$103,197,000
BLOCK MORTGAGE FINANCE, INC.
Block Mortgage Finance
Asset-Backed Certificates, Series 1997-1,
Class A-1
Class A-2
Class A-3
Class A-4
UNDERWRITING AGREEMENT
January 24, 1997
Xxxxxx Xxxxxxx & Co. Incorporated
as Representative of the Several
Underwriters listed herein
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Block Mortgage Finance, Inc. (the "Depositor"), a
wholly-owned, special purpose subsidiary of Companion
Mortgage Corporation ("Companion"), has authorized the
issuance and sale of Block Mortgage Finance Asset-Backed
Certificates, Series 1997-1, Class A-1, Class A-2 and
Class A-3 Certificates (collectively, the "Fixed Rate
Certificates") and Class A-4 Certificates (the "Adjustable
Rate Certificates" and together with the Fixed Rate
Certificates, the "Class A Certificates"), Class X-1 and
Class X-2 Certificates (the "Class X Certificates") and
the Class R Certificates (the "Class R Certificates" and
together with the Class X Certificates, the "Private
Certificates"). As used herein, the Class A Certificates,
Class X Certificates and Class R Certificates are herein
collectively referred to as the "Certificates." The
Certificates evidence in the aggregate the beneficial
interest in a pool of fixed and adjustable rate mortgage
loans (the "Mortgage Loans"). The Fixed Rate Certificates
will represent an undivided ownership interest in the
group of Mortgage Loans (the "Fixed Rate Group") which are
secured by fixed-rate first and second mortgages primarily
on one- to four-family residential dwellings. The
Adjustable Rate Certificates will represent an undivided
ownership interest in the group of Mortgage Loans (the
"Adjustable Rate Group" and, together with the Fixed Rate
Group, the "Loan Groups") which are secured by
adjustable-rate
first mortgages primarily on one- to four-family
residential dwellings.
Only the Class A Certificates are being purchased by
the several underwriters named in Schedule B hereto
(collectively, the "Underwriters"), at the price set forth
in Schedule A.
The Certificates will be issued under a pooling and
servicing agreement (the "Pooling and Servicing
Agreement"), dated as of December 31, 1996 among the
Depositor, Block Financial Corporation, as seller (in its
capacity as seller, the "Seller") and as master servicer
(in its capacity as master servicer, the "Master
Servicer", and in both capacities, "Block Financial"), and
Bankers Trust Company of California N.A., as trustee (the
"Trustee"). On or prior to the Closing Date (as defined
herein), Companion will transfer to the Seller, without
recourse, all of its right, title and interest in and to
the Mortgage Loans as of the Cut-Off Date and the
collateral securing each Mortgage Loan pursuant to a
mortgage loan purchase agreement (the "Mortgage Loan
Purchase Agreement") dated as of December 31, 1996 between
Companion and the Seller. The Master Servicer will enter
into a subservicing agreement, dated as of December 31,
1996 (the "Sub-Servicing Agreement) with NF Investments,
Inc. (the "Sub-Servicer") to provide for the subservicing
of the Mortgage Loans. The Seller, pursuant to the terms
of the Pooling and Servicing Agreement, will transfer to
the Depositor all of its right, title and interest in and
to the Mortgage Loans as of the Cut-Off Date and the
collateral securing each Mortgage Loan. The Depositor,
pursuant to the Pooling and Servicing Agreement will
transfer all of its right, title and interest in and to
the Mortgage Loans as of the Cut-off Date and the
collateral securing each Mortgage Loan to the Trustee.
The Certificates will evidence fractional undivided
interests in the property held in trust for the holders of
such Certificates (the "Trust"). The assets of the Trust
will include, among other things: the Mortgage Loans to be
conveyed by the Depositor to the Trust on the Closing
Date; such amounts as may be held by the Master Servicer
in the Collection Account (other than investment earnings
thereon) and any other accounts held by or maintained by
the Master Servicer with respect to the servicing of the
Mortgage Loans and the other assets of the Trust; and such
amounts as may be held by the Trustee in the Distribution
Account (other than investment earnings thereon) and any
other accounts held by the Trustee for the Trust. The
aggregate undivided interest in the Trust represented by
the Class A Certificates initially will be equal to
$103,197,000 of principal (subject to a variance of plus
or minus 5%), which will represent 100% of the outstanding
principal balances of the Mortgage Loans as of December
31, 1996 (the "Cut-Off Date"). The Class A Certificates
will have the benefit of two financial guaranty insurance
policies (each, a "Policy") issued by MBIA Insurance
Corporation, (the "Certificate Insurer") the principal
operating subsidiary of MBIA Inc., a New York Stock
Exchange listed company, pursuant to an Insurance
BWNY03/62100.9/14040/00302/1977 February 12, 1997
Agreement (the "Insurance Agreement") dated as of December
31, 1996 among the Seller, the Master Servicer, the
Depositor, the Trustee and the Certificate Insurer. In
addition to the Insurance Agreement, the Seller, the
Underwriters and the Certificate Insurer will enter into
an indemnification agreement (the "Indemnification
Agreement") dated as of January 24, 1997. A Form of the
Pooling and Servicing Agreement has been filed as an
exhibit to the Registration Statement (hereinafter
defined).
The Trust will include two segregated asset pools,
with respect to which elections will be made to treat the
assets of each as a "real estate mortgage investment
conduit" (a "REMIC") for federal income tax purposes. The
Class A Certificates and the Class X Certificates will
represent beneficial ownership of "regular interests" in
the Master REMIC and the Class R Certifi- xxxxx will
represent beneficial ownership of "residual interests" in
each of the Subsidiary REMIC and the Master REMIC.
Capitalized terms used but not defined herein shall
have the meanings given to them in the Pooling and
Servicing Agreement.
This Underwriting Agreement, the Pooling and
Servicing Agreement, the Mortgage Loan Purchase Agreement,
the Sub-Servicing Agreement, the Insurance Agreement and
the Indemnification Agreement are referred to collectively
herein as the "Agreements". The Master Servicer,
Companion, the Seller and the Depositor are referred to
collectively herein as the "Transaction Parties".
The Depositor has filed with the Securities and
Exchange Commission (the "Commission") on October 15,
1996, a registration statement on Form S-3 (No.
333-14041), including a form of prospectus and prospectus
supplement relating to the Class A Certificates, and has
filed with the Commission amendment No. 1 to such
registration statement on December 31, 1996 and amendment
No. 2 to such registration statement on January 21, 1997,
and pursuant to the provisions hereof shall file such
post-effective amendments thereto as may hereafter be
required pursuant to the Securities Act of 1933, as
amended (the "1933 Act"), and the rules and regulations of
the Commission thereunder (the "Rules and Regulations").
Such registration statement (as amended) is referred to
herein as the "Registration Statement"; the prospectus
and prospectus supplement relating to the offering of the
Class A Certificates constituting a part of the
Registration Statement filed by the Depositor are
collectively referred to herein as the "Prospectus" and
each of the prospectus and prospectus supplement are
referred to as the "Base Prospectus" and the "Prospectus
Supplement," respectively; "Amendment No. 1" and Amendment
No. 2" referred to herein mean the amendment No. 1 to such
Registration Statement filed with the Commission on
December 31, 1996 and the amendment No. 2 to such
Registration Statement filed with the Commission on
January 21, 1997, respectively; and any reference herein
to any amendment or supplement with respect to the
Registration Statement or the
BWNY03/62100.9/14040/00302/1977 February 12, 1997
Prospectus shall be deemed to refer to and include any
information deemed to be a part thereof pursuant to Rule
430A under the 1933 Act.
SECTION 1. Representations and Warranties of the
Master Servicer, Companion, the Seller and the Depositor.
Each of the Master Servicer, Companion, the Seller and the
Depositor, as to itself, and Block Financial,
individually, with respect to (a), (b), (q), (s), (t) and
(u) below, represents and warrants to, and agrees with the
Underwriters that:
(a) The Registration Statement, as amended by
Amendment No. 1 and Amendment No. 2, has become effective
under the 1933 Act. The Registration Statement complies,
and all amendments to the Registration Statement at the
time such amended Registration Statement becomes effective
will comply, in all material respects with the
requirements of the 1933 Act and the Rules and
Regulations. The Registration Statement at the time such
Registration Statement became effective did not, and any
amendment to the Registration Statement at the time such
amended Registration Statement becomes effective will not,
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
The Prospectus as of the date hereof does, and the
Prospectus as amended or supplemented as of the Closing
Date will, comply in all material respects with the
requirements of the 1933 Act and the Rules and
Regulations. The Prospectus as of the date hereof did not,
and the Prospectus as amended or supplemented as of the
Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading; provided, however, that the representations
and warranties in this subsection shall not apply to
statements in, or omissions from, the Registration
Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Depositor in
writing by the Underwriters or the Certificate Insurer
expressly for use in the Registration Statement or
Prospectus. The Seller and the Depositor acknowledge that
the statements set forth in the last paragraph of the
cover page of the Prospectus Supplement and in the Section
"Underwriting" in the Prospectus Supplement constitute the
only information furnished in writing by the Underwriters
for inclusion in the Prospectus. The conditions to the use
by the Depositor of a registration statement on Form S-3
under the 1933 Act, as set forth in the General
BWNY03/62100.9/14040/00302/1977 February 12, 1997
Instructions to Form S-3, have been satisfied with respect
to the Registration Statement and the Prospectus. There
are no contracts or documents of the Depositor or its
affiliates that are required to be filed as exhibits to
the Registration Statement pursuant to the 1933 Act or the
Rules and Regulations that have not been so filed on or
prior to the effective date of the Registration Statement.
