the obligations of the
Servicer under the Pooling and Servicing Agreement.
8. To the best of such counsel's knowledge, there are no actions,
proceedings or investigations pending or threatened against or affecting
the Trustee before or by any court, arbitrator, administrative agency or
other governmental authority that, if decided adversely to the Trustee,
would materially and adversely affect the ability of the Trustee to carry
out the transactions contemplated in the Pooling and Servicing Agreement.
In rendering such opinion or making such statement, such counsel may rely,
as to matters of fact, on certificates of responsible officers of the Trustee.
Such opinions and written statements may also assume the due authorization,
execution and delivery of the instruments and documents referred to therein by
the parties thereto other than the Trustee. Such opinion may be qualified as an
opinion only on the laws of the state where the Trustee is located and the State
of New York and the federal laws of the United States.
22
I. The Underwriters shall have received a favorable opinion or opinions,
dated the date of the Closing Date, of counsel for the Underwriters, with
respect to the issuance and sale of the Offered Certificates, this Agreement,
the Prospectus and such other related matters as the Underwriters may reasonably
require.
J. The Underwriters shall have received a favorable opinion, dated the
Closing Date, from counsel to the Certificate Insurer (which may be in-house
counsel) in form and scope satisfactory to counsel for the Underwriters,
substantially to the effect that:
1. The Certificate Insurer is a stock insurance corporation duly
incorporated, validly existing and in good standing under the laws of the
State of New York. The Certificate Insurer is validly licensed and
authorized to issue the Certificate Insurance Policy and perform its
obligations under the Insurance Agreement in accordance with the terms
thereof under the laws of the State of New York.
2. The Certificate Insurer has the corporate power to execute and
deliver, and to take all action required of it under, the Insurance
Agreement and the Certificate Insurance Policy.
3. The execution, delivery and performance by the Certificate
Insurer of the Certificate Insurance Policy and the Insurance Agreement are
within the corporate power of the Certificate Insurer and have been
authorized by all necessary corporate action on the part of the Certificate
Insurer, and do not require the consent or approval of, the giving of
notice to, the prior registration with, or the taking of any other action
in respect of any state or other governmental agency or authority that has
not previously been obtained or effected.
4. The Certificate Insurance Policy and the Insurance Agreement have
been duly authorized, executed and delivered by the Certificate Insurer and
constitute legal, valid and binding agreements of the Certificate Insurer,
enforceable against the Certificate Insurer in accordance with their terms,
except as enforcement thereof may be limited by (x) bankruptcy,
reorganization, insolvency, moratorium and other similar laws relating to
or affecting the enforcement of creditors' rights generally, including,
without limitation, laws relating to fraudulent transfer or conveyances,
preferential transfers and equitable subordination, presently or from time
to time in effect and general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law), as
such laws may be applied in any such proceeding with respect to the
Certificate Insurer and (y) the qualification that the remedy of specific
performance and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceedings
with respect thereto may be brought.
23
5. To the extent the Certificate Insurance Policy constitutes a
security within the meaning of Section 2(l) of the Securities Act, it is a
security that is exempt from the registration requirements of the
Securities Act.
6. The information set forth under the captions "The Certificate
Insurer" and "The Certificate Insurance Policy" in the Prospectus
Supplement are materially correct and, insofar as such information
constitutes a description of the Certificate Insurance Policy, accurately
summarizes the Certificate Insurance Policy.
K. The Company shall have furnished to the Underwriters a certificate,
dated the Closing Date and signed by the Chairman of the Board, the President or
a Vice President of the Company stating that the signer of such certificate has
carefully examined the Registration Statement (excluding any documents
incorporated therein by reference), the Prospectus, the Pooling and Servicing
Agreement and this Agreement and that, to the best of his or her knowledge based
upon reasonable investigation:
1. The representations and warranties of the Company in this
Agreement and all related agreements are true and correct as of the Closing
Date; the Company has complied with all agreements and satisfied all the
conditions on its part to be satisfied on or prior to the Closing Date.
2. There has been no amendment or other document filed affecting the
charter documents or the by-laws of the Company since March 2, 1995 and no
such amendment has been authorized. No event has occurred that has
affected the good standing of the Company under the laws of the State of
Delaware.
3. There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company from the end of the fiscal quarter immediately
proceeding the fiscal quarter in which the Closing Date occurs.
4. There are no actions, suits or proceedings pending with respect
to which it has received service of process or, to the best of such
officer's knowledge, threatened against or affecting the Company that, if
adversely determined, individually or in the aggregate, would be reasonably
likely to adversely affect the Company's obligations under the Pooling and
Servicing Agreement or this Agreement in any material way; no merger,
liquidation, dissolution or bankruptcy of the Company is pending or
contemplated.
