EXHIBIT 1.1
ASSET BACKED FUNDING CORPORATION
$1,026,972,000
(Approximate)
Asset Backed Funding Corporation Asset-Backed Certificates,
Series 2006-OPT1
August 8, 2006
UNDERWRITING AGREEMENT
Banc of America Securities LLC
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. Introductory. Asset Backed Funding Corporation, a Delaware
corporation (the "Company"), proposes to sell to Banc of America Securities LLC
(the "Underwriter"), $1,026,972,000.00 aggregate Certificate Principal Balance
of its Asset-Backed Certificates identified in Schedule I hereto (the "Offered
Certificates") having the Original Class Certificate Principal Balances set
forth in Schedule I (subject to an upward or downward variance, not to exceed
5%, of the precise Original Class Certificate Principal Balances within such
range to be determined by the Company in its sole discretion). The Offered
Certificates, together with the Class B, Class CE, Class P, Class R and Class
R-X Certificates (the "Non-Offered Certificates") are collectively referred to
herein as the "Certificates" and evidence the entire ownership interest in the
assets of a trust fund consisting primarily of three pools of fixed and
adjustable-rate mortgage loans, as described in Schedule I (the "Mortgage
Loans") to be acquired by the Company pursuant to a mortgage loan purchase
agreement (the "Mortgage Loan Purchase Agreement"), to be dated as of July 1,
2006, between the Company and Bank of America, National Association. As of the
close of business on the date specified in Schedule I as the cut-off date (the
"Cut-off Date"), the Mortgage Loans will have the aggregate principal balance
set forth in Schedule I. This Underwriting Agreement shall hereinafter be
referred to as the "Agreement." Elections will be made to treat the segregated
pool of assets consisting of the Mortgage Loans and certain other related assets
(exclusive of the arrangements intended to protect against basis risk for
certain of the certificates, the interest rate swap agreement, the swap account,
the cap carryover reserve account and prepayment charges) as multiple separate
real estate mortgage investment conduits (each, a "REMIC"). The Certificates are
to be issued pursuant to a pooling and servicing agreement, to be dated as of
July 1, 2006 (the "Pooling Agreement"), among the Company, as depositor, Option
One Mortgage Corporation, as servicer (the "Servicer"), and Xxxxx Fargo Bank,
N.A., as trustee (the "Trustee"). The Offered Certificates will be issued in the
denominations specified in Schedule I. The Pooling Agreement, this Agreement,
the Mortgage Loan Purchase Agreement and the purchase agreement, to be dated
August 10, 2006, among Banc of America Securities LLC, as Initial Purchaser and
the Company (the "Purchase Agreement") are collectively referred to herein as
the "Basic Documents."
Capitalized terms used herein that are not otherwise defined herein have
the meanings assigned thereto in the Pooling Agreement.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the Underwriter as follows:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement on such Form (the file number of which is set forth in Schedule I
hereto), which has become effective, for the registration under the Act of
the Offered Certificates. Such registration statement, as amended to the
date of this Agreement, meets the requirements set forth in Rule 415(a)(1)
under the Act and complies in all other material respects with said Rule.
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 Offered Certificates and the plan of
distribution thereof and has previously advised the Underwriter of all
further information (financial and other) with respect to the Company to be
set forth therein. Such registration statement, including the exhibits
thereto, as amended to the date of this Agreement, is hereinafter called
the "Registration Statement"; the prospectus first required to be filed to
satisfy the condition set forth in Rule 172(c) and pursuant to Rule 424(b)
under the Act is hereinafter called the "Basic Prospectus"; and such
supplement to the Basic Prospectus, in the form required to be filed to
satisfy the condition set forth in Rule 172(c) and pursuant to Rule 424(b)
under the Act, is hereinafter called the "Prospectus Supplement" and,
collectively with the Basic Prospectus, the "Final Prospectus." Any
reference herein to the Registration Statement, the Basic Prospectus or the
Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the date of this Agreement, or the issue date
of the Basic Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus or the Final
Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the date of this Agreement, or the
issue date of the Basic Prospectus or the Final Prospectus, as the case may
be, and deemed to be incorporated therein by reference.
(b) At or prior to the time when sales to investors of the Offered
Certificates were first made (the "Time of Sale"), the Company had prepared
the information (collectively, the "Time of Sale Information") listed in
Schedule II hereto. If, subsequent to the date of this Agreement, the
Company or the Underwriter has determined that such information included an
untrue statement of 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 and have
terminated their old purchase contracts and entered into new purchase
contracts with purchasers of the Offered Certificates, then "Time of Sale
Information" will refer to the information available to purchasers at the
time of entry into the first such new purchase contract, including any
information that corrects such material misstatements or omissions
("Corrective Information") and "Time of Sale" will refer to the time and
date on which such new purchase contracts were entered into.
(c) As of the date hereof, 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 (including the filing of any document incorporated by reference
in the Registration Statement), when any supplement to the Final Prospectus
is filed with the Commission and at the Closing Date, (i) the Registration
Statement, as amended as of any such time, and the Final Prospectus, as
amended or supplemented as of any such time, will comply in all material
respects with the Act and the respective rules thereunder, (ii) the
Registration Statement, as amended as of any such time, will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, and (iii) the Final Prospectus, as amended or
supplemented as of any such time, will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, 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 information furnished in writing to the Company
by or on behalf of the Underwriter specifically for use in connection with
the preparation of the Registration Statement or the Final Prospectus.
(d) The Time of Sale Information, at the Time of Sale did not, and at
the Closing Date will not, contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representation and
warranty with respect to the information contained in or omitted from the
Time of Sale Information or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Underwriter specifically for use in
connection with the preparation of the Time of Sale Information.
(e) The Company has been duly incorporated and is validly existing as
a corporation under the laws of the State of Delaware and has corporate and
other 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
this Agreement and the other Basic Documents to which it is a party.
(f) The Company is not aware of (i) any request by the Commission for
any further amendment of the Registration Statement or the Basic Prospectus
or for any additional information or (ii) the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement.