(b) Since the respective dates as of which
information is given in the Prospectus, or the Prospectus
as amended and supplemented at the Closing Date, there has
not been any material adverse change in the general
affairs, management, financial condition, or results of
operations of any of the Transaction Parties or of their
subsidiaries or affiliates, otherwise than as set forth in
the Prospectus or the Prospectus as amended and
supplemented at the Closing Date.
(c) Such Transaction Party has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of its respective jurisdiction of
incorporation, with the full right, power and authority
(corporate and other) to own, lease and operate its
properties and conduct its business as described in the
Prospectus and to enter into and perform its obligations
under the Agreements to which it is a signatory, and, with
respect to the Depositor, to cause the Certificates to be
issued; such Transaction Party is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction which requires such
qualification, except where failure to be so qualified
would not have a material adverse effect on (A) its
business or financial condition, (B) its obligations under
the Agreements to which it is a signatory or (C) the
Owners of the Certificates; such Transaction Party is duly
authorized and licensed under applicable law, including,
without limitation, those that regulate the business of
originating, selling or servicing first and junior lien
mortgage loans, to conduct in the various jurisdictions in
which it does business, the business it currently conducts
therein and to perform its obligations as contemplated by
the Agreements, except where failure to be so qualified or
licensed would not have a material adverse effect on (A)
its business or financial condition, (B) its obligations
under the Agreements to which it is a signatory or (C) the
Owners of the Certificates.
(d) There are no legal or governmental proceedings
pending to which such Transaction Party is a party or of
which any property of such Transaction Party is the
subject, which, if determined adversely to such
Transaction Party would individually or in the aggregate
have a material adverse effect on (A) its financial
position, shareholders' equity or results of operations,
(B) its obligations under the Agreements to which it is a
signatory or (C) the Owners of the Certificate; and to the
best knowledge of such Transaction Party, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others.
BWNY03/62100.9/14040/00302/1977 February 12, 1997
(e) This Underwriting Agreement has been and, prior
to the Closing Date, the Agreements (other than this
Underwriting Agreement) will have been, duly authorized,
executed and delivered by each Transaction Party which is
a party to such Agreements and when duly executed and
delivered by the other parties thereto will constitute,
legal, valid and binding instruments enforceable against
such Transaction Party, in accordance with their
respective terms, subject as to enforceability (i) to
applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors'
rights generally, (ii) to general principles of equity
(regardless of whether enforcement is sought in a
proceeding in equity or at law) and (iii) with respect to
rights of indemnity under this Agreement and the
Indemnification Agreement, to limitations of public policy
under applicable securities laws.
(f) The issuance and delivery of the Certificates,
the consummation of any other of the transactions
contemplated in the Agreements and the fulfillment of the
terms of the Agreements do not and will not conflict with
or violate any term or provision of the Certificate or
Articles of Incorporation or Bylaws of such Transaction
Party; any statute, order or regulation applicable to such
Transaction Party of any court, regulatory body,
administrative agency or governmental body having
jurisdiction over such Transaction Party; and do not and
will not conflict with, result in a breach or violation or
the acceleration of, or constitute a default under, or
result in the creation or imposition of any lien, charge
or encumbrance upon any of the property or assets of such
Transaction Party pursuant to the terms of, any indenture,
mortgage, deed of trust, loan agreement or other agreement
or instrument to which such Transaction Party is a party
or by which such Transaction Party may be bound or to
which any of the property or assets of such Transaction
Party may be subject, except for conflicts, violations,
breaches, accelerations and defaults which would not be,
individually or in the aggregate, materially adverse to
such Transaction Party or the Owners of the Certificates
or materially adverse to the transactions contemplated by
the Agreements.
(g) Deloitte & Touche llp is an independent public
accountant with respect to the Master Servicer, Companion,
the Seller and the Depositor as required by the 1933 Act
and the Rules and Regulations.
(h) The direction by the Depositor to the Trustee to
execute, countersign, issue and deliver the Certificates
will, as of the Closing Date, be duly authorized by the
Depositor, and assuming the Trustee has been duly
authorized to do so, when executed, countersigned, issued
and delivered by the Trustee in accordance with the
Pooling and Servicing Agreement, the Certificates will be
validly issued and outstanding and will be entitled to the
benefits provided by the Pooling and Servicing Agreement.
BWNY03/62100.9/14040/00302/1977 February 12, 1997
(i) No consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body is required for the issuance
or sale of the Class A Certificates, or the consummation
by such Transaction Party of the other transactions
contemplated by the Agreements, except the registration
under the 1933 Act of the Class A Certificates and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities
or Blue Sky laws in connection with the issuance of the
Class A Certificates and the purchase and distribution of
the Class A Certificates by the Underwriters.
(j) Such Transaction Party possesses all material
licenses, certificates, authorities or permits issued by
the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now
conducted by it and as described in the Prospectus, and
such Transaction Party has not received any notice of
proceedings relating to the revocation or modification of
any such license, certificate, authority or permit which,
singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially
and adversely affect the conduct of its business,
operations or financial condition.
(k) At the time of execution and delivery of the
Mortgage Loan Purchase Agreement, Companion (i) will have
good and marketable title to each Mortgage Loan being
transferred by it to the Seller, free and clear of any
lien, mortgage pledge, charge, encumbrance, adverse claim
or other security interest (collectively "Liens"), (ii)
will not have assigned to any person, other than the
Seller, any of its right, title or interest in or to such
Mortgage Loans and (iii) will have the power and authority
to sell such Mortgage Loans to the Seller.
(l) At the time of execution and delivery of the
Pooling and Servicing Agreement, after giving effect to
the sale of the Mortgage Loans from Companion to the
Seller pursuant to the Mortgage Loan Purchase Agreement,
the Seller (i) will have good and marketable title to each
Mortgage Loan being transferred by it to the Depositor,
free and clear of any Lien, (ii) will not have assigned to
any person, other than the Depositor, any of its right,
title or interest in or to such Mortgage Loans and (iii)
will have the power and authority to sell such Mortgage
Loans to the Depositor.
(m) At the time of execution and delivery of the
Pooling and Servicing Agreement, after giving effect to
the sale of the Mortgage Loans from the Seller to the
Depositor pursuant to the Pooling and Servicing Agreement,
the Depositor (i) will have good and marketable title to
each Mortgage Loan being transferred by it to the Trustee
pursuant to the Pooling and Servicing Agreement, free and
clear of and Liens, (ii) will not have assigned to any
person, other than the Trustee, any of its right, title or
interest
BWNY03/62100.9/14040/00302/1977 February 12, 1997
in or to such Mortgage Loans and (iii) will have the power
and authority to sell such Mortgage Loans to the Trustee.
(n) Upon execution and delivery of the Mortgage Loan
Purchase Agreement by all of the parties thereto, the
Seller will have acquired beneficial ownership of all of
Companion's right, title and interest in and to the
Mortgage Loans, free of all Liens.
(o) Upon execution and delivery of the Pooling and
Servicing Agreement by all of the parties thereto, the
Depositor will have acquired beneficial ownership of all
of the Seller's right, title and interest in and to the
Mortgage Loans, free of all Liens.
(p) Upon execution and delivery of the Pooling and
Servicing Agreement by all of the parties thereto, the
Trustee will have acquired beneficial ownership of all of
the Depositor's right, title and interest in and to the
Mortgage Loans, and upon delivery to the Underwriters of
the Class A Certificates and payment of the purchase price
therefore, the Underwriters will have good and marketable
title to the Class A Certificates, in each case free of
Liens.
(q) As of the Closing Date, each of the Mortgage
Loans will meet the eligibility criteria described in the
Prospectus and set forth in the Pooling and Servicing
Agreement.
(r) Such Transaction Party will not conduct its
operations while any of the Class A Certificates are
outstanding in a manner that would require such
Transaction Party or the Trust to be registered as an
"investment company" under the Investment Company Act of
1940, as amended (the "1940 Act"), as in effect on the
date hereof or require the Trust to be registered under
the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") as in effect on the date hereof.
(s) On the Closing Date, the Certificates and the
Pooling and Servicing Agreement will conform in all
material respects to the descriptions thereof contained
in the Prospectus.
(t) On the Closing Date, the Class A Certificates
shall have been rated "AAA" by Standard & Poor's Ratings
Services and "Aaa" by Xxxxx'x Investors Service, Inc.
(u) Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of
the Agreements and the Certificates have been paid or will
be paid at or prior to the Closing Date.
(v) On the Closing Date, each of the representations
and warranties of the Master Servicer, the Seller and the
Depositor set forth in the Pooling and Servicing Agreement
and the Insurance Agreement and of Companion with respect
to the Mortgage Loans set forth in the Mortgage Loan
Purchase Agreement will be true and correct in all
material respects.
SECTION 2. Purchase and Sale. The commitment of the
Underwriters to purchase the Class A Certificates pursuant
to this Agreement shall be deemed to have been made on the
basis of the representations and warranties of the Master
Servicer, the Seller and the Depositor herein contained
and shall be subject to the terms and conditions herein
set forth. The Depositor agrees to instruct the Trustee
to issue, and agrees to sell to the Underwriters, and the
Underwriters agree, severally and not jointly (except as
provided in Section 12 hereof), to purchase from the
Depositor, at the purchase price for each Class A
Certificate set forth on Schedule A hereto, the respective
principal amount of Class A Certificates set forth
opposite the name of such Underwriter on Schedule A hereto.