L. The Trustee shall have furnished to the Underwriters a certificate of
the Trustee, signed by one or more duly authorized officers of the Trustee,
dated the Closing Date, as to the due authorization, execution and delivery of
the Pooling and Servicing Agreement by the Trustee and the acceptance by the
Trustee of the Trust Fund created thereby and the due execution,
24
authentication and delivery of the Certificates by the Trustee thereunder and
such other matters as the Representative shall reasonably request.
M. The Certificate Insurance Policy and the Insurance Agreement shall
have been issued by the Certificate Insurer and shall have been duly
authenticated by an authorized agent of the Certificate Insurer, if so required
under applicable state law or regulations.
N. The Offered Certificates shall be rated not lower than the required
ratings set forth under the heading "Ratings" in the Prospectus Supplement.
O. The Company shall, by the Closing Date, have furnished to the
Underwriters such further information, certificates and documents as the
Underwriters may reasonably have requested pursuant to a request made not less
than three full Business Days prior to the Closing Date.
P. Prior to the Closing Date, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the
Certificates 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 Company in connection with the issuance and sale of
the Certificates as herein contemplated shall be satisfactory in form and
substance to the Underwriters and counsel for the Underwriters.
Q. Subsequent to the execution and delivery of this Agreement, none of
the following shall have occurred: (i) 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;
(ii) a banking moratorium shall have been declared by federal or state
authorities; (iii) 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 (iv) 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 (i), (ii),
(iii) and (iv) herein, in the reasonable judgment of the Underwriters,
impractical or inadvisable to proceed with the public offering or delivery of
the Certificates on the terms and in the manner contemplated in the Prospectus.
R. The Representative shall have received from KPMG Peat Marwick LLP,
certified public accountants, (a) a letter, dated on or before the Closing Date,
in form and substance satisfactory to the Representative and counsel for the
Underwriters, addressed to each of the Underwriters to the effect that they have
performed certain specified procedures requested by the
25
Representative with respect to the information set forth in the Prospectus
and certain matters relating to the Company and (b) the letter prepared
pursuant to Section V.N.
S. The Representative and counsel for the Underwriters shall have
received copies of any opinions of counsel supplied to the Rating Agencies
relating to any matters with respect to the Certificates. Any such opinions
shall be dated the Closing Date and addressed to each of the Underwriters or
accompanied by reliance letters to the Representative or shall state that each
of the Underwriters may rely upon them.
T. On or prior to the Closing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of (A) any intended or
potential downgrading or (B) any review or possible change in rating the
direction of which has not been indicated, in the rating accorded the
Certificate Insurer's claims paying ability by any "nationally recognized
statistical rating organization," as such term is defined for purposes of the
Securities Act.
U. Subsequent to the date hereof, there shall not have occurred any
change, or any development involving a prospective change, in a condition,
financial or otherwise, or in the earnings, business, properties or operations
of (A) the Company and its subsidiaries or (B) the Certificate Insurer, that is,
in the Representative's judgment, material and adverse and that makes it, in the
Representative's judgment, impracticable to market the Offered Certificates on
the terms and in the manner contemplated in the Prospectus.
If any of the conditions specified in this Section VI shall not have been
fulfilled in all material respects when and as provided herein, this Agreement
and all obligations of an Underwriter hereunder may be canceled at, or at any
time prior to, the Closing Date by such Underwriter. The applicable Underwriter
shall give notice of such cancellation to the Company in writing, or by
telephone confirmed in writing. Such cancellation shall be without liability of
any party to any other party except as provided in Section VII.
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 reasonable satisfactory
to counsel for the Underwriters.
