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EXHIBIT 1.1
NON-REMIC UA
EXECUTION
FIRSTPLUS HOME LOAN OWNER TRUSTS
ASSET-BACKED SECURITIES
(Issuable in Series)
UNDERWRITING AGREEMENT
Banc One Capital Corporation September 24,
1996
000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Small
Ladies and Gentlemen:
FIRSTPLUS INVESTMENT CORPORATION, a corporation organized and
existing under the laws of the State of Nevada (the "Company"), proposes to
cause FIRSTPLUS HOME LOAN OWNER TRUSTS (each, a "Trust") to offer for sale from
time to time its Asset-Backed Securities evidencing interests in pools of
certain contracts and mortgage loans (the "Securities"). The Securities may be
issued in various series, and within each series, in one or more classes, in
one or more offerings on terms determined at the time of sale (each such
series, a "Series" and each such class, a "Class"). Each Trust may issue one
or more classes of Asset-Backed Notes (the "Notes") pursuant to an Indenture to
be dated as of the respective cut-off date (each, a "Cut-off Date") as
supplemented by one or more supplements to such Indenture (such Indenture, as
supplemented, the "Indenture") between the related Trust and the indenture
trustee named therein (the "Indenture Trustee"). Simultaneously with the
issuance of the Notes, the Trust may issue Asset-Backed Certificates (the
"Certificates"), each representing a fractional undivided ownership interest in
the related Trust,
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pursuant to a separate Trust Agreement (each, a "Trust Agreement") to be dated
as of the respective Cut-off Date among the Trust, one or more affiliates of
the Company and the owner trustee, named therein (the "Owner Trustee").
The assets of each Trust will consist primarily of a pool of
fixed- or adjustable-rate, fully-amortizing property improvement and/or debt
consolidation loans, and the related notes and mortgages (collectively, the
"Home Loans") having the original terms to maturity and interest rate types
specified in the related Terms Agreement referred to hereinbelow. Certain of
the Home Loans may be partially insured by the Federal Housing Administration
(the "FHA") of the United States Department of Housing and Urban Development
("HUD") pursuant to Title I of the National Housing Act of 1934, as amended
("Title I Home Loans"). Unless otherwise specified in the related Prospectus
Supplement and the related Sale and Servicing Agreement (as defined below), the
Company or its affiliate, as FHA Insurance Holder (the "FHA Insurance Holder"),
will enter into an FHA claims administration agreement (each, an "FHA Claims
Agreement") with FIRSTPLUS FINANCIAL, INC., as transferor and servicer (the
"Transferor" or "Servicer") pursuant to which the Servicer will administer,
process and submit claims (the Servicer in such capacity, the "FHA Claims
Administrator") to the FHA in respect of Title I Home Loans.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned thereto in the related sale and servicing agreement to be
dated as of the applicable Cut-off Date (the "Sale and Servicing Agreement"),
among the Company as seller (the "Seller"), the Servicer, the Indenture Trustee
and the related Trust, or, if not defined therein, in the respective Indenture
or Trust Agreement.
If and to the extent specified in the related Sale and Servicing
Agreement, in addition to the Home Loans conveyed to the Trust on the Closing
Date (such Home Loans so conveyed to the Trust at such time, the "Initial Home
Loans"), the Seller shall be obligated to convey to the Trust, from time to
time during the period commencing after the Closing Date and ending at the
expiration of the period specified in such Sale and Servicing Agreement (each,
a "Pre-Funding Period")(the date of any such conveyance, a "Subsequent Transfer
Date"), additional Home Loans
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(any such additional Home Loans so conveyed to the Trust through the Pre-
Funding Period, the "Subsequent Home Loans").
The Securities may have the benefit of one or more insurance policies
(each, a "Policy") issued by the securities insurer named therein (the
"Securities Insurer") pursuant to an indemnity and insurance agreement among
the Seller, the Indenture Trustee, the Servicer and the Securities Insurer (the
"Insurance Agreement").
Underwritten offerings of Securities may be made through you
or through an underwriting syndicate managed by you. The Company proposes to
sell one or more Series of the Securities to you and to each of the other
several underwriters, if any, participating in an underwriting syndicate
managed by you.
Whenever the Company determines to make an offering of
Securities (each, an "Offering") pursuant to this Agreement through you, it
will enter into an agreement (the "Terms Agreement") providing for the sale of
specified Classes of Offered Securities (as defined below) to, and the purchase
and public offering thereof by, you and such other underwriters, if any,
selected by you as have authorized you to enter into such Terms Agreement on
their behalf (the underwriters designated in any such Terms Agreement being
referred to herein as "Underwriters," which term shall include you whether
acting alone in the sale of any Offered Securities of any series or as a member
of an underwriting syndicate). Each such Offering which the Company elects to
make pursuant to this Agreement shall be governed by this Agreement, as
supplemented by the related Terms Agreement, and this Agreement and such Terms
Agreement shall inure to the benefit of and be binding upon each underwriter
participating in the offering of such Offered Securities. Each Terms
Agreement, which shall be substantially in the form of Exhibit A hereto, shall
specify, among other things, the Classes of Securities to be purchased by the
Underwriters (the "Offered Securities"), whether such Offered Securities
constitute Notes or Certificates, the principal balance or balances of the
Offered Securities, each subject to any stated variance, the names of the
Underwriters participating in such offering (subject to substitution as
provided in Section 13 hereof) and the price or prices at which such Offered
Securities are to be purchased by the Underwriters from the Company.
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1. Representations and Warranties. (a) The Company and
FFI represent and warrant to and agree with the Underwriters, as of the date of
the related Terms Agreement, that:
(i) The registration statement
specified in the related Terms Agreement, on Form S-3,
including a prospectus, has been filed with the Securities and
Exchange Commission (the "Commission") for the registration
under the Securities Act of 1933, as amended (the "Act"), of
asset-backed securities issuable in series, which registration
statement has been declared effective by the Commission. Such
registration statement, as amended to the date of the related
Terms Agreement, including any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the
Act which were filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), on or before the
effective date of the Registration Statement, is hereinafter
called the "Registration Statement," and such prospectus, as
such prospectus is supplemented by a prospectus supplement
relating to the Offered Securities of the related Series, each
in the form first filed via XXXXX by a financial printer or
another person designated by the Company (the "Financial
Printer") after the date of the related Terms Agreement
pursuant to Rule 424(b) under the Act, including any documents
incorporated by reference therein pursuant to Item 12 of Form
S-3 under the Act which were filed under the Exchange Act on
or before the date of such Prospectus Supplement (other than
any such incorporated documents that relate to Collateral Term
Sheets (as defined herein)) (such prospectus supplement,
including such incorporated documents (other than those that
relate to Collateral Term Sheets), in the form first filed
after the date of the related Terms Agreement pursuant to Rule
424(b) is hereinafter called the "Prospectus Supplement"), is
hereinafter called the "Final Prospectus". Any preliminary
prospectus, including any preliminary prospectus supplement
which, as completed, is proposed to be used in connection with
the sale of a Series of Offered Securities and any prospectus
filed with the Commission pursuant to Rule 424(a) of the Act
is hereinafter referred to as a "Preliminary Prospectus." Any
reference herein to the terms "amend,"
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"amendment" or "supplement" with respect to the Registration
Statement, the Preliminary Prospectus, the Final Prospectus or
the Prospectus Supplement shall be deemed to refer to and
include the filing of any document under the Exchange Act
after the effective date of the Registration Statement or the
issue date of the Preliminary Prospectus, the Final Prospectus
or Prospectus Supplement, as the case may be, deemed to be
incorporated therein by reference pursuant to Item 12 of Form
S-3 under the Act.