(g) This Agreement has been duly authorized, executed and delivered by
the Company, and each of the other Basic Documents to which the Company is
a party, when delivered by the Company, will have been duly authorized,
executed and delivered by the Company, and will constitute a legal, valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject, as to the enforcement of remedies, to
applicable bankruptcy, insolvency, reorganization, moratorium, receivership
and similar laws affecting creditors' rights generally and to general
principles of equity (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law), and except as
rights to indemnity and contribution hereunder may be limited by federal or
state securities laws or principles of public policy.
(h) The Company is not, and on the date on which the first bona fide
offer of the Offered Certificates is made will not be, an "ineligible
issuer," as defined in Rule 405 under the Act.
(i) On the Closing Date, the Basic Documents will conform to the
description thereof contained in the Registration Statement, the Final
Prospectus and the Time of Sale Information; the Offered Certificates will
have been duly and validly authorized and, when such Offered Certificates
are duly and validly executed, issued and delivered in accordance with the
Pooling Agreement, and sold to the Underwriter as provided herein, will be
validly issued and outstanding and entitled to the benefits of the Pooling
Agreement.
(j) As of the Closing Date, the representations and warranties of the
Company set forth in the Pooling Agreement will be true and correct.
(k) Neither the execution and delivery by the Company of this
Agreement or any other of the Basic Documents nor the consummation by the
Company of the transactions contemplated herein or therein, nor the
issuance of the Offered Certificates or the public offering thereof as
contemplated in the Final Prospectus or the Time of Sale Information will
conflict in any material respect with or result in a material breach of, or
constitute a material default (with notice or passage of time or both)
under, or result in the imposition of any lien, pledge, charge, of the
property or assets of the Company (except as required or permitted pursuant
thereto or hereto), pursuant to any material mortgage, indenture, loan
agreement, contract or other instrument to which the Company is party or by
which it is bound, nor will such action result in any violation of any
provisions of any applicable law, administrative regulation or
administrative or court decree, the certificate of incorporation or by-laws
of the Company. The Company is not in violation of its certificate of
incorporation, in default in any material respect in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease, trust agreement, transfer and servicing agreement or other
instrument to which a party or by which it may be bound, or to which any
material portion of its property or assets is subject.
(l) No legal or governmental proceedings are pending to which the
Company is a party or of which any property of the Company is subject,
which if determined adversely to the Company would, individually or in the
aggregate, have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company; and to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(m) Since the date of which information is given in the Registration
Statement, there has not been any material adverse change in the business
or net worth of the Company.
(n) Any taxes, fees and other governmental charges in connection with
the execution and delivery of the Basic Documents and the execution,
delivery and sale of the Offered Certificates have been or will be paid at
or prior to the Closing Date.
(o) No consent, approval, authorization or order of, or registration,
filing or declaration with, any court or governmental agency or body is
required, or will be required, in connection with (i) the execution and
delivery by the Company of any Basic Document or the performance by the
Company of any of its obligations under the Basic Documents or (ii) the
offer, sale or delivery of the Offered Certificates except such as shall
have been obtained or made, as the case may be, or will be obtained or
made, as the case may be, prior to the Closing Date, or will not materially
adversely affect the ability of the Company to perform its obligations
under any Basic Document.
(p) The Company possesses, and will possess, 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 Final Prospectus and
the Time of Sale Information, except to the extent that the failure to have
such licenses, certificates, authorities or permits does not have a
material adverse effect on the Offered Certificates or the financial
condition of the Company, and the Company has not received, nor will it
have received as of the Closing Date, 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.
(q) On the Closing Date, (i) the Company will have good and marketable
title to the related Mortgage Loans being transferred by it to the Trust
pursuant thereto, free and clear of any lien, (ii) the Company will not
have assigned to any person any of its right, title or interest in such
Mortgage Loans or in the Pooling Agreement, and (iii) the Company will have
the power and authority to sell such Mortgage Loans to the Trust, and upon
execution and delivery of the Pooling Agreement by the Trustee, the Company
and the Servicer, the Trust will have good and marketable title thereto, in
each case free of liens.
(r) The properties and businesses of the Company conform, and will
conform, in all material respects, to the descriptions thereof contained in
the Final Prospectus and the Time of Sale Information.
(s) The Trust Fund (as defined in the Pooling Agreement) is not
required to be registered under the Investment Company Act of 1940, as
amended.
(t) It is not necessary in connection with the offer, sale and
delivery of the Offered Certificates in the manner contemplated by this
Agreement to qualify the Pooling Agreement under the Trust Indenture Act of
1939, as amended.
(u) Other than the Final Prospectus, the Company (including its agents
and representatives other than the Underwriter) has not made, used,
prepared, authorized, approved or referred to and will not make, use,
prepare, authorize, approve or refer to any "written communication" (as
defined in Rule 405 under the Act) that constitutes an offer to sell or
solicitation of an offer to buy the Offered Certificates other than (i)
information included in the Time of Sale Information, (ii) any document not
constituting a prospectus pursuant to Section 2(a)(10)(a) of the Act or
Rule 134 under the Act or (iii) other written communication approved in
writing in advance by the Underwriter.
(v) Any Issuer Free Writing Prospectus (as defined in Section
11(e)(i)) included in the Time of Sale Information complied in all material
respects with the Act and has been, or will be filed in accordance with
Rule 433 under the Act (to the extent required thereby).
SECTION 3. Purchase, Sale and Delivery of Offered Certificates. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, the aggregate Certificate Principal Balance of the Offered
Certificates at a purchase price set forth in Schedule I hereto.
The Company will deliver the Offered Certificates to the Underwriter,
against payment of the purchase price therefor in same day funds wired to such
bank as may be designated by the Company, or by such other manner of payment as
may be agreed upon by the Company and the Underwriter, at the offices of
Cadwalader, Xxxxxxxxxx & Xxxx LLP, New York, New York at 10:00 A.M., Eastern
time, on August 10, 2006, or at such other place or time not later than seven
full business days thereafter as the Underwriter and the Company determine, such
time being referred to herein as the "Closing Date."