SECTION VII. Payment of Expenses. If the transaction closes, or if the
transaction fails to close other than as a result of a failure of the
Underwriters to perform hereunder, the Company agrees to pay: (a) the costs
incident to the authorization, issuance, sale and delivery of the Certificates
and any taxes payable in connection therewith; (b) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement and any amendments and exhibits thereto (including the Prospectus);
(c) the costs of distributing the Registration Statement as originally filed and
each amendment thereto and any post-effective amendments thereof (including, in
each case, exhibits), the Prospectus and any amendment or supplement to the
Prospectus or any document incorporated by reference therein, all as provided in
this Agreement; (d) the costs of reproducing and distributing this Agreement;
(e) the fees and
26
expenses of qualifying the Certificates under the securities laws of the
several jurisdictions as provided in Section V.I hereof and of preparing,
printing and distributing a "blue sky" memorandum (including any related fees
and expenses of counsel to the Underwriters); (f) any fees charged by the
Rating Agencies for rating the Offered Certificates; (g) the cost of the
accountant's letter relating to the Prospectus; (h) the fees and expenses of
the Certificate Insurer (other than the fees payable pursuant to the Pooling
and Servicing Agreement); (i) the cost of any accountant's comfort letters
that the Underwriters request relating to any Computational Materials or ABS
Term Sheets (except that the cost of any accountant's comfort letters that
the Underwriters request relating to any corrected Computational Materials or
ABS Term Sheets shall be at the expense of the Underwriter requesting same);
and (j) all other costs and expenses incident to the performance of the
obligations of the Company (including costs and expenses of its counsel);
provided, however, that the Underwriters shall pay any transfer taxes on the
Offered Certificates that they may sell and the expenses of advertising any
offering of the Offered Certificates made by the Underwriters.
If this Agreement is terminated by either Underwriter in accordance with
the provisions of Section VI or Section XI, whether or not the transactions
contemplated hereunder are consummated, the Company shall cause such Underwriter
to be reimbursed for all reasonable out-of-pocket expenses, including fees and
disbursements of counsel for such Underwriter, except that the Company shall not
be obligated under this Agreement to reimburse such Underwriter for reasonable
out-of-pocket expenses, excluding fees and disbursements of counsel for such
Underwriter, if this Agreement is terminated by either Underwriter in accordance
with Section VI.Q herein.
SECTION VIII. Indemnification and Contribution. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities, joint or several, to which they or any
of them may become subject under the Securities Act, the Exchange Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) were caused by (a) any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (if used within the period mentioned in Section V.G
and as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or were caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading except insofar as such
losses, claims, damages or liabilities were caused by any such untrue statement
or omission or alleged untrue statement or omission made therein based upon and
in conformity with (i) the information furnished in writing to the Company by
either Underwriter specifically for use in connection with the preparation of
the Registration Statement, any preliminary prospectus or the Prospectus or any
revision or amendment thereof or supplement thereto and (ii) any information in
any Computational Materials or ABS Term Sheets or Collateral Term Sheets, as
applicable (except to the extent such losses, claims, damages or
27
liabilities, or actions in respect thereof, are based on errors in such
Computational Materials or ABS Term Sheets caused directly by errors
described in clause (b) below), required to be provided by the Underwriters
to the Company pursuant to Section IV.B or (b) any error contained in the
Mortgage Pool information provided to the Underwriters by the Company for use
in connection with the preparation by the Underwriters of Computational
Materials or ABS Term Sheets. Such indemnity with respect to any Corrected
Statement (as defined below) in such Prospectus (or supplement thereto) shall
not inure to the benefit of the Underwriters (or any person controlling
either of the Underwriters) from whom the person asserting any loss, claim,
damage or liability purchased the Offered Certificates that are the subject
thereof if such person did not receive a copy of the 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 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.
The Underwriters agree, severally and not jointly, to indemnify and hold
harmless the Company and its directors and officers who sign the Registration
Statement and any person controlling the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Company to the Underwriters, but only
with reference to (i) information relating to either Underwriter furnished in
writing to the Company by such Underwriter specifically for use in connection
with the preparation of the Registration Statement, any preliminary prospectus
or the Prospectus or any revision or amendment thereof or supplement thereto and
(ii) any Computational Materials or ABS Term Sheets, as applicable, except for
errors therein caused directly by errors contained in the Mortgage Pool
information provided to the Underwriters by the Company for use in connection
with the preparation by the Underwriters of such materials.