(ii) The related Registration
Statement, at the time it became effective, and the prospectus
contained therein, and any amendments thereof and supplements
thereto filed prior to the date of the related Terms
Agreement, conformed in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder; on the date of the related Terms
Agreement and on each Closing Date (as defined in Section 3
below), the related Registration Statement and the related
Final Prospectus, and any amendments thereof and supplements
thereto, will conform in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder; such 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; such Final Prospectus, on the date of
any filing pursuant to Rule 424(b) and on each Closing Date,
will not include any untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
are made, not misleading; and the Form 8-K relating to any
Subsequent Home Loans, on the date of any filing thereof, will
not include any untrue statement of a material fact or omit to
state any information which such Final Prospectus states will
be included in such Form 8-K; provided, however, that the
Company makes no representations or warranties as to the
information contained in or omitted from (A) such Registration
Statement or such Final Prospectus (or any supplement thereto)
in reliance upon and in conformity
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with written information furnished to the Company by or on
behalf of the Underwriters specifically for use in the
preparation thereof or (B) any Current Report (as defined in
Section 5(b) below), or in any amendment thereof or supplement
thereto, incorporated by reference in such Registration
Statement or such Final Prospectus (or any amendment thereof
or supplement thereto).
(iii) The Securities of the
related Series will conform to the description thereof
contained in the related Final Prospectus; and will each on
the related Closing Date be duly and validly authorized, and,
when validly executed, countersigned, issued and delivered in
accordance with the related Indenture or Trust Agreement, as
applicable, and sold to you as provided herein and in the
related Terms Agreement, will each be validly issued and
outstanding and entitled to the benefits of such Indenture or
Trust Agreement, as applicable, and, if applicable, the
related Policy.
(iv) Neither the issuance nor
sale of the Securities of the related Series nor the
consummation of any other of the transactions herein
contemplated, nor the fulfillment of the terms hereof or of
the related Terms Agreement, will conflict with any statute,
order or regulation applicable to the Company of any court,
regulatory body, administrative agency or governmental body
having jurisdiction over the Company or with any
organizational document of the Company or any instrument or
any agreement under which the Company is bound or to which it
is a party.
(v) This Agreement and the
related Terms Agreement have been duly authorized, executed
and delivered by the Company.
(vi) At or prior to the related
Closing Date, the Trust will have entered into the related
Indenture, Trust Agreement and any Insurance Agreement and,
assuming the due authorization, execution and delivery thereof
by the other parties thereto, such Indenture, such Trust
Agreement and such Insurance Agreement (on such Closing Date)
will constitute the
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valid and binding agreement of the Trust enforceable in
accordance with its terms, subject as to enforceability, to
bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights and to general principles of
equity (regardless of whether the enforceability of such
Indenture, such Trust Agreement or such Insurance Agreement is
considered in a proceeding in equity or at law).
(vii) At or prior to the related
Closing Date, the Company will have entered into the related
Sale and Servicing Agreement and any related FHA Claims
Agreement and, assuming the due authorization, execution and
delivery thereof by the other parties thereto, such Sale and
Servicing Agreement and such FHA Claims Agreement (on such
Closing Date) will constitute the valid and binding agreement
of the Company enforceable in accordance with its terms,
subject as to enforceability, to bankruptcy, insolvency,
reorganization or other similar laws affecting creditors'
rights and to general principles of equity (regardless of
whether the enforceability of such Sale and Servicing
Agreement and such FHA Claims Agreement is considered in a
proceeding in equity or at law).
(viii) The FHA Insurance Holder and
the Transferor are each approved by the FHA as a lender under
the Title I program and each holds a valid contract of
insurance or approval for insurance under the Title I program;
the FHA Insurance Holder, will have received prior to each
Closing Date or Subsequent Transfer Date, as the case may be,
all material consents, authorizations, orders and approvals
from governmental authorities, agencies or bodies and all
other material actions will have been taken prior to such
Closing Date or Subsequent Transfer Date, which are necessary
to permit the FHA Insurance Holder to obtain the benefit of
the FHA Insurance in respect of the related Title I Home Loan
as described in the related Final Prospectus and will have
completed prior to each Closing Date or Subsequent Transfer
Date, as the case may be, all material actions of the
Transferor and the FHA Insurance Holder that are necessary to
duly and validly effect the
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transfer of the FHA Insurance applicable to the Title I Home
Loans into the FHA contract of insurance coverage reserve
account of the FHA Insurance Holder.
(ix) If applicable, the related
Policy, when delivered, will constitute the legal, valid and
binding obligation of the Securities Insurer, enforceable in
accordance with its terms.
(x) Any funds or accounts
established from time to time with respect to a Series of
Securities in accordance with the related Indenture, Trust
Agreement or Sale and Servicing Agreement will have been
properly funded at the Closing Date by the deposit by the
Seller of the requisite cash therein, in the manner specified
by such Indenture, Trust Agreement or Sale and Servicing
Agreement.
(xi) Immediately prior to the
transfer and assignment thereof on the Closing Date, and on
any Subsequent Transfer Date, Transferor had good title to,
and was the sole owner of, each Home Loan and all action had
been taken to obtain good record title to each related Home
Loan. Each Home Loan has, as of such date(s), will be
transferred free and clear of any lien, mortgage, pledge,
charge, security interest, adverse claim or other encumbrance.
(xii) Neither the Seller, the
Transferor, the Trust nor any funds or accounts established
thereunder is an "investment company" (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"))
or is under the "control" (as such term is defined in the 0000
Xxx) of an "investment company" that is registered or required
to be registered under, or is otherwise subject to the
provisions of, the 1940 Act.
2. Purchase and Sale. Subject to the execution of the
Terms Agreement for a particular Offering and subject to the terms and
conditions and in reliance upon the representations and warranties set forth in
this Agreement and such Terms Agreement, the Company agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not
jointly, agrees to
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purchase from the Company, the respective original principal amounts of the
related Offered Securities set forth in the related Terms Agreement opposite
the name of such Underwriter, plus any additional original principal amount of
Offered Securities which such Underwriter may be obligated to purchase pursuant
to Section 13 hereof, at the purchase price therefor set forth in such Terms
Agreement (the "Purchase Price").
The parties hereto agree that settlement for all securities
sold pursuant to this Agreement shall take place on the terms set forth herein
and not as set forth in Rule 15c6-1(a) under the Exchange Act.
3. Delivery and Payment. Delivery of and payment for
the Offered Securities of a Series shall be made at the specified offices of
Xxxxxxx & Xxxxx L.L.P., at 10:00 a.m. New York City time, on the Closing Date
specified in the related Terms Agreement, which date and time may be postponed
by agreement between the Underwriters and the Company (such date and time being
herein called the "Closing Date"). Delivery of such Offered Securities shall
be made to the Underwriters against payment by the Underwriters of the Purchase
Price thereof to or upon the order of the Company by wire transfer in federal
or other immediately available funds. Unless delivery is made through the
facilities of The Depository Trust Company, the Offered Securities shall be
registered in such names and in such authorized denominations as the
Underwriters may request not less than two full business days in advance of
each Closing Date.
