Exhibit 1.1
FINANCIAL ASSET SECURITIZATION, INC.
--------------------
Mortgage Participation Securities
(Issuable in Series)
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
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April 1997
Financial Asset Securitization, Inc., a Virginia corporation (the
"Company"), proposes to sell Mortgage Participation Securities in various series
(each, a "Series"), in one or more offerings on terms determined at the time of
sale, each to be issued by a separate trust (the "Trust") under a pooling and
servicing agreement or trust agreement, each of which may incorporate by
reference therein standard terms (in either case, collectively, the "Trust
Agreement"), for such Series between the Company, a master servicer named
therein (the "Master Servicer"), and the trustee named therein (the "Trustee").
The securities of each Series related to a Trust (the "Securities") will
represent in the aggregate the entire beneficial ownership interest in one or
more segregated pools of mortgage loans or interests in mortgage loans (the
"Mortgage Loans").
The Mortgage Loans will be serviced pursuant to the Trust Agreement by
the Master Servicer or pursuant to separate servicing agreements (the "Servicing
Agreements") with one or more servicers (the "Servicers"), each of which must be
approved as a seller-servicer by the Federal Home Loan Mortgage Corporation
("FHLMC") or the Federal National Mortgage Association ("FNMA"). The performance
by the Servicers of their duties and responsibilities under their Servicing
Agreements will be monitored and supervised by the Master Servicer.
The Securities for a Series will be issued by a separate Trust, and the
Trustee may make one or more elections to have Trust assets or portions thereof
treated as real estate mortgage investment conduits (each, a "REMIC") under the
Internal Revenue Code of 1986, as amended (the "Code"). In the event that more
than one REMIC is created, all references herein to a REMIC shall be deemed to
refer to all REMICs, unless the context otherwise requires.
The Company will sell, assign and transfer Mortgage Loans acquired by
it to the related Trust for each Series, all in exchange for the related
Securities. The Mortgage Loans are expected to be acquired by the Company from
one or more sellers (each, in such capacity, a "Seller"), in each case pursuant
to a mutually acceptable sales or other agreement (each, a "Sales Agreement"),
between the Company and the Seller of such Mortgage Loans, containing customary
provisions and negotiated in good faith. The net proceeds to the Company from
the sale of each Series of Securities principally will be used to pay the
purchase price of the Mortgage Loans acquired for the related Trust.
The Securities are more fully described in the Registration Statement
(as hereinafter defined). Each Series of Securities, and any classes of
Securities within each Series, may vary, among other things, as to number and
types of classes, aggregate principal amount, final stated distribution dates
and the rate or rates, allocation, priority and timing of distributions thereof.
From time to time, the Company may enter into one or more underwriting
agreements (each, an "Underwriting Agreement") that provide for the sale of all
or a portion of certain classes of a Series of Securities (such securities to be
so purchased being herein collectively referred to as the "Underwritten
Securities") to the underwriters named in the related underwriting agreement
(the "Underwriters"). The standard provisions set forth herein are to be
incorporated by reference in any such Underwriting Agreement. An Underwriting
Agreement, including the provisions hereof incorporated therein by reference, is
herein referred to as the "Agreement." Unless otherwise defined herein, all
capitalized terms shall have the meanings assigned to them in the Underwriting
Agreement and if not defined therein shall have the meanings assigned to them in
the Trust Agreement.
The Underwriting Agreement relating to each offering of Securities
shall specify the principal amount of Securities to be issued and their
respective interest rates or methods of determining same, the price or prices at
which the Underwritten Securities are to be purchased by the Underwriters from
the Company, the initial public offering prices or the method by which the
prices at which such Underwritten Securities are to be sold will be determined,
the names of the firms, if any, designated as representatives of the
Underwriters (the "Representatives"), the principal amount of Underwritten
Securities to be purchased by each Underwriter, and the date, time and manner of
delivery of the Underwritten Securities and payment therefor. Each such offering
of Underwritten Securities will be governed by the Agreement, which shall inure
to the benefit of and be binding upon the Underwriters participating in the
offering of such Underwritten Securities.
The Company is a limited-purpose finance corporation and wholly-owned
subsidiary of JST Company, L.L.C., a Virginia limited liability company ("JST").
JST, in turn, is an indirect, wholly-owned subsidiary of Wheat First Butcher
Singer, Inc.
1. Representations and Warranties. (a) The Company represents
and warrants to, and agrees with, each Underwriter that:
(i) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration
statement on Form S-3 for the registration of securities under
the Securities Act of 1933, as amended (the "Act"), which
registration statement has become effective, and has filed
such amendments thereto and such additional registration
statements as may have been required to the date of the
Agreement. Such registration statement, as amended at the date
of the Agreement, meets the requirements set forth in Rule 415
under the Act and complies in all other material respects with
the Act and the rules and regulations thereunder. The Company
proposes to file with the Commission pursuant to Rule 424
under the Act a supplement to the form of prospectus included
in such registration statement relating to the Securities and
the plan of distribution thereof. Such registration statement,
including the exhibits thereto, as amended at the date of the
Agreement, and including all information, if any, filed with
the Commission pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act") and incorporated by
reference therein, is hereinafter called the "Registration
Statement"; the latter of such prospectus in the form in which
it appears in the Registration Statement or in the form most
recently revised and filed with the Commission pursuant to
Rule 424 is hereinafter called the "Base Prospectus"; such
form of prospectus supplemented by the supplement to the form
of prospectus specifically relating to the Securities, in the
form in which it shall be first filed with the Commission
pursuant to Rule 424 (including the Base Prospectus as so
supplemented) is hereinafter called the "Final Prospectus."
Any preliminary form of the Final Prospectus which has
heretofore been filed pursuant to Rule 424 or, prior to the
effective date of the Registration Statement, pursuant to Rule
402(a), 424(a) or 430A, is hereinafter called a "Preliminary
Final Prospectus."
(ii) As of the date of the Agreement, when the Final
Prospectus is first filed pursuant to Rule 424 under the Act,
when, prior to the Closing Date (as hereinafter defined), any
amendment to the Registration Statement becomes effective,
when any supplement to the Final Prospectus is filed with the
Commission, and at the Closing Date, (A) the Registration
Statement, as amended as of any such time, and the Final
Prospectus, as amended or supplemented as of any such time,
complies and will comply in all material respects with the
applicable requirements of the Act and the rules and
regulations thereunder and (B) the Registration Statement, as
amended as of any such time, does not contain and will not
contain any untrue statement of a material fact and does not
omit and will not omit to state any material fact required to
be stated therein or necessary in order to make the statements
therein not misleading and the Final Prospectus, as amended or
supplemented as of any such time, does not and will not
include an untrue statement of a material fact and does not
omit and will not omit to state a material fact necessary in
order to make the statements, in light of the circumstances
under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to
the information contained in or omitted from the Registration
Statement or the Final Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with
Underwriting Information (as defined herein) furnished in
writing to the Company by or on behalf of any Underwriter
specifically for use in connection with the preparation of the
Registration Statement and the Final Prospectus.