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding
within thirty days after a statement therefor is received by the indemnifying
party. In any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party, in connection with any
28
proceeding or relating proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one separate firm (in addition to any
local counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Representative in the case of parties
indemnified pursuant to the first paragraph of this Section VIII and by the
Company in the case of parties indemnified pursuant to the second paragraph
of this Section VIII. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the third sentence of
this paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
To the extent the indemnification provided for this Section VIII is
available to an indemnified party under the first or second paragraph of this
Section VIII or is insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand, and the Underwriters on the
other, from the offering of the Offered Certificates or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand, and of each of the Underwriters on the other, in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand, and each of the
Underwriters on the other, in connection with the offering of the Offered
Certificates shall be deemed to be in the same respective proportions that the
total net proceeds from the offering of the Offered Certificates (before
deducting expenses) received by the Company and the total underwriting discounts
and commissions received by each of the Underwriters in respect thereof,
respectively, bear to the aggregate public offering price of the Offered
Certificates. The relative fault of the Company on the one hand, and of each of
the Underwriters on the other, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact related to information
supplied by the
29
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. Each Underwriter's obligation to contribute pursuant to this
Section VIII is several in proportion to the respective principal amounts of
the Offered Certificates it has purchased hereunder, and not joint.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section VIII were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section VIII, neither Underwriter shall be required to
contribute any amount in excess of the amount by which the total underwriting
discounts and commissions received by such Underwriter in connection with the
Offered Certificates underwritten and distributed to the public by such
Underwriter exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of any such untrue or alleged untrue
statement or omission or alleged omission. No person guilty or fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for this Section VIII are
not exclusive and shall not limit any rights or remedies that may otherwise be
available to any indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section VIII
and the representations and warranties of the Company in this Agreement shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of the
Underwriters or any person controlling either of the Underwriters or by or on
behalf of the Company, its directors or officers or any person controlling the
Company and (iii) acceptance of any payment for any of the Offered Certificates.
SECTION IX. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in agreements delivered pursuant hereto or certificates
of officers of the Company submitted pursuant hereto shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of the Underwriters or controlling persons thereof, or by or on behalf of the
Company and shall survive delivery of any Offered Certificates to the
Underwriters.
SECTION X. Default by an Underwriter. If either of the Underwriters shall
fail to purchase and pay for any of the Offered Certificates agreed to be
purchased by such Underwriter hereunder and such failure to purchase shall
constitute a default in the performance of its obligations under this Agreement,
the remaining Underwriter shall be obligated severally to take up and pay for
the Offered Certificates that the defaulting Underwriter agreed but failed to
30
purchase; provided, however, that in the event that the aggregate principal
amount of Offered Certificates that the defaulting Underwriter agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of all of the
Offered Certificates set forth in the Prospectus Supplement, the remaining
Underwriter shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Offered Certificates, and if such
nondefaulting Underwriter does not purchase all the Offered Certificates, this
Agreement will terminate without liability to the nondefaulting Underwriter or
the Company. In the event of a default by either Underwriter as set forth in
this Section X, the Closing Date shall be postponed for such period, not
exceeding seven days, as the nondefaulting Underwriter shall determine in order
that required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve a defaulting Underwriter of its liability, if any, to
the Company and to the nondefaulting Underwriter for damages occasioned by its
defaulting hereunder.
SECTION XI. Termination of Agreement. The Underwriters may terminate this
Agreement immediately upon notice to the Company, at any time at or prior to the
Closing Date if any of the events or conditions described in Section VI.Q of
this Agreement shall occur and be continuing. In the event of any such
termination, the provisions of Section VII, the indemnity agreement set forth in
Section VIII, and the provisions of Sections IX and XIV shall remain in effect.
SECTION XII. Notices. All statements, requests, notices and agreements
hereunder shall be in writing and effective only on receipt, and:
(i) if to the Underwriters, shall be delivered or sent by overnight
mail or facsimile transmission (confirmed by overnight mail) to the
Representative at its address set forth above, Attention: General Counsel,
telecopy number (000) 000-0000; and
(ii) if to the Company, shall be delivered or sent by overnight mail
or facsimile transmission (confirmed by overnight mail) to 00000 Xxxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attention: General Counsel,
telecopy number (000) 000-0000.
SECTION XIII. Persons Entitled to the Benefit of this Agreement. This
Agreement shall inure to the benefit and be binding upon the Underwriters and
the Company, 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 any of the Underwriters within the meaning of Section 15 of
the Securities Act, and for the benefit of directors of the Company, officers of
the Company who have signed the Registration Statement and any person
controlling the Company within the meaning of Section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any
31
person, other than the persons referred to in this Section XIII, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
SECTION XIV. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement, or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Certificates 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. The
provisions of Sections V, VII and VIII hereof shall survive the termination or
cancellation of this Agreement.
SECTION XV. Definition of the Term "Business Day". For purposes of this
Agreement, "Business Day" means any day on which the New York Stock Exchange,
Inc. is open for trading.
SECTION XVI. 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 submit to the jurisdiction of the United States District
Court for the Southern District of New York and the appellate court thereof, to
the extent jurisdiction is proper therein, 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, to the
extent permitted by law, in such federal court.
SECTION XVII. 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 XVIII. 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.
SECTION XIX. Amendments and Waivers. This Agreement may be amended,
modified, altered or terminated, and any of its provisions waived, only in a
writing signed on behalf of the Company and the Representative.