The Company agrees to notify the Underwriters at least two
business days before each Closing Date of the exact principal balance evidenced
by the Offered Securities and to have such Offered Securities available for
inspection, checking and packaging in New York, New York, no later than 12:00
noon on the business day prior to such Closing Date.
4. Offering by the Underwriters. It is understood that
the Underwriters propose to offer the Offered Securities of the related Series
for sale to the public as set forth in the related Final Prospectus.
5. Agreements. The Company and FFI agree with the
Underwriters that:
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(a) The Company will cause the each of the
Preliminary Prospectus and the Final Prospectus as supplemented by a
Prospectus Supplement relating to the Offered Securities to be filed
pursuant to Rule 424 under the Act and will promptly advise the
Underwriters when such Preliminary Prospectus and such Final
Prospectus as so supplemented has been so filed, and prior to the
termination of the Offering to which such Preliminary Prospectus and
Final Prospectus relates also will promptly advise the Underwriters
(i) when any amendment to the related Registration Statement
specifically relating to such Offered Securities shall have become
effective or any further supplement to such Preliminary Prospectus or
such Final Prospectus has been filed, (ii) of any request by the
Commission for any amendment of such Registration Statement,
Preliminary Prospectus or Final Prospectus or for any additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of such Registration Statement or the
institution or threatening of any proceeding for that purpose and (iv)
of the receipt by the Company of any written notification with respect
to the suspension of the qualification of such Offered Securities for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will not file any amendment
of the related Registration Statement or supplement to the related
Preliminary Prospectus or Final Prospectus (other than any amendment
or supplement specifically relating to one or more Series of
asset-backed securities other than the Series that includes the
related Offered Securities) unless (i) the Company has given
reasonable notice of its intention to file any such amendment or
supplement, (ii) the Company has furnished the Underwriters with a
copy for their review within a reasonable time prior to filing, and
(iii) the Underwriters do not reasonably object to the filing of such
amendment or supplement. The Company will use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(b) The Company will cause any Computational
Materials and any Structural Term Sheets (each as defined in Section 8
below) with respect to the Offered Securities of a Series that are
delivered by an Underwriter to the Company pursuant to Section 8 to be
filed with the Commission on a
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Current Report on Form 8-K (a "Current Report") pursuant to Rule
13a-11 under the Exchange Act in accordance with Section 10 on the
business day immediately following the date on which the related Terms
Agreement is executed and delivered. The Company will cause any
Collateral Term Sheet (as defined in Section 9 below) with respect to
the Offered Securities of a Series that is delivered by the
Underwriters to the Company in accordance with the provisions of
Section 9 to be filed with the Commission on a Current Report pursuant
to Rule 13a-11 under the Exchange Act in accordance with Section 10 on
the business day immediately following the day on which such
Collateral Term Sheet is delivered to counsel for the Company by the
Underwriters prior to 10:30 a.m. In addition, if at any time prior to
the availability of the related Prospectus Supplement, the
Underwriters have delivered to any prospective investor a subsequent
Collateral Term Sheet that reflects, in the reasonable judgment of the
Underwriters and the Company, a material change in the characteristics
of the Home Loans for the related Series from those on which a
Collateral Term Sheet with respect to the related Series previously
filed with the Commission was based, the Company will cause any such
Collateral Term Sheet that is delivered by the Underwriters to the
Company in accordance with the provisions of Section 9 hereof to be
filed with the Commission on a Current Report in accordance with
Section 10. Each such Current Report shall be incorporated by
reference in the related Final Prospectus and the related Registration
Statement.
(c) If, at any time when a prospectus relating to
the Offered Securities of a Series is required to be delivered under
the Act, any event occurs as a result of which the related Final
Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in light of the circumstances
under which they were made not misleading, or if it shall be necessary
at any time to amend or supplement the related Final Prospectus to
comply with the Act or the rules thereunder, the Company promptly will
prepare and file with the Commission, subject to paragraph (a) of this
Section 5, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance; provided, however, that the Company will not be required
to file any such amendment or
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supplement with respect to any Computational Materials, Structural
Term Sheets or Collateral Term Sheets incorporated by reference in
the Final Prospectus other than any amendments or supplements of such
Computational Materials or Structural Term Sheets that are furnished
to the Company by the Underwriters pursuant to Section 8(e) hereof or
any amendments or supplements of such Collateral Term Sheets that are
furnished to the Company by the Underwriters pursuant to Section 9(d)
hereof which are required to be filed in accordance therewith.
(d) The Company will furnish to the Underwriters
and counsel for the Underwriters, without charge, and, so long as
delivery of a prospectus by the Underwriters or a dealer may be
required by the Act, as many copies of the related Preliminary
Prospectus and the related Final Prospectus and any supplements
thereto (other than exhibits to the related Current Report) as the
Underwriters may reasonably request.
(e) The Company will furnish such information,
execute such instruments and take such actions as may be reasonably
requested by the Underwriters to qualify the Offered Securities of a
Series for sale under the laws of such jurisdictions as the
Underwriters may designate, to maintain such qualifications in effect
so long as required for the distribution of such Offered Securities
and to determine the legality of such Offered Securities for purchase
by investors; provided, however, that the Company shall not be
required to qualify to do business in any jurisdiction where it is not
qualified on the date of the related Terms Agreement or to take any
action which would subject it to general or unlimited service of
process or corporate or franchise taxation as a foreign corporation in
any jurisdiction in which it is not, on the date of the related Terms
Agreement, subject to such service of process.
(f) So long as the Offered Securities of a Series
are outstanding, the Company will furnish to the Underwriters copies
of the annual independent public accountants' servicing report
furnished to the Indenture Trustee pursuant to the related Sale and
Servicing Agreement.
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(g) Whether or not the transactions
contemplated hereby and by the related Terms Agreement shall be
consummated, the Company shall be responsible for the payment of any
costs and expenses for which details are submitted, in connection with
the performance of its obligations under this Agreement and the
related Terms Agreement, including, without limitation, (a) the cost
and expenses of printing or otherwise reproducing the related
Registration Statement, the related Preliminary Prospectus, the
related Final Prospectus, this Agreement, the related Terms Agreement,
the related Sale and Servicing Agreement, the related Trust Agreement,
the related Indenture and the Offered Securities, and (b) the cost of
delivering the related Offered Securities to the office of the
Underwriters, insured to the satisfaction of the Underwriters, (c) the
fees and disbursements of the Seller's and the Servicer's counsel and
accountants, (d) the qualification of the Securities under state
securities or blue sky laws, including filing fees and the fees and
disbursements of counsel for you in connection therewith and in
connection with the preparation of any blue sky survey and legal
investment survey, (e) the printing, word processing and duplicating
expenses and supervision related to preparation of and delivery to the
Underwriter of copies of any document contemplated hereunder and any
blue sky survey and legal investment survey, (f) the fees of rating
agencies, (g) the fees and expenses, if any, incurred in connection
with the listing of the Offered Securities on any national securities
exchange, (h) the fees, if any, of the National Association of
Securities Dealers, Inc., and the fees and expenses of counsel for you
in connection with any required written submission to or appearance
before such entity, (i) the fees and expenses of the Indenture
Trustee, the Owner Trustee, any custodian, the backup servicer and the
Securities Insurer, and their respective counsel, and (j) any such
other related expenses not specified above.