The Offered Certificates so to be delivered will be in such denominations
and registered in such names as the Underwriter requests two full business days
prior to the Closing Date and will be made available at the office of Banc of
America Securities LLC, Charlotte, North Carolina or, upon the Underwriter's
request, through the facilities of The Depository Trust Company.
SECTION 4. Offering by the Underwriter.
(a) It is understood that the Underwriter proposes to offer the
Offered Certificates subject to this Agreement for sale to the public
(which may include selected dealers) on the terms as set forth in the Final
Prospectus.
(b) The Underwriter represents and warrants to, and agrees with, the
Company, that:
(i) In relation to each Member State of the European Economic
Area which has implemented the Prospectus Directive (each, a "Relevant
Member State"), it has not made and will not make an offer of
Certificates to the public in that Relevant Member State prior to the
publication of a prospectus in relation to the Offered Certificates
which has been approved by the competent authority in that Relevant
Member State or, where appropriate, approved in another Relevant
Member State and notified to the competent authority in that Relevant
Member State, all in accordance with the Prospectus Directive, except
that it may, with effect from and including the relevant
implementation date, make an offer of Certificates to the public in
that Relevant Member State at any time:
(A) to legal entities which are authorized or regulated to
operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in
securities;
(B) to any legal entity which has two or more of (1) an
average of at least 250 employees during the last financial year;
(2) a total balance sheet of more than (euro)43,000,000 and (3)
an annual net turnover of more than (euro)50,000,000, as shown in
its last annual or consolidated accounts; or
(C) in any other circumstances which do not require the
publication by the issuer of a prospectus pursuant to Article 3
of the Prospectus Directive.
For the purposes of this representation, the expression an "offer of
Certificates to the public" in relation to any Offered Certificates in
any Relevant Member State means the communication in any form and by
any means of sufficient information on the terms of the offer and the
Certificates to be offered so as to enable an investor to decide to
purchase or subscribe the Certificates, as the same may be varied in
that Member State by any measure implementing the Prospectus Directive
in that Member State and the expression "Prospectus Directive" means
the European Commission Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State.
(ii) It has only communicated or caused to be communicated and
will only communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning of
Section 21 of the United Kingdom Financial Services and Markets Act
2000 (the "FSMA")) received by it in connection with the issue or sale
of the Certificates in circumstances in which Section 21(1) of the
FSMA does not apply to the issuer.
(iii) It has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation
to the Offered Certificates in, from or otherwise involving the United
Kingdom.
SECTION 5. Covenants of the Company. The Company hereby covenants and
agrees with the Underwriter that:
(a) Prior to the termination of the offering of the Offered
Certificates, the Company will not file any amendment of the Registration
Statement or supplement (including the Final Prospectus) to the Basic
Prospectus unless the Company has furnished the Underwriter a copy for its
review prior to filing and will not file any such proposed amendment or
supplement to which the Underwriter reasonably objects. Subject to the
foregoing sentence, the Company will cause the Final Prospectus to be filed
with the Commission pursuant to Rule 424. The Company will advise the
Underwriter promptly (i) when the Final Prospectus shall have been filed
with the Commission pursuant to Rule 424, (ii) when any amendment to the
Registration Statement relating to the Offered Certificates shall have
become effective, (iii) of any request by the Commission for any amendment
of the Registration Statement or amendment of or supplement to the Final
Prospectus or for any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose and (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Offered
Certificates 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 and, if issued, to obtain as
soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Offered
Certificates is required to be delivered under the Act, any event occurs as
a result of which 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 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 Exchange Act or the respective rules thereunder, the Company
promptly will prepare and file with the Commission, subject to the first
sentence of paragraph (a) of this Section 5, an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance and will use its best efforts to cause any required
post-effective amendment to the Registration Statement containing such
amendment to be made effective as soon as possible.
(c) The Company will furnish to the Underwriter and counsel for the
Underwriter, without charge, executed 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 the Underwriter or dealers may be required by the Act, as
many copies of the Final Prospectus and any amendments thereof and
supplements thereto as the Underwriter may reasonably request. The Company
will pay the expenses of printing all documents relating to the initial
offering.
(d) The Company will furnish such information as may be required and
otherwise cooperate in qualifying the Offered Certificates for sale under
the laws of such jurisdictions as the Underwriter may reasonably designate
and to maintain such qualifications in effect so long as required for the
distribution of the Offered Certificates; 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.
SECTION 6. Conditions to the Obligations of the Underwriter. The obligation
of the Underwriter to purchase the Offered Certificates shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein as of the date hereof, as of the date of the effectiveness of
any amendment to the Registration Statement filed prior to the Closing Date
(including the filing of any document incorporated by reference therein) and as
of the Closing Date, to the accuracy of the statements of the Company made in
any certificates delivered pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions:
(a) The Underwriter shall have received from Deloitte & Touche LLP a
letter, dated the date hereof, confirming that they are independent public
accountants within the meaning of the Act and the rules and regulations of
the Commission promulgated thereunder and otherwise in form and substance
reasonably satisfactory to the Underwriter and counsel to the Underwriter.
(b) 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 Offered
Certificates shall have been duly taken and made. At and prior to the
Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted, or to the knowledge of the Company or
the Underwriter, shall have been contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or the Servicer which, in the reasonable judgment of the
Underwriter, materially impairs the investment quality of the Offered
Certificates; (ii) any downgrading in the rating of the Servicer by any
"nationally recognized statistical rating organization" (as such term is
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 the Servicer (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) 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; (iv) any banking moratorium
declared by federal, North Carolina or New York authorities; or (v) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the reasonable
judgment of the Underwriter, the effects 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 Offered
Certificates.