32
If the foregoing correctly sets forth the agreement between the Company and
the Underwriters, please indicate your acceptance in the space provided for the
purpose below.
Very truly yours,
EQUIVANTAGE ACCEPTANCE CORP.
By: /s/ Xxxxxxxxx Xxxx
-------------------------------
Name: Xxxxxxxxx Xxxx
Title: Senior Vice President
CONFIRMED AND ACCEPTED, as
of the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
Acting on its own behalf and as
Representative of the Underwriters
referred to in the foregoing Agreement
By: /s/ Xxx Xxxx
----------------------------
Name: Xxx Xxxx
Title: Managing Director
Schedule I
EquiVantage Home Equity Loan Trust 1997-4, Series 1997-4
Registration Statement No. 333-22343
Base Prospectus dated November 25, 1997
Prospectus Supplement dated November 25, 1997
Title of Certificates: Class A-1
Amount of Certificates: $29,380,000 (approximate)
Pass-Through Rate: LIBOR* + 0.17% per annum
Purchase Price Percentage: 99.70%
Cut-off Date: December 1, 1997
Closing: December 15, 1997
Denominations: $1,000 and integral multiples
of $1.00 in excess thereof
Title of Certificates: Class A-2
Amount of Certificates: $21,000,000 (approximate)
Pass-Through Rate 6.640% per annum
Purchase Price Percentage: 99.70% (plus accrued interest
from the Cut-off Date at
applicable Pass-Through
Rate)
Cut-off Date: December 1, 1997
Closing: December 15, 1997
Denominations: $1,000 and integral multiples
of $1.00 in excess thereof
* As defined in the Prospectus Supplement.
Schedule I-1
Title of Certificates: Class A-3
Amount of Certificates: $14,000,000 (approximate)
Pass-Through Rate: With respect to any Payment Date* that
occurs prior to the Step-Up Payment
Date*, 7.045% per annum and, with
respect to any Payment Date on the
Step-Up Payment Date or thereafter,
7.545% per annum
Purchase Price Percentage: 99.70% (plus accrued interest from
the Cut-off Date at applicable
Pass-Through Rate)
Cut-off Date: December 1, 1997
Closing: December 15, 1997
Denominations: $1,000 and integral multiples
of $1.00 in excess thereof
Title of Certificates: Class A-4
Amount of Certificates: $7,000,000 (approximate)
Pass-Through Rate: With respect to any Payment Date that
occurs prior to the Step-Up Payment
Date, 6.705% per annum and, with respect
to any Payment Date on the Step-Up
Payment Date or thereafter, 7.205% per
annum
Purchase Price Percentage: 99.70% (plus accrued interest from
the Cut-off Date at applicable
Pass-Through Rate)
Cut-off Date: December 1, 1997
Closing: December 15, 1997
Denominations: $1,000 and integral multiples
of $1.00 in excess thereof
* As defined in the Prospectus Supplement.
Schedule I-2
Title of Certificates: Class A-5
Amount of Certificates: $28,620,000 (approximate)
Pass-Through Rate: LIBOR + 0.24% for each Accrual Period*on
or prior to the Clean-Up Call Date*;
LIBOR + 0.48% thereafter
Purchase Price Percentage: 99.70%
Cut-off Date: December 1, 1997
Closing: December 15, 1997
Denominations: $1,000 and integral multiples
of $1.00 in excess thereof
Representative: Prudential Securities Incorporated
Date, Time and Location of Settlement: 10:00 a.m. on December 15, 1997
at the offices of Xxxxxxx &
Xxxxx L.L.P., 0000 Xxxxxxxxxxxx
Xxxxxx, X.X., Xxxxx 000,
Xxxxxxxxxx, XX 00000
* As defined in the Prospectus Supplement.
Schedule I-3
Schedule II
Class ofCertificates Principal Amount of Certificates
Name of Underwriter Purchased by suchUnderwriter Purchased by such Underwriter
Prudential Securities Incorporated Class A-1 $14,690,000
Class A-2 $10,500,000
Class A-3 $ 7,000,000
Class A-4 $ 3,500,000
Class A-5 $14,310,000
------------
TOTAL $50,000,000
============
Class of Certificates Principal Amount ofCertificates
Name of Underwriter Purchased by suchUnderwriter Purchased by such Underwriter
First Union Capital Markets Corp. Class A-1 $14,690,000
Class A-2 $10,500,000
Class A-3 $ 7,000,000
Class A-4 $ 3,500,000
Class A-5 $14,310,000
------------
TOTAL $50,000,000
============
SCHEDULE II