6. Conditions to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the Offered Securities of any
Series shall be subject to the accuracy in all material respects of the
representations and warranties on the part of the Company contained in this
Agreement, as supplemented by the related Terms Agreement, as of the respective
dates thereof and the related Closing Date, to the accuracy of the statements
of the
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Company made in any applicable officers' certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations under
this Agreement and such Terms Agreement and to the following additional
conditions applicable to the related Offering:
(a) No stop order suspending the effectiveness of
the related Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) Xxxxxxx & Xxxxx, counsel for the Company,
shall have furnished to the Underwriters an opinion, dated the related
Closing Date, to the effect that:
(i) this Agreement and the
related Terms Agreement have been duly executed and delivered
by the Company;
(ii) each of the related Sale and
Servicing Agreement and any FHA Claims Agreement have been
duly executed and delivered by the Company and is a legal,
valid and binding agreement of the Company enforceable against
the Company in accordance with its terms;
(iii) each of the related
Indenture, Trust Agreement and any Insurance Agreement have
been duly executed and delivered by the Trust and is a legal,
valid and binding agreement of the Trust enforceable against
the Trust in accordance with its terms;
(iv) the Notes, when duly
executed and delivered by the Owner Trustee and when
authenticated by the Indenture Trustee in accordance with the
related Indenture, will be validly issued and outstanding and
entitled to the benefits of such Indenture;
(v) the Certificates, when duly
executed and delivered by the Owner Trustee in accordance with
the related Trust Agreement, will be validly issued and
outstanding and entitled to the benefits of such Trust
Agreement;
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(vi) the related Trust Agreement
is not required to be qualified under the Trust Indenture Act
of 1939, as amended, (the "Trust Indenture Act") and the Trust
created thereunder is not required to be registered under the
1940 Act;
(vii) the Indenture has been duly
qualified under the Trust Indenture Act;
(viii) the related Indenture
constitutes a grant by the Trust to the Indenture Trustee of a
valid and perfected security interest in, on the Closing Date,
and on any Subsequent Transfer Date, the Home Loans and any
funds or accounts to be deposited or established with such
Indenture Trustee for the benefit and security of the holders
of the related Notes (and any cash deposited therein), subject
to no prior lien, mortgage, pledge, charge, security
interest, adverse claim or other encumbrance.
(ix) such counsel confirms that
the related Registration Statement is effective under the Act
and, to the best of such counsel's knowledge, no stop order
with respect thereto has been issued, and no proceeding for
that purpose has been instituted or threatened by the
Commission under the Act; such Registration Statement (except
the financial statements and schedules and other financial and
statistical data included therein and the documents
incorporated by reference therein), at the time it became
effective and the related Final Prospectus (except the
financial statements and schedules and the other financial and
statistical data included therein, the documents incorporated
by reference therein and the information included in the first
sentence of the last paragraph on the cover page, the
information under the heading "Underwriting" therein insofar
as such information relates to the offer and sale of the
Securities by the Underwriters, as of the date of the
Prospectus Supplement, conformed in all material respects to
the requirements of the Act and the rules and regulations
thereunder; and no information has come to the attention of
such counsel that causes it to believe that (A) such
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Registration Statement (except the financial statements and
schedules and the other financial and statistical data
included therein and the documents incorporated by reference
therein) at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading or (B) such Final Prospectus
or any amendment or supplement thereto (except the financial
statements and schedules and the other financial and
statistical data included therein, the documents incorporated
by reference therein and the information included in the first
sentence of the last paragraph on the cover page, the
information under the heading "Underwriting" therein insofar
as such information relates to the offer and sale of the
Securities by the Underwriters), as of the date of the
Prospectus Supplement or at the related 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;
(x) the statements set forth
under the headings "Description of the Transfer and Servicing
Agreements" and "Description of the Offered Securities" in the
related Final Prospectus, insofar as such statements purport
to summarize certain provisions of the related Trust
Agreement, the related Indenture, the related Sale and
Servicing Agreement" and the related Offered Securities,
provide a fair summary of such provisions;
(xi) the statements set forth in
the related Final Prospectus under the headings "Certain Legal
Aspects of the Loan Assets", "Certain Federal Income Tax
Consequences" (insofar as they relate specifically to the
purchase, ownership and disposition of the related Offered
Securities) and "ERISA Considerations" (insofar as they relate
specifically to the purchase, ownership and disposition of
such Offered Securities), to the extent that they constitute
matters
- 16 -
17
of law or legal conclusions, provide a fair summary of such
law or conclusions;
(xii) such HUD/FHA regulatory
matters as reasonably required by the Underwriters; and
(xiii) the statements set forth in
the related Final Prospectus under the heading "Certain
Federal Income Tax Consequences" and in the related Prospectus
Supplement under the heading "Summary of Terms -- Tax Status",
to the extent such statements relate to federal income tax
consequences, accurately describe the material federal income
tax consequences to holders of the Securities.
Such opinion may express its reliance as to factual matters on the
representations and warranties made by, and on certificates or other
documents furnished by, officers of the parties to this Agreement, the
related Terms Agreement, the related Sale and Servicing Agreement, the
related Indenture, the related Trust Agreement or any related
Insurance Agreement. Such opinion may 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, insofar as it concerns the enforceability of the
documents referred to therein, to the extent that such enforceability
may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights in general
and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law). Such
opinion may be further qualified as expressing no opinion as to (x)
the statements in the related Final Prospectus under the heading
"Certain Legal Aspects of the Loan Assets" except insofar as such
statements relate to the laws of the State of Texas and the laws of
the United States, and (y) the statements in such Final Prospectus
under the headings "ERISA Considerations" and "Certain Federal Income
Tax Consequences" except insofar as such statements relate to the laws
of the United States.
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18
(c) Xxxxxx X. Xxxxxxx, as General Counsel for
the Company and FFI, shall have furnished to the Underwriters an
opinion, dated the related Closing Date, to the effect that:
(i) Each of the Company and FFI
have been duly incorporated and each is validly existing as a
corporation in good standing in the jurisdiction of its
organization with corporate power to own its properties, to
conduct its business as described in the related Final
Prospectus and to enter into and perform its obligations under
this Agreement, the related Terms Agreement, the related Sale
and Servicing Agreement, the related Indenture, the related
Trust Agreement, the related Insurance Agreement and the
Securities of the related Series, as applicable;
(ii) The Company has full power
and authority to deposit the related Home Loans as
contemplated herein and in the related Trust Agreement and FFI
has full power and authority to transfer and service the
related Home Loans as contemplated in the related Sale and
Servicing Agreement;
(iii) No consent, approval,
authorization or order of any court or governmental agency or
body is required for the consummation by (a) the Company of
the transactions contemplated herein and in the related Sale
and Servicing Agreement, Trust Agreement and Indenture (b) by
FFI of the transactions contemplated in the related Sale and
Servicing Agreement, except such as may be required under the
blue sky laws of any jurisdiction and such other approvals as
have been obtained;
(iv) Neither the issuance of the
Securities of the related Series nor delivery of the related
Offered Securities, nor the consummation of any other of the
transactions contemplated in this Agreement, the related Terms
Agreement, the related Sale and Servicing Agreement, the
related Trust Agreement, the related Indenture or the related
Insurance Agreement, nor the fulfillment of the terms of the
related Securities, the related Sale and Servicing Agreement,
the related Indenture, the related Trust Agreement, this
Agreement,
- 18 -
19
the related Terms Agreement or the related Insurance
Agreement, as applicable, will conflict with or violate any
term or provision of the articles of incorporation or by-laws
of the Company or FFI, as applicable or any statute, order or
regulation applicable to the Company of any court, regulatory
body, administrative agency or governmental body having
jurisdiction over the Company or FFI and will not conflict
with, result in a breach or violation or the acceleration of
or constitute a default under the terms of any indenture or
other agreement or instrument known to such counsel to which
the Company or FFI is a party or by which it is bound; and
(v) There are no actions,
proceedings or investigations pending or, to the best
knowledge of such counsel, threatened before any court,
administrative agency or other tribunal (i) asserting the
invalidity of this Agreement, the related Terms Agreement, the
related Sale and Servicing Agreement, the related Trust
Agreement, the related Indenture, the related Insurance
Agreement or the related Securities, (ii) seeking to prevent
the issuance of the Securities of the related Series or the
consummation by the Company or FFI, as applicable, of any of
the transactions contemplated by this Agreement, such Terms
Agreement, such Sale and Servicing Agreement, such Indenture,
such Trust Agreement or such Insurance Agreement, or (iii)
which might materially and adversely affect the performance by
the Company or FFI, as applicable, of its obligations under,
or the validity or enforceability of, this Agreement, such
Terms Agreement, such Sale and Servicing Agreement, such
Indenture, such Trust Agreement, such Insurance Agreement or
the related Securities.