(d) On or before the Closing Date, the Underwriter shall have received
evidence satisfactory to it that each class of Offered Certificates has
been given the ratings set forth on Schedule I hereto.
(e) The Underwriter shall have received a favorable opinion of
Xxxxxxxxxx, Xxxxxxxxxx & Xxxx LLP, special tax counsel for the Company,
addressed to the Underwriter and dated the Closing Date and reasonably
satisfactory in form and substance to the Underwriter and counsel to the
Underwriter.
(f) The Underwriter shall have received a favorable opinion of
Xxxxxxxxxx, Xxxxxxxxxx & Xxxx LLP, special counsel for the Company,
addressed to the Underwriter and dated the Closing Date and reasonably
satisfactory in form and substance to the Underwriter, with respect to the
validity of the Certificates, ERISA matters and such other related matters
as the Underwriter shall require, and the Company shall have furnished or
caused to be furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
(g) The Underwriter shall have received copies of any opinions of
counsel for the Company that the Company is required to deliver to any
Rating Agency. Any such opinions shall be dated the Closing Date and
addressed to the Underwriter or accompanied by reliance letters addressed
to the Underwriter.
(h) The Underwriter shall have received an opinion of counsel to the
Trustee, dated the Closing Date, in form and substance satisfactory to the
Underwriter and its counsel.
(i) The Underwriter shall have received a certificate dated the
Closing Date of the President, any Vice President or the Secretary of the
Company in which the officer shall state that, to the best of his or her
knowledge after reasonable investigation, (i) the representations and
warranties of the Company with respect to the Mortgage Loans contained in
any Basic Document are true and correct, (ii) the representations and
warranties of the Company in this Agreement are true and correct, (iii) the
Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing
Date, (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued, (v) no proceedings for that purpose have been
instituted or are contemplated by the Commission, and (vi) there has been
no amendment or other document filed affecting the Certificate of
Incorporation or bylaws of the Company, and no such amendment has been
authorized.
(j) At the Closing Date, the Certificates and the Pooling Agreement
will conform in all material respects to the descriptions thereof contained
in the Final Prospectus.
(k) The Underwriter shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement or
the Final Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact or omits to state a fact which, in the opinion
of counsel to the Underwriter, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(l) The Underwriter shall have received from Cadwalader, Xxxxxxxxxx &
Xxxx LLP, special counsel for the Underwriter, a letter dated the Closing
Date with respect to the Final Prospectus, in form and substance
satisfactory to the Underwriter.
(m) All corporate proceedings and other legal matters relating to the
authorization, form and validity of this Agreement, the Pooling Agreement,
the Mortgage Loan Purchase Agreement, the Certificates, the Registration
Statement and the Final Prospectus, and all other legal matters relating to
this Agreement and the transactions contemplated hereby, shall be
reasonably satisfactory in all respects to counsel for the Underwriter, and
the Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.
(n) The Underwriter shall have received a certificate (upon which
Cadwalader, Xxxxxxxxxx & Xxxx LLP shall be entitled to rely in rendering
its opinions and letters under the Basic Documents) dated the Closing Date
of an officer of the Trustee in which such officer shall state that, to the
best of such officer's knowledge after reasonable investigation: (i) the
Trustee is not an affiliate of any other entity listed as a transaction
party in the Prospectus Supplement, (ii) the information in the Prospectus
Supplement related to the Trustee (the "Trustee Disclosure") includes (a)
the Trustee's correct name and form of organization and (b) a discussion of
the Trustee's experience serving as trustee for asset-backed securities
transactions involving mortgage loans; and (iii) the Trustee Disclosure is
true and correct in all material respects and nothing has come to his or
her attention that that would lead such officer to believe that the Trustee
Disclosure contains any untrue statement of material fact or omits to state
a material fact necessary to make the statements therein not misleading.
(o) The Underwriter shall have received a certificate (upon which
Cadwalader, Xxxxxxxxxx & Xxxx LLP shall be entitled to rely in rendering
its opinions and letters under the Basic Documents) dated the Closing Date
of an officer of Option One Mortgage Corporation (the "Originator") in
which such officer shall state that, to the best of such officer's
knowledge after reasonable investigation: (i) except as disclosed, the
Originator is not an affiliate of any other entity listed as a transaction
party in the Prospectus Supplement; (ii) the information in the Prospectus
Supplement related to the Originator (the "Originator Disclosure") includes
the Originator's correct name, form of organization and length of time
originating mortgage loans; (iii) the description of the Originator's
origination program includes (a) experience in originating mortgage loans,
(b) size and composition of the Originator's origination portfolio, and (c)
the Originator's credit-granting or underwriting criteria for the mortgage
loans; (iv) except as set forth in the Originator Disclosure, no additional
information regarding the Originator's origination program could have a
material adverse affect in the performance of the pool assets or the
Offered Certificates; and (v) the Originator Disclosure is true and correct
in all material respects and nothing has come to his or her attention that
that would lead such officer to believe that the Originator Disclosure
contains any untrue statement of material fact or omits to state a material
fact necessary to make the statements therein not misleading.