(iii) As of the date of the Agreement, when the Final
Prospectus is first filed pursuant to Rule 424 under the Act,
when, prior to the Closing Date, any amendment to the
Registration Statement becomes effective, when any supplement
to the Final Prospectus is filed with the Commission, and at
the Closing Date, there has not and will not have been (A) any
request by the Commission for any further amendment of the
Registration Statement or the Final Prospectus or for any
additional information, (B) any issuance by the Commission of
any stop order suspending the effectiveness of the
Registration Statement or the initiation or threat of any
proceeding for that purpose, or (C) any notification with
respect to the suspension of the qualification of the
Underwritten Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(iv) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the Commonwealth of Virginia with full corporate power
and authority to own its properties and conduct its business
as now conducted by it and to enter into and perform its
obligations under the Agreement, the related Sales
Agreement(s) and Trust Agreement, and has qualified to do
business as a foreign corporation and is in good standing
under the laws of each jurisdiction that requires such
qualification wherein it owns or leases material properties,
except where the failure to so qualify would not have a
material adverse effect on the Company or its ability to
perform its obligations under the Agreement, the related Sales
Agreement(s) and the Trust Agreement.
(v) The execution, delivery and performance of the
Agreement, related Sales Agreement(s) and Trust Agreement are
within the corporate power of the Company. The Agreement has
been and, as of the Closing Date, the related Sales
Agreement(s) and Trust Agreement will have been, duly
authorized by all necessary action on the part of the Company,
and neither the issuance and sale of the Underwritten
Securities, nor the execution and delivery by the Company of
the Agreement, the related Sales Agreement(s) or Trust
Agreement, nor the consummation by the Company of any of the
transactions herein or therein contemplated, nor compliance by
the Company with the provisions hereof or thereof, will (A)
violate the articles of incorporation or by-laws of the
Company, (B) result in a breach or violation of, or constitute
a default under, any law, governmental rule or regulation or
any judgment, decree or order binding on the Company or its
properties, or any of the provisions of any indenture,
mortgage, deed of trust, contract or other instrument to which
the Company is a party or by which it is bound, or (C) result
in the creation of any lien, charge, or encumbrance upon any
of its properties pursuant to the terms of any such indenture,
mortgage, deed of trust, contract or other instrument (other
than the related Sales Agreement(s) or Trust Agreement).
(vi) The Agreement and the related Sales Agreement(s)
have been duly executed and delivered by the Company and, as
of the Closing Date, the related Trust Agreement will have
been duly executed by the Company and, assuming the due
authorization, execution and delivery by the other parties
thereto, each constitutes, or will constitute, a legal, valid
and binding agreement of the Company, enforceable against the
Company in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is
sought in a proceeding in equity or at law, and except that
the provisions relating to indemnification and contribution
may be unenforceable as against public policy.
(vii) The Underwritten Securities and the Trust
Agreement will conform in all material respects to the
descriptions thereof contained in the Final Prospectus, and,
when duly and validly executed by the Trustee and the
Underwritten Securities are delivered to and paid for by the
Underwriters as provided herein, such Underwritten Securities
will be validly issued and entitled to the benefits of the
Trust Agreement.
(viii) Since the respective dates as of which
information is given in the Registration Statement and the
Final Prospectus, there has not been any material adverse
change or development involving a prospective material adverse
change in the business, operations, financial condition,
properties or assets of the Company.
(ix) There are no actions, suits or proceedings
against, or investigations of, the Company pending, or, to the
knowledge of the Company, threatened, before any court,
administrative agency or other tribunal (A) asserting the
invalidity of the Agreement, any related Sales Agreement,
Trust Agreement, or Servicing Agreement or the Underwritten
Securities, (B) seeking to prevent the issuance of the
Underwritten Securities or the consummation of any of the
transactions contemplated by the Agreement, any related Sales
Agreement, Trust Agreement or Servicing Agreement, (C) that
might materially and adversely affect the performance by the
Company of its obligations under the Agreement, any related
Sales Agreement, Trust Agreement, or Servicing Agreement, or
(D) seeking to affect adversely the federal or state income
tax attributes of the Securities as described in the Final
Prospectus.
(x) No filing or registration with, notice to,
qualification of or with, or consent, approval, authorization
or order or other action of any person, corporation or other
organization or of any court, supervisory or governmental
authority or agency is required for the consummation by the
Company of the transactions contemplated by the Agreement or
the Trust Agreement except such as have been, or will have
been prior to the Closing Date, obtained under the Act, or
state securities laws or Blue Sky laws, or from the National
Association of Securities Dealers, Inc. in connection with the
purchase and distribution of the Underwritten Securities by
the Underwriters, or any recordations of the assignment of the
Mortgage Loans to the Trustee pursuant to the Trust Agreement
that have not yet been completed.
(xi) At the time of execution of the related Trust
Agreement, the Company will own the Mortgage Loans being
transferred to the Trust pursuant to the Trust Agreement, free
and clear of any lien, adverse claim, mortgage, charge, pledge
or other encumbrance or security interest, and will not have
assigned to any other person any of its right, title or
interest in such Mortgage Loans; and, upon the execution of
the Trust Agreement, the Company will transfer all its right,
title and interest in such Mortgage Loans to the Trustee.
(xii) Under generally accepted accounting principles,
the Company will report its transfer of the Mortgage Loans to
the Trust pursuant to the Trust Agreement and the sale of the
Underwritten Securities as a sale of its interest in the
Mortgage Loans. The Company has been advised by its
independent certified public accountants that it concurs with
such treatment under generally accepted accounting principles.
For federal income tax purposes, the Company will treat the
transfer of the Mortgage Loans to the Trust and the sale of
the Securities as a sale of its interest in the Mortgage
Loans.
(xiii) As of the Closing Date, the Mortgage Loans
will be duly and validly assigned in blank or to the Trustee
(or its nominee), the related Mortgage Notes will be endorsed
in blank or to the Trustee (or its nominee) and delivered to
the Trustee or to an agent on its behalf and, where required
in order to transfer all right, title and interest to a
Mortgage Loan, upon the recordation of assignments to the
Trustee of the related mortgages in the public records in
which such mortgage shall have been recorded, the Trustee will
own each such Mortgage Loan, subject to no prior lien,
mortgage, security interest, pledge, charge or other
encumbrance, except as permitted under the Trust Agreement.