SECTION 3. Delivery and Payment. Payment of the
purchase price for, and delivery of, any Class A
Certificates to be purchased by the Underwriters shall be
made at the office of Brown & Wood llp, One World Trade
Center, New York, New York, or at such other place as
shall be agreed upon by you and the Depositor, at 10:00
a.m. New York City time on January 29, 1997 or at such
other time or date as shall be agreed upon in writing by
you and the Depositor (the "Closing Date"). The Class A
Certificates will be delivered in book-entry form through
the facilities of The Depository Trust Company, CEDEL S.A.
and the Euroclear System. Payment shall be made to the
Depositor by wire transfer of same day funds payable to
the account of the Depositor. Delivery of the Class A
Certificates shall be made to you for the respective
accounts of the Underwriters against payment of the
purchase price thereof. Such Class A Certificates shall
be in such denominations and registered in such names as
you may request in writing at least one business day prior
to the Closing Date. Such Class A Certificates, which may
be in temporary form, will be made available for
examination and packaging by you no later than 3:00 p.m.
New York City time on the first business day prior to the
Closing Date.
SECTION 4. Offering by the Underwriters. It is
understood that the Underwriters propose to offer the
Class A Certificates for sale to the public as set forth
in the Prospectus.
SECTION 5. Covenants of the Seller, the Depositor and
the Master Servicer. The Master Servicer, Seller and the
Depositor each covenant, as to itself, with each of the
Underwriters for so long as the Class A Certificates are
outstanding as follows:
(a) If, at any time when the Prospectus, as amended
or supplemented, is required by the 1933 Act to be
delivered in connection with sales of the Class A
Certificates by the Underwriters, any event shall occur or
condition exist as a result
BWNY03/62100.9/14040/00302/1977 February 12, 1997
of which it is necessary, in the opinion of counsel to the
Underwriters or counsel for the Depositor, to further
amend or supplement the Prospectus as then amended or
supplemented in order that the Prospectus as amended or
supplemented will not include an untrue statement of a
material fact or omit to state any material fact necessary
to make the statements therein, in light of the
circumstances under which they were made, not misleading,
or if it shall be necessary, in the opinion of any such
counsel at any such time to amend or supplement the
Registration Statement or the Prospectus as then amended
or supplemented in order to comply with the requirements
of the 1933 Act or the Rules and Regulations thereunder,
or if required by such Rules and Regulations, including
Rule 430A thereunder, to file a post-effective amendment
to such Registration Statement (including an amended
Prospectus), the Depositor will promptly prepare and file
with the Commission such amendment or supplement as may be
necessary to correct such untrue statement or omission or
to make the Registration Statement or Prospectus comply
with such requirements, and within two business days will
furnish to the Underwriters as many copies of the
Prospectus, as amended or supplemented, as reasonably
requested.
(b) The Depositor will give you reasonable notice of
its intention to file any amendment to the Registration
Statement or the Prospectus, as amended or supplemented,
pursuant to the 1933 Act relating to the Class A
Certificates, will furnish you with copies of any such
amendment or supplement proposed to be filed a reasonable
time in advance of filing, and will not file any such
amendment or supplement to which you or your counsel shall
reasonably object.
(c) The Depositor will notify you immediately, and
confirm the notice in writing, (i) of the effectiveness of
any amendment to the Registration Statement, (ii) of the
mailing or the delivery to the Commission for filing of
any supplement to the Prospectus or the Prospectus as
amended or supplemented, (iii) of the receipt of any
comments from the Commission with respect to the
Registration Statement or the Prospectus or the Prospectus
as amended or supplemented, (iv) of any request by the
Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus or for
additional information and (v) of the issuance by the
Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any
proceedings for that purpose. The Depositor will make
every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(d) The Depositor will deliver to you as many signed
and as many conformed copies of the Registration Statement
(as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by
reference therein and documents incorporated by reference
in the Prospectus) as you may reasonably request.
(e) The Depositor will make generally available to
holders of the Class A Certificates as soon as
practicable, but in any event not later than 120 days
after the close of the period covered thereby, an earnings
statement of the Trust (which need not be audited)
complying with Section 11(a) of the 1933 Act and the Rules
and Regulations (including, at the option of the Seller,
Rule 158) and covering a period of at least twelve
consecutive months beginning not later than the first day
of the first fiscal quarter following the Closing Date.
(f) The Depositor will endeavor, in cooperation with
you, to qualify the Class A Certificates for offering and
sale under the applicable securities laws of such states
and other jurisdictions of the United States as you may
designate, and will maintain or cause to be maintained
such qualifications in effect for as long as may be
required for the distribution of the Class A Certificates.
The Depositor will file or cause the filing of such
statements and reports as may be reasonably required by
the laws of each jurisdiction in which the Class A
Certificates have been qualified as above provided.
(g) None of the Master Servicer, Companion, the
Seller or the Depositor will, without your prior written
consent, publicly offer or sell or contract to sell any
mortgage pass-through certificates, mortgage pass-through
notes or collateralized mortgage obligations or other
similar securities representing interests in or secured by
other mortgage-related assets originated or owned by any
of them for a period of 30 days following the commencement
of the offering of the Class A Certificates to the public.
(h) So long as the Class A Certificates shall be
outstanding, the Depositor will deliver to the
Underwriters the annual statement as to compliance
delivered to the Trustee pursuant to the Pooling and
Servicing Agreement and the annual statement of a firm of
independent public accountants furnished to the Trustee
pursuant to the Pooling and Servicing Agreement, as soon
as such statements are furnished to the Trustee.
(i) The Depositor will apply the net proceeds from
the sale of the Class A Certificates in the manner set
forth in the Prospectus.
(j) If, between the date hereof and the Closing Date,
to the knowledge of the Master Servicer, the Seller or the
Depositor, there are any legal or governmental proceedings
instituted or threatened against such Transaction Party
which, if determined adversely to such Transaction Party,
would individually or in the aggregate have a material
adverse effect on the financial condition, shareholders'
equity or results of operations of such Transaction Party,
or on its ability to perform its obligations under the
Agreements, the Master Servicer, the Seller or the
BWNY03/62100.9/14040/00302/1977 February 12, 1997
Depositor, as applicable, will give prompt written notice
thereof to the Underwriters.
SECTION 6. Conditions to the Underwriters'
Obligations. The obligations of the Underwriters to
purchase the Class A Certificates pursuant to this
Agreement are subject to the accuracy on and as of the
Closing Date of the representations and warranties on the
part of the Master Servicer, the Seller and the Depositor
herein contained, to the material accuracy of the
statements of officers of the Master Servicer, the Seller
and the Depositor, respectively, made pursuant hereto, to
the performance by the Master Servicer, the Seller and the
Depositor of all of their respective obligations hereunder
and to the following conditions at the Closing Date:
(a) (i) The Registration Statement shall have been
declared effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission; any
price-related information previously omitted from the
effective Registration Statement pursuant to Rule 430A
under the 1933 Act shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) under the
1933 Act within the prescribed time period, and the
Depositor shall have provided evidence satisfactory to the
Underwriters of such timely filing, or a post-effective
amendment to the Registration Statement providing such
information shall have been promptly filed with the
Commission and declared effective in accordance with the
requirements of Rule 430A under the 1933 Act; and prior to
the Closing Date the Depositor shall have provided
evidence satisfactory to the Underwriters of such
effectiveness and (ii) there shall not have come to your
attention any facts that would cause you to believe that
the Prospectus, at the time it was required to be
delivered to a purchaser of the Class A Certificates,
contained an untrue statement of a material fact or
omitted 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.
(b) The Underwriters shall have received the
favorable opinion or opinions, dated the date of the
Closing Date, of Xxxxxxxx & Xxxxxx, l.l.p., as special
counsel to the Master Servicer, Companion, the Seller and
the Depositor (collectively, the "Block Transaction
Parties"), in form and substance satisfactory to the
Underwriters, to the effect that:
(i) The Depositor is a duly incorporated, validly
existing corporation and in good standing under the
laws of the State of Delaware. Block Financial
Corporation (in its capacity(ies) as the Seller, the
Master Servicer or both, as applicable, "Block
Financial") is a duly incorporated, validly existing
corporation and in good standing under the laws of
the State of Delaware. Companion is a duly
incorporated, validly existing corporation and in
good standing under the laws of the State of Delaware.
(ii) The Depositor has all requisite power and
authority under the General Corporation Law of the
State of Delaware to execute, deliver and perform its
obligations under each of the Pooling and Servicing
Agreement, the Insurance Agreement and the
Underwriting Agreement. Block Financial has all
requisite power and authority under the General
Corporation Law of the State of Delaware to execute,
deliver and perform its obligations under each of the
Agreements. Companion has all requisite power and
authority under the General Corporation Law of the
State of Delaware to execute, deliver and perform its
obligations under the Mortgage Loan Purchase
Agreement and the Underwriting Agreement.