(p) The Underwriter shall have received a certificate (upon which
Cadwalader, Xxxxxxxxxx & Xxxx LLP shall be entitled to rely in rendering
its opinions and letters under the Basic Documents) dated the Closing Date
of an officer of the Servicer in which such officer shall state that, to
the best of such officer's knowledge after reasonable investigation: (i)
except as disclosed in the Prospectus Supplement, the Servicer is not an
affiliate of any other entity listed as a transaction party in the
Prospectus Supplement; (ii) the information in the Prospectus Supplement
related to the Servicer (the "Servicer Disclosure") includes (a) the
Servicer's correct name and form of organization, (b) the correct length of
time that the Servicer has been servicing mortgage loans; and (c) a
discussion of the Servicer's experience in servicing mortgage loans; (iii)
except as set forth in the Servicer Disclosure, (a) there are no other
servicers responsible for calculating or making distributions to the
holders of the Offered Certificates, performing work-outs or foreclosures,
or any other material aspect of servicing the mortgage loans, (b) there
have been no material changes to the Servicer's servicing policies and
procedures during the last three years, (c) no additional information
regarding the Servicer's financial condition could have a material affect
on performance of the Mortgage Loans or the Offered Certificates, (d) no
commingling of funds on deposit in collection accounts will be permitted by
the Servicer, (e) no additional information with respect to any special or
unique factors involved in servicing the mortgage loans could have a
material affect on performance of the Offered Certificates, and (f) no
additional information with respect to the Servicer's process for handling
delinquencies, losses, bankruptcies and recoveries could have a material
affect on performance of the Offered Certificates; (iv) for each other
servicer identified in the Prospectus Supplement as responsible for
calculating or making distributions to the holders of the Offered
Certificates, performing work-outs or foreclosures, or any other material
aspect of servicing the mortgage loans, the certifications in clauses (ii)
and (iii) above are made with respect to such servicer; and (v) the
Servicer Disclosure is true and correct in all material respects and
nothing has come to his or her attention that that would lead such officer
to believe that the Servicer Disclosure contains any untrue statement of
material fact or omits to state a material fact necessary to make the
statements therein not misleading.
The Company will provide or cause to be provided to the Underwriter such
conformed copies of such opinions, certificates, letters and documents as the
Underwriter may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
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 the
Underwriter by notice to the Company 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. Reimbursement of the Underwriter's Expenses. If the sale of the
Offered Certificates provided for herein is not consummated because any
condition to the obligations of the Underwriter set forth in Section 6 hereof is
not satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Underwriter, the Company will reimburse
the Underwriter upon demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been reasonably incurred by
it in connection with the proposed purchase and sale of the Offered
Certificates.
SECTION 8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Underwriter and
any person who controls the Underwriter within the meaning of either the Act or
the Exchange Act against any and all losses, claims, damages or liabilities to
which it may become subject under the Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Offered Certificates as originally filed or in any amendment thereof, or in
the Basic Prospectus or the Final Prospectus or the Time of Sale Information, or
in any amendment thereof or supplement thereto, 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, in light of
the circumstances under which they were made, not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any Issuer
Free Writing Prospectus (as defined in Section 11(e)(i) or any Issuer
Information (as defined in Section 11(b)) contained in any Free Writing
Prospectus prepared by or on behalf of the Underwriter or in any Free Writing
Prospectus which is required to be filed pursuant to Section 11(e) or Section
11(g), or the omission or alleged omission to state a material fact required to
make the statements therein, in light of the circumstances under which they were
made, not misleading, which was not corrected by Corrective Information
subsequently supplied by the Company to the Underwriter within a reasonable
period of time prior to the Time of Sale, and (iii) any breach of the
representation and warranty in Section 2(h), and agrees to reimburse the
Underwriter and any such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Underwriter specifically for use in
connection with the preparation thereof. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the Company, each
of its directors, each of its officers who signs the Registration Statement and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Underwriter, but only with reference to (i) any untrue statements or alleged
untrue statements of a material fact, or omissions or alleged omissions to state
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in the information
furnished in writing to the Company by the Underwriter specifically for use in
connection with the preparation of the Registration Statement, the Prospectus,
the Time of Sale Information or any revision or amendment thereof or supplement
thereto and (ii) any untrue statements or alleged untrue statements of a
material fact in any Free Writing Prospectus prepared by or on behalf of the
Underwriter, or omissions or alleged omissions to state a material fact
necessary to make the statements therein (when read in conjunction with the Time
of Sale Information), in the light of the circumstances under which they were
made, not misleading; provided, that the Underwriter shall not be obligated to
so indemnify and hold harmless to the extent such loss, liability, claim, damage
or expense is caused by a misstatement or omission resulting from an error or
omission in any Issuer Information which was not corrected by Corrective
Information subsequently supplied by the Company to the Underwriter within a
reasonable period of time prior to the Time of Sale.
(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 in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which 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 to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by the Underwriter in the case of
subparagraph (a), representing the indemnified parties under subparagraph (a)
who are parties to such action), (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 commencement of
the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party; and
except that if clause (i) or (iii) is applicable, such liability shall be only
in respect of the counsel referred to in such clause (i) or (iii).
(d) To provide for just and equitable contribution in circumstances in
which the indemnification provided for in paragraphs (a) or (b) of this Section
8 is due in accordance with its terms but is for any reason held by a court to
be unavailable from the Company or the Underwriter on the grounds of policy or
otherwise, the Company or the Underwriter shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) to which
the Company or the Underwriter may be subject, as follows:
(i) in the case of any losses, claims, damages and liabilities (or
actions in respect thereof) which do not arise out of or are not based upon
any untrue statement or omission of a material fact in any Free Writing
Prospectus, in such proportion as is appropriate to reflect the relative
benefit received by each of the Company and the Underwriter; and
(ii) in the case of any losses, claims, damages and liabilities (or
actions in respect thereof) which arise out of or are based upon any untrue
statement or omission of a material fact in any Free Writing Prospectus, in
such proportion as is appropriate to reflect the relative fault of the
Company and the Underwriter 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 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 in such Free Writing
Prospectus results from information prepared by the Company or the
Underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
Notwithstanding anything to the contrary in this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls the Underwriter within the meaning of either the Act or the Exchange
Act shall have the same rights to contribution as the Underwriter and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, and each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the preceding
sentence of this paragraph (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
SECTION 9. Representations and Indemnities to Survive; No Fiduciary Duty.
The respective agreements, representations, warranties, indemnities and
other statements of the Company and its respective officers and of the
Underwriter set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriter or the 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 Offered Certificates. The provisions of Sections 7 and 8 hereof
and this Section 9 shall survive the termination or cancellation of this
Agreement.
SECTION 10. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
This Agreement shall be subject to termination in the absolute discretion
of the Underwriter, by notice given to the Company prior to delivery of and
payment for the Offered Certificates, 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 federal authorities or (iii)
there shall have occurred any outbreak or material escalation of hostilities or
other calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the reasonable judgment of the
Underwriter, impracticable to market the Offered Certificates.