(xiv) As of the Closing Date, any Letter of Credit or
Surety Bond included in any accounts or funds constituting
part of the Trust with respect to the Securities will name the
Trustee as the beneficiary thereof and will be delivered to
and held by the Trustee and any cash will be delivered to the
Trustee, and the Trustee either will own such assets, or have
a first priority perfected security interest therein, in
either case subject to no prior lien, security interest,
pledge, charge or other encumbrance.
(xv) Each related Seller has been duly incorporated
or otherwise formed and is validly existing and, if a
corporation, in good standing under the laws of the
jurisdiction of its incorporation or formation and duly
qualified to do business under the laws of each jurisdiction
that requires such qualification wherein it owns or leases any
material properties (except where the failure so to qualify
would not have a material adverse effect on such Seller or its
ability to perform its obligations under the related Sales
Agreement).
(xvi) At the time of the execution and delivery of a
related Sales Agreement by each Seller, the execution,
delivery and performance of such Sales Agreement by such
Seller will be within the legal power of such Seller and will
have been duly authorized by all necessary action on the part
of such Seller; and neither the execution and delivery of such
Sales Agreement by such Seller, nor the consummation by such
Seller of the transactions therein contemplated, nor
compliance with the provisions thereof by such Seller, will
(A) violate the articles of incorporation, by-laws,
partnership agreement or other organizational agreement of
such Seller, (B) result in a breach or violation of, or
constitute a default under any law, governmental rule or
regulation, any judgment, decree or order binding on such
Seller or its properties, or any of the provisions of any
indenture, mortgage, deed of trust, contract or other
instrument to which such Seller is a party or by which it is
bound, or (C) result in the creation or imposition of any
lien, charge or encumbrance upon any of its properties
pursuant to the terms of any such indenture, mortgage, deed of
trust, contract or other instrument.
(xvii) Each Sales Agreement, when executed and
delivered as contemplated thereby, will have been duly
executed and delivered by the Seller that is a party thereto,
and each will constitute, when so executed and delivered, a
legal, valid and binding agreement, enforceable against such
Seller in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is
sought in a proceeding in equity or at law, and except that
the provisions relating to indemnification and contribution
may be unenforceable as against public policy.
(xviii) Under generally accepted accounting
principles, each Seller will report its transfer of the
Mortgage Loans pursuant to the related Sales Agreement as a
sale of its interest in the Mortgage Loans. Each Seller has
been advised by its independent certified public accountants
that they concur with such treatment under generally accepted
accounting principles and, if applicable, regulatory
accounting principles. Each Seller also will so report the
transfer in all financial statements and reports to the
regulatory and supervisory agencies and authorities to which
it reports, if any. For federal income tax purposes, each
Seller will treat the transfer of the Mortgage Loans pursuant
to the related Sales Agreement as a sale of the interest in
the Mortgage Loans represented by the Underwritten Securities
and an exchange of the remaining interest in the Mortgage
Loans for any Securities of each other class of the same
Series retained by the respective Seller.
(xix) At the Closing Date, each Mortgage Note and
Mortgage will constitute a legal, valid and binding
instrument, enforceable in accordance with its terms subject
to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and will
meet the criteria for selection described in the Final
Prospectus.
(xx) At the Closing Date, any required Primary
Insurance Policies and Standard Hazard Insurance Policies will
have been duly and validly authorized, executed and delivered
by, and will constitute legal, valid and binding obligations
of the issuers of the Primary Mortgage Insurance Policies and
Hazard Insurance Policies, as the case may be, subject to
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and to
general principles of equity regardless of whether enforcement
is sought in a proceeding in equity or at law.
(xxi) At the Closing Date, any Pool Insurance Policy
or Special Hazard Insurance Policy will have been duly and
validly authorized, executed and delivered by, and will
constitute the legal, valid and binding obligation of, the
issuer of such policy (the "Insurer"), subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is
sought in a proceeding in equity or at law.
(xxii) Each Mortgage Loan was originated by an entity
that met the requirements of Section 3(a)(41) of the Exchange
Act at the time of origination and, unless otherwise noted in
the Final Prospectus, each of the Underwritten Securities,
when issued, will constitute a "mortgage related security" as
such term is defined in Section 3(a)(41) of the Exchange Act
for so long as such Security is rated in one of the two
highest rating categories by a nationally recognized
statistical rating organization.
(xxiii) The Master Servicer has been duly
incorporated and is validly existing and in good standing
under the laws of the jurisdiction of its incorporation and
has full corporate power and authority to own its properties
and to conduct its business as now conducted by it and is duly
qualified to do business under the laws of each jurisdiction
that requires such qualification wherein it owns or leases any
material properties or conducts any material business or in
which the performance of its duties under the Trust Agreement
would require such qualification (except where the failure so
to qualify would not have a material adverse effect on the
Master Servicer's performance under the Trust Agreement); and
the Master Servicer is approved by and in good standing with
FNMA or FHLMC as an "eligible seller/servicer" of residential
mortgage loans as provided in the FNMA Guidelines or the FHLMC
Guidelines.
(xxiv) At the time of the execution and delivery of
the Trust Agreement by the Master Servicer, the execution,
delivery and performance by the Master Servicer of such Trust
Agreement will be within the corporate power of the Master
Servicer and will have been duly authorized by all necessary
corporate action on the part of the Master Servicer; and
neither the execution and delivery thereof by the Master
Servicer, nor the consummation by the Master Servicer of the
transactions therein contemplated, nor compliance with the
provisions thereof by the Master Servicer, will (A) violate
the articles of incorporation or by-laws of the Master
Servicer, (B) result in a breach of, or constitute a default
under any law, governmental rule or regulation, or any
judgment, decree or order binding on the Master Servicer or
its properties, or any of the provisions of any indenture,
mortgage, deed of trust, contract or other instrument to which
the Master Servicer is a party or by which it is bound or (C)
result in the creation or imposition of any lien, charge or
encumbrance upon any of its property pursuant to the terms of
any such indenture, mortgage, deed of trust, contract or other
instrument.
(xxv) The Trust Agreement, when executed and
delivered as contemplated thereby, will have been duly
executed and delivered by the Master Servicer, and will
constitute a legal, valid and binding agreement, enforceable
against the Master Servicer in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally
and to general principles of equity regardless of whether
enforcement is sought in a proceeding in equity or at law.
(xxvi) Each Servicer has been duly incorporated and
is validly existing and in good standing under the laws of the
jurisdiction of its incorporation and duly qualified to do
business under the laws of each jurisdiction that requires
such qualification wherein it owns or leases any material
properties or conducts any material business or in which the
performance of its duties under its Servicing Agreement would
require such qualification (except where the failure so to
qualify would not have a material adverse effect on the
Servicer's performance under the Servicing Agreement); and
each Servicer is approved by FNMA or FHLMC as an "eligible
seller/servicer" of residential mortgage loans as provided in
the FNMA Guidelines or the FHLMC Guidelines.