(iii) The execution, delivery and performance of
the Underwriting Agreement have been duly authorized
by all requisite corporate action on the part of the
Depositor, and the Underwriting Agreement has been
duly executed and delivered by the Depositor. The
execution, delivery and performance of the Pooling
and Servicing Agreement and the Insurance Agreement
have been duly authorized by all requisite corporate
action on the part of the Depositor, and each of the
Pooling and Servicing Agreement and the Insurance
Agreement has been duly executed and delivered by the
Depositor and is the legally valid and binding
obligation of the Depositor enforceable against the
Depositor in accordance with its terms. The
execution, delivery and performance of each of the
Underwriting Agreement and the Indemnification
Agreement have been duly authorized by all requisite
corporate action on the part of Block Financial, and
the Underwriting Agreement and the Indemnification
Agreement have been duly executed and delivered by
Block Financial. The execution, delivery and
performance of the Pooling and Servicing Agreement,
the Insurance Agreement, the Mortgage Loan Purchase
Agreement and the Subservicing Agreement have been
duly authorized by all requisite corporate action on
the part of Block Financial, and each of the Pooling
and Servicing Agreement, the Insurance Agreement, the
Mortgage Loan Purchase Agreement and the Subservicing
Agreement has been duly executed and delivered by
Block Financial and is the legal, valid and binding
obligation of Block Financial enforceable against
Block Financial in accordance with its terms. The
execution, delivery and performance of the
Underwriting Agreement have been duly authorized by
all requisite corporate action on the part of
Companion, and the Underwriting Agreement has been
duly executed and delivered by Companion. The
execution, delivery and performance of the Mortgage
Loan Purchase Agreement have been duly authorized by
all requisite corporate action on the part of
Companion, and the Mortgage Loan Purchase Agreement
has been duly executed and delivered by Companion.
The
BWNY03/62100.9/14040/00302/1977 February 12, 1997
Mortgage Loan Purchase Agreement is legal, valid and
binding obligation of Companion enforceable against
Companion in accordance with its terms. Such
opinions with respect to the enforceability of such
Agreements will be subject to bankruptcy, insolvency,
reorganization and other laws of general
applicability relating to or affecting creditors'
rights, to general principles of equity and to the
qualifications previously provided by Xxxxxxxx &
Xxxxxx L.L.P. and approved by the counsel to the
Underwriters.
(iv) The Depositor's execution, delivery and
performance of its obligations under the Pooling and
Servicing Agreement, the Insurance Agreement and the
Underwriting Agreement will not (A) conflict with the
Certificate of Incorporation or By- laws of the
Depositor or (B) violate applicable provisions of
federal, Missouri or New York statutory law or
regulation or the General Corporation Law of the
State of Delaware, the violation of which would have
a material adverse effect on the ability of the
Depositor to perform its obligations under any of
such agreements. Block Financial's execution,
delivery and performance of its obligations under the
Agreements will not (A) conflict with the Certificate
of Incorporation or Bylaws of Block Financial or (B)
violate applicable provisions of federal, Missouri or
New York statutory law or regulation or the General
Corporation Law of the State of Delaware, the
violation of which would have a material adverse
effect on the ability of Block Financial to perform
its obligations under the Agreements. Companion's
execution, delivery and performance of its
obligations under the Mortgage Loan Purchase
Agreement and the Underwriting Agreement will not (A)
conflict with the Certificate of Incorporation or
Bylaws of Companion or (B) violate applicable
provisions of federal, Missouri or New York statutory
law or regulation, or the General Corporation Law of
the State of Delaware, the violation of which would
have a material adverse effect on the ability of
Companion to perform its obligations under the
Mortgage Loan Purchase Agreement or the Underwriting
Agreement.
(v) To such counsel's knowledge, and based in
part upon the Depositor's written representations to
such counsel, the Depositor's execution and delivery
of, and its performance of its obligations under, the
Pooling and Servicing Agreement, the Insurance
Agreement and the Underwriting Agreement will not
conflict with, result in a breach or violation of,
constitute a default or an event of acceleration
under, or result in the creation or imposition of any
lien, charge or encumbrance upon the property or
assets of the Depositor pursuant to the terms of, (A)
any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument
known to such counsel to which the Depositor is a
party or by which it or its property is bound or (B)
any order, judgment or decree of any State of
Delaware, State of Missouri, State of New York or
United States court, administrative agency or
governmental instrumentality applicable to the
Depositor which is known to such counsel, the
conflict with which, or the breach, violation,
default, acceleration or creation or imposition of
which, would have a material adverse effect on the
ability of the Depositor to perform its obligations
under any of such agreements. To such counsel's
knowledge, and based in part upon Block Financial's
written representations to such counsel, Block
Financial's execution and delivery of, and its
performance of its obligations under, the Agreements
will not conflict with, result in a breach or
violation of, constitute a default or an event of
acceleration under, or result in the creation or
imposition of any lien, charge or encumbrance upon
the property or assets of Block Financial pursuant to
the terms of, (A) any indenture, mortgage, deed of
trust, loan agreement or other material agreement or
instrument known to such counsel to which Block
Financial is a party or by which it or its property
is bound or (B) any order, judgment or decree of any
State of Delaware, State of Missouri, State of New
York or United States court, administrative agency or
governmental instrumentality applicable to Block
Financial which is known to such counsel, the
conflict with which, or the breach, violation,
default, acceleration or creation or imposition of
which, would have a material adverse effect on the
ability of Block Financial to perform its obligations
under the Agreements. To such counsel's knowledge,
and based in part upon Companion's representations to
such counsel, Companion's execution and delivery of,
and its performance of its obligations under, the
Mortgage Loan Purchase Agreement and the Underwriting
Agreement will not conflict with, result in a breach
or violation of, constitute a default or an event of
acceleration under, or result in the creation or
imposition of any lien, charge or encumbrance upon
the property or assets of Companion pursuant to the
terms of, (A) any indenture, mortgage, deed of trust,
loan agreement or other material agreement or
instrument known to such counsel to which Companion
is a party or by which it or its property is bound or
(B) any order, judgment or decree of any State of
Delaware, State of Missouri, State of New York or
United States court, administrative agency or
governmental instrumentality applicable to Companion
which is known to such counsel, the conflict with
which, or the breach, violation, default,
acceleration or creation or imposition of which,
would have a material adverse effect on the ability
of Companion to perform its obligations under the
Mortgage Loan Purchase Agreement or the Underwriting
Agreement.
(vi) The direction by the Depositor to the
Trustee to authenticate, issue and deliver the
Certificates has been duly authorized by the
Depositor, and the Certificates, when duly
BWNY03/62100.9/14040/00302/1977 February 12, 1997
authorized, authenticated, issued and delivered by
the Trustee and paid for by the Underwriters in
accordance with the Pooling and Servicing Agreement
and the Underwriting Agreement, will be validly
issued and outstanding and will be entitled to the
benefits provided by the Pooling and Servicing
Agreement.
(vii) To such counsel's knowledge, and based in
part upon the Depositor's written representations to
such counsel, the Depositor is not required to obtain
the consent, approval, authorization or order of, or
to register or file with, or to give notice to, any
court or governmental agency or body of the State of
Delaware (under the General Corporation Law thereof),
the State of Missouri, the State of New York or the
United States of America in order to execute,
deliver, perform and comply with the terms of, or for
the consummation of the transactions of the Depositor
contemplated by, the Pooling and Servicing Agreement,
the Insurance Agreement or the Underwriting Agreement
except any consent, approval, authorization, order,
registration, filing or notice (A) as may be required
under state securities, real estate syndication or
Blue Sky laws in connection with the offering and
sale of the Class A Certificates (as to which we
express no opinion whatsoever) or (B) which is a
future obligation of the Depositor pursuant to the
terms of the Pooling and Servicing Agreement, the
Insurance Agreement or the Underwriting Agreement,
such as, by way of illustration, but not in
limitation of the generality of the foregoing, filing
or recording an Uniform Commercial Code assignment of
a financing statement or an assignment of Mortgage
with respect to a Mortgage Loan; or if any such
consent, approval, authorization, order,
registration, filing or notice (not described in the
exception to the immediately preceding clause) is
required, the Depositor has obtained, made or given
the same. To such counsel's knowledge, and based in
part upon Block Financial's written representations
to such counsel, Block Financial is not required to
obtain the consent, approval, authorization or order
of, to register or file with, or to give notice to,
any court or governmental agency or body of the State
of Delaware (under the General Corporation Law
thereof), the State of Missouri, the State of New
York or the United States of America in order to
execute, deliver, perform and comply with the terms
of, or for the consummation of the transactions of
Block Financial contemplated by, the Agreements
except any consent, approval, authorization, order,
registration, filing or notice (A) as may be required
under state securities, real estate syndication or
Blue Sky laws in connection with the offering and
sale of the Class A Certificates (as to which we
express no opinion whatsoever) or (B) which is a
future obligation of Block Financial pursuant to the
terms of an Agreement, such as, by way of
illustration, but not in limitation of the generality
of the foregoing, filing or recording an Uniform
Commercial Code assignment of a financing statement
or an assignment of Mortgage with respect to a
Mortgage Loan or obtaining a consent, approval,
order, etc. in connection with a foreclosure; or if
any such consent, approval, authorization, order,
registration, filing or notice (not described in the
exception to the immediately preceding clause) is
required, Block Financial has obtained, made or given
the same. To such counsel's knowledge, and based in
part upon Companion's written representations to such
counsel, Companion is not required to obtain the
consent, approval, authorization or order of, to
register or file with, or to give notice to, any
court or governmental agency or body of the State of
Delaware (under the General Corporation Law thereof),
the State of Missouri, the State of New York or the
United States of America in order to execute,
deliver, perform and comply with the terms of, or for
the consummation of the transactions of Companion
contemplated by, the Mortgage Loan Purchase Agreement
or the Underwriting Agreement except any consent,
approval, authorization, order, registration, filing
or notice (A) as may be required under state
securities, real estate syndication or Blue Sky laws
in connection with the offering and sale of the Class
A Certificates (as to which we express no opinion
whatsoever) or (B) which is a future obligation of
Companion pursuant to the terms of the Mortgage Loan
Purchase Agreement or the Underwriting Agreement,
such as, by way of illustration, but not in
limitation of the generality of the foregoing, filing
or recording an Uniform Commercial Code assignment of
a financing statement or an assignment of Mortgage
with respect to a Mortgage Loan; or if any such
consent, approval, authorization, order,
registration, filing or notice (not described in the
exception to the immediately preceding clause) is
required, Companion has obtained, made or given the
same.