In rendering his opinion such counsel may rely as to matters of fact,
to the extent deemed proper and as stated therein, on certificates of
responsible officers of the Company, FFI or public officials.
(d) The Underwriters shall have received from
Xxxxx & Wood, counsel for the Underwriters, such opinion or opinions,
dated the related Closing Date, with respect to the issuance and sale
of the Securities of the related Series, the
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20
related Registration Statement, the related Final Prospectus and such
other related matters in form and substance that is customary and
reasonably acceptable to the Underwriters, and the Company shall have
furnished to such counsel such documents as the Underwriters may
reasonably request for the purpose of enabling them to pass upon such
matters.
(e) The Company shall have furnished to the
Underwriters a certificate of the Company, signed by the President or
any Vice President dated the related Closing Date, to the effect that
the signers of such certificate have carefully examined the related
Registration Statement (excluding any Current Reports and any other
documents incorporated by reference therein), the related Final
Prospectus, the Form 8-K relating to the Subsequent Home Loans, this
Agreement and the related Terms Agreement and that:
(i) the representations and
warranties of the Company in this Agreement are true and
correct in all material respects on and as of the related
Closing Date with the same effect as if made on such Closing
Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to such Closing Date;
(ii) no stop order suspending the
effectiveness of such Registration Statement has been issued
and no proceedings for that purpose have been instituted or,
to their knowledge, threatened; and
(iii) nothing has come to their
attention that would lead them to believe that such
Registration Statement (excluding any Current Report) contains
any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading, that the related
Final Prospectus (excluding the related Current Report)
contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or
that the Form 8-K relating to
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21
the Subsequent Home Loans includes any untrue statement of a
material fact or omits to state any information which the
Final Prospectus states will be included in such Form 8-K.
(f) Counsel for the Indenture Trustee shall have
furnished to the Underwriters an opinion, dated the related Closing
Date, in form and substance that is customary and reasonably
acceptable to the Underwriters regarding certain matters relating to
the Indenture Trustee.
(g) Counsel for the Owner Trustee shall have
furnished to the Underwriters an opinion, dated the related Closing
Date, in form and substance that is customary and reasonably
acceptable to the Underwriters regarding certain matters relating to
the Owner Trustee.
In addition, such counsel shall furnish to the Underwriters
such opinions as to the treatment of the Trust Fund for purposes of
state tax law where the Owner Trustee maintains possession of the
assets of the Trust Fund as are customary and reasonably satisfactory
to the Underwriters.
(h) Ernst & Young LLP shall have furnished to the
Underwriters one or more letters in form and substance that is
customary and reasonably satisfactory to the Underwriters, to the
effect that they have performed certain specified procedures requested
by the Underwriters with respect to certain information relating to
the Offered Securities and certain matters relating to the Company and
the Servicer.
(i) The Policy relating to the Offered Securities
of the related Series, if any, shall have been duly executed and
issued prior to the Closing Date, in form and substance that is
customary and reasonably satisfactory to the Underwriters, and shall
conform in all respects to the description thereof in the Prospectus.
(j) If applicable, counsel for the Securities
Insurer shall have furnished to the Underwriters an opinion, dated the
related Closing Date, in form and substance that is customary and
reasonably acceptable to the Underwriters
- 21 -
22
regarding to certain matters relating to the Securities Insurer.
In rendering his opinion such counsel may rely as to matters
of fact, to the extent deemed proper and as stated therein, on
certificates of responsible officers of the Securities Insurer or
public officials.
(k) The Owner Trustee shall have received from
the Seller all funds required to be delivered by the Seller to be
deposited in any account required to be established in accordance with
the related Trust Agreement.
(l) If applicable, the Servicer, as FHA Claims
Administrator, and the Seller, as FHA Insurance Holder, shall have
executed and delivered the FHA Claims Agreement in form and substance
reasonably acceptable to the Underwriters.
(m) The Offered Securities of the related Series
shall have received the ratings specified in the related Terms
Agreement (the "Required Ratings").
(n) On or prior to the Closing Date, there has
been no downgrading, nor has any notice been given of (i) any intended
or possible downgrading or (ii) any review or possible changes in
rating the direction of which has not been indicated, in the rating
accorded and originally requested by the Company relating to any
previously issued asset-backed securities of the Company by any
"nationally recognized statistical rating organization" (as such terms
is defined for purposes of the Exchange Act).
(o) On or prior to the Closing Date, there has
been no downgrading, not has any notice been given of (i) any intended
or possible downgrading or (ii) any review or possible changes in
rating the direction of which has not been indicated, in the rating
accorded the Securities Insurer's claims paying ability by any
"nationally recognized statistical rating organization" (as such terms
is defined for purposes of the Exchange Act).
(p) Subsequent to the date of the related Terms
Agreement, there shall not have been any change, or any
- 22 -
23
development involving a prospective change, in or affecting the
business or properties of (i) the Company, its parent company or any
of its subsidiaries, (ii) the Transferor or (iii) the Securities
Insurer which the Underwriters conclude in their reasonable judgment,
after consultation with the Company, materially impairs the investment
quality of the Offered Securities of the related Series so as to make
it impractical or inadvisable to proceed with the public offering or
the delivery of such Offered Securities as contemplated by the related
Final Prospectus.
(q) Prior to the related Closing Date, the
Company shall have furnished to the Underwriters such further
information, certificates and documents as the Underwriters may
reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects with respect to the particular
Offered Securities of a Series when and as provided in this Agreement and the
related Terms Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement and the related Terms Agreement shall not
be in all material respects reasonably satisfactory in form and substance to
the Underwriters and their counsel, this Agreement (with respect to the related
Offered Securities) and the related Terms Agreement and all obligations of the
Underwriters hereunder (with respect to the related Offered Securities) and
thereunder may be canceled at, or at any time prior to, the related Closing
Date by the Underwriters. Notice of such cancellation shall be given to the
Company in writing, or by telephone or telegraph confirmed in writing.