(xxvii) At the time of the execution and delivery of
a Servicing Agreement by each Servicer, the execution,
delivery and performance by the Servicer of such Servicing
Agreement will be within the corporate power of such Servicer
and will have been duly authorized by all necessary corporate
action on the part of such Servicer; and neither the execution
and delivery thereof by such Servicer, nor the consummation by
such Servicer of the transactions therein contemplated, nor
compliance with the provisions thereof by such Servicer, will
(A) violate the articles of incorporation or by-laws of such
Servicer, (B) result in a breach of, or constitute a default
under any law, governmental rule or regulation, or any
judgment, decree or order binding on such Servicer or its
properties, or any of the provisions of any indenture,
mortgage, deed of trust, contract or other instrument to which
such Servicer is a party or by which it is bound or (C) result
in the creation or imposition of any lien, charge or
encumbrance upon any of its property pursuant to the terms of
any such indenture, mortgage, deed of trust, contract or other
instrument.
(xxviii) Each Servicing Agreement, when executed and
delivered as contemplated thereby, will have been duly
executed and delivered by the Servicer that is a party
thereto, and will constitute a legal, valid and binding
agreement, enforceable against such Servicer in accordance
with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights generally and to general principles of
equity regardless of whether enforcement is sought in a
proceeding in equity or at law.
(xxix) Any taxes, fees and other governmental charges
in connection with the execution, delivery and issuance of the
Agreement and the Trust Agreement and the execution, delivery
and sale of the Securities have been or will be paid at or
prior to the Closing Date.
(xxx) Neither the Company nor the Trust is, and the
issuance and sale of the Securities in the manner contemplated
by the Final Prospectus will not cause the Company or the
Trust to become, subject to registration or regulation as an
Investment Company or an affiliate of an Investment Company
under the Investment Company Act of 1940, as amended.
(xxxi) The Trust Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended.
(xxxii) Immediately prior to the delivery of the
Underwritten Securities to the Underwriters, the Company will
own the Securities free and clear of any lien, adverse claim,
pledge, encumbrance or other security interest, and will not
have assigned to any person any of its right, title or
interest in the Securities, and, upon consummation of the
transactions contemplated in the Agreement, the Company will
transfer all its right, title and interest in the Securities
to the Underwriters free and clear of any lien, adverse claim,
pledge, encumbrance or other security interest.
(xxxiii) At the Closing Date, the representations and
warranties made by the Company in the Trust Agreement, any
Servicing Agreement and any Sales Agreement will be true and
correct in all material respects.
The Company shall be deemed not to have made the
representations and warranties contained in clauses (xiv) through
(xxviii), inclusive, of this Section 1 with respect to, and to the
extent of, representations and warranties made to the Underwriters by
any Seller, the Master Servicer, any Servicer or any Insurer or other
credit provider as to the matters covered in such clauses in a
certificate or opinion of counsel in form satisfactory to counsel for
the Underwriters delivered to the Underwriters on the Closing Date;
provided, however, the foregoing shall in no way limit the rights of
the Underwriters to indemnification and contribution as otherwise
provided in Section 8 hereof.
Any certificate signed by a Seller, the Master Servicer, a
Servicer, an Insurer or other credit provider and delivered to the
Underwriters or to counsel for the Underwriters in connection with an
offering of the Securities shall state that it is a representation and
warranty as to the matters covered thereby by a Seller, the Master
Servicer, a Servicer, an Insurer or other credit provider, as the case
may be, to each Underwriter to whom the representations and warranties
in this Section 1 are made.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties set forth herein, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the applicable purchase prices set
forth in the Underwriting Agreement (plus accrued interest as therein set
forth), Underwritten Securities representing the respective aggregate
approximate principal amounts, notional amounts or percentage interests, as the
case may be, of the various classes of Securities set forth in the Underwriting
Agreement or opposite such Underwriter's name in an attachment to the
Underwriting Agreement.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities shall be made at the office, on the date and at the time specified in
the Underwriting Agreement, which date and time may be postponed by agreement
between the Underwriters and the Company or as provided in Section 10 hereof
(such date and time of delivery and payment for the Underwritten Securities
being herein called the "Closing Date"). Delivery of the Underwritten Securities
shall be made to the Underwriters against payment by the Underwriters of the
purchase price thereof to or upon the order of the Company in the type of funds
specified in the Underwriting Agreement. The Underwritten Securities shall be
registered in such names and in such authorized denominations as the
Underwriters may request not less than two full business days in advance of the
Closing Date.
The Company agrees to have the Underwritten Securities available for
inspection, checking and packaging by the Underwriters in New York, New York (or
such other location within the continental United States requested by the
Underwriters), not later than 1:00 p.m. on the business day prior to the Closing
Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Underwritten Securities for sale to the
public as set forth in the Final Prospectus.
5. Agreements. (a) The Company covenants and agrees with the
several Underwriters that:
(i) Substantially contemporaneously with the
execution of the Agreement, the Company will prepare the
supplement to the Base Prospectus setting forth the principal
amount of Securities covered thereby and the material terms
thereof, the initial public offering price of the Underwritten
Securities or the manner of offering such Underwritten
Securities, the price at which the Underwritten Securities are
to be purchased by the Underwriters from the Company, the
selling concessions and reallowance, if any, and such other
information as the Underwriters and the Company deem
appropriate in connection with the offering of the Securities.
Until the Closing Date, the Company will not file any
amendment to the Registration Statement or supplement to the
Base Prospectus, and thereafter, will not file any supplement
to the Final Prospectus relating to the Securities unless the
Company has furnished the Underwriters a copy for their review
prior to filing and will not file any such proposed amendment
or supplement to which the Underwriters reasonably object.
Subject to the foregoing sentence, the Company will cause the
Final Prospectus to be filed with the Commission pursuant to
Rule 424 under the Act and a report on Form 8-K will be filed
with the Commission within 15 days following the Closing
setting forth specific information concerning the Securities
and the Mortgage Loans and including, as an exhibit, a copy of
the Trust Agreement. In addition, to the extent that any
Underwriter (i) has provided Collateral Term Sheets (as
defined herein) to the Company that such Underwriter has
provided to a prospective investor, the Company will file or
cause to be filed with the Commission such Collateral Term
Sheets as an Exhibit to Form 8-K within two business days of
its receipt thereof, or (ii) has provided Structural Term
Sheets or Computational Materials (as such terms are defined
herein) to the Company that such Underwriter has provided to a
prospective investor, the Company will file or cause to be
filed with the Commission such Structural Term Sheets and
Computational Materials as an Exhibit to Form 8-K as soon as
reasonably practicable after the date of the Underwriting
Agreement, but in any event, not later than the date on which
the Final Prospectus is filed with the Commission pursuant to
Rule 424 under the Act. The Company will promptly advise the
Underwriters (A) when the Final Prospectus shall have been
filed with the Commission pursuant to Rule 424 and the Form
8-K containing Computational Materials shall have been filed
with the Commission, (B) when any amendment to the
Registration Statement shall have become effective, (C) of any
request by the Commission for any amendment of the
Registration Statement or the Final Prospectus or for any
additional information, (D) of the issuance by the Commission
of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threatening of any
proceeding for that purpose, and (E) of the receipt by the
Company of any notification with respect to the suspension of
the qualification of the Underwritten Securities for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order or
suspension and, if issued, to obtain as soon as possible the
withdrawal thereof.
(ii) If, at any time when a prospectus relating to
the Securities is required to be delivered under the Act, any
event occurs as a result of which in the opinion of counsel to
the Company or the Underwriters, the Final Prospectus, as then
amended or supplemented, would include any untrue statement of
a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or
if it shall be necessary to amend or supplement the Final
Prospectus to comply with the Act or the rules and regulations
thereunder, the Company will promptly prepare and file with
the Commission, subject to paragraph (i) of this Section 5(a),
an amendment or supplement that will correct such statement or
omission or an amendment that will effect such compliance and,
if such amendment or supplement is required to be contained in
a post-effective amendment of the Registration Statement, will
use its best efforts to cause such amendment of the
Registration Statement to be made effective as soon as
possible and will promptly file all reports and any definitive
proxy or information statements required to be filed by the
Company pursuant to Sections 13, 14, and 15 of the Exchange
Act subsequent to the date of the Prospectus for so long as
the delivery of a Prospectus is required in connection with
the offering or sale of the Securities; provided however, that
any such amendment or update prepared more than nine months
after the Closing Date shall be at the expense of the
Underwriters.
(iii) The Company will furnish to counsel for the
Underwriters and to each Underwriter, without charge,
conformed copies of the Registration Statement (including
exhibits thereto) and each amendment thereto which shall
become effective on or prior to the Closing Date, and, so long
as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of any Preliminary Final
Prospectus and the Final Prospectus and any amendments thereof
and supplements thereto as the Underwriters may reasonably
request.
(iv)The Company will apply the net proceeds from
the sale of the Securities in the manner set forth in the
Prospectus.
(v) The Company will pay all the fees and
disbursements of its counsel and of independent accountants
for the Company relating to legal review, opinions of counsel
for the Company, audits, review of unaudited financials, cold
comfort review or otherwise; the costs and expenses of
printing (or otherwise reproducing) and delivering the
Agreement, the Trust Agreement and the Securities; the initial
fees, costs and expenses of the Trustee under the Trust
Agreement and its counsel; the costs and expenses incident to
the preparation, printing, distribution and filing of the
Registration Statement (including exhibits thereto), the Base
Prospectus, the Preliminary Final Prospectus and the Final
Prospectus, and all amendments of and supplements to the
foregoing, and of the Securities; and the fees of rating
agencies. Except as provided in Section 7 hereof, the
Underwriters shall be responsible for paying all costs and
expenses incurred by them in connection with their purchase
and sale of the Underwritten Securities.
(vi) The Company will use its best efforts to arrange
for the qualification of the Securities for sale under the
laws of such jurisdictions as the Underwriters may designate
in the Underwriting Agreement, to maintain such qualifications
in effect so long as required for the distribution of the
Securities and to arrange for the determination of the
legality of the Securities for purchase by investors;
provided, however, that the Company shall not be required to
qualify to do business in any jurisdiction where it is not now
so qualified or to take any action which would subject it to
general or unlimited service of process in any jurisdiction
where it is not now so subject; and provided further, that the
Underwriters will pay all costs and expenses associated
therewith.
(vii) So long as any Securities are outstanding, the
Company will cause the Master Servicer or Trustee to furnish
to the Underwriter, as soon as available, a copy of (A) the
annual statement of compliance delivered by the Master
Servicer to the Trustee under the Trust Agreement, (B) the
annual independent public accountants' servicing report
furnished to the Trustee pursuant to the Trust Agreement, (C)
each report, statement or other document regarding the
Securities filed with the Commission under the Exchange Act or
mailed to the holders of the Securities, pursuant to the Trust
Agreement or otherwise, (D) any reports provided by certified
public accountants pursuant to the Trust Agreement regarding
the reports, statements or other documents included in (C)
above, and (E) from time to time, such other information
concerning the Securities as the Underwriter may reasonably
request and which may be furnished by the Company or the
Master Servicer without undue expense.
(viii) Without the consent of the Underwriters, the
Company will not waive any of the conditions to its
obligations to purchase Mortgage Loans pursuant to a Sales
Agreement.
(b) Each Underwriter represents, warrants, covenants and
agrees with the Company that:
(i) It either (A) has not provided any potential
investor with a Collateral Term Sheet (that is required to be
filed with the Commission within two business days of first
use under the terms of the Public Securities Association
Letter as described below), or (B) has, substantially
contemporaneously with its first delivery of such Collateral
Term Sheet to a potential investor, delivered such Collateral
Term Sheet to the Company, which Collateral Term Sheet, if
any, is attached to the Underwriting Agreement as Exhibit A.
(ii) It either (A) has not provided any potential
investor with a Structural Term Sheet or Computational
Materials prior to the date of the Underwriting Agreement, or
(B) has provided any such Structural Term Sheet or
Computational Materials to the Company, which Structural Term
Sheets and Computational Materials, if any, are attached to
the Underwriting Agreement as Exhibit B.
(iii) Each Collateral Term Sheet bears a legend
indicating that the information contained therein will be
superseded by the description of the collateral contained in
the Prospectus Supplement and, except in the case of the
initial Collateral Term Sheet, that such information
supersedes the information in all prior Collateral Term
Sheets.
(iv) Each Structural Term Sheet and all Computational
Materials bear a legend substantially as follows (or in such
other form as may be agreed prior to the date of the
Underwriting Agreement):
This information does not constitute either an offer
to sell or a solicitation of an offer to buy any of
the securities referred to herein. Information
contained herein is confidential and provided for
information only, does not purport to be complete and
should not be relied upon in connection with any
decision to purchase the securities. This information
supersedes any prior versions hereof and will be
deemed to be superseded by any subsequent versions
including, with respect to any description of the
securities or the underlying assets, the information
contained in the final Prospectus and accompanying
Prospectus Supplement. Offers to sell and
solicitations of offers to buy the securities are
made only by the final Prospectus and the related
Prospectus Supplement.
(v) It (at its own expense) agrees to provide to the
Company any accountants' letters obtained relating to the
Collateral Term Sheets, Structural Term Sheets and
Computational Materials, which accountants' letters shall be
addressed to the Company.
(vi) It has not, and will not, without the prior
written consent of the Company, provide any Collateral Term
Sheet, Structural Term Sheets or Computational Materials to
any investor or prospective investor after the date of the
Underwriting Agreement unless such Collateral Term Sheets,
Structural Term Sheets or Computational Materials are preceded
or accompanied by the delivery of the Final Prospectus to such
investor or prospective investor.
For purposes of this Agreement, Collateral Term Sheets and Structural
Term Sheets shall have the respective meanings assigned to them in the February
13, 1995 letter of Cleary, Gottlieb, Xxxxx & Xxxxxxxx on behalf of the Public
Securities Association (which letter, and the SEC staff's response thereto, are
publicly available February 17, 1995). The term "Collateral Term Sheet" as used
herein includes any subsequent Collateral Term Sheet that reflects a substantive
change in the information presented. Computational Materials has the meaning
assigned to it in the May 17, 1994 letter of Xxxxx & Wood on behalf of Xxxxxx,
Xxxxxxx & Co., Inc. (which letter, and the SEC staff's response thereto, are
publicly available May 20, 1994).
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters under the Agreement to purchase the Securities shall be
subject to the performance by the Company, each Seller and the Master Servicer
of its obligations hereunder (in the case of the Company) and in any applicable
agreement, and the following additional conditions:
(a) To the accuracy on the date of the Agreement and on the
Closing Date (as if made on such Closing Date) and as of the date of
the effectiveness of any amendment to the Registration Statement filed
prior to the Closing Date of the representations and warranties on the
part of the Company contained herein, and to the extent that the
Company is deemed, pursuant to Section 1 hereof, not to make the
representations and warranties (xv) through (xxviii), inclusive, or
portions thereof, to the accuracy of the representations and warranties
provided by the parties making such representations and warranties as
of the date thereof and on the Closing Date (as if made on such Closing
Date) and as of the date of the effectiveness of any amendment to the
Registration Statement filed prior to the Closing Date.
(b) The Registration Statement shall have become effective and
no stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and not
withdrawn and no proceedings for that purpose shall have been
instituted or threatened; and the Final Prospectus shall have been
filed or mailed for filing with the Commission in accordance with Rule
424 under the Act, and all actions required to be taken and all filings
required to be made by the Company under the Act prior to the sale of
the Securities shall have been duly taken or made.
(c) Certificates
(i) The Company shall have delivered to the
Underwriters a certificate of the Company, signed by the
President or any Vice President or Assistant Vice President of
the Company and dated the Closing Date, to the effect that the
signer of such certificate has carefully examined the
Registration Statement, the Final Prospectus, and the
Agreement and that: (A) the representations and warranties of
the Company in the Agreement are true and correct in all
material respects at and as of the Closing Date with the same
effect as if made on the Closing Date; (B) the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date; (C) no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or,
to the Company's knowledge, threatened; (D) nothing has come
to such Officer's attention that would lead him or her to
believe that the Final Prospectus contains any untrue
statement of a material fact or omits to state any material
fact necessary in order to make the statements, in the light
of the circumstances under which they were made, not
misleading; and (E) there has been no material adverse change
or development involving a prospective material adverse change
in the business, operations, financial condition, properties
or assets of the Company.
(ii) The Master Servicer shall have delivered to the
Underwriters a certificate of the Master Servicer, signed by
the President or any Vice President or Assistant Vice
President of the Master Servicer and dated the Closing Date,
to the effect that the signer of such certificate has
carefully examined the Trust Agreement and that: (A) the
representations and warranties of the Master Servicer in the
Trust Agreement are true and correct in all material respects
at and as of the Closing Date with the same effect as if made
on the Closing Date, (B) there has been no material adverse
change or development involving a prospective material adverse
change in the business, operations, financial condition,
properties or assets of the Master Servicer and (C) the Master
Servicer has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at
or prior to the Closing Date.
(iii) Each Seller shall have delivered to the
Underwriters a certificate of such Seller, signed by the
President or any Vice President or Assistant Vice President
and dated the Closing Date, to the effect that the signer of
such certificate has examined the Sales Agreement and that:
(A) the representations and warranties of the related Seller
in such Sales Agreement are true and correct in all material
respects at and as of the Closing Date with the same effect as
if made on the Closing Date; and (B) such Seller has complied
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the
Closing Date.
(iv) Each Seller shall have delivered to the
Underwriters a certificate of such Seller, signed by such
Seller's Chief Financial Officer (however denominated) and
dated the Closing Date, stating that the transfer of the
Mortgage Loans from the Seller to the Company pursuant to the
Sales Agreement will be classified as a sale of the Seller's
interest in the Mortgage Loans under generally accepted
accounting principles and, if applicable, under regulatory
accounting principles.
(d) Accounting Comfort
(i) The Underwriters shall have received from a
nationally recognized independent accounting firm, two
letters, (i) one dated the date of the Agreement and
satisfactory in form and substance to the Underwriters and
counsel for the Underwriters to the effect that (A) the
decrement tables, any yield tables and any related statistical
data contained in the Prospectus Supplement are accurate based
upon the Modeling Assumptions set forth therein and (B)
covering such other matters relating to the Trust as the
Underwriters may reasonably request; and (ii) the other dated
the Closing Date and satisfactory in form and substance to the
Underwriters and counsel for the Underwriters (A) confirming
the information contained in the letter dated the date of the
Agreement and (B) covering such other matters relating to the
Trust as the Underwriters may reasonably request.
(ii) The Underwriters shall have received from the
certified public accountants of the Servicer and Master
Servicer, as applicable, a letter or letters dated the date of
the Agreement and satisfactory in form and substance to the
Underwriters and counsel to the Underwriters to the effect
that they have performed certain specified procedures as a
result of which they determined that certain information of an
accounting, financial and statistical nature set forth in the
Final Prospectus under the caption (A) "The Servicer" (or
other caption relating to the Servicer's servicing activities)
is an accurate compilation of the records of the Servicer; and
(B) "The Master Servicer" (or other caption relating to the
Master Servicer's servicing activities) is an accurate
compilation of the records of the Master Servicer.
(e) Opinions
(i) The Underwriters shall have received from Hunton
& Xxxxxxxx, counsel for the Company, a favorable opinion,
dated the Closing Date and satisfactory in form and substance
to counsel for the Underwriters, as to (A) various matters
relating to the issuance of the Securities; (B) the applicable
federal income tax treatment of the Securities; (C) in the
event of the bankruptcy of the Company, a court would find
that the Mortgage Loans are not assets of the Company and (D)
such other matters reasonably requested by the Underwriters.
(ii) The Underwriters shall have received copies of
any opinions of counsel furnished to the Rating Agencies (upon
which the Underwriters shall be entitled to rely).
(iii) The Underwriters shall have received from
reputable counsel an opinion or opinions of counsel dated the
Closing Date and satisfactory in form and substance to counsel
for the Underwriters, as to the income tax treatment of the
Securities in those states specified in the Underwriting
Agreement.
(iv) The Underwriters shall have received from
counsel for the Underwriters such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the
Securities, the Trust Agreement, the Agreement, the
Registration Statement, the Final Prospectus and other related
matters as the Underwriters may reasonably require, and the
Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to
pass upon such matters.
(v) The Company shall have furnished to the
Underwriters the opinions of counsel to the Master Servicer,
dated the Closing Date and satisfactory in form and substance
to counsel for the Underwriters, as to the due authorization,
execution and delivery of the Trust Agreement by the Master
Servicer, its enforceability against the Master Servicer and
such other matters reasonably requested by the Underwriters.
(vi) The Company shall have furnished to the
Underwriters the opinions of counsel to each Seller, dated the
Closing Date and satisfactory in form and substance to counsel
for the Underwriters, as to the due authorization, execution
and delivery of each of the Sales Agreement by the related
Seller, its enforceability against the related Seller and such
other matters reasonably requested by the Underwriters.
(vii) The Company shall have furnished to the
Underwriters the opinions of counsel to the Trustee, dated the
Closing Date and satisfactory in form and substance to counsel
for the Underwriters, as to the due authorization, execution
and delivery of the Trust Agreement by the Trustee and such
other matters reasonably requested by the Underwriters.
(viii) The Company shall have furnished to the
Underwriters the opinions of counsel to any Insurer, dated the
Closing Date and satisfactory in form and substance to counsel
for the Underwriters, as to the due issuance and
enforceability of the policies issued by such Insurer and such
other matters reasonably requested by the Underwriters.
(ix) The Company shall have furnished to the
Underwriters the opinions of counsel to the issuers of any
Letters of Credit or Surety Bond, dated the Closing Date and
satisfactory in form and substance to counsel for the
Underwriters, as to the due issuance and enforceability of
such instruments and such other matters reasonably requested
by the Underwriters.
(f) The Underwritten Securities have been assigned the ratings
set forth in the Underwriting Agreement, which shall be in one of the
four highest rating categories by one or more "nationally recognized
statistical rating organizations" (as that term is defined by the
Commission) designated in the Underwriting Agreement. On the Closing
Date, (i) such rating or ratings shall not have been rescinded and
there shall not have been any downgrading, or public notification of a
possible downgrading or public notice of a possible change, without
indication of direction; and (ii) no downgrading, or public
notification of a possible downgrading or public notification of a
possible change, without indication of direction, shall have occurred
in the rating accorded any of the debt securities of any person,
providing any form of credit enhancement for the Securities by any
"nationally recognized statistical rating organization."
(g) If applicable, and subject to the conditions set forth in
the Trust Agreement, any reserve fund to be established for the benefit
of the Securityholders shall have been established by the Company with
the Trustee in accordance with the terms of the Trust Agreement and any
initial deposit thereto shall have been delivered to the Trustee for
deposit therein as contemplated by the Trust Agreement.
(h) On the Closing Date, there shall not have occurred any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company since the date of
the Underwriting Agreement that the Underwriter concludes in the
reasonable judgment of the Underwriter materially impairs the
investment quality of the Underwritten Securities so as to make it
impractical or inadvisable to proceed with the public offering or the
delivery of the Underwritten Securities as contemplated by the Final
Prospectus.
(i) All proceedings in connection with the transactions
contemplated by the Agreement and all documents incident hereto shall
be satisfactory in form and substance to the Underwriters and counsel
for the Underwriters, and the Underwriters and counsel for the
Underwriters shall have received such information, certificates and
documents as they may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in
the Agreement, if the Company is in breach of any covenants or
agreements contained herein or if any of the opinions and certificates
mentioned above or elsewhere in the Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the
Underwriters and counsel for the Underwriters, the Agreement and all
obligations of the Underwriters under the Agreement may be canceled at,
or at any time prior to, the Closing Date by the Underwriters. Notice
of such cancellation shall be given to the Company in writing, or by
telephone or telegraph and confirmed in writing.
In the event that the Company is advised prior to the Closing
Date that the documentation for some of the Mortgage Loans is
incomplete or defective and such defects cannot be remedied prior to
the Closing Date, the Company may, with the consent of the
Underwriters, nevertheless deliver the Mortgage Loans to the Trust and
may deposit with the Trustee an amount equal to the principal amount of
the incomplete or defective Mortgage Loans as of the Cut-off Date plus
one month's interest on each such Mortgage Loan at the Note Rate. If
the incomplete or defective documentation for a Mortgage Loan is
remedied prior to the first Distribution Date, the amount deposited
with the Trustee on account thereof shall be returned to the Company.
If the incomplete or defective documentation for a Mortgage Loan is not
remedied prior to the first Distribution Date, the amount will be
applied in payment of the Securities and the Mortgage Loan released to
the Company.
7. Reimbursement of Expenses. If for any reason other than a default by
the Underwriters in their obligations under the Agreement the sale of the
Underwritten Securities provided for herein is not consummated, the Company or
the Master Servicer will reimburse the Underwriters severally upon demand for
all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been reasonably incurred by them in connection with
their investigation, the preparation to market and the marketing of the
Securities, or in contemplation of the performance by them of their obligations
under the Agreement.
8. Indemnification and Contribution. (a) The Company
indemnifies and holds harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act as follows:
(i) against any and all losses, claims, expenses,
damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject
under the Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in
(y) the Registration Statement, the Final Prospectus, or any
amendment or supplement thereto, or any related Preliminary
Final Prospectus, or (z) the Collateral Term Sheets,
Structural Term Sheets or Computational Materials (but only to
the extent the underlying information related to such untrue
statement or alleged untrue statement arises out of or is
based upon Company Information (as defined below) that was not
superseded or corrected by delivery to the Underwriters of
corrected written or electronic information, or for which the
Company provided written notice of an error or material
omission prior to the confirmation of the sale of the
applicable Underwritten Securities) or arise out of, or are
based upon, the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading; and will reimburse
each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided,
however, that (A) the Company will not be liable in any such
case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement
or omission, or alleged untrue statement or omission, made in
any of such documents in reliance upon and in conformity with
written information furnished to the Company by an
Underwriter, specifically for use therein and constituting
Underwriting Information (as defined below), and (B) such
indemnity solely with respect to any Preliminary Final
Prospectus shall not inure to the benefit of any Underwriter
(or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage or liability
purchased the Securities which are the subject thereof if such
person did not receive a copy of the Final Prospectus (or the
Final Prospectus as amended or supplemented, excluding any
documents incorporated therein by reference) at or prior to
the confirmation of the sale of such Securities to such person
in any case where such delivery is required by the Act and the
untrue statement or omission of a material fact contained in
such Preliminary Final Prospectus was corrected in the Final
Prospectus (or the Final Prospectus as amended or
supplemented, excluding any documents incorporated therein by
reference);
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, 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 Company; and
(iii) against any and all expense whatsoever
(including the fees and disbursements of counsel chosen by
you), reasonably incurred in investigating, preparing or
defending against 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, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid
under (i) or (ii) above.
As used herein, (i) the term "Company Information" means the information
furnished to the Underwriters by or on behalf of the Company regarding the
Company or the Mortgage Loans and (ii) the term "Underwriting Information" means
the information (a) in the portion of the Final Prospectus constituting the
prospectus supplement set forth under the heading "Underwriting" and the
statements regarding the Underwriters' intention to make a secondary market and
sales to investors in negotiated transactions and, if applicable, to engage in
certain transactions to stabilize, maintain or affect the market price of the
Underwritten Securities and (b) contained in Collateral Term Sheets, Structural
Term Sheets or Computational Materials to the extent such information does not
constitute, does not arise out of and is not based upon Company Information.
This indemnity will be in addition to any liability that the Company
may otherwise have.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of the Company's officers who have
signed the Registration Statement and each person, if any, who controls
the Company within the meaning of the Act or the Exchange Act, against
any and all losses, claims, expenses, damages or liabilities to which
the Company or any such director, officer or controlling person may
become subject, under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities, (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in (y) the Registration
Statement, the Final Prospectus or any amendment or supplement thereto,
or any related Preliminary Final Prospectus, or (z) the Collateral Term
Sheets, Structural Term Sheets or Computational Materials (except to
the extent the underlying information relating to such untrue statement
or alleged untrue statement constitutes, arises out of, or is based
upon Company Information), or arise out of, or are based upon, the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information constituting Underwriting
Information furnished to the Company by such Underwriter specifically
for use therein; and will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity agreement
will be in addition to any liability that such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability that it may
have to any indemnified party otherwise than under this Section 8. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and, to the
extent that it may elect by written notice delivered promptly to the
indemnified party after receiving the aforesaid notice from such
indemnified party, jointly with any other indemnifying party similarly
notified, to assume (at its own expense) the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the
indemnifying party) to represent the indemnified party in such action;
provided that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
or parties shall have concluded that there may be legal defenses
available to it or them and/or other indemnified parties which are
different from or additional to those available to the indemnified
party, the indemnified party or parties shall have the right to select
separate counsel in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party
of the selected counsel, and, after notice from the indemnifying party
to such indemnified party under this Section 8, such indemnifying party
shall not be liable for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation unless (i) the
indemnified party shall have employed separate legal counsel in
connection with the assertion of legal defenses in accordance with the
proviso to the next preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by any indemnified party in
the case of subsection (a) above, representing the indemnified parties
under such subparagraph (a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party (it being
understood that if clause (i) or (iii) is applicable, such liability
shall be only in respect of the counsel referred to in such clause (i)
or (iii)).
(d) If the indemnification provided for in this Section 8 is
unavailable to hold harmless an indemnified party under subsection (a)
or (b) above in respect of any losses, claims, damages or liabilities
(or actions in respect thereof) referred to herein, then each
indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering of the
Underwritten Securities to which such loss, claim, damage or liability
(or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice
required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand the
Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities
(or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from such offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
facts or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim
subject to the limitations set forth in subsection (c) above.
Notwithstanding the provisions of this subsection (d), the Underwriters
shall not be required to contribute any amount in excess of the amount
by which the total price at which the Underwritten Securities
underwritten and distributed to the public exceeds the amount of any
damages which the Underwriters have otherwise paid or been required or
become liable to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligation of any
Underwriter pursuant to this subsection (d) shall be several in
proportion to its respective underwriting obligations and not joint.
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities of any Class agreed to be
purchased by such Underwriter or Underwriters under the Agreement and such
failure to purchase shall constitute a default in the performance of its or
their obligations under the Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions which
the portion of the Securities of such Class set forth opposite their names in an
attachment to the Underwriting Agreement bears to the aggregate amount of
Securities of such Class set forth opposite the names of the remaining
Underwriters) the Securities of such Class which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the amount of Securities of such Class which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities of such Class as set forth in the Final Prospectus, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities of such Class, and if
such non-defaulting Underwriters do not purchase all the Securities of such
Class, the Agreement will terminate without liability to any non-defaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date for such Class of Securities shall be
postponed for such period, not exceeding seven days, as the Underwriters shall
determine in order that the required changes in the Registration Statement and
the Final Prospectus or in any other documents or arrangements may be effected.
Nothing contained in the Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company and any non-defaulting Underwriter for
damages occasioned by its default under the Agreement.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Underwriters, by notice given to the Company prior to
or at delivery of and payment for all Securities if prior to such time (i)
trading in securities generally on the New York Stock Exchange shall have been
suspended or limited, or minimum prices shall have been established on such
Exchange, (ii) a banking moratorium shall have been declared by either federal
or New York State authorities or (iii) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
clause (iii) in the judgment of the Underwriters make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Underwritten Securities on the terms and in the manner contemplated by the
Prospectus Supplement.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and the Underwriters set forth in or made pursuant to the Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of this Section 11 and
Sections 5(a)(v), 7 and 8 hereof shall survive the termination or cancellation
of the Agreement.
12. Notices. All communications under the Agreement will be
in writing and effective only on receipt and, if sent to the Underwriters,
will be mailed, delivered or telegraphed and confirmed to it at the office
or offices set forth in the Underwriting Agreement; or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at
Riverfront Plaza, West Tower, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000, Attention: President.
13. Successors. The Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and their
successors and assigns, and no other person will have any right or obligation
under the Agreement.
14. Applicable Law. The Agreement will be governed by and construed
in accordance with the laws of the jurisdiction as may be specified in the
Underwriting Agreement. The Agreement may be executed in any number of
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall together constitute but one and the same instrument.
15. Miscellaneous. Time shall be of the essence of the Agreement. The
Agreement supersedes all prior or contemporaneous agreements and
understandings relating to the subject matter of the Agreement. Neither the
Agreement nor any term of the Agreement may be changed, waived, discharged or
terminated except by a writing signed by the party against whom enforcement of
such change, waiver, discharge or termination is sought.