(viii) The Registration Statement is effective
under the 1933 Act, and to such counsel's knowledge,
no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933
Act or proceedings therefore initiated or threatened
by the Commission.
(ix) The conditions to the use by the Depositor
of a registration statement on Form S-3 under the
1933 Act, as set forth in the General Instructions to
Form S-3 have been satisfied with respect to the
Registration Statement. To such counsel's knowledge,
and based in part upon the Depositor's
representations to such counsel, there are no
contracts or documents of any of the Transaction
Parties which are required to be filed as exhibits to
the Registration Statement pursuant to the 1933 Act
or the Rules and Regulations thereunder which have
not been so filed. The statements set forth in each
of the Base Prospectus and the Prospectus Supplement
under the captions "RISK FACTORS -- Legal
Considerations" and "ERISA
BWNY03/62100.9/14040/00302/1977 February 12, 1997
CONSIDERATIONS" and the statements set forth in the
Base Prospectus under the caption "CERTAIN LEGAL
ASPECTS OF THE PRIMARY ASSETS", in each case insofar
as such statements purport to summarize matters of
state or federal law or legal conclusions with
respect thereto, have been prepared or reviewed by
such counsel and provide a fair summary of such law
or conclusions.
(x) To such counsel's knowledge, and based in
part upon the Depositor's representations to such
counsel, there are no actions, suits or proceedings
against the Depositor (or to which the property of
the Depositor is subject) pending or overtly
threatened in writing before any court, governmental
agency or arbitrator which (A) question, directly or
indirectly, the validity or enforceability of any of
the Pooling and Servicing Agreement, the Insurance
Agreement or the Underwriting Agreement or (B) would,
if decided adversely to the Depositor, either
individually or in aggregate, have a material adverse
effect on the Depositor's financial condition,
business or properties taken as a whole or the
validity or enforceability of any of such agreements
or the Certificates or (C) would materially and
adversely affect the ability of the Depositor to
perform its obligations under any of such
agreements. To such counsel's knowledge, and based
in part upon Block Financial's representations to
such counsel, there are no actions, suits or
proceedings against Block Financial (or to which the
property of Block Financial is subject) pending or
overtly threatened in writing before any court,
governmental agency or arbitrator which (D) question,
directly or indirectly, the validity or
enforceability of any of the Agreements, or (E)
would, if decided adversely to Block Financial,
either individually or in the aggregate, have a
material adverse effect on Block Financial's
financial condition, business or properties taken as
a whole or the validity or enforceability of any
Agreement or the Certificates or (F) would materially
and adversely affect the ability of Block Financial
to perform its obligations under the Agreements. To
such counsel's knowledge, and based in part upon
Companion's representations to such counsel, there
are no actions, suits or proceedings against
Companion (or to which the property of Companion is
subject) pending or overly threatened in writing
before any court, governmental agency or arbitrator
which (G) question, directly or indirectly, the
validity or enforceability of any of the Mortgage
Loan Purchase Agreement or the Underwriting Agreement
or (H) would, if decided adversely to Companion,
either individually or in the aggregate, have a
material adverse effect on Companion's financial
condition, business or properties taken as a whole or
the validity or enforceability of any of such
agreements or the Certificates or (I) would
materially and adversely affect the ability of
Companion to perform its obligations under such
agreements.
BWNY03/62100.9/14040/00302/1977 February 12, 1997
(xi) The Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture
Act of 1939, as amended, and neither the Depositor
nor the Trust Fund is required to be registered under
the Investment Company Act of 1940, as amended.
(xii) In connection with such counsel's
participation in the preparation of the Registration
Statement and the Prospectus, such counsel has not
independently verified the accuracy, completeness or
fairness of the statements contained therein, and,
without limiting the generality of the foregoing,
such counsel has not, with the opinion recipients'
consent, reviewed any loan files relating to the
Mortgage Loans. The limitations inherent in such
counsel's participation in the preparation of the
Registration Statement and the Prospectus and the
knowledge available to such counsel are such that
such counsel is unable to assume, and does not
assume, any responsibility for the accuracy,
completeness or fairness of the statements contained
in the Registration Statement and the Prospectus. On
the basis of such counsel's participation in the
preparation of the Registration Statement and the
Prospectus as described above and such counsel's
participation in conferences and telephone
conversations with representatives of the Depositor,
the Seller, the Master Servicer, the Underwriters and
others at which the contents of the Registration
Statement and the Prospectus were discussed, and
relying as to facts necessary to the determination of
materiality to the extent such counsel may do so in
the exercise of such counsel's professional
responsibility upon the certificates and statements
of officers and other representatives of the
Depositor, the Seller, the Master Servicer and
others, no facts have come to such counsel's
attention that lead such counsel to believe that as
of the date hereof, the Registration Statement or the
Prospectus (excluding any financial or statistical
data contained therein, the sections of the Base
Prospectus and the Prospectus Supplement captioned
"FEDERAL INCOME TAX CONSEQUENCES", the section of the
Base Prospectus captioned "PLAN OF DISTRIBUTION" and
the sections of the Prospectus Supplement captioned
"NF INVESTMENTS, INC.", "CREDIT ENHANCEMENT --
Certificate Insurance Policy", "CREDIT ENHANCEMENT --
The Certificate Insurer", "UNDERWRITING" and "REPORT
OF EXPERTS", as to which such counsel does not
comment) contains any untrue statement of a material
fact or omits to state a material fact required to be
stated therein or necessary to make the statements
therein, in the light of the circumstances under
which they were made, not misleading.
Such counsel's opinion letters may express its
reliance as to factual matters upon the representations
and warranties made by the Block Transaction Parties and
on certificates or other documents furnished by officers
of the Block Transaction Parties. In
BWNY03/62100.9/14040/00302/1977 February 12, 1997
addition to the qualifications with respect to the
enforceability opinions under paragraph (iii) above, the
other opinions set forth in such opinion letters will be
subject to such qualifications as Xxxxxxxx & Xxxxxx L.L.P.
customarily makes with respect to such opinions in the
manner that Xxxxxxxx & Xxxxxx L.L.P. customarily makes
such qualifications.
(c) [Reserved]
(d) The Underwriters shall have received the
favorable opinion of counsel to the Sub-Servicer, dated
the date of the Closing Date, addressed to the
Underwriters and in form and scope satisfactory to counsel
to the Underwriters, to the effect that:
(i) The Sub-Servicer has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the state of its
incorporation, with corporate power to own its
properties, to conduct its business as described in
the Prospectus and to enter into and perform its
obligations under the Sub-Servicing Agreement.
(ii) The Sub-Servicer has full corporate power
and authority to serve in the capacity of a
sub-servicer of the Mortgage Loans as contemplated
in the Sub-Servicing Agreement and the Pooling and
Servicing Agreement.
(iii) The Sub-Servicer is duly authorized under
relevant statutes, laws and court decisions, to
conduct in the various jurisdictions in which it does
business the respective businesses therein currently
conducted by it, except where failure to be so
permitted or failure to be so authorized will not
have a material adverse effect on its business or
financial condition and will not have a material
adverse effect on the Class A Certificates, and the
Sub-Servicer is duly authorized under applicable law,
including those that regulate the business of
originating, selling or servicing mortgage loans, to
conduct in the various jurisdictions in which it does
business the business it currently conducts therein
and to perform its obligations as contemplated by the
Sub-Servicing Agreement.
(iv) The Sub-Servicing Agreement has been duly
authorized, executed and delivered by the
Sub-Servicer pursuant thereto and, assuming the due
authorization, execution and delivery of such
agreements by the other parties thereto, such
agreements constitute the valid and binding
obligation of the Sub-Servicer, enforceable against
the Sub- Servicer in accordance with its terms,
except that in each case as to enforceability (A)
such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to
creditors' rights generally and (B) the remedy of
specific performance and injunctive and other forms
of equitable relief may be subject to equitable
defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(v) The consummation of the transactions
contemplated under the Sub-Servicing Agreement, or
the fulfillment of the terms of the Sub-Servicing
Agreement does not and will not conflict with or
violate any term or provision of the Certificate or
Articles of Incorporation or Bylaws of the Sub-
Servicer or, to the best of such counsel's knowledge,
any statute, order or regulation applicable to the
Sub-Servicer, of any court, regulatory body,
administrative agency or governmental body having
jurisdiction over the Sub-Servicer and do not and
will not conflict with, result in a breach or
violation or the acceleration of, or constitute a
default under, or result in the creation or
imposition of any lien, charge or encumbrance upon
any of the property or assets of the Sub-Servicer
pursuant to the terms of, any indenture, mortgage,
deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the
Sub-Servicer is a party or by which the Sub-Servicer
may be bound or to which any of the property or
assets of the Sub-Servicer may be subject except for
conflicts, violations, breaches, accelerations and
defaults which would not, individually or in the
aggregate, be materially adverse to the Sub-Servicer
or materially adverse to the transactions
contemplated by the Sub-Servicing Agreement.
(vi) To the best of such counsel's knowledge, no
consent, approval, authorization, order, registration
or qualification of or with any court or governmental
agency or body is required for the consummation by
the Sub-Servicer of the transactions contemplated by
the Sub-Servicing Agreement.
(vii) There are no actions, proceedings or
investigations pending before or, to the best
knowledge of such counsel, threatened by any court,
administrative agency or other tribunal to which the
Sub-Servicer is a party or of which any of their
respective properties is the subject (A) which if
determined adversely to the Sub-Servicer would have a
material adverse effect on the business or financial
condition of the Sub-Servicer, (B) asserting the
invalidity of the Sub- Servicing Agreement, (C)
seeking to prevent the consummation by the
Sub-Servicer of any of the transactions contemplated
by the Sub-Servicing Agreement, or (D) which might
materially and adversely affect the performance by
the Sub-Servicer of its obligations under, or the
validity or enforceability of, the Sub-Servicing
Agreement.
(e) The Underwriters shall have received the
favorable opinion of counsel to the Trustee, dated the
date of the Closing Date, addressed to the Underwriters
and in form and scope
BWNY03/62100.9/14040/00302/1977 February 12, 1997
satisfactory to counsel to the Underwriters, to the
effect that:
(i) The Trustee has duly authorized, executed and
delivered the Pooling and Servicing Agreement and the
Insurance Agreement, which constitute the valid and
legally binding agreements of the Trustee and are
enforceable against the Trustee in accordance with
their terms, subject, as to enforcement of remedies,
(A) to applicable bankruptcy, insolvency,
reorganization, and other similar laws affecting the
rights of creditors generally and (B) to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in
equity or at law).
(ii) The Trustee has duly executed and
countersigned the Certificates issued on the date
thereof on behalf of the Trust.
(iii) The execution and delivery by the Trustee
of the Pooling and Servicing Agreement and the
Insurance Agreement and the performance by the
Trustee of its obligations thereunder do not conflict
with or result in a violation of the Organization
Certificate or Bylaws of the Trustee.
(iv) The Trustee has full power and authority to
execute and deliver the Pooling and Servicing
Agreement, and the Insurance Agreement and to perform
its obligations thereunder.
(v) To the best of such counsel's knowledge,
there are no actions, proceedings or investigations
pending or threatened against or affecting the
Trustee before or by any court, arbitrator,
administrative agency or other governmental authority
which, if adversely decided, would materially and
adversely affect the ability of the Trustee to carry
out the transactions contemplated in the Pooling and
Servicing Agreement and the Insurance Agreement.
(vi) No consent, approval or authorization of,
or registration, declaration or filing with, any
court or governmental agency or body of the United
States of America or any state thereof is required
for the execution, delivery or performance by the
Trustee of the Pooling and Servicing Agreement and
the Insurance Agreement.
(f) The Underwriters shall have received the
favorable opinion or opinions, dated the date of the
Closing Date, of Brown & Wood llp, as counsel for the
Underwriters, with respect to the issuance of the Class A
Certificates and the sale of the Class A Certificates to
the Underwriters, the Registration Statement, this
Agreement, the Prospectus and such other related matters
as the Underwriters may require.
BWNY03/62100.9/14040/00302/1977 February 12, 1997
(g) The Underwriters shall have received the
favorable opinion, dated the date of the Closing Date, of
Xxxxx Xxxx, special counsel for the Certificate Insurer,
in form and scope satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Certificate Insurer is a stock insurance
corporation, duly incorporated and validly existing
under the laws of the State of New York. The
Corporation is validly licensed and authorized to
issue each of the Policies and perform its
obligations under each of the Policies in accordance
with the terms thereof, under the laws of the State
of New York.
(ii) The execution and delivery by the
Certificate Insurer of each of the Policies, the
Insurance Agreement and the Insurance Indemnification
Agreement are within the corporate power of the
Certificate Insurer and have been authorized by all
necessary corporate action on the part of the
Certificate Insurer; each of the Policies has been
duly executed and is the valid and binding obligation
of the Certificate Insurer enforceable in accordance
with its terms except that the enforcement of the
Policies may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting
creditors' rights generally and by general principles
of equity.
(iii) The Certificate Insurer is authorized to
deliver the Insurance Agreement and the Insurance
Indemnification Agreement and each of the Insurance
Agreement and the Insurance Indemnification Agreement
has been duly executed and is a valid and binding
obligation of the Certificate Insurer enforceable in
accordance with its terms except that the enforcement
of the Insurance Agreement and the Insurance
Indemnification Agreement may be limited by laws
relating to bankruptcy, insolvency, reorganization,
moratorium, receivership and other similar laws
affecting creditors' rights generally and by general
principles of equity and, in the case of the
Insurance Indemnification Agreement, public policy
considerations as to rights of indemnification for
violations of federal and state securities laws.
(iv) No consent, approval, authorization or order
of any state or federal court or governmental agency
or body is required on the part of the Certificate
Insurer, the lack of which would adversely affect the
validity or enforceability of each of the Policies,
the Insurance Agreement or the Insurance
Indemnification Agreement; to the extent required by
applicable legal requirements that would adversely
affect the validity or enforceability of each of the
Policies, the form of each of the Policies has been
filed with, and approved by,
BWNY03/62100.9/14040/00302/1977 February 12, 1997
all governmental authorities having jurisdiction over
the Certificate Insurer in connection with the
Policies.
(v) To the extent that either of the Policies
constitute a security within the meaning of Section
2(1) of the 1933 Act, it is a security that is exempt
from the registration requirements of the 1933 Act.
(vi) The information set forth under the caption
"CREDIT ENHANCEMENT-Certificate Insurance Policies"
in the Prospectus Supplement, insofar as such
statements constitute a description of the Policies,
accurately summarizes the Policies.
(h) The Underwriters shall have received an opinion,
dated the date of the Closing Date, of Xxxxxxxx & Xxxxxx,
l.l.p. as counsel to the Master Servicer, Companion, the
Seller and the Depositor, addressed to the Seller, the
Depositor and satisfactory to the Certificate Insurer,
Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, and Xxxxx'x Investors Service,
Inc., relating to the true sale of the Mortgage Loans (i)
by Companion to the Seller, (ii) by the Seller to the
Depositor, and (iii) by the Depositor to the Trust and
such counsel shall have consented to reliance by the
Certificate Insurer, Standard & Poor's Ratings Services
and Xxxxx'x Investors Service, Inc. and the Underwriters
on such opinion as though such opinion had been addressed
to each such party.
(i) Each of the Transaction Parties shall have
furnished to the Underwriters a certificate signed on
behalf of such Transaction Party by an accounting or
financial officer thereof, dated the date of the Closing
Date, as to (i) the accuracy of the representations and
warranties of such Transaction Party herein at and as of
the Closing Date, (ii) there being no legal or
governmental proceedings pending, other than those, if
any, referred to in the Prospectus or the Prospectus as
amended or supplemented, as the case may be, to which such
Transaction Party is a party or of which any property of
such Transaction Party is the subject, which, in the
judgment of such Transaction Party, have a reasonable
likelihood of resulting in a material adverse change in
the financial condition, shareholders' equity or results
of operations of such Transaction Party to have a material
adverse effect on the ability to perform its obligations
under the Agreements; and to the best knowledge of each
such Transaction Party, no such proceedings are threatened
or contemplated by governmental authorities or threatened
by others, (iii) the performance by such Transaction Party
of all of its respective obligations hereunder to be
performed at or prior to the Closing Date, and (iv) such
other matters as you may reasonably request.
(j) The Trustee shall have furnished to the
Underwriters a certificate of the Trustee, signed by one
or more duly authorized officers of the Trustee, dated the
date of the Closing Date, as to the due authorization,
execution and delivery of the Pooling and Servicing
Agreement by the Trustee and the acceptance by the Trustee
of the trust created by the Pooling and Servicing
Agreement and the due execution and delivery of the
Certificates by the Trustee thereunder and such other
matters as you shall reasonably request.
(k) The Indemnification Agreement shall have been
entered into between the Certificate Insurer, the Seller
and the Underwriters, in which the Certificate Insurer
will represent to the Underwriters, among other
representations, that (i) the information under the
captions "CREDIT ENHANCEMENT--The Certificate Insurer,"
and "CREDIT ENHANCEMENT--Certificate Insurance Policies"
(the "Insurer Information") in the Prospectus Supplement
was approved by the Certificate Insurer and is limited and
does not purport to provide the scope of disclosure
required to be included in a prospectus for a registrant
under the Securities Act of 1933, in connection with the
public offer and sale of securities of such registrant.
Within such limited scope of disclosure, the Insurer
Information does not contain any untrue statement of a
material fact or omit to state a material fact necessary
to make the statements therein, in light of the
circumstances under which they were made, not misleading
and (ii) there has been no change in the financial
condition of the Certificate Insurer since September 30,
1996 which would have a material adverse effect on the
Certificate Insurer's ability to meet its obligations
under the Policies and shall contain provisions,
reasonably satisfactory to the Underwriters, for the
indemnification of the Underwriters.
(l) The Policies shall have been issued by the
Certificate Insurer pursuant to the Insurance Agreement
and shall have been duly countersigned by an authorized
agent of the Certificate Insurer, if so required under
applicable state law or regulation.
(m) The Class A Certificates shall have been rated
"AAA" by Standard & Poor's Ratings Services and "Aaa" by
Xxxxx'x Investors Service, Inc.
(n) Counsel to the Transaction Parties shall have
furnished to the Underwriters any opinions supplied to
Standard & Poor's Ratings Services, Xxxxx'x Investors
Service, Inc. or the Certificate Insurer relating to the
Class A Certificates and such opinions shall state that
the Underwriters may rely thereon.
(o) The Underwriters shall have received from
Deloitte & Touche llp, or other independent certified
public accountants acceptable to the Underwriters, a
letter, dated as of the date of this Agreement in the form
heretofore agreed to.
(p) Prior to the Closing Date, Brown & Wood llp, as
counsel for the Underwriters, shall have been furnished
with such documents and
BWNY03/62100.9/14040/00302/1977 February 12, 1997
opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance of the Class A
Certificates and the sale of the Class A Certificates to
the Underwriters as herein contemplated and related
proceedings or in order to evidence the accuracy and
completeness of any of the representations and warranties,
or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Transaction
Parties in connection with the issuance of the Class A
Certificates and the sale of the Class A Certificates to
the Underwriters as herein contemplated shall be
satisfactory in form and substance to the Underwriters and
Brown & Wood llp.
(q) Since the respective dates as of which
information is given in the Prospectus, there shall not
have been any change, or any development involving a
prospective change, in or affecting the general affairs,
management, financial condition, stockholders' equity or
results of operations of any of the Transaction Parties or
the Certificate Insurer otherwise than as set forth or
contemplated in the Prospectus, the effect of which is in
the judgment of the Underwriters so material and adverse
as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Class A
Certificates on the terms and in the manner contemplated
in the Prospectus.
(r) Subsequent to the execution and delivery of this
Underwriting Agreement, there shall not have occurred any
downgrading in the rating of any securities of the Seller
and Master Servicer, or any public announcement that any
such organization has under surveillance or review its
rating of any securities of any of the Transactional
Parties or the Certificate Insurer (other than an
announcement with positive implications of a possible
upgrade, and no implication of a possible downgrade, of
such rating).
(s) Prior to the Closing Date, Block Financial
Corporation shall deliver to you a waiver, in form
acceptable to you, to the terms of the Credit Agreement
between Block Financial Corporation and [Mellon Bank as
agent for the several participating banks] with respect to
the transactions contemplated by the Agreements.
(t) Prior to the Closing Date, each of the
Transaction Parties shall have furnished to you such
further information, certificates and documents as you may
reasonably request.
If any condition specified in this Section 6 shall
not have been fulfilled when and as required to be
fulfilled, this Agreement may be terminated by you by
notice to the Depositor at any time at or prior to the
Closing Date, and such termination shall be without
liability of any party to any other party except as
provided in Section 7.
SECTION 7. Payment of Expenses. Block Financial
Corporation
BWNY03/62100.9/14040/00302/1977 February 12, 1997
agrees to pay all expenses incident to the performance of
their obligations under this Agreement, including without
limitation those related to (i) the filing of the
Registration Statement and all amendments thereto,
(ii) the preparation, issuance and delivery of the
Certificates, (iii) the fees and disbursements of Xxxxxxxx
& Xxxxxx l.l.p., as special counsel for the Transactional
Parties, and of Deloitte & Touche llp, accountants of the
Master Servicer, the Seller and the Depositor, (iv) the
first $100,000 of fees and expenses, and 50% of the
reasonable fees and expenses in excess thereof, of Brown
and Wood llp, as special tax counsel for the Depositor,
(v) the qualification of the Class A Certificates under
securities and Blue Sky laws and the determination of the
eligibility of the Class A Certificates for investment in
accordance with the provisions of subsection 5(f)
including filing fees, (vi) the printing and delivery to
the Underwriters, in such quantities as you may reasonably
request, of copies of the Registration Statement and
Prospectus and all amendments and supplements thereto, and
of any Blue Sky Survey, (vii) the delivery to the
Underwriters, in such quantities as you may reasonably
request, of copies of the Agreements, (viii) the fees
charged by nationally recognized statistical rating
agencies for rating the Class A Certificates, (ix) the
reasonable fees and expenses of the Trustee and its
counsel and (x) the reasonable fees and expenses of the
Certificate Insurer and its counsel.
If this Agreement is terminated by you in accordance
with the provisions of Section 6, the Master Servicer, the
Seller and the Depositor shall reimburse you for all
reasonable out-of-pocket expenses, including the fees and
disbursements of Brown & Wood llp, as counsel for the
Underwriters.
SECTION 8. Indemnification. (a) Block Financial
Corporation and the Depositor jointly and severally agree
to indemnify and hold harmless the Underwriters and each
person, if any, who controls the Underwriters within the
meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising
out of any untrue statement or alleged untrue
statement of a material fact contained in the
Registration Statement (or any amendment thereto),
including the information deemed to be a part of the
Registration Statement pursuant to Rule 430A under
the 1933 Act, if applicable, or the omission or
alleged omission therefrom of a material fact
required to be stated therein or necessary to make
the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement
of a material fact contained in the Prospectus (or
any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in
light of the circumstances under which they were
made, not misleading,
BWNY03/62100.9/14040/00302/1977 February 12, 1997
unless (a) such untrue statement or omission or
alleged untrue statement or omission was made in
reliance upon and in conformity with written
information furnished to the Depositor by the
Underwriters or the Certificate Insurer expressly for
use in the Registration Statement (or any amendment
thereto), (b) such untrue statement or omission or
alleged untrue statement or omission was made in any
Preliminary Prospectus and corrected in the
Prospectus and (A) any such loss, claim, damage or
liability suffered or incurred by an Underwriter
resulted from an action, claim or suit by any person
who purchased the Class A Certificates from such
Underwriter in the offering and (B) such Underwriter
failed to deliver or provide a copy of the Prospectus
dated January 24, 1997 to such person at or prior to
the confirmation of the sale of such Class A
Certificates in any case where such delivery is
required by the 1933 Act;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of
any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected
with the written consent of the Depositor; and
(iii) against any and all reasonable expense
whatsoever (including the reasonable fees and
disbursements of counsel chosen by you) as
reasonably incurred in investigating, preparing to
defend or defending against or appearing as a third
party witness with respect to any litigation, or
investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or
omission, as such expense is incurred and to the
extent that any such expense is not paid under (i) or
(ii) above.
This indemnity agreement will be in addition to any
liability which any of the Master Servicer, the Seller or
the Depositor may otherwise have.
(b) Each of the Underwriters severally and not
jointly agrees to indemnify and hold harmless Block
Financial Corporation and the Depositor, each of their
directors, each of their officers who signed the
Registration Statement, and each person, if any, who
controls Block Financial Corporation and/or the Depositor
within the meaning of Section 15 of the 1933 Act (each, an
"Indemnified Party") against any and all loss, liability,
claim, damage and expense, as incurred, described in the
indemnity contained in subsection (a) of this Section 8,
arising out of any untrue statements or omissions, or
alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or
BWNY03/62100.9/14040/00302/1977 February 12, 1997
the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information
furnished to the Seller and/or to the Depositor by such
Underwriter expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto). The parties
acknowledge that the statements set forth in the last
paragraph of the cover page of the Prospectus Supplement
and in the Section "Underwriting" in the Prospectus
Supplement constitute the only information furnished in
writing by the Underwriters for inclusion in the
Prospectus.
(c) Each indemnified party shall give prompt notice
to each indemnifying party of any action commenced
against it with respect to which indemnity may be sought
hereunder, but failure to so notify an indemnifying party
shall not relieve it from any liability which it may have
hereunder unless it has been materially prejudiced by such
failure to notify or from any liability which it may have
otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in
the defense of such action. In no event shall the
indemnifying parties be liable for the fees and expenses
of more than one counsel for all indemnified parties in
connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of
the same general allegations or circumstances, unless (i)
if the defendants in any such action include one or more
of the indemnified parties and the indemnifying party, and
one or more of the indemnified parties shall have employed
separate counsel after having reasonably concluded that
there may be legal defenses available to it or them that
are different from or additional to those available to the
indemnifying party or to one or more of the other
indemnified parties or (ii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party
within a reasonable time after notice of the commencement
of the action.
SECTION 9. Contribution. In order to provide for
just and equitable contribution in circumstances in which
the indemnity agreement provided for in Section 8 is for
any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms,
Block Financial Corporation and the Depositor on the one
hand, and the Underwriters, on the other, shall contribute
to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity
agreement incurred by Block Financial Corporation and/or
the Depositor and one or more of the Underwriters, in such
proportion as shall be appropriate to reflect the relative
benefits to Block Financial Corporation and the Depositor
on the one hand and the Underwriters on the other in
connection with the matter to which the indemnification
relates, which relative benefits shall be deemed to be in
such proportions the Underwriters shall be responsible for
that portion represented by the percentage that the
underwriting discount on the cover of the Prospectus on
the Closing
BWNY03/62100.9/14040/00302/1977 February 12, 1997
Date bears to the initial public offering price for the
Class A Certificates as set forth thereon, and Block
Financial Corporation and the Depositor shall be jointly
and severally responsible for the balance or (ii) if the
allocation provided by clause (i) above is not permitted
by applicable law or otherwise prohibited hereby, in such
proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also
the relative fault of Block Financial Corporation and the
Depositor on the one hand and the Underwriters or
Underwriter, as applicable, on the other in connection
with the statements or omissions that resulted in such
losses, claims, damages or liabilities, or actions in
respect thereof, as well as any other relevant equitable
considerations; provided, however, that no person guilty
of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. Relative fault shall be
determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material
fact relates to information supplied by Block Financial
Corporation or the Depositor, on the one hand, or the
Underwriters, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission.
Block Financial Corporation, the Depositor and the
Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 9 were to be
determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose)
or by any other method of allocation which does not take
into account the equitable considerations referred to in
the first sentence of this Section 9. The amount paid by
an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof)
referred to in the first sentence of this Section 9 shall
be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in
connection with investigating, preparing to defend or
defending against any action or claim that is the subject
of this Section 9. Notwithstanding the provisions of this
Section 9, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total
underwriting commission received by such Underwriter for
the sale of the Class A Certificates underwritten by such
Underwriter and distributed to the public were offered to
the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay in respect
of such losses, liabilities, claims, damages and
expenses. The Underwriters' obligations in this Section 9
to contribute are several in proportion to their
respective underwriting obligations and not joint. Each
party entitled to contribution agrees that upon the
service of a summons or other initial legal process upon
it in any action instituted against it in respect to which
contribution may be sought, it shall promptly give written
notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify
such party or parties of
BWNY03/62100.9/14040/00302/1977 February 12, 1997
any such service shall not relieve the party from whom
contribution may be sought for any obligation it may have
hereunder or otherwise (except as specifically provided in
Section 8 hereof). For purposes of this Section 9, each
person, if any, who controls any Underwriter within the
meaning of Section 14 of the 1933 Act shall have the same
rights to contribution as such Underwriter, and each
respective director of Block Financial Corporation and/or
the Depositor, each respective officer of Block Financial
Corporation and/or the Depositor who signed the
Registration Statement, and each person, if any, who
controls Block Financial Corporation and/or the Depositor
within the meaning of Section 14 of the 1933 Act shall
have the same rights to contribution as Block Financial
Corporation and/or the Depositor.
SECTION 10. Representations, Warranties and
Agreements to Survive Delivery. All representations,
warranties and agreements contained in this Agreement or
any statement set forth in any of the certificates of
officers of the Seller or the Depositor submitted pursuant
hereto shall remain operative and in full force and
effect, regardless of any investigation made by or on
behalf of the Underwriters or controlling person thereof,
or by or on behalf of the Master Servicer, Companion, the
Seller or the Depositor and shall survive delivery of any
Underwritten Certificates to the Underwriters.
SECTION 11. Termination of Agreement. This Agreement
shall be subject to termination by notice given by you to
the Depositor if (i) any change, or any development
involving a prospective change, in or affecting
particularly the business or properties of the Trust, any
of the Transaction Parties or the Certificate Insurer
which, in your judgment, materially impairs the investment
quality of the Class A Certificates or makes it
impractical or inadvisable to market the Class A
Certificates; (ii) Block Financial Corporation fails to
obtain the waiver referred to in Section 6(r) hereto;
(iii) any downgrading in the rating of any securities of
the Trust, the Transactions Parties or the Certificate
Insurer, the Seller or the Depositor by any "nationally
recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under
surveillance or review its rating of any securities of the
Trust, any of the Transaction Parties or the Certificate
Insurer (other than an announcement with positive
implications of a possible upgrading, and no implication
of a possible downgrading, of such rating); (iv) any
suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting
of minimum prices for trading on such exchange; (v) any
suspension of trading of any securities of the Trust, the
Transaction Parties or the Certificate Insurer on any
exchange or in the over-the-counter market; (vi) any
banking moratorium declared by Federal or New York
authorities; or (vii) any outbreak or escalation of major
hostilities in which the United States is involved, any
declaration of war by Congress, or any other
BWNY03/62100.9/14040/00302/1977 February 12, 1997
substantial national or international calamity or
emergency if, in your judgment, the effect of any such
outbreak, escalation, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Class A
Certificates. In the event of any such termination, the
covenant set forth in subsection 5(b), the provisions of
Section 7, the indemnity agreement set forth in Section 8,
and the provisions of Sections 9 and 14 shall remain in
effect.
SECTION 12. Default by One or More of the
Underwriters. If one of the Underwriters participating in
the public offering of the Class A Certificates shall fail
on the Closing Date to purchase the Class A Certificates
which it is obligated to purchase hereunder (the
"Defaulted Certificates"), then the non-defaulting
Underwriter shall have the right, within 24 hours
thereafter, to make arrangements for it, or any other
underwriter, to purchase all, but not less than all, of
the Defaulted Certificates in such amounts as may be
agreed upon and upon the terms herein set forth. If,
however, you have not completed such arrangements within
such 24-hour period, then:
(i) if the aggregate principal amount of
Defaulted Certificates does not exceed 10% of the
aggregate principal amount of the Class A
Certificates to be purchased pursuant to this
Agreement, the non-defaulting Underwriter named in
this Agreement shall be obligated to purchase the
full amount thereof, or
(ii) if the aggregate principal amount of
Defaulted Certificates exceeds 10% of the aggregate
principal amount of the Class A Certificates to be
purchased pursuant to this Agreement, this Agreement
shall terminate, without any liability on the part of
the non-defaulting Underwriter.
No action taken pursuant to this Section 12 shall
relieve the defaulting Underwriter from the liability with
respect to any default of such Underwriter under this
Agreement.
In the event of a default by any Underwriters as set
forth in this Section 12, either you or the Seller shall
have the right to postpone the Closing Date for a period
not exceeding five Business Days in order that any
required changes in the Registration Statement or
Prospectus or in any other documents or arrangements may
be effected.
SECTION 13. Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the
Underwriters shall be directed to them at the address set
forth on the first page hereof. Notices to the Master
Servicer, the Seller or the Depositor shall be
BWNY03/62100.9/14040/00302/1977 February 12, 1997
directed to Block Mortgage Finance, Inc., 0000 Xxxx
Xxxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxx 00000, to the
attention of the Secretary, with a copy to the Treasurer.
SECTION 14. Parties. This Agreement shall inure to
the benefit of and be binding upon the Underwriters, the
Master Servicer, the Seller and the Depositor, and their
respective successors. Nothing expressed or mentioned in
this Agreement is intended nor shall it be construed to
give any person, firm or corporation, other than the
parties hereto and their respective successors and the
controlling persons and officers and directors referred to
in Sections 8 and 9 and their heirs and legal
representatives, any legal or equitable right, remedy or
claim under or with respect to this Agreement or any
provision herein contained. This Agreement and all
conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the parties and their
respective successors and said controlling persons and
officers and directors and their heirs and legal
representatives (to the extent of their rights as
specified herein) and except as provided above for the
benefit of no other person, firm or corporation. No
purchaser of Class A Certificates from the Underwriters
shall be deemed to be a successor by reason merely of such
purchase.
SECTION 15. Governing Law and Time. This Agreement
shall be governed by the law of the State of New York and
shall be construed in accordance with such law. Specified
times of day refer to New York City time.
SECTION 16. Counterparts. This Agreement may be
executed in counterparts, each of which shall constitute
an original of any party whose signature appears on it,
and all of which shall together constitute a single
instrument.
BWNY03/62100.9/14040/00302/1977 February 12, 1997
If the foregoing is in accordance with the
Underwriters' understanding of our agreement, please sign
and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a
binding agreement among the Underwriters, the Master
Servicer, the Seller and the Depositor in accordance with
its terms.
Very truly yours,
BLOCK MORTGAGE FINANCE, INC. as
Depositor
By:
Name:
&..
COMPANION MORTGAGE CORPORATION
By: __________________________
Name:
Title:
BLOCK FINANCIAL CORPORATION, as
Master Servicer and Seller
By:
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
XXXXXX XXXXXXX & CO. INCORPORATED
as Representative of the Underwriters
By:
Name:
Title:
Schedule A
Underwriting
Underwriter Class A-1 Class A-2 Class A-3 Class A-4
Certificates Certificates Certificates Certificates
Xxxxxx Xxxxxxx &
Co. Incorporated
Certificate Balance (1)...... $12,027,000.00 $7,695,500.00 $10,560,000.00 $21,316,000.00
Price to Public.............. 99.937500% 99.890625% 99.312500% 100.000000%
Underwriting Discount........ 0.21% 0.30% 0.50% 0.25%
Purchase Price............... $11,994,226.43 $7,663,996.55 $10,487,400.00 $21,262,710.00
Salomon Brothers Inc
Certificate Balance (1)...... $12,027,000.00 $7,695,500.00 $10,560,000.00 $21,316,000.00
Price to Public.............. 99.937500% 99.890625% 99.312500% 100.000000%
Underwriting Discount........ 0.21% 0.30% 0.50% 0.25%
Purchase Price............... $11,994,226.43 $7,663,996.55 $10,487,400.00 $21,262,710.00
__________________
(1) Subject to a permitted variance of plus or
minus 5%, dependent upon the principal balance
of the Mortgage Loans as of the Cut-off Date in
the Trust Fund on the Closing Date.
