EXHIBIT 1.1
SEQUOIA HELOC TRUST 2004-1
HELOC ASSET-BACKED NOTES
UNDERWRITING AGREEMENT
June 29, 2004
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Sequoia Mortgage Funding Corporation, a Delaware corporation (the
"Depositor") and an indirect wholly-owned limited purpose subsidiary of Redwood
Trust, Inc., a Maryland corporation ("Redwood Trust"), proposes to cause Sequoia
HELOC Trust 2004-1 (the "Trust") to issue and sell to you (the "Underwriter")
its HELOC Asset-Backed Notes, Series 2004-1 (the "Notes") having the
characteristics set forth in the Prospectus Supplement (as defined below),
secured by a trust fund, the assets of which will consist primarily of
adjustable rate revolving home equity line of credit mortgage loans secured by
first or second liens on one- to four-family residential properties (the
"Mortgage Loans"). The Mortgage Loans will have the characteristics described in
the Prospectus Supplement, subject to the variances, ranges, minimums and
maximums set forth in the Prospectus Supplement.
The Trust is a statutory trust established under the laws of the State
of Delaware pursuant to the Trust Agreement, dated as of June 1, 2004 (the
"Trust Agreement"), between the Depositor and Wilmington Trust Company, as owner
trustee (the "Owner Trustee"). The Trust
was formed for the sole purpose of issuing the Notes and two classes of
Certificates (as defined in the Prospectus Supplement). The Notes will be issued
pursuant to an indenture, dated as of June 1, 2004 (the "Indenture"), between
the Trust and Xxxxx Fargo Bank, N.A., as indenture trustee (the "Indenture
Trustee"). On or about June 29, 2004 (the "Closing Date"), (a) the Seller will
assign all of its right, title and interest in the Mortgage Loans to the
Depositor pursuant to a mortgage loan purchase and sale agreement, dated as of
the Closing Date (the "Mortgage Loan Purchase and Sale Agreement"), between RWT
Holdings, Inc., as seller (the "Seller") and the Depositor, as purchaser, and
(b) the Depositor will assign all of its right, title and interest in the
Mortgage Loans to the Trust pursuant to a sale and servicing agreement, dated as
of June 1, 2004 (the "Sale and Servicing Agreement"), among the Depositor, as
depositor, the Seller, Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation, as
servicer (the "Servicer"), the Trust and Indenture Trustee. The Trust will
simultaneously pledge the Mortgage Loans, together with all principal
collections received and interest collections due with respect to the Mortgage
Loans, (a) in the case of interest collections, with respect to the principal
balance of the Mortgage Loans as of such date, after the close of business on
June 1, 2004 (the "Cut-off Date") and (b) in the case of principal collections
and interest collections on Additional Balances (as such term is defined in the
Prospectus Supplement) created after the Cut-off Date, after the close of
business on June 15, 2004 (the "Issue Date"), to the Indenture Trustee pursuant
to the Indenture in order to secure payment of the Notes. The Indenture Trustee
will concurrently with such assignment, authenticate and deliver the Notes to
the Depositor for sale to the Underwriter. In addition, pursuant to various
assignment, assumption and recognition agreements (collectively, the "Assignment
Agreements"), (i) the Seller will assign its rights under various underlying
mortgage loan purchase and servicing agreements relating to the Mortgage Loans
entered into by
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the Seller (collectively, the "Underlying Purchase and Servicing Agreements"),
to the Depositor and (ii) the Depositor will, in turn, assign its rights under
the Underlying Purchase and Servicing Agreements to the Trust for the benefit of
the Noteholders.
Pursuant to an insurance and indemnity agreement, dated as of June 29,
2004 (the "Insurance Agreement") among the Seller, the Depositor, Ambac
Assurance Corporation ("Insurer"), the Indenture Trustee and the Trust, the
Insurer will issue a certificate guaranty insurance policy (the "Policy") for
the benefit of the holders of the Notes. Simultaneously, therewith the Insurer
will enter into an indemnification agreement (the "Indemnification Agreement",
and together with the Insurance Agreement, the "Insurer Documents") with the
Underwriter.
The Trust Agreement, the Indenture, the Mortgage Loan Purchase and Sale
Agreement, the Acknowledgments, the Sale and Servicing Agreement, the Assignment
Agreements, the Policy, the Insurer Documents and this Agreement are sometimes
referred to herein collectively as the "Transaction Documents." Capitalized
terms used but not otherwise defined herein shall have the respective meanings
ascribed to such terms in the Indenture.
1. Representations and Warranties. The Seller, the Depositor and
Redwood Trust, jointly and severally represent and warrant to, and agree with,
the Underwriter that:
(i) A registration statement on Form S-3 (File
No. 333-115296), including a prospectus, has been filed with the
Securities and Exchange Commission (the "Commission") and has become
effective under the Securities Act of 1933, as amended (the "Act").
Such registration statement, as amended at the date of this Agreement,
meets the requirements set forth in Rule 415(a)(1)(x) under the Act. As
of the Closing Date (as hereinafter defined), no stop order suspending
the effectiveness of such registration
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statement has been issued and no proceedings for that purpose have been
initiated or, to the knowledge of the Seller, the Depositor or Redwood
Trust, threatened by the Commission. The prospectus in the form in
which it will be used in connection with the offering of the Notes is
proposed to be supplemented by a prospectus supplement dated the date
hereof relating to the Notes and, as so supplemented, to be filed with
the Commission pursuant to Rule 424(b) under the Act. (Such
registration statement, together with any revision, amendment or
supplement, is hereinafter referred to as the "Registration Statement;"
such prospectus supplement, as first filed with the Commission,
together with any revision, amendment or supplement, is hereinafter
referred to as the "Prospectus Supplement;" and such prospectus, in the
form in which it will first be filed with the Commission in connection
with the offering of such Notes, including the documents incorporated
therein as of the time of such filing and as supplemented by the
Prospectus Supplement, together with any revision, amendment or
supplement, is hereinafter referred to as the "Prospectus"). Any
reference herein to the Registration Statement, a preliminary
prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), on or before the date 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(b) under the Act, as the case may be; and
any reference herein to 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
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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 to Rule 424(b) under the Act, as the case
may be, deemed to be incorporated therein by reference.
(ii) The Registration Statement and the
Prospectus, as of the date of the Prospectus Supplement will conform,
and the Registration Statement, the Prospectus as revised, amended or
supplemented and filed with the Commission prior to the termination of
the offering of the Notes, and the Indenture, as of their respective
effective or issue dates, will conform in all material respects to the
requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "TIA") and the respective rules and regulations of the Commission
thereunder applicable to such documents as of such respective dates,
and the Registration Statement and the Prospectus as revised, amended
or supplemented and filed with the Commission as of the Closing Date
will conform in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder applicable
to such documents as of the Closing Date. The Registration Statement,
at the time it became effective, did not include 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; and the Prospectus as of the date of the Prospectus
Supplement and as of the Closing Date, will not include any untrue
statement of a material fact and will not omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Seller, the Depositor and
Redwood Trust make no representations, warranties or agreements as to
the information contained in the Prospectus or any revision or
amendment thereof or
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supplement thereto in reliance upon and in conformity with information
furnished in writing to the Depositor by or on behalf of the
Underwriter specifically for use in connection with the preparation of
the Prospectus or any revision or amendment thereof or supplement
thereto, such information being defined as the "Underwriter
Information" in Section 10 hereof.
(iii) The conditions to the use by the Depositor
of a registration statement on Form S-3 under the Act, as set forth in
the General Instructions to Form S-3, have been satisfied with respect
to the Registration Statement. There are no contracts or documents of
the Depositor which are required to be filed as exhibits to the
Registration Statement pursuant to the Act or the rules and regulations
of the Commission thereunder which have not been so filed.
(iv) The Notes conform in all material respects
to the description thereof contained in the Prospectus. The issuance of
the Notes has been duly authorized and on the Closing Date the Notes
will have been duly and validly executed, authenticated, issued and
delivered in accordance with the Indenture and delivered to the
Underwriter for the account of the Underwriter against payment therefor
as provided herein, will be duly and validly issued and outstanding and
entitled to the benefits and security afforded by the Indenture and
will constitute legal, valid and binding obligations of the Trust,
enforceable in accordance with their terms and the terms of the
Indenture, except as the same may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting enforcement of
creditors' rights generally and by general principles of equity.
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(v) This Agreement has been duly authorized,
executed and delivered by each of the Seller, the Depositor and Redwood
Trust and as of the Closing Date, each of the other Transaction
Documents to which the Seller, the Depositor or Redwood Trust is a
party will have been, duly authorized, executed and delivered by the
Seller, the Depositor or Redwood Trust, as applicable, and will conform
in all material respects to the descriptions thereof contained in the
Prospectus and, assuming the valid execution and delivery thereof by
the other parties thereto, each Transaction Document to which Redwood
Trust, the Seller or the Depositor is a party will constitute a legal,
valid and binding agreement of the Seller, the Depositor or Redwood
Trust, as applicable, enforceable in accordance with its terms, except
as the same may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and by general
principles of equity.
(vi) Each of the Seller, the Depositor and
Redwood Trust has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its respective State of
incorporation, and each of the Seller, the Depositor and Redwood Trust
is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction where the character
of its respective properties or the nature of its respective activities
makes such qualification necessary, except such jurisdictions, if any,
in which the failure to be so qualified will not have a material
adverse effect on the condition (financial or otherwise), earnings,
regulatory affairs, business affairs, business prospects or properties
of Redwood Trust, the Seller or the Depositor; each of Redwood Trust,
the Seller and the Depositor holds all material licenses, certificates
and permits from all governmental authorities necessary for the
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conduct of its respective business as described in the Prospectus; and
each of the Seller, the Depositor and Redwood Trust has the corporate
power and authority to own its respective properties and conduct its
respective business as described in the Prospectus and to enter into
and perform its respective obligations under each Transaction Document
to which it is a party.
(vii) Neither the issuance, delivery or sale of
the Notes, nor the consummation of any other of the transactions
contemplated herein, nor the execution and delivery of the Transaction
Documents by the Seller, the Depositor or Redwood Trust, as applicable,
and compliance with the provisions of the Transaction Documents, does
or will conflict with or result in the breach of any material term or
provision of the certificate of incorporation or by-laws of the Seller,
the Depositor, or Redwood Trust, and none of the Seller, the Depositor
or Redwood Trust is in breach or violation of or in default (nor has an
event occurred which with notice or lapse of time or both would
constitute a default) under the terms of (i) any indenture, contract,
lease, mortgage, deed of trust, note, agreement or other evidence of
indebtedness or other agreement, obligation or instrument to which the
Seller, the Depositor or Redwood Trust is a party or by which it or its
respective properties are bound, or (ii) any law, decree, order, rule
or regulation applicable to the Seller, the Depositor or Redwood Trust
of any court or supervisory, regulatory, administrative or governmental
agency, body or authority, or arbitrator having jurisdiction over the
Seller, the Depositor or Redwood Trust, or its respective properties,
the default in or the breach or violation of which would have a
material adverse effect on the Depositor, Redwood Trust, the Trust or
the Notes or on the ability of the Seller, the Depositor or Redwood
Trust to perform its respective obligations under the Transaction
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Documents to which it is a party; and neither the delivery of the
Notes, nor the consummation of any other of the transactions
contemplated herein, nor the compliance with the provisions of the
Transaction Documents will result in such a breach, violation or
default which would have such a material adverse effect.
(viii) No filing or registration with, notice to,
or consent, approval, authorization or order or other action of any
court or governmental authority or agency is required for the
consummation by the Seller, the Depositor or Redwood Trust of the
transactions contemplated by the Transaction Documents to which it is a
party (other than as required under "blue sky" or state securities
laws, as to which no representations and warranties are made by the
Seller, the Depositor or Redwood Trust), except such as have been, or
will have been prior to the Closing Date, obtained under the Act, and
such recordations of the assignment of the Mortgage Loans (as defined
in the Prospectus Supplement) to the Trust (to the extent such
recordations are required pursuant to the Sale and Servicing Agreement)
that have not yet been completed.
(ix) There is no action, suit or proceeding
before or by any court, administrative or governmental agency now
pending to which the Seller, the Depositor or Redwood Trust is a party,
or to the best knowledge of the Seller, the Depositor or Redwood Trust,
threatened against the Seller, the Depositor or Redwood Trust, which
could reasonably result individually or in the aggregate in any
material adverse change in the condition (financial or otherwise),
earnings, regulatory affairs, business affairs, business prospects or
properties of the Seller, the Depositor or Redwood Trust or could
reasonably interfere with or materially and adversely affect the
consummation of the transactions contemplated in the Transaction
Documents.
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(x) At the time of execution and delivery of the
Mortgage Loan Purchase and Sale Agreement between the Seller and the
Depositor, the Seller will own the Mortgage Loans being sold to the
Depositor pursuant thereto, free and clear of any lien, mortgage,
pledge, charge, encumbrance, adverse claim or other security interest
(collectively "Liens"), except to the extent permitted by the Mortgage
Loan Purchase and Sale Agreement, and will not have assigned to any
person other than the Depositor any of its right, title or interest in
the Mortgage Loans.
(xi) Immediately prior to the assignment of the
Mortgage Loans by the Depositor to the Trust as contemplated by the
Sale and Servicing Agreement, the Depositor (i) will have good title to
and was the sole owner of, each such Mortgage Loan free and clear of
any Lien, (ii) will not have assigned to any Person any of its rights,
title or interest in and to such Mortgage Loans or in the Sale and
Servicing Agreement and (iii) will have the power and authority to sell
such Mortgage Loans to the Trust, and upon execution and delivery of
the Sale and Servicing Agreement by the Trustee, the Trust will have
acquired all of the Depositor's rights, title and interest in and to
such Mortgage Loans.
(xii) Any taxes, fees and other governmental
charges in connection with the execution, delivery and issuance of the
Transaction Documents and the Notes have been or will be paid by the
Seller, the Depositor or Redwood Trust at or prior to the Closing Date,
except for fees for recording assignments of the Mortgage Loans to the
Trust pursuant to the Sale and Servicing Agreement that have not yet
been completed, which fees will be paid by or on behalf of Redwood
Trust.
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(xiii) The representations and warranties made by
the Depositor in the Indenture will be true and correct at the time
made and at the Closing Date.
(xiv) At the Closing Date, the execution and
delivery of the Indenture by the Trust will have been duly authorized
by the Depositor and upon due execution and delivery thereof by the
parties thereto the Indenture will constitute a legal, valid and
binding agreement enforceable in accordance with its terms, except as
the same may be limited by bankruptcy, reorganization, insolvency or
other similar laws affecting creditors' rights generally and by general
principles of equity.
(xv) As of the Closing Date, the Trust will have
assigned, pledged and delivered to the Indenture Trustee under the
Indenture all of its right, title and interest in and to, among other
things, the Mortgage Loans and cash and/or other assets, if any, in the
amount set forth in the Indenture.
(xvi) The Mortgage Loans conform in all material
respects to the description thereof contained in the Prospectus
Supplement.
(xvii) Neither the Depositor nor the Trust is, and
neither the issuance and sale of the Notes nor the activities of the
Trust pursuant to the Indenture will cause the Depositor or the Trust
to be, an "investment company" or under the interest of an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act").
(xviii) At the Closing Date, the Trust will own (i)
the Mortgage Loans listed in Exhibit A to the Sale and Servicing
Agreement and (ii) the money or other assets specified or referred to
in the granting clauses of the Indenture (to the extent specified
therein) as being pledged to the Indenture Trustee at the Closing Date
(together, the
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"Collateral"), free and clear of any liens or encumbrances other than
the lien of the Indenture and the Trust Agreement; the Trust has
corporate power and authority to assign, pledge and deliver the
Collateral to the Indenture Trustee under the Indenture, and will have
duly authorized such assignment, pledge and delivery to the Indenture
Trustee by all necessary corporate action.
(xix) At the Closing Date, each Mortgage Loan
listed on Exhibit A to the Sale and Servicing Agreement will have been
duly and validly assigned, pledged and delivered to the Indenture
Trustee, or its nominee, and together with such assignment, pledge and
delivery of each Mortgage Loan, will create as security for repayment
of the Notes a valid, perfected first security interest in the
Collateral. The information set forth with respect to the Mortgage
Loans in Exhibit A to the Sale and Servicing Agreement will be, as of
the Closing Date, true and correct in all material respects.
(xx) The Trust Agreement (together with the
filing of the Certificate of Trust of the Trust with the Secretary of
State of the State of Delaware) is effective to establish the Trust as
a statutory trust under and pursuant to the laws of the State of
Delaware.
(xxi) None of the Seller, the Depositor or Redwood
Trust is doing business with Cuba.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Depositor
agrees to sell, and the Underwriter agrees to purchase from the Depositor, the
Notes to be purchased by the Underwriter in the initial Principal Amount and at
the purchase price set forth on Schedule 1 annexed hereto (including accrued
interest, (a) in the case of interest collections, with respect to the principal
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balance of the Mortgage Loans as of such date, after the close of business on
the Cut-off Date and (b) in the case of principal collections and interest
collections on Additional Balances (as such term is defined in the Prospectus
Supplement) created after the Cut-off Date, after the close of business on the
Issue Date.
3. Delivery and Payment. The Notes shall be delivered at the office, on
the date and at the time specified in the Prospectus Supplement, which place,
date and time may be changed by agreement between the Underwriter and the
Depositor (such date and time of delivery of and payment for the Notes being
hereinafter referred to as the "Closing Date"). Delivery of the Notes shall be
made to the Underwriter as against its payment of the purchase price therefor to
or upon the order of the Trust in immediately available federal funds. The Notes
shall be registered in such names and in such denominations as required by
book-entry registration not less than two full business days prior to the
Closing Date. The Depositor agrees to cause the Notes to be made available for
inspection, checking and packaging in New York, New York on the business day
prior to the Closing Date.
4. Offering by Underwriter. It is understood that the Underwriter
proposes to offer the Notes for sale as set forth in the Prospectus and that you
will not offer, sell or otherwise distribute the Notes (except for the sale
thereof in exempt transactions) in any state in which the Notes are not exempt
from registration under "blue sky" or state securities laws (except where the
Notes will have been qualified for offering and sale at your direction under
such "blue sky" or state securities laws).
5. Agreements.
(a) The Depositor agrees with the Underwriter that:
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(i) The Depositor will cause the Prospectus to
be filed with the Commission pursuant to Rule 424(b) under the Act and,
if necessary, within 15 days of the Closing Date, will file a report on
Form 8-K setting forth specific information concerning the Mortgage
Loans, and will promptly advise the Underwriter when the Prospectus has
been so filed, and, prior to the termination of the offering of the
Notes, will also promptly advise the Underwriter (i) when any amendment
to the Registration Statement 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 Notes or the
Trust), (ii) of any request by the Commission for any amendment of the
Registration Statement or the Prospectus or for any additional
information (unless such amendment or request for additional
information does not relate to the Notes or the Trust), (iii) of any
written notification received by the Depositor of the suspension of
qualification of the Notes 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 Depositor, the threatening of any proceeding for
that purpose. The Depositor 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. The Depositor will not file prior to
the termination of such offering any amendment to the Registration
Statement or any revision of or supplement to the Prospectus (other
than any such amendment, revision or supplement which does not relate
to Notes or the Trust) which shall be disapproved by the Underwriter
after reasonable notice and review of such filing.
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(ii) If, at any time when a prospectus relating
to the Notes is required to be delivered under the 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 a material fact necessary to make the statements therein
in the light of the circumstances under which they were made not
misleading, or (ii) it shall be necessary to revise, amend or
supplement the Prospectus to comply with the Act or the rules and
regulations of the Commission thereunder, the Depositor promptly will
notify the Underwriter and will, upon the request of the Underwriter,
or may, after consultation with the Underwriter, prepare and file with
the Commission a revision, amendment or supplement which will correct
such statement or omission or effect such compliance, and furnish
without charge to the Underwriter as many copies as the Underwriter may
from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance.
(iii) The Depositor will furnish to the
Underwriter and counsel to the Underwriter, without charge, conformed
copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus relating to the Notes is required
under the Act, as many copies of the Prospectus and any revisions or
amendments thereof or supplements thereto as may be reasonably
requested.
(iv) The Depositor will, as between itself and
the Underwriter, pay all expenses incidental to the performance of the
obligations of the Depositor, the Seller or the Redwood Trust under
this Agreement, including without limitation (i) expenses of preparing,
printing and reproducing the Registration Statement, the Prospectus,
the Transaction Documents and the Notes, (ii) the cost of delivering
the Notes to the
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Underwriter, (iii) the fees charged by securities rating agencies for
rating the Notes, (iv) all transfer taxes, if any, with respect to the
sale and delivery of the Notes to the Underwriter, (v) the fees and
expenses of the Owner Trustee, the Indenture Trustee and the Insurer,
(vi) any expenses for the qualification of the Notes under "blue sky"
or state securities laws, including filing fees and the fees and
disbursements of counsel for the Underwriter in connection therewith
and in connection with the preparation of any Blue Sky Survey, (vii)
all other costs and expenses incidental to the performance by the
Depositor, the Seller or the Redwood Trust of their respective
obligations hereunder which are not otherwise specifically provided for
in this subsection and (viii) the fees of any counsel to the
Underwriter, including the fees incurred in connection with the review
of the Transaction Documents and the preparation of the Underwriting
Agreement and the legal opinions, in excess of $40,000 (it being
understood that the Underwriter will pay all fees of any counsel to the
Underwriter up to and including $40,000). In addition, it is understood
that, except as provided in this paragraph (iv) and in Section 9
hereof, the Underwriter will pay all the following additional expenses:
(i) any transfer taxes on resale of any of the Notes by it and (ii) any
advertising expenses connected with any offers that the Underwriter may
make.
(v) So long as any Notes are outstanding, upon
request of the Underwriter, the Depositor will furnish, or will cause
to be furnished, to the Underwriter, as soon as available, a copy of
(i) the annual statement of compliance prepared by the Servicer
pursuant to the Sale and Servicing Agreement, (ii) each report
regarding the Notes filed with the Commission under the Exchange Act or
mailed to the holders of the Notes and (iii) from time to time, such
other information concerning the Notes which
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may be furnished by the Depositor or the Trustee without undue expense
and without violation of applicable law.
(vi) The Depositor will file or cause to be filed
a current report on Form 8-K for purposes of filing any Computational
Materials furnished to the Depositor by the Underwriter prior to the
time of filing of the Prospectus as provided in Section 5(a) hereof and
will include therein all Computational Materials so furnished. In
addition, the Depositor will file or cause to be filed all reports with
respect to the Trust required to be filed under the Exchange Act when
the same are required thereby to be so filed.
(vii) For a period ending on the Closing Date, the
Depositor shall not offer or sell, or announce the offering of, or
cause any trust created by the Depositor to offer or sell, or announce
the offering of, any mortgage-backed notes or other similar
mortgage-related securities, without the prior written consent of the
Underwriter.
(b) Redwood Trust covenants with the Underwriter and with the
Depositor that it shall notify you and the Depositor of the occurrence of any
material events respecting the activities, affairs or condition, financial or
otherwise, of Redwood Trust and its subsidiaries and, if as a result of any such
event it is necessary to amend or supplement the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, Redwood Trust will forthwith supply such
information to the Depositor as shall be necessary for the Depositor to prepare
an amendment or supplement to the Prospectus so that, as so amended or
supplemented, the Prospectus will not contain an 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 existing at the time it is delivered
to a purchaser, not misleading.
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6. Conditions to the Obligations of Underwriter. The obligation of the
Underwriter to purchase the Notes to be purchased by it as set forth on Schedule
1 annexed hereto shall be subject to the accuracy in all material respects of
the representations and warranties on the part of the Seller, the Depositor and
Redwood Trust contained herein as of the date hereof and as of the Closing Date,
to the accuracy of the statements of the Seller, the Depositor and Redwood Trust
made in any officer's certificate pursuant to the provisions hereof, to the
performance in all material respects by the Seller, the Depositor and Redwood
Trust of its obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted and be pending or shall have been threatened,
any requests for additional information on the part of the Commission (to be
included in the Registration Statement or in the Prospectus or otherwise) shall
have been complied with to the reasonable satisfaction of the Underwriter, and
the Prospectus shall have been filed or transmitted for filing with the
Commission not later than the time the same is required to be filed or
transmitted for filing pursuant to the rules and regulations of the Commission.
(b) Each of the Depositor and the Seller shall have furnished
to the Underwriter a certificate, dated the Closing Date, signed by the Chairman
of the Board or the President and the principal financial or accounting officer
of such entity, to the effect that each signer of such certificate has carefully
examined the Registration Statement, the Prospectus and this Agreement and that:
(i) The representations and warranties made by
such entity herein are true and correct in all material respects on and
as of the Closing Date with the same effect
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as if made on the Closing Date, and such entity has complied with all
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness
of the Registration Statement has been issued, and no proceedings for
that purpose have been instituted and are pending or, to the knowledge
of such officer, have been threatened as of the Closing Date;
(iii) Nothing has come to the attention of such
officer that would lead such officer to believe that the Prospectus
(other than any information included in the Computational Materials and
incorporated in the Prospectus by reference, which information (i) is
not also otherwise included in the Prospectus Supplement and (ii) is
not Seller Mortgage Loan Information) contains any untrue statement of
a material fact or omits to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and
(iv) Nothing has come to the attention of such
officer that would lead such officer to believe that any Seller
Mortgage Loan Information (as defined herein) contains any untrue
statement of a material fact or, in conjunction with the Prospectus,
omits any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(c) Redwood Trust shall have furnished to the Underwriter a
certificate, dated the Closing Date, of Redwood Trust, signed by the Chairman of
the Board or President and the principal financial or accounting officer of
Redwood Trust, to the effect that each signer of such
19
certificate has carefully examined the Registration Statement, the Prospectus
and this Agreement and that:
(i) The representations and warranties of
Redwood Trust herein are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date, and Redwood Trust has complied with all agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness
of the Registration Statement has been issued, and no proceedings for
that purpose have been instituted and are pending or, to the knowledge
of such officer, have been threatened as of the Closing Date; and
(iii) Nothing has come to the attention of such
officer that would lead such officer to believe that the Prospectus
(other than any information included in the Computational Materials and
incorporated in the Prospectus by reference, which information (i) is
not also otherwise included in the Prospectus Supplement and (ii) is
not Seller Mortgage Loan Information) contains any untrue statement of
a material fact or omits to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) Each of the Depositor and the Seller shall have furnished
to the Underwriter an opinion, dated the Closing Date, of Xxxxx & Xxxxx, special
counsel to the Depositor and the Seller, in form and substance satisfactory to
the Underwriter and counsel to the Underwriter, to the effect that:
20
(i) Such entity has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the State of its incorporation and is duly qualified to do business in,
and is in good standing as a foreign corporation under the laws of,
each jurisdiction where the character of its properties or the nature
of its activities makes such qualification necessary, except such
jurisdictions, if any, in which the failure to be so qualified will not
have a material adverse effect on the condition (financial or
otherwise), earnings, regulatory affairs, business affairs, business
prospects or properties of such entity; and such entity holds all
material licenses, certificates and permits from all governmental
authorities necessary for the conduct of its business as described in
the Prospectus;
(ii) No filing or registration with, notice to,
or consent, approval, authorization, order or other action of any
governmental agency or body or any court is required for the
consummation by such entity of the transactions contemplated by the
terms of the Transaction Documents to which it is a party 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 Notes, any recordations of the Mortgage Loans to the Trustee (to
the extent such recordations are required pursuant to the Indenture)
that have not yet been completed and such other approvals as have been
obtained;
(iii) The issuance, delivery and sale of the Notes
to be purchased by the Underwriter pursuant to this Agreement, the
execution and delivery of the Transaction Documents by such entity and
the consummation of any of the transactions contemplated by the terms
of the Transaction Documents do not conflict with or result in a breach
or violation of any material term or provision of, or constitute a
default under, the certificate
21
of incorporation or by-laws of such entity, or any indenture, contract,
lease, mortgage, deed of trust, note, agreement or other evidence of
indebtedness or other agreement, obligation or instrument to which such
entity is a party or by which it or its property is bound, or any
statute or any law, decree, order, rule or regulation applicable to
such entity of any court, regulatory body, administrative agency or
governmental body having jurisdiction over such entity or its
properties;
(iv) There are no legal or governmental actions,
investigations or proceedings pending to which such entity is a party,
or, to the best knowledge of such counsel, threatened against the such
entity, (A) asserting the invalidity of any Transaction Document or the
Notes, (B) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by any Transaction
Document, (C) which might materially and adversely affect the
performance by such entity of its respective obligations under, or the
validity or enforceability of, any Transaction Document or the Notes or
(D) seeking to affect adversely the Federal income tax attributes of
the Notes as described in the Prospectus under the heading "Federal
Income Tax Consequences" or the state income tax attributes of the
Notes as described in the Prospectus under the heading "State Tax
Considerations;"
(v) The Registration Statement and any
amendments thereto have become effective under the Act; to the best
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued and not withdrawn, 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 and the Indenture, as of their
respective effective or issue dates (other
22
than the financial and statistical information contained therein as to
which such counsel need express no opinion), complied as to form in all
material respects with the applicable requirements of the Act or the
TIA, as applicable, and the respective rules and regulations
thereunder;
(vi) To the best knowledge of such counsel, there
are no material contracts, indentures or other documents of a character
required to be described or referred to in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration
Statement other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto;
(vii) Each Transaction Document to which such
entity is a party has been duly authorized, executed and delivered by
such entity and constitutes a valid, legal and binding agreement of
such entity enforceable against such entity in accordance with its
terms, subject, as to enforceability to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and to general principles of equity regardless of
whether enforcement is sought in a proceeding in equity or at law;
(viii) The direction by the Depositor to the Trust
to execute, and cause the Indenture Trustee to authenticate and deliver
the Notes has been duly and validly authorized by the Depositor, and
the Notes, when authenticated by the Indenture Trustee in the manner
anticipated by the Indenture and delivered and paid for by you as
provided in this Agreement, will constitute the legal, valid and
binding obligations of the Trust, enforceable against the Trust in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors'
23
rights generally, and will be validly issued and outstanding and
entitled to the benefits of the Indenture;
(ix) The Notes and the Transaction Documents
conform in all material respects to the descriptions thereof contained
in the Prospectus;
(x) The statements in the Prospectus under the
headings "Certain Legal Aspects of the Loans" and "Legal Investment,"
to the extent that they constitute matters of law or legal conclusions
with respect thereto, have been reviewed by such counsel and are
correct in all material respects;
(xi) The Indenture, when executed and delivered,
will have been duly qualified under the TIA; and (xii) Neither the
Depositor nor the Trust is required to be registered as an "investment
company" under the 1940 Act.
Such counsel shall also state that nothing has come to its attention
that would lead such counsel to believe that the Registration Statement, 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 that the Prospectus, as of the
date of the Prospectus Supplement, and on 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; it being
understood that such counsel need express no view as to financial and
statistical information contained therein.
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
24
the Transaction Documents. 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 Seller, the Depositor and Redwood Trust. Such
opinion may be qualified as an opinion only on the laws of the States of New
York, California and Delaware and the federal law of the United States. To the
extent that such firm relies upon the opinion of other counsel in rendering any
portion of its opinion, the opinion of such other counsel shall be attached to
and delivered with the opinion of such firm that is delivered to you.
(e) The Depositor shall have furnished to the Underwriter an
opinion, dated the Closing Date, of Xxxxxxx and Xxxxxx LLP, special tax counsel
to the Depositor, in form and substance satisfactory to the Underwriter and
counsel to the Underwriter, to the effect that:
(i) the statements in the Prospectus under the
heading "Federal Income Tax Consequences", as supplemented or
modified by the statements in the Prospectus Supplement under
the heading "Federal Income Tax Consequences," to the extent
that they constitute matters of law or legal conclusions with
respect to Federal income tax matters, are correct in all
material respects;
(ii) the Trust will not be characterized as an
association or publicly traded partnership taxable as a
corporation for federal income tax purposes or as a taxable
mortgage pool within the meaning of Section 7701(i) of the
Internal Revenue Code of 1986, as amended.
(iii) the Notes will constitute indebtedness of
the Trust for federal income tax purposes.
25
(f) Redwood Trust shall have furnished to the Underwriter an
opinion, dated the Closing Date, of Xxxxx & Xxxxx, special counsel to Redwood
Trust, in form and substance satisfactory to the Underwriter and counsel to the
Underwriter, to the effect that:
(i) Redwood Trust has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
the State of Maryland and is duly qualified to do business in, and is
in good standing as a foreign corporation under the laws of, each
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary, except such
jurisdictions, if any, in which the failure to be so qualified will not
have a material adverse effect on the condition (financial or
otherwise), earnings, regulatory affairs, business affairs, business
prospects or properties of Redwood Trust; and Redwood Trust holds all
material licenses, certificates and permits from all governmental
authorities necessary for the conduct of its business as described in
the Prospectus;
(ii) Each Transaction Document to which Redwood
Trust is a party has been duly authorized, executed and delivered by
Redwood Trust and constitutes a valid, legal binding agreement of
Redwood Trust, enforceable against Redwood Trust in accordance with its
terms, subject, as to enforceability to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and to general principles of equity regardless of
whether enforcement is sought in a proceeding in equity or at law;
(iii) No consent, approval, authorization or order
of any court or governmental agency or body is required for the
consummation by Redwood Trust of the transactions contemplated by the
terms of the Transaction Documents to which Redwood
26
Trust is a party 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 Notes, any recordations of the
assignment of the Mortgage Loans to the Trustee (to the extent such
recordations are required pursuant to the Indenture) that have not yet
been completed and such other approvals as have been obtained;
(iv) The consummation of any of the transactions
contemplated by the terms of the Transaction Documents to which Redwood
Trust is a party do not conflict with or result in a breach or
violation of any material term or provision of, or constitute a default
under, the charter or by-laws of Redwood Trust, or, to the best
knowledge of such counsel, any indenture or other agreement or
instrument to which Redwood Trust is a party or by which it is bound,
or any statute or regulation applicable to Redwood Trust or any order
of any court, regulatory body, administrative agency or governmental
body having jurisdiction over Redwood Trust; and
(v) There are no legal or governmental actions,
investigations or proceedings pending to which Redwood Trust is a
party, or, to the best knowledge of such counsel, threatened against
Redwood Trust, (A) asserting the invalidity of any Transaction Document
to which Redwood Trust is a party or (B) which might materially and
adversely affect the performance by Redwood Trust of its obligations
under, or the validity or enforceability of any Transaction Document to
which Redwood Trust is a party.
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 the Transaction Documents. Such opinion
may assume the due authorization, execution and
27
delivery of the instruments and documents referred to therein by the parties
thereto other than Redwood Trust, the Seller and the Depositor. Such opinion may
be qualified as an opinion only on the laws of the States of Maryland, New York,
Delaware and California and the federal law of the United States. To the extent
that such counsel relies upon the opinion of other counsel in rendering any
portion of its opinion, the opinion of such other counsel shall be attached to
and delivered with the opinion of such counsel that is delivered to the
Underwriter.
(g) The Owner Trustee shall have furnished to the Underwriter
an opinion, dated the Closing Date, of Potter, Xxxxxxxx & Xxxxxxx LLP, counsel
to the Owner Trustee, in form and substance satisfactory to the Underwriter and
counsel to the Underwriter, to the effect that:
(i) The Owner Trustee has been duly organized
and is validly existing as a banking corporation duly organized under
the laws of the state of Delaware, and is duly qualified to do business
in each jurisdiction where the character of its properties or the
nature of its activities makes such qualification necessary, except
such jurisdictions, if any, in which the failure to be so qualified
will not have a material adverse effect on the condition (financial or
otherwise), earnings, regulatory affairs, business affairs, business
prospects or properties of the Owner Trustee; and the Owner Trustee
holds all material licenses, certificates and permits from all
governmental authorities necessary for the conduct of its business as
described in the Prospectus;
(ii) Each Transaction Document to which the Owner
Trustee is a party has been duly authorized, executed and delivered by
the Owner Trustee and constitutes a valid, legal binding agreement of
the Owner Trustee, enforceable against the Owner Trustee in accordance
with its terms, subject, as to enforceability to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights
28
generally and to general principles of equity regardless of whether
enforcement is sought in a proceeding in equity or at law;
(iii) No consent, approval, authorization or order
of any court or governmental agency or body is required for the
consummation by the Owner Trustee of the transactions contemplated by
the Transaction Documents to which the Owner Trustee is a party;
(iv) The consummation of any of the transactions
contemplated by the Transaction Documents do not conflict with or
result in a breach or violation of any material term or provision of,
or constitute a default under, the charter or by-laws of the Owner
Trustee, or, to the best knowledge of such counsel, any indenture or
other agreement or instrument to which the Owner Trustee is a party or
by which it is bound, or any statute or regulation applicable to the
Owner Trustee or any order of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Owner Trustee; and
(v) There are no legal or governmental actions,
investigations or proceedings pending to which the Owner Trustee is a
party, or, to the best knowledge of such counsel, threatened against
the Owner Trustee, (A) asserting the invalidity of any Transaction
Document to which the Owner Trustee is a party or (B) which might
materially and adversely affect the performance by the Owner Trustee of
its obligations under, or the validity or enforceability of any
Transaction Document to which the Owner Trustee is a party.
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
29
parties to the Transaction Documents. 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 Trustee. Such opinion may be
qualified as an opinion only on the laws of the State Delaware and the federal
law of the United States. To the extent that such counsel relies upon the
opinion of other counsel in rendering any portion of its opinion, the opinion of
such other counsel shall be attached to and delivered with the opinion of such
counsel that is delivered to the Underwriter.
(h) The Trust shall have furnished to the Underwriter an
opinion, dated the Closing Date, of Potter, Xxxxxxxx & Xxxxxxx LLP, counsel to
the Trust, in form and substance satisfactory to the Underwriter and counsel to
the Underwriter, to the effect that:
(i) The Trust has been duly organized and is
validly existing as a statutory trust duly organized under the laws of
the state of Delaware;
(ii) The Transaction Documents to which the Trust
is a party have been duly authorized, executed and delivered by the
Trust and constitutes a valid, legal and binding agreement of the
Trust, enforceable against the Trust in accordance with its terms,
subject, as to enforceability to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and to general principles of equity regardless of
whether enforcement is sought in a proceeding in equity or at law;
(iii) No consent, approval, authorization or order
of any court or governmental agency or body is required for the
consummation by the Trust of the transactions contemplated by the
Transaction Documents, except any 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 Notes, any recordations
of the assignment of
30
the Mortgage Loans to the Trust (to the extent such recordations are
required pursuant to the Indenture) that have not yet been completed
and such other approvals as have been obtained; and
(iv) The consummation of any of the transactions
contemplated by the Transaction Documents do not conflict with or
result in a breach or violation of any material term or provision of,
or constitute a default under, the certificate of trust of the Trust,
or, to the best knowledge of such counsel, any indenture or other
agreement or instrument to which the Trust is a party or by which it is
bound, or any statute or regulation applicable to the Trust or any
order of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Trust.
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 the Transaction Documents. 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 Trust. Such
opinion may be qualified as an opinion only on the laws of the State of Delaware
and the federal law of the United States. To the extent that such counsel relies
upon the opinion of other counsel in rendering any portion of its opinion, the
opinion of such other counsel shall be attached to and delivered with the
opinion of such counsel that is delivered to the Underwriter.
(i) The Indenture Trustee shall have furnished
to the Underwriter an opinion, dated the Closing Date, of Xxxxx Xxxxxxx
LLP, counsel to the Indenture Trustee, in form and substance
satisfactory to the Underwriter and counsel to the Underwriter, to the
effect that:
31
(i) The Indenture Trustee has been duly
organized and is validly existing as a national banking association
duly organized under the laws of the United States of America, and is
duly qualified to do business in each jurisdiction where the character
of its properties or the nature of its activities makes such
qualification necessary, except such jurisdictions, if any, in which
the failure to be so qualified will not have a material adverse effect
on the condition (financial or otherwise), earnings, regulatory
affairs, business affairs, business prospects or properties of the
Indenture Trustee; and the Indenture Trustee holds all material
licenses, certificates and permits from all governmental authorities
necessary for the conduct of its business as described in the
Prospectus;
(ii) Each Transaction Document to which the
Indenture Trustee is a party has been duly authorized, executed and
delivered by the Indenture Trustee and constitutes a valid, legal
binding agreement of the Indenture Trustee, enforceable against the
Indenture Trustee in accordance with its terms, subject, as to
enforceability to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law;
(iii) No consent, approval, authorization or order
of any court or governmental agency or body is required for the
consummation by the Indenture Trustee of the transactions contemplated
by the terms of the Transaction Documents to which the Indenture
Trustee is a party;
(iv) The consummation of any of the transactions
contemplated by the terms of the Transaction Documents to which the
Indenture Trustee is a party do not
32
conflict with or result in a breach or violation of any material term
or provision of, or constitute a default under, the charter or by-laws
of the Indenture Trustee, or, to the best knowledge of such counsel,
any indenture or other agreement or instrument to which the Indenture
Trustee is a party or by which it is bound, or any statute or
regulation applicable to the Indenture Trustee or any order of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over the Indenture Trustee; and
(v) There are no legal or governmental actions,
investigations or proceedings pending to which the Indenture Trustee is
a party, or, to the best knowledge of such counsel, threatened against
the Indenture Trustee, (A) asserting the invalidity of any Transaction
Document to which the Indenture Trustee is a party or (B) which might
materially and adversely affect the performance by the Indenture
Trustee of its obligations under, or the validity or enforceability of
any Transaction Document to which the Indenture Trustee is a party.
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 the Transaction Documents. 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 Indenture
Trustee. Such opinion may be qualified as an opinion only on the laws of the
State of New York and the federal law of the United States. To the extent that
such counsel relies upon the opinion of other counsel in rendering any portion
of its opinion, the opinion of such other counsel shall be attached to and
delivered with the opinion of such counsel that is delivered to the Underwriter.
33
(j) The Servicer shall have furnished to the Underwriter an
opinion, dated the Closing Date, of in-house counsel to the Servicer, in form
and substance satisfactory to the Underwriter and counsel to the Underwriter, to
the effect that:
(i) The Servicer has been duly incorporated and
is validly existing as corporation under the laws of the State of
Delaware and has the corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Transaction Documents to which it is a party. Each of the Transaction
Documents to which the Servicer is a party has been duly authorized,
executed and delivered by the Servicer.
(ii) Assuming the Transaction Documents to which
the Servicer is a party have been duly authorized, executed and
delivered by the parties thereto, other than Servicer, each of the
Transaction Documents to which the Servicer is a party constitutes a
legal, valid and binding obligation of the Servicer, enforceable
against the Servicer in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance or other
similar laws affecting creditors' rights generally and to general
principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
(iii) No consent, approval, authorization or order
of, or filing with, any Illinois or federal court or governmental
agency or body is required to be obtained or made by the Servicer in
connection with the execution and delivery of, performance under, or
compliance with, the Transaction Documents to which it is a party,
except such as have been made or obtained.
34
(iv) The execution and delivery of the
Transaction Documents to which it is a party and the performance and
compliance with the terms of such documents by Servicer (a) will not
violate its Certificate of Incorporation, Assistant Secretary's
Certificate, By-Laws or resolutions, (b) will not conflict with or
result in a breach or violation of any Federal or State of Illinois
law, rule or regulation presently in effect and applicable to the
Servicer where such conflict, breach or violation would have a material
adverse effect on the ability of the Servicer to perform its
obligations thereunder and (c) will not constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default under, or result in the breach of, any material contract or
agreement or other material instrument to which the Servicer is a
party.
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 the Transaction Documents. Such opinion
may be qualified as an opinion only on the laws of the States of Illinois,
Delaware and the federal law of the United States. To the extent that such
counsel relies upon the opinion of other counsel in rendering any portion of its
opinion, the opinion of such other counsel shall be attached to and delivered
with the opinion of such counsel that is delivered to the Underwriter.
(k) The Insurer shall have furnished to the Underwriter an
opinion, on in-house counsel to the Insurer, dated the Closing Date, in form and
substance satisfactory to the Underwriter and counsel to the Underwriter, to the
effect that:
(i) The Insurer has been duly incorporated and
is validly existing as a stock insurance corporation under the laws of
the State of Wisconsin, and is duly
35
qualified to do business in 50 states, the District of Columbia, the
Commonwealth of Puerto Rico, the Territory of Guam and the U.S. Virgin
Islands;
(ii) The Insurer has full corporate power and
authority to execute and deliver the Policy and the Policy has been
duly authorized, executed and delivered by the Insurer, and constitutes
a legal, valid and binding agreement of the Insurer, enforceable
against the Insurer in accordance with its terms except to the extent
that the enforceability (but not the validity) of such obligation may
be limited by any applicable bankruptcy, insolvency, liquidation,
rehabilitation or other similar law or enactment now or hereafter
enacted affecting the enforcement of creditors' rights generally and by
general principles of equity;
(iii) The execution and delivery by the Insurer of
the Policy and the Insurer Documents will not, and the consummation of
the transactions contemplated thereby and the satisfaction of the terms
thereof will not, conflict with or result in a breach of any of the
terms, conditions or provisions of the Restated Articles of
Incorporation or Restated Corporate By-Laws of the Insurer, or to such
counsel's knowledge, any material restriction contained in any
contract, agreement or instrument to which the Insurer is a party or by
which it is bound or constitute a material default under any of the
foregoing;
(iv) Proceedings legally required for the
issuance of the Policy and the execution, delivery and performance of
the Insurer Documents have been taken by the Insurer and licenses,
orders, consents or other authorizations or approvals of any
governmental boards or bodies legally required for the enforceability
of the Policy and
36
the other Insurer Documents have been obtained or are not material to
the enforceability of the Policy or the Insurer Documents;
(v) The Policy is exempt from registration under
the Act;
(vi) There is no action, suit or proceeding
pending against or, to such counsel's knowledge, affecting the Insurer
in any court, or before or by any governmental body, which is likely to
affect or impair the validity or enforceability of the Policy or the
Insurer Documents;
(vii) The statements in the Prospectus Supplement
under the headings "The Insurer and the Policy" and "The Insurer," to
the extent that they constitute summaries of the matters referred to in
such opinion, accurately reflect and fairly present the information
purported to be shown and, insofar as such statements describe the
Insurer, fairly and accurately describe the Insurer; and
(viii) The Insurer is authorized to deliver the
Insurer Documents, and each of the Insurer Documents has been duly
executed and delivered and is the valid and binding obligation of the
Insurer enforceable in accordance with its terms except to the extent
that the enforceability (but not the validity) of such obligation may
be limited by any applicable bankruptcy, insolvency, liquidation,
rehabilitation or other similar law or enactment now or hereafter
enacted affecting the enforcement of creditors' rights generally and by
general principles of equity and subject to principles of public policy
limiting the right to enforce the indemnification provisions contained
therein.
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 the Insurer Documents. Such opinion may
assume the due authorization, execution and delivery
37
of the instruments and documents referred to therein by the parties thereto
other than the Insurer. Such opinion may be qualified as an opinion only on the
laws of the State of New York, the insurance laws of the State of Wisconsin and
the federal law of the United States. To the extent that such counsel relies
upon the opinion of other counsel in rendering any portion of its opinion, the
opinion of such other counsel shall be attached to and delivered with the
opinion of such counsel that is delivered to the Underwriter.
(l) The Underwriter shall have received copies of any opinions
of counsel delivered to the rating agencies set forth in the Prospectus as
rating the Notes, including, but not limited to, any "true sale,"
"non-consolidation" or "perfection" opinions. Any such opinions shall be dated
the Closing Date and addressed to the Underwriter or accompanied by reliance
letters addressed to the Underwriter.
(m) The Underwriter shall have received from its counsel such
opinion or opinions, dated the Closing Date, with respect to the issuance and
sale of the Notes, the Registration Statement and the Prospectus, and such other
related matters as you may reasonably require.
(n) All of the Transaction Documents shall have been duly
executed and delivered.
(o) The Depositor's independent accountants, Deloitte & Touche
LLP, shall have furnished to the Underwriter a letter or letters addressed to
the Underwriter and dated as of or prior to the date of first use of the
Prospectus Supplement in the form and reflecting the performance of the
procedures previously agreed to by the Depositor and the Underwriter.
(p) The Insurer's independent accountants, KPMG LLC, shall
have furnished the Depositor and the Underwriter its consent to the inclusion of
its audit report with respect to the
38
Insurer in the Prospectus Supplement and the reference to it under the heading
"Experts" in the Prospectus Supplement.
(q) Subsequent to the date hereof, there shall not have
occurred any change, or any development involving a prospective change in or
affecting the earnings, business or properties of Redwood Trust, the Depositor
or the Seller which, in your judgment, materially impairs the investment quality
of the Notes so as to make it impractical or inadvisable to proceed with the
public offering or the delivery of the Notes as contemplated by the Prospectus.
(r) The Notes shall be rated not lower than the required
ratings set forth under the heading "Ratings" in the Prospectus Supplement, such
ratings shall not have been rescinded and no public announcement shall have been
made that any such required rating of the Notes has been placed under review
(otherwise than for possible upgrading).
(s) The Depositor shall have furnished to the Underwriter such
further information, certificates and documents as the Underwriter may
reasonably have requested, and all proceedings in connection with the
transactions contemplated by this Agreement and all documents incident hereto
shall be in all material respects satisfactory in form and substance to the
Underwriter and its counsel.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as provided in this Agreement, this Agreement and
all obligations of the Underwriter hereunder may be canceled at, or at any time
prior to, the Closing Date by the Underwriter. Notice of such cancellation shall
be given to the Depositor in writing, or by telephone or telegraph confirmed in
writing.
7. Termination. This Agreement shall be subject to termination in your
absolute discretion, by notice given to the Depositor if, subsequent to the date
hereof, (i) trading generally
39
shall have been suspended or materially limited on, or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the Nasdaq
National Market, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of
Redwood Trust or the Depositor shall have been suspended on any exchange or in
any over-the-counter market, (iii) a material disruption in securities
settlement, payment or clearance services in the United States shall have
occurred, (iv) any moratorium on commercial banking activities shall have been
declared by Federal or New York State authorities or (v) there shall have
occurred any outbreak or escalation of hostilities, or any change in financial
markets or any calamity or crisis that, in your judgment, is material and
adverse and which, singly or together with any other event specified in this
clause (v), makes it, in your judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Notes on the terms and in the manner
contemplated in the Prospectus Supplement.
8. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Depositor, the Seller and Redwood Trust and their respective officers and of the
Underwriter set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriter or the Depositor, the Seller or Redwood Trust, and will survive
delivery of and payment for the Notes. The provisions of Section 5(a)(iv),
Section 9, Section 12 and Section 13 hereof shall survive the termination or
cancellation of this Agreement.
9. Reimbursement of Underwriter Expenses. If for any reason, other than
default by the Underwriter in its obligation to purchase the Notes or
termination by the Underwriter pursuant to Section 7 hereof, the Notes are not
delivered as provided herein, the Depositor, the Seller and Redwood Trust
jointly and severally agree to reimburse the Underwriter for all damages, losses
40
and out-of-pocket expenses of the Underwriter, including reasonable fees and
disbursements of its counsel, reasonably incurred by the Underwriter in making
preparations for the purchase, sale and delivery of the Notes, but the
Depositor, the Seller and Redwood Trust shall then be under no further liability
to the Underwriter with respect to the Notes, except as provided in Section
5(a)(iv), Section 8, Section 12 or Section 13 hereof.
10. Certain Definitions. For purposes of this Agreement, the following
terms shall have the respective meanings set forth below:
Computational Materials: Within the meaning of the no-action letter
issued by the staff of the Commission on May 20, 1994 to Xxxxxx, Peabody
Acceptance Corporation I, et al., as modified by a no-action letter issued by
the staff of the Commission on May 27, 1994 to the Public Securities Association
(the "PSA") and as further modified by a no-action letter issued by the staff of
the Commission on February 17, 1995 to the PSA, tables and/or charts displaying,
with respect to the Notes, any of the following: yield; average life; duration;
expected maturity; interest rate sensitivity; loss sensitivity; cash flow
characteristics; background information regarding the Mortgage Loans; proposed
structure; or similar information (tabular or otherwise) of a statistical,
mathematical, tabular or computational nature, which materials are furnished by
the Underwriter to prospective investors.
Seller Mortgage Loan Information: Information relating to the Mortgage
Loans furnished by or on behalf of the Depositor or the Seller to the
Underwriter, upon which the mathematical calculations reflected in the
Computational Materials of the Underwriter are based.
Spread: The excess, if any, of (i) the purchase prices paid by
investors to the Underwriter for the Notes over (ii) the purchase price paid by
the Underwriter to the Depositor for the Notes purchased by the Underwriter.
41
Underwriter Information: The only written information furnished by or
on behalf of the Underwriter to the Depositor specifically for use in connection
with the preparation of the Registration Statement or the Prospectus, such
information being (i) the information relating to the Underwriter set forth in
the Prospectus Supplement in the third to final paragraph on the cover page
thereof and the second paragraph under the caption "Method of Distribution"
therein and (ii) any Computational Materials prepared by the Underwriter,
furnished to the Depositor and included in the Form 8-K; provided, however, that
such Computational Materials shall not include (i) any Seller Mortgage Loan
Information or any errors in the mathematical calculations reflected in such
Computational Materials to the extent such errors result from such Seller
Mortgage Loan Information or (ii) any information contained in the Computational
Materials that is also otherwise included in the Prospectus Supplement.
11. Computational Materials. The Underwriter that desires to furnish
Computational Materials to investors shall furnish two (2) copies thereof, or
deliver by electronic transmission, as applicable, to or at the direction of
Xxxxx & Xxxxx no later than 3:00 p.m. New York City time on the business day
prior to the day on which the Prospectus Supplement is being cleared for
printing. In addition, the Underwriter which has so furnished Computational
Materials to the Depositor hereby represents as to the materials it has
furnished as follows:
(a) The Computational Materials so furnished by the
Underwriter include all Computational Materials prepared by the Underwriter
that:
(i) are generated based on assumptions regarding
the payment priorities and characteristics of the Notes that is
actually issued and purchased by the Underwriter; and
42
(ii) are provided to prospective investors under
the following conditions prior to the time of filing of the Prospectus
pursuant to Rule 424(b):
A. in the case of each prospective investor that has
orally indicated to the Underwriter that it will purchase all
or a portion of the Notes to which such Computational
Materials relate, the Computational Materials relating to the
Notes that are sent to such prospective investor; and
B. for any other prospective investor, all
Computational Materials that are sent to such prospective
investor after the structure for the Notes is finalized;
provided, however, that the Computational Materials so furnished need
not include any Computational Materials that relate to abandoned
structures or that are furnished to prospective investors prior to the
time that the structure of the Notes is finalized where such investors
have not indicated to the Underwriter their intention to purchase the
Notes described in such Computational Materials.
(b) Neither the Depositor nor any of its affiliates
participated in the preparation of the Computational Materials other than by
supplying the Seller Mortgage Loan Information to the Underwriter.
(c) At or prior to the time any Computational Materials are
furnished to the Depositor for filing on the Form 8-K, the Underwriter
furnishing such Computational Materials will provide to the Depositor a letter,
in form and substance reasonably satisfactory to the Depositor and the
Underwriter, of a firm of independent public accountants of national reputation
to the effect that such accountants have performed certain specified procedures
with respect to such Computational Materials and have found no exceptions, other
than such exceptions as are acceptable to the Depositor and the Underwriter. The
Underwriter furnishing a
43
letter of the sort described in the preceding sentence will bear the costs and
expenses of such letter.
12. Indemnification. (a) The Depositor, the Seller and Redwood Trust
jointly and severally agree to indemnify and hold harmless the Underwriter and
each person who controls the Underwriter within the meaning of either the Act or
the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they may become subject under the Act, the Exchange
Act, or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or in any revision or amendment thereof or supplement thereto, (ii)
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (iii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus or in any revision or amendment thereof or supplement therefore, or
(iv) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement therein, in the light of
the circumstances under which they were made, not misleading and further agree
to promptly reimburse each such indemnified party for any legal or other
expenses reasonably incurred by it or him, as incurred, in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action; provided, however, that none of the Depositor, the
Seller or Redwood Trust shall be liable to a particular Underwriter or any
person who controls the Underwriter to the extent that any misstatement or
alleged misstatement or omission or alleged omission was (i) made in the
Prospectus or the Registration Statement pursuant to
44
Underwriter Information or (ii) corrected (with such correction delivered to the
Underwriter) at least one day prior to the written confirmation of such sale and
the Underwriter did not deliver, at or prior to the written confirmation of such
sale, a copy of the Prospectus as then revised, amended or supplemented in any
case where such delivery is required by the Act or the Exchange Act, if the
Depositor has previously furnished copies thereof to the Underwriter in
accordance with the terms of this Agreement. This indemnity agreement will be in
addition to any liability that the Depositor, the Seller or Redwood Trust may
otherwise have.
(b) The Underwriter severally agrees to indemnify and hold
harmless the Depositor, Redwood Trust and the Seller, the officers of the
Depositor who signed the Registration Statement or any amendment thereof, the
directors of the Depositor, and each person who controls the Depositor, Redwood
Trust or the Seller within the meaning of either the Act or the Exchange Act, to
the same extent as the foregoing indemnities from the Depositor, the Seller and
Redwood Trust to the Underwriter; provided, however, that the Underwriter will
be liable in any such case only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with Underwriter Information furnished by the Underwriter
to the Depositor or to a prospective investor; and provided, further, that any
such omission or alleged omission relating to the Computational Materials
included in the Underwriter Information pursuant to the definition thereof shall
be determined by reading such Computational Materials in conjunction with the
Prospectus as an integral document and in the light of the circumstances under
which such statements in the Computational Materials and Prospectus were made.
This indemnity agreement will be in addition to any liability that the
Underwriter may otherwise have.
45
(c) Promptly after receipt by an indemnified party under this Section 12 of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 12, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability which it may have to any indemnified
party, unless the indemnifying party is materially prejudiced by such failure to
notify and in any event shall not relieve the indemnifying party from any
liability which it may have to any indemnified party other than under this
Section 12. In case any such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party (including impleaded
parties) and the indemnified party or parties shall have reasonably concluded
that there may be legal defenses available to it or them and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
elect separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
46
employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (in addition to local counsel) for each of, and
approved by, the Underwriter in the case of paragraph (a) of this Section 12,
representing the related indemnified parties under such paragraph (a) who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall only be in respect of the counsel
referred to in such clause (i) or (iii). No indemnifying party shall, without
the 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.
13. Contribution. If the indemnification provided for in Section 12 is
unavailable or insufficient to hold harmless an indemnified party under Section
12, then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in Section 12 above in such proportion as is appropriate
to reflect the relative benefits received by the Depositor, the Seller and
Redwood Trust on the one hand and the Underwriter on the other from the offering
of the Notes 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
47
relative fault of the Depositor, the Seller and Redwood Trust on the one hand
and the Underwriter on the other in connection with the statements or omissions
or alleged statements or alleged omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Depositor, the Seller and
Redwood Trust on the one hand and the Underwriter on the other shall be in such
proportion so that the Underwriter is responsible for an amount equal to the
Spread, and the Depositor, the Seller and Redwood Trust are responsible for the
balance. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omissions or alleged omission to state a material fact relates to information
supplied by the Depositor, the Seller or Redwood Trust or by the Underwriter and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this Section 13 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is the
subject of this Section 13. The Underwriter shall not be required to contribute
any amount in excess of (x) the Spread of the Underwriter, over (y) the amount
of any damages which the applicable Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. The obligation of the Underwriter to contribute under this Section 13
is several in proportion to the portion of the Spread applicable to it. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
48
14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns, and
no other person will have any right or obligation hereunder.
15. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
16. Miscellaneous. Time shall be of the essence of this Agreement. This
Agreement supersedes all prior or contemporaneous agreements and understandings
relating to the subject matter hereof. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by a writing
signed by the party against whom enforcement of such change, waiver, discharge
or termination is sought. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
17. Notices. All communications hereunder shall be in writing and
effective only on receipt and, if sent to the Underwriter, shall be delivered to
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxxx Xxxxxxx with a copy
to 1221 Avenue of the Americas, New York, New York, attention of Xxxxxxxx Xxxxx.
If such notice is sent to the Depositor, the Seller or Redwood Trust, it shall
be delivered to Xxx Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxx 00000,
attention of Xxxx Xxxxxxxxxxx, Vice President.
* * *
49
If the foregoing is in accordance with your understanding of our
agreement please sign and return to the undersigned a counterpart hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
by and among the Depositor, the Seller, Redwood Trust and the Underwriter
relating to the Notes.
Very truly yours,
REDWOOD TRUST, INC.
By: _____________________________________
Name: Xxxx Xxxxxxxxxxx
Title: Vice President
RWT HOLDINGS, INC.,
as Seller
By: _____________________________________
Name: Xxxx Xxxxxxxxxxx
Title: Vice President
SEQUOIA MORTGAGE FUNDING CORPORATION,
as Depositor
By: _____________________________________
Name: Xxxx Xxxxxxxxxxx
Title: Vice President
The foregoing Agreement
is hereby confirmed and accepted by:
XXXXXX XXXXXXX & CO. INCORPORATED
By: _____________________________________
Name:
Title:
Schedule 1
Amount to be
purchased by Xxxxxx
Original Principal Purchase Xxxxx Xxxxxxx & Co.
Amount(1) Interest Rate(2) Percentage Incorporated
------------------ ---------------- -------------- -------------------
$ 317,044,000 Variable 99.8125% $ 317,044,000
--------------
(1) This balances is approximate, as described in the Prospectus
Supplement.
(2) The Notes will accrue interest based on adjustable interest rates, as
described in the Prospectus Supplement.