SECTION 11. Offering Communications; Free Writing Prospectuses.
(a) Unless preceded or accompanied by a prospectus satisfying the
requirements of Section 10(a) of the Act, the Underwriter shall not convey or
deliver any written communication to any person in connection with the initial
offering of the Certificates, unless such written communication (i) is made in
reliance on Rule 134 under the Act, (ii) constitutes a prospectus satisfying the
requirements of Rule 430B under the Act or (iii) constitutes a "free writing
prospectus," as defined in Rule 405 under the Act (a "Free Writing Prospectus").
Without limitation thereby, without the prior written consent of the Company
(which consent may be withheld for any reason), the Underwriter shall not convey
or deliver in connection with the initial offering of the Certificates any "ABS
informational and computational material," as defined in Item 1101(a) of
Regulation AB under the Act ("ABS Informational and Computational Material"), in
reliance upon Rules 167 and 426 under the Act.
(b) (i) The Underwriter shall deliver to the Company, no later than two
business days prior to the date of first use thereof, (A) any Free Writing
Prospectus prepared by or on behalf of the Underwriter that contains any "issuer
information," as defined in Rule 433(h) under the Act and footnote 271 of the
Commission's Securities Offering Reform Release No. 33-8591 ("Issuer
Information"), and (B) any Free Writing Prospectus or portion thereof that
contains only a description of the final terms of the Certificates.
(ii) Notwithstanding the provisions of Section (b)(i), any Free
Writing Prospectus described therein that contains only ABS Informational and
Computational Material may be delivered by the Underwriter to the Company not
later than the later of (a) two business days prior to the due date for filing
of the Prospectus pursuant to Rule 424(b) under the Act or (b) the date of first
use of such Free Writing Prospectus.
(c) The Underwriter represents and warrants to the Company that the Free
Writing Prospectuses to be furnished to the Company by the Underwriter pursuant
to Section 11(b)(i) or (ii) will constitute all Free Writing Prospectuses of the
type described therein that were furnished to prospective investors by the
Underwriter in connection with its offer and sale of the Certificates.
(d) The Underwriter represents and warrants to the Company that each Free
Writing Prospectus required to be provided by it to the Company pursuant to
Section 11(b), when read in conjunction with the Time of Sale Information, did
not, as of the Time of Sale, include any untrue statement of a material fact or
omit any material fact required to be stated therein necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading; provided however, that the Underwriter makes no
representation to the extent such misstatements or omissions were the result of
any inaccurate Issuer Information supplied by the Company to the Underwriter
which information was not corrected by Corrective Information subsequently
supplied by the Company to the Underwriter within a reasonable period of time
prior to the Time of Sale.
(e) The Company agrees to file with the Commission the following:
(i) Any Free Writing Prospectus that constitutes an "issuer free
writing prospectus," as defined in Rule 433(h) under the Act (an "Issuer Free
Writing Prospectus");
(ii) Any Free Writing Prospectus or portion thereof delivered by the
Underwriter to the Company pursuant to Section 11(b) hereof; and
(iii) Any Free Writing Prospectus for which the Company or any person
acting on its behalf provided, authorized or approved information that is
prepared and published or disseminated by a person unaffiliated with the Company
or any other offering participant that is in the business of publishing, radio
or television broadcasting or otherwise disseminating communications.
(f) Any Free Writing Prospectus required to be filed pursuant to Section
11(e) by the Company shall be filed with the Commission not later than the date
of first use of the Free Writing Prospectus, except that:
(i) any Free Writing Prospectus or portion thereof required to be
filed that contains only the description of the final terms of the Certificates
may be filed by the Company within two days of the later of the date such final
terms have been established for all classes of Certificates and the date of
first use;
(ii) any Free Writing Prospectus or portion thereof required to be
filed that contains only ABS Informational and Computational Material may be
filed by the Company with the Commission not later than the later of the due
date for filing the final Prospectus relating to the Certificates pursuant to
Rule 424(b) under the Act or two business days after the first use of such Free
Writing Prospectus;
(iii) any Free Writing Prospectus required to be filed pursuant to
Section 11(e)(iii) may, if no payment has been made or consideration has been
given by or on behalf of the Company for the Free Writing Prospectus or its
dissemination, be filed by the Company with the Commission not later than four
business days after the Company becomes aware of the publication, radio or
television broadcast or other dissemination of the Free Writing Prospectus; and
(iv) the Company shall not be required to file (A) Issuer Information
contained in any Free Writing Prospectus of an offering participant other than
the Issuer, if such information is included or incorporated by reference in a
prospectus or Free Writing Prospectus previously filed with the Commission that
relates to the offering of the Certificates, or (B) any Free Writing Prospectus
or portion thereof that contains a description of the Certificates or the
offering of the Certificates which does reflect the final terms thereof.
(g) The Underwriter shall file with the Commission any Free Writing
Prospectus that is used or referred to by it and distributed by or on behalf of
the Underwriter in a manner reasonably designed to lead to its broad,
unrestricted dissemination not later than the date of the first use of such Free
Writing Prospectus.
(h) Notwithstanding the provisions of Section 11(g), the Underwriter shall
file with the Commission any Free Writing Prospectus for which the Underwriter
or any person acting on its behalf provided, authorized or approved information
that is prepared and published or disseminated by a person unaffiliated with the
Company or any other offering participant that is in the business of publishing,
radio or television broadcasting or otherwise disseminating written
communications and for which no payment was made or consideration given by or on
behalf of the Company or any other offering participant, not later than four
business days after the Underwriter becomes aware of the publication, radio or
television broadcast or other dissemination of the Free Writing Prospectus.
(i) Notwithstanding the provisions of Sections 11(e) and 11(g), neither the
Company nor the Underwriter shall be required to file any Free Writing
Prospectus that does not contain substantive changes from or additions to a Free
Writing Prospectus previously filed with the Commission.