7. Indemnification and Contribution. (a) The Company
and FFI jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the meaning of
the Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act, or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in the Registration
- 23 -
24
Statement relating to the Offered Securities of the applicable Series as it
became effective or in any amendment or supplement thereof, or in such
Registration Statement, in the related Preliminary Prospectus or the related
Final Prospectus, or in any amendment thereof, or in the Form 8-K referred to
in such Final Prospectus or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and agrees
to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company and FFI will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein (A) in reliance upon and in conformity with written information
furnished to the Company as herein stated by or on behalf of any Underwriter
through you specifically for use in connection with the preparation thereof or
(B) in any Computational Materials or ABS Term Sheets furnished to prospective
investors by the Underwriters or any Current Report or any amendment or
supplement thereof, except to the extent that any untrue statement or alleged
untrue statement therein or omission therefrom results directly from an error
(a "Home Loan Pool Error") in the information concerning the characteristics of
the Home Loans furnished by the Company to any Underwriter in writing or by
electronic transmission that was used in the preparation of either (x) any
Computational Materials or ABS Term Sheets (or amendments or supplements
thereof) included in such Current Report (or amendment or supplement thereof)
or (y) any written or electronic materials furnished to prospective investors
on which the Computational Materials (or amendments or supplements) were based.
(b) Each Underwriter agrees, severally, and not jointly,
to indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement relating to the Offered
Securities of the applicable Series, and each person who controls the Company
within the meaning of the Act or the Exchange Act to the same extent as the
foregoing indemnities from the Company to each Underwriter, but only with
reference to (A) written information furnished to the Company by or on behalf
of such Underwriter through you specifically for use in the preparation of the
documents referred to in the foregoing indemnity
- 24 -
25
with respect to the related Series, or (B) any Computational Materials or ABS
Term Sheets (or amendments or supplements thereof) delivered to prospective
investors by such Underwriter, including any Computational Materials or ABS
Term Sheets that are furnished to the Company by such Underwriter pursuant to
Section 8 and incorporated by reference in such Registration Statement, the
related Preliminary Prospectus or the related Final Prospectus or any amendment
or supplement thereof (except that no such indemnity shall be available for any
losses, claims, damages or liabilities, or actions in respect thereof,
resulting from any Home Loan Pool Error, other than a Corrected Home Loan Pool
Error).
(c) Promptly after receipt by an indemnified party under
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 7, notify such indemnifying party in writing of the
commencement thereof; but the omission so to notify such indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 7. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party or
parties of the commencement thereof, the indemnifying party or parties will be
entitled to participate therein, and to the extent that they may elect by
written notice delivered to an indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel satisfactory to such indemnified party; provided, however, that
if the defendants in any such action include both an indemnified party and an
indemnifying party and such indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to an
indemnifying party, such indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from an indemnifying party or parties to
such indemnified party of their election so to assume the defense of such
action and approval by such indemnified party of counsel, such indemnifying
party or parties will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) such
indemnified party shall have employed
- 25 -
26
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party or parties shall not be liable
for the expenses of more than one separate counsel approved by the indemnified
party or parties in the case of subparagraph (a) or (b), representing the
indemnified parties under subparagraph (a) or (b), who are parties to such
action), (ii) the indemnifying party or parties shall not have employed counsel
satisfactory to the indemnified party or parties to represent such indemnified
party or parties within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party or parties have authorized the
employment of counsel for an indemnified party at the expense of the
indemnifying parties; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) If the indemnification provided for in paragraph (a)
or (b) of this Section 7 is due in accordance with its terms but is for any
reason held by a court to be unavailable from the Company, FFI or any
Underwriter, on grounds of policy or otherwise, or if an indemnified party
failed to give notice under paragraph (c) of this Section 7 in respect of a
claim otherwise subject to indemnification in accordance with paragraph (a) or
(b) of this Section 7, the Company, FFI and each Underwriter shall contribute
to the aggregate losses, claims, damages and liabilities (including legal and
other expenses reasonably incurred in connection with investigating or
defending same) to which the Company, FFI and such Underwriter may be subject
in such proportion so that such Underwriter is responsible for that portion
represented by the difference between the portion of the proceeds to the
Company in respect of the Offered Securities underwritten by such Underwriter
for the related Series and the portion of the total proceeds received by such
Underwriter from the sale of such Offered Securities (the "Underwriting
Discount"), and the Company and FFI are responsible for the balance; provided,
however, that in no case shall any such Underwriter be responsible under this
subparagraph for any amount in excess of such Underwriting Discount applicable
to the Offered Securities purchased by such Underwriter pursuant to this
Agreement and the related Terms Agreement. Notwithstanding anything to the
contrary in this Section 7(d), no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who
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27
was not guilty of such fraudulent misrepresentation. For purposes of this
Section 7, each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to the immediately preceding sentence of this paragraph (d).
8. Computational Materials and Structural Term Sheets.
(a) In accordance with Section 10, the Underwriters shall deliver to the
Company one complete copy of all materials provided by the Underwriters to
prospective investors in such Offered Securities which constitute (i)
"Computational Materials" within the meaning of the no-action letter dated May
20, 1994 issued by the Division of Corporation Finance of the Commission to
Xxxxxx, Xxxxxxx Acceptance Corporation I, Xxxxxx, Peabody & Co. Incorporated,
and Xxxxxx Structured Asset Corporation and the no-action letter dated May 27,
1994 issued by the Division of Corporation Finance of the Commission to the
Public Securities Association (together, the "Xxxxxx Letters") and the filing
of such material is a condition of the relief granted in such letter (such
materials being the "Computational Materials"), and (ii) "Structural Term
Sheets" within the meaning of the no-action letter dated February 17, 1995
issued by the Division of Corporation Finance of the Commission to the Public
Securities Association (the "PSA Letter") and the filing of such material is a
condition of the relief granted in such letter (such materials being the
"Structural Term Sheets"). Each delivery of Computational Materials and
Structural Term Sheets to the Company pursuant to this paragraph (a) shall be
effected in accordance with Section 10.
(b) Each Underwriter represents and warrants to and
agrees with the Company, as of the date of the related Terms Agreement and as
of the Closing Date, that:
(i) the Computational Materials furnished to the
Company by such Underwriter pursuant to Section 8(a)
constitute (either in original, aggregated or consolidated
form) all of the materials furnished to prospective investors
by such Underwriter prior to the
- 27 -
28
time of delivery thereof to the Company that are required to
be filed with the Commission with respect to the related
Offered Securities in accordance with the Xxxxxx Letters, and
such Computational Materials comply with the requirements of
the Xxxxxx Letters;
(ii) the Structural Term Sheets furnished to the
Company by such Underwriter pursuant to Section 8(a)
constitute all of the materials furnished to prospective
investors by such Underwriter prior to the time of delivery
thereof to the Company that are required to be filed with the
Commission as "Structural Term Sheets" with respect to the
related Offered Securities in accordance with the PSA Letter,
and such Structural Term Sheets comply with the requirements
of the PSA Letter; and
(iii) on the date any such Computational Materials
or Structural Term Sheets with respect to such Offered
Securities (or any written or electronic materials furnished
to prospective investors on which the Computational Materials
are based) were last furnished to each prospective investor by
such Underwriter and on the date of delivery thereof to the
Company pursuant to Section 8(a) and on the related Closing
Date, such Computational Materials (or such other materials)
or Structural Term Sheets did not and will not include any
untrue statement of a material fact or, when read in
conjunction with the Final Prospectus and Prospectus
Supplement, omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading.