(j) The Company and the Underwriter each agree that any Free Writing
Prospectuses prepared by the Underwriter shall contain the following legend:
The depositor has filed a registration statement (including a
prospectus) with the SEC for the offering to which this
communication relates. Before you invest, you should read the
prospectus in that registration statement and other documents the
depositor has filed with the SEC for more complete information about
the issuer and this offering. You may get these documents for free
by visiting XXXXX on the SEC Web site at xxx.xxx.xxx. Alternatively,
the depositor, any underwriter or any dealer participating in the
offering will arrange to send you the prospectus if you request it
by calling toll-free 0-000-000-0000 or you e-mail a request to
xx.xxxxxxxxxx_xxxxxxxxxxxx@xxxxxxxxxxxxxx.xxx. The securities may
not be suitable for all investors. Banc of America Securities LLC
and its affiliates may acquire, hold or sell positions in these
securities, or in the related derivatives, and may have an
investment or commercial banking relationship with the depositor.
Because the asset-backed securities are being offered on a "when, as
and if issued" basis, any contract of sale will terminate, by its
terms, without any further obligation or liability between us, if
the securities themselves, or the particular class to which the
contract relates, are not issued. Because the asset-backed
securities are subject to modification or revision, any such
contract also is conditioned upon the understanding that no material
change will occur with respect to the relevant class of securities
prior to the closing date. If a material change does occur with
respect to such class, our contract will terminate, by its terms,
without any further obligation or liability between us (the
"Automatic Termination"). If an Automatic Termination occurs, we
will provide you with revised offering materials reflecting the
material change and give you an opportunity to purchase such class.
To indicate your interest in purchasing the class, you must
communicate to us your desire to do so within such timeframe as may
be designated in connection with your receipt of the revised
offering materials.
This free writing prospectus is being delivered to you solely to
provide you with information about the offering of the securities
referred to in this free writing prospectus and to solicit an offer
to purchase the securities, when, as and if issued. Any such offer
to purchase made by you will not be accepted and will not constitute
a contractual commitment by you to purchase any of the securities
until we have accepted your offer to purchase securities. You may
withdraw your offer to purchase securities at any time prior to our
acceptance of your offer.
The information in this free writing prospectus supersedes
information contained in any prior similar free writing prospectus
relating to these securities prior to the time of your commitment to
purchase.
This free writing prospectus is not an offer to sell or solicitation
of an offer to buy these securities in any state where such offer,
solicitation or sale is not permitted.
The Company and the Underwriter each agree that any Free Writing
Prospectus prepared by the Underwriter and that is not an Issuer Free Writing
Prospectus or that does not contain Issuer Information shall also contain the
following legend:
Neither the issuer of the securities nor any of its affiliates
prepared, provided, approved or verified any statistical or
numerical information presented herein, although that information
may be based in part on loan level data provided by the issuer or
its affiliates.
(k) In the event that the Company becomes aware that, as of the Time of
Sale, any Issuer Free Writing Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein (when read in conjunction with the Time of Sale
Information), in light of the circumstances under which they were made, not
misleading (a "Defective Issuer Free Writing Prospectus"), the Company shall
notify the Underwriter within one business day after discovery and the Company
shall, if requested by the Underwriter, prepare and deliver to the Underwriter a
Free Writing Prospectus that corrects the material misstatement or omission in
the Defective Issuer Free Writing Prospectus (such corrected Issuer Free Writing
Prospectus, a "Corrected Issuer Free Writing Prospectus").
(l) In the event that the Underwriter become aware that, as of the Time of
Sale, any Free Writing Prospectus prepared by or on behalf of the Underwriter
delivered to an investor in any Certificates contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained therein (when read in conjunction with the Time of Sale
Information), in light of the circumstances under which they were made, not
misleading, when considered in conjunction with the Time of Sale Information
(together with a Defective Issuer Free Writing Prospectus, a "Defective Free
Writing Prospectus"), the Underwriter shall notify the Company thereof within
one business day after discovery.
(m) The Underwriter shall, if requested by the Company:
(i) if the Defective Free Writing Prospectus was a Free Writing
Prospectus prepared by or on behalf of the Underwriter, prepare a Free
Writing Prospectus which corrects the material misstatement in or omission
from the Defective Free Writing Prospectus (together with a Corrected
Issuer Free Writing Prospectus, a "Corrected Free Writing Prospectus");
(ii) deliver the Corrected Free Writing Prospectus to each investor
which received the Defective Free Writing Prospectus prior to entering
into a contract of sale with such investor;
(iii) notify such investor in a prominent fashion that the prior
contract of sale with the investor has been terminated, and of the
investor's rights as a result of termination of such agreement;
(iv) provide such investor with an opportunity to affirmatively
agree to purchase the Certificates on the terms described in the Corrected
Free Writing Prospectus; and
(v) comply with any other requirements for reformation of the
original contract of sale with such investor, as described in Section
IV.A.2.c of the Commission's Securities Offering Reform Release No.
33-8591.
(n) The Company and the Underwriter agree to retain all Free Writing
Prospectuses that they have used and that are not required to be filed pursuant
to this Section 11 for a period of three years following the initial bona fide
offering of the Certificates.
(o) The Underwriter covenants with the Company that after the final
Prospectus is available the Underwriter shall not distribute any written
information concerning the Offered Certificates to a prospective purchaser of
Offered Certificates unless such information is preceded or accompanied by the
final Prospectus.
SECTION 12. 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
Underwriter shall be directed to Banc of America Securities LLC, 000 Xxxxx Xxxxx
Xxxxxx, XX0-027-21-04, Charlotte, North Carolina 28255, Attention: Xxxxxx X.
Xxxxxxx; and notices to the Company shall be directed to it at Asset Backed
Funding Corporation, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Associate General Counsel, with a copy to the Treasurer.
SECTION 13. Parties. This Agreement shall inure to the benefit of and be
binding upon the Company, the Underwriter, any controlling persons referred to
herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of Offered Certificates from the Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 14. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS,
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW (BUT WITH REFERENCE TO
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH BY ITS TERMS
APPLIES TO THIS AGREEMENT).
SECTION 15. No Advisory or Fiduciary Responsibility. The Company
acknowledges and agrees that: (i) the purchase and sale of the Offered
Certificates pursuant to this Agreement, including the determination of the
public offering price of the Offered Certificates and any related discounts and
commissions, is an arm's-length commercial transaction between the Company, on
the one hand, and the Underwriter on the other hand, and the Company is capable
of evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement; (ii) in
connection with each transaction contemplated hereby and the process leading to
such transaction the Underwriter is and has been acting solely as a principal
and is not the agent or fiduciary of the Company or its affiliates,
stockholders, creditors or employees or any other party; (iii) the Underwriter
has not assumed, nor will it assume, an advisory or fiduciary responsibility in
favor of the Company with respect to any of the transactions contemplated hereby
or the process leading thereto (irrespective of whether the Underwriter has
advised or is currently advising the Company on other matters) or any other
obligation to the Company except the obligations expressly set forth in this
Agreement; (iv) the Underwriter and its affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Company and that the Underwriter has no obligation to disclose any of such
interests by virtue of any fiduciary or advisory relationship; and (v) the
Underwriter has not provided any legal, accounting, regulatory or tax advice
with respect to the offering contemplated hereby and the Company has consulted
its own legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.
The Company hereby waives and releases, to the fullest extent permitted by
law, any claims that the Company may have against the Underwriter with respect
to any breach or alleged breach of fiduciary duty.
SECTION 16. Miscellaneous.
(a) This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Underwriter with respect
to the subject matter hereof.
(b) Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated except by a writing signed by the party against whom
enforcement of such change, waiver, discharge or termination is sought.
(c) This Agreement may be signed in any number of counterparts each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
(d) The headings of the Sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.
SECTION 17. Non-Petition.
The Underwriter hereby agrees not to cause or participate in the filing of
a petition in bankruptcy against the Company for the non-payment to the
Underwriter of any amounts provided by this Agreement or otherwise until one
year and one day after the payment in full of all amounts due on the
Certificates in accordance with the terms of the Pooling Agreement.
If the foregoing is in accordance with your understanding of our agreement,
please sign this Agreement and return it to us.
Very truly yours,
ASSET BACKED FUNDING CORPORATION
By: /s/ Xxxxxxx X. Xxxxx-Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx-Xxxxxx
Title: Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above.
BANC OF AMERICA SECURITIES LLC
By: /s/ Xxxxxxx X. Xxxxx-Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx-Xxxxxx
Title: Vice President
SCHEDULE I
Offered Certificates: Class A-1, Class A-2, Class A-3A, Class A-3B, Class A-3C1,
Class A-3C2, Class A-3D, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8 and Class M-9.
Registration Statement File Number: 333-130524
Original Class Certificate Principal Balance of the Offered Certificates:
Original Class Certificate
Class Principal Balance
----------- --------------------------
Class A-1 $167,027,000
Class A-2 $166,946,000
Class A-3A $244,701,000
Class A-3B $79,718,000
Class A-3C1 $75,000,000
Class A-3C2 $33,495,000
Class A-3D $18,763,000
Class M-1 $57,354,000
Class M-2 $55,191,000
Class M-3 $20,020,000
Class M-4 $23,256,000
Class M-5 $21,112,000
Class M-6 $16,233,000
Class M-7 $20,561,000
Class M-8 $12,445,000
Class M-9 $15,150,000
Purchase Price: $[ ]
Classes of Book-Entry Class A-1, Class A-2, Class A-3A,
Certificates: Class A-3B, Class A-3C1, Class A-3C2,
Class A-3D, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8 and Class M-9
Description A pool of fixed and adjustable rate, first and
of Mortgage Loans: second-lien sub-prime mortgage loans having an
aggregate principal balance as of the Cut-off
Date of approximately $988,027,916.34.
Denominations: The Offered Certificates will be
issued in book-entry form. Each such
Class of Certificates will be
evidenced by one or more certificates
registered in the name of Cede & Co.
in the aggregate amount equal to the
Original Class Certificate Principal
Balance of such Class. Interests in
such Classes of Offered Certificates
may be purchased by investors in
minimum denominations of $25,000 and
integral multiples of $1.
Cut-off Date: July 1, 2006.
Certificate Ratings:
Class Fitch Xxxxx'x S&P
----- ----- ------- ---
Class A-1 AAA Aaa AAA
Class A-2 AAA Aaa AAA
Class A-3A AAA Aaa AAA
Class A-3B AAA Aaa AAA
Class A-3C1 AAA Aaa AAA
Class A-3C2 AAA Aaa AAA
Class A-3D AAA Aaa AAA
Class M-1 AA+ Aa1 AA+
Class M-2 AA Aa2 AA
Class M-3 AA- Aa3 AA-
Class M-4 A+ A1 A+
Class M-5 A A2 A
Class M-6 A- A3 A-
Class M-7 BBB+ Baa1 BBB+
Class M-8 BBB Baa2 BBB
Class M-9 BBB- Baa3 BBB-
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I-24
USActive 3932621.1
SCHEDULE II
TIME OF SALE INFORMATION
1. Free Writing Prospectus, in the form of a RMBS New Issue Term Sheet,
filed and accepted by the Commission on August 4, 2006, with a filing date of
August 4, 2006 and accession number 0000914121-06-002536.
2. Free Writing Prospectus, filed and accepted by the Commission on August
8, 2006, with a filing date of August 8, 2006 and accession number
0000914121-06-002540.
3. Free Writing Prospectus, in the form of spreadsheets containing
information on the Mortgage Loans in the form of collateral tape information,
filed and accepted by the Commission on August 8, 2006, with a filing date of
August 8, 2006 and accession number of 0000914121-06-002546.