Notwithstanding the foregoing, each Underwriter makes no representation or
warranty as to whether any Computational Materials or Structural Term Sheets
(or any written or electronic materials on which the Computational Materials
are based) included or will include any untrue statement resulting directly
from any Home Loan Pool Error.
(c) If, at any time when a prospectus relating to the
Offered Securities of a Series is required to be delivered under the Act, it
shall be necessary to amend or supplement the related
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29
Final Prospectus as a result of an untrue statement of a material fact
contained in any Computational Materials or Structural Term Sheets provided by
any Underwriter pursuant to this Section 8 or the omission to state therein a
material fact required, when considered in conjunction with the related Final
Prospectus and Prospectus Supplement, to be stated therein or necessary to make
the statements therein, when read in conjunction with the related Final
Prospectus and Prospectus Supplement, not misleading, or if it shall be
necessary to amend or supplement any Current Report relating to any
Computational Materials or Structural Term Sheets to comply with the Act or the
rules thereunder, such Underwriter promptly will prepare and furnish to the
Company for filing with the Commission an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Each Underwriter represents and warrants to the Company, as of the
date of delivery by it of such amendment or supplement to the Company, that
such amendment or supplement will not include any untrue statement of a
material fact or, when read in conjunction with the related Final Prospectus
and Prospectus Supplement, omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, each such Underwriter makes no representation or warranty as to
whether any such amendment or supplement will include any untrue statement
resulting directly from any Home Loan Pool Error.
9. Collateral Term Sheets. (a) Prior to the
delivery of any "Collateral Term Sheet" within the meaning of the PSA Letter,
the filing of which material is a condition of the relief granted in such
letter (such material being the "Collateral Term Sheets"), to a prospective
investor in the Offered Securities, the Underwriters shall notify the Company
and its counsel by telephone of their intention to deliver such materials and
the approximate date on which the first such delivery of such materials is
expected to occur. Not later than 10:30 a.m., New York time, on the business
day immediately following the date on which any Collateral Term Sheet was first
delivered to a prospective investor in the Offered Securities, the Underwriters
shall deliver to the Company one complete copy of all materials provided by the
Underwriters to prospective investors in such Offered Securities which
constitute "Collateral Term Sheets." Each delivery of a Collateral Term Sheet
to the Company pursuant to this paragraph (a) shall be effected in accordance
with Section 10. (Collateral Term Sheets and Structural
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30
Term Sheets are, together, referred to herein as "ABS Term Sheets.") At the
time of each such delivery, the Underwriter making such delivery shall indicate
in writing that the materials being delivered constitute Collateral Term
Sheets, and, if there has been any prior such delivery with respect to the
related Series, shall indicate whether such materials differ in any material
respect from any Collateral Term Sheets previously delivered to the Company
with respect to such Series pursuant to this Section 9(a) as a result of the
occurrence of a material change in the characteristics of the related Home
Loans.
(b) Each Underwriter represents and warrants to and
agrees with the Company as of the date of the related Terms Agreement and as of
the Closing Date, that:
(i) The Collateral Term Sheets furnished
to the Company by such Underwriter pursuant to Section 9(a) constitute
all of the materials furnished to prospective investors by such
Underwriter prior to time of delivery thereof to the Company that are
required to be filed with the Commission as "Collateral Term Sheets"
with respect to the related Offered Securities in accordance with the
PSA Letter, and such Collateral Term Sheets comply with the
requirements of the PSA Letter; and
(ii) On the date any such Collateral Term
Sheets with respect to such Offered Securities were last furnished to
each prospective investor by such Underwriter and on the date of
delivery thereof to the Company pursuant to Section 9(a) and on the
related Closing Date, such Collateral Term Sheets did not and will not
include any untrue statement of a material fact or, when read in
conjunction with the Final Prospectus and Prospectus Supplement, omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
Notwithstanding the foregoing, each Underwriter makes no representation or
warranty as to whether any Collateral Term Sheet included or will include any
untrue statement or material omission resulting directly from any Home Loan
Pool Error.
(c) If, at any time when a prospectus relating to the
Offered Securities of a Series is required to be delivered under
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31
the Act, it shall be necessary to amend or supplement the related Final
Prospectus as a result of an untrue statement of a material fact contained in
any Collateral Term Sheets provided by any Underwriter pursuant to this Section
9 or the omission to state therein a material fact required, when considered in
conjunction with the related Final Prospectus and Prospectus Supplement, to be
stated therein or necessary to make the statements therein, when read in
conjunction with the related Final Prospectus and Prospectus Supplement, not
misleading, or if it shall be necessary to amend or supplement any Current
Report relating to any Collateral Term Sheets to comply with the Act or the
rules thereunder, such Underwriter promptly will prepare and furnish to the
Company for filing with the Commission an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Each Underwriter represents and warrants to the Company, as of the
date of delivery of such amendment or supplement to the Company, that such
amendment or supplement will not include any untrue statement of a material
fact or, when read in conjunction with the related Final Prospectus and
Prospectus Supplement, omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, each such Underwriter makes no representation or warranty as to
whether any such amendment or supplement will include any untrue statement
resulting directly from any Home Loan Pool Error.
10. Delivery and Filing of Current Reports, Collateral
Term Sheets, Structural Term Sheets.
(a) Any Current Report, Collateral Term Sheet or
Structural Term Sheet that is required to be delivered by the
Underwriter to the Company hereunder shall be effected by the delivery
of four copies to counsel for the Company and one copy in computer
readable format to the Financial Printer on or prior to 10:30 a.m. on
the date so specified herein.
(b) The Company shall cause the Financial Printer to file
with the Commission any such Current Report, Collateral Term Sheet or
Structural Term Sheet within one business day immediately following
the delivery thereof pursuant to the preceding subsection. The
Company shall use its best efforts to cause any such Current Report,
Collateral Term Sheet or Structural Term Sheet to be so filed prior to
2:00 p.m., New
- 31 -
32
York time, on such business day and will promptly advise the
Underwriters of such filing.
11. Termination. This Agreement (with respect to a
particular Offering) and the related Terms Agreement shall be subject to
termination in the absolute discretion of the Underwriters, by notice given to
the Company prior to delivery of and payment for the related Offered
Securities, if prior to the related Closing Date (i) trading in securities
generally on the New York Stock Exchange shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking activities
in New York shall have been declared by either federal or New York State
authorities, or (iii) there shall have occurred any outbreak or material
escalation of hostilities or other calamity or crisis the effect of which on
the financial markets of the United States is such as to make it, in the
reasonable judgment of the Underwriters, impracticable to market such Offered
Securities.
12. Representations and Indemnities to Survive Delivery.
The agreements, representations, warranties, indemnities and other statements
of the Company or its officers and of the Underwriters set forth in or made
pursuant to this Agreement and the related Terms Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriters or the Company or any of the officers, directors of controlling
persons referred to in Section 7 hereof, and will survive delivery of and
payment for the related Offered Securities. The provisions of Section 7 hereof
shall survive the termination or cancellation of this Agreement and the related
Terms Agreement.
13. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail on the Closing Date to purchase the
Offered Securities which it or they are obligated to purchase hereunder and
under the applicable Terms Agreement (the "Defaulted Securities"), you shall
have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth and under the applicable
Terms Agreement. If, however, you have not completed such arrangements within
such 24-hour period, then:
- 32 -
33
(a) if the aggregate original Certificate Principal
Balance of Defaulted Securities does not exceed 10% of the aggregate
original Certificate Principal Balance of the Offered Securities to be
purchased pursuant to such Terms Agreement, the non-defaulting
Underwriters named in such Terms Agreement shall be obligated to
purchase the full amount thereof in the proportions that their
respective underwriting obligations thereunder bear to the
underwriting obligations of all non-defaulting Underwriters; and
(b) if the aggregate original Certificate Principal
Balance of Defaulted Securities exceeds 10% of the aggregate original
Certificate Principal Balance of the Offered Securities to be
purchased pursuant to such Terms Agreement, the applicable Terms
Agreement shall terminate without any liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section 13 and nothing in this
Agreement shall relieve any defaulting Underwriter from liability in respect of
its default.
In the event of any such default which does not result in a
termination of this Agreement or such applicable Terms Agreement, either you or
the Company shall have the right to postpone the Closing Date for a period of
time not exceeding seven days in order to effect any required changes in the
Registration Statement or in any other documents or arrangements.
14. Guarantor. RAC Financial Group, Inc., the parent of
the Company and FFI, ("RAC") shall guarantee any obligation or liability of the
Company or FFI pursuant to Section 7 hereof. RAC's acceptance of its guarantee
obligation is acknowledged by the execution of the signature page of this
Agreement by an authorized signatory of RAC.
15. Successors. This Agreement and the related Terms
Agreement will inure to the benefit of and be binding upon the parties hereto
and thereto and their respective successors and the officers, directors and
controlling persons referred to in Section 7 hereof, and their successors and
assigns, and no other person will have any right or obligation hereunder or
thereunder. No purchaser of any Offered Certificate from the Underwriters
shall be deemed a successor or assign by reason of such purchase.
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34
16. APPLICABLE LAW. THIS AGREEMENT AND THE RELATED TERMS
AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
THEREIN.
17. Miscellaneous. This Agreement, as supplemented by
the related Terms Agreement, supersedes all prior and contemporaneous
agreements and understandings relating to the subject matter hereof. This
Agreement and the related Terms Agreement or any term of each may not be
changed, waived, discharged or terminated except by an affirmative written
agreement made by the party against whom enforcement of the change, waiver,
discharge or termination is sought. The headings in this Agreement and the
related Terms Agreement are for purposes of reference only and shall not limit
or otherwise affect the meaning hereof or thereof.
16. Notices. All communications by one party hereunder
to all other parties hereunder will be in writing and effective only on receipt
by such other parties, and will be delivered as follows: (A) to the
Underwriters at the addresses first above written; (B) to the Company at 0000
Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000X, Xxx Xxxxx, Xxxxxx 00000, Attention: Xxxxxxx
Xxxxxxxx; and (C) to FFI at FIRSTPLUS FINANCIAL, INC., 0000 Xxxxxxxxxxx Xxxx,
Xxxxxx, Xxxxx 00000-0000, Attention: Xx. Xxxxx Xxxxxxxx.
- 34 -
35
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and the Underwriters.
Very truly yours,
FIRSTPLUS INVESTMENT CORPORATION
By:
-----------------------------
Xxxxxxxxxxx X. Xxxxxxxx
Senior Vice President
FIRSTPLUS FINANCIAL INC.
By:
-----------------------------
Xxxxxxxxxxx X. Xxxxxxxx
Senior Vice President
ACKNOWLEDGED BY:
RAC FINANCIAL GROUP, INC.
By:
----------------------------
Xxxxxxxxxxx X. Xxxxxxxx
Senior Vice President
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
BANC ONE CAPITAL CORPORATION
By:
------------------------------
Soc Xxxxxxxx
Vice President
BEAR, XXXXXXX & CO. INC.
By:
------------------------------
Xxxxxxx Xxxxxxx
Associate Director
-35-
36
EXHIBIT A
FIRSTPLUS HOME LOAN TRUST ___-__
ASSET-BACKED SECURITIES
TERMS AGREEMENT
(to Underwriting Agreement,
dated September 24, 1996
among the Company, FFI and the Underwriters)
FIRSTPLUS INVESTMENT CORPORATION [Date]
0000 Xxxxxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000-0000
FIRSTPLUS FINANCIAL INC.
0000 Xxxxxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000-0000
Each of Banc One Capital Corporation ("Banc One Capital") and
Bear, Xxxxxxx & Co. Inc. ("Bear, Xxxxxxx," each an "Underwriter" and
collectively the "Underwriters") agrees, severally and not jointly, subject to
the terms and provisions herein and of the captioned Underwriting Agreement
(the "Underwriting Agreement"), to purchase such Classes of Series ____-__
Securities specified opposite its name in Section 2(a) hereof (the "Offered
Securities"). This letter supplements and modifies the Underwriting Agreement
solely as it relates to the purchase and sale of the Offered Securities
described below. The Series ____-__ Securities are registered with the
Securities and Exchange Commission by means of an effective Registration
Statement (No. _____). Capitalized terms used and not defined herein have the
meanings given them in the Underwriting Agreement.
Section 1. The Home Loan Pool: The Series _____-__
Securities shall evidence the entire beneficial ownership interest in a
mortgage pool (the "Home Loan Pool") of mortgage loans (the "Home Loans")
having the characteristics described in the Prospectus Supplement dated the
date hereof.
37
Section 2. The Securities: The Offered Securities shall
be issued as follows:
(a) Classes: The Offered Securities shall be issued with the
following Class designations, interest rates and principal balances,
subject in the aggregate to the variance referred to in the Final
Prospectus:
Principal Interest Class Purchase
Class Balance Rate Price Percentage
----- ------- ---- ----------------
Each of the Underwriters agrees, severally and not jointly, subject to
the terms and provisions herein and of the captioned Underwriting Agreement, to
purchase the principal balances of the Classes of Series ____-__ Securities
specified opposite its name below.
Class Bear, Xxxxxxx Banc One Capital
----- -------------------- ---------------------
(b) The Offered Securities shall have such other
characteristics as described in the related Final Prospectus.
Section 3. Purchase Price: The Purchase Price for each
Class of the Offered Securities shall be the Class Purchase Price Percentage
therefor (as set forth in Section 2(a) above) of the initial Class Principal
Balance thereof plus accrued interest at the applicable interest rate per annum
of each such Class from and including the Cut-off Date up to, but not
including, _____________ (the "Closing Date").
Section 4. Required Ratings: The Offered
Securities shall have received Required Ratings of at least [ ] from [ ].
Section 5. Securities Insurer:
Section 6. Location of Closing:
38
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Underwriters and the Company.
Very truly yours,
[UNDERWRITER]
as Representative of the several
Underwriters
By:
------------------------------
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
FIRSTPLUS INVESTMENT CORPORATION
By:
-------------------------------
Name:
Title:
FIRSTPLUS FINANCIAL INC.
By:
-------------------------------
Name:
Title:
ACKNOWLEDGED BY:
RAC FINANCIAL GROUP, INC.
By:
--------------------------------
Name:
Title:
