EXHIBIT 4.1
Execution Copy
$1,700,000,000
CONTIMORTGAGE HOME EQUITY LOAN TRUST 1998-1
Home Equity Loan Pass-Through Certificates
Series 1998-1
UNDERWRITING AGREEMENT
March 5, 1998
Bear, Xxxxxxx & Co. Inc.
As Representative of the Several Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
ContiSecurities Asset Funding Corp. (the "Depositor"), a Delaware
corporation, has authorized the issuance and sale of Home Equity Loan
Pass-Through Certificates, Series 1998-1, Class A-1, Class A-2 , Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9 and Class A-10
IO (the "Class A Trust Certificates"), Class B (the "Subordinate Certificates").
The Class A Certificates and the Subordinate Certificates are collectively the
"Offered Certificates". Also issued are the Class R, Class R-I, Class R-II and
Class C Certificates (the "Retained Certificates"). The Class A Certificates,
the Subordinate Certificates and the Retained Certificates shall be referred to
as the "Certificates".
Only the Offered Certificates are being purchased by the Underwriters
named in Schedule A hereto, and the Underwriters are purchasing, severally, only
the Offered Certificates set forth opposite their names in Schedule A, except
that the amounts purchased by the Underwriters may change in accordance with
Section X of this Agreement. Bear, Xxxxxxx & Co. Inc. ("Xxxx, Xxxxxxx") is
acting as representative of the several Underwriters and in such capacity is
hereinafter referred to as the " Representative."
The Class A Certificates, Subordinate Certificates and Retained
Certificates (collectively the "Certificates") will be issued under a pooling
and servicing agreement (the "Pooling and Servicing Agreement"), to be dated as
of March 1, 1998 among the Depositor, ContiMortgage Corporation
("ContiMortgage"), as the servicer and a seller (in such capacity, the
"Servicer" or a "Seller," as the case may be), ContiWest Corporation
("ContiWest"), as a seller (a "Seller," and collectively with ContiMortgage, the
"Sellers") and Manufacturers and Traders Trust Company, as the Trustee (in such
capacity, the "Trustee"). Each of the Depositor, ContiMortgage and ContiWest is
a subsidiary of ContiFinancial Corporation ("ContiFinancial").
The Certificates will evidence fractional undivided interests in the
Trust (the "Trust") formed pursuant to the Pooling and Servicing Agreement. The
assets of the Trust will initially include, among other things, two pools of
home equity loans, one comprised of fixed rate and adjustable rate home equity
loans and the other comprised only of adjustable rate home equity loans having a
Cut-Off Date as of the close of business on March 20, 1998 (the "Home Equity
Loans"), and such amounts as may be held by the Trustee in any accounts held by
the Trustee for the Trust. The Home Equity Loans are secured primarily by first
and second deeds of trust or mortgages on one- to four-family residential
properties. A form of the Pooling and Servicing Agreement has been filed as an
exhibit to the Registration Statement.
The Certificates are more fully described in a Registration Statement
which the Depositor has furnished to the Underwriters. Capitalized terms used
but not defined herein shall have the meanings given to them in the Pooling and
Servicing Agreement.
The Class A Certificates will be entitled to the benefits of a
certificate guaranty insurance policy (the "Policy") issued by MBIA Insurance
Corporation ("MBIA"). The Depositor, ContiMortgage and ContiWest will also enter
into an Indemnification Agreement (the "Indemnification Agreement") dated as of
March 1, 1998 among the Underwriters, the Depositor, ContiMortgage, ContiWest
and MBIA, governing the liability of the several parties with respect to the
losses resulting from material misstatements or omissions contained in the
Prospectus Supplement.
Pursuant to Section 3.05 of the Pooling and Servicing Agreement and
concurrently with the execution thereof, ContiMortgage and ContiWest will
transfer to the Depositor all of their right, title and interest in and to the
unpaid principal balances of the Home Equity Loans as of the Cut-Off Date and
interest due after the Cut-Off Date and the collateral securing each Home Equity
Loan.
SECTION I. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The
Depositor represents and warrants to, and agrees with the Underwriters that as
of the date hereof and as of the Closing Date:
A. A Registration Statement on Form S-3 (No. 333-39505), has (i) been
prepared by the Depositor in conformity with the requirements of the Securities
Act of 1933, as amended (the "Securities Act") and the rules and regulations
(the "Rules and Regulations") of the United States Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective and is still effective as of
the date hereof under the Securities Act; Copies of such Registration Statement
have been delivered by the Depositor to the Underwriters. As used in this
Agreement, "Effective Time" means the date and the time as of which such
Registration Statement, or the most recent post-effective amendment thereto, if
any, was declared effective by the Commission; "Effective Date" means the date
of the Effective Time; "Registration Statement" means such registration
statement, at the Effective Time, including any documents incorporated by
reference therein at such time; "Basic Prospectus" means such final prospectus
dated December 16, 1997; and "Prospectus Supplement" means the final prospectus
supplement relating to the Offered Certificates, to be filed with the Commission
pursuant to paragraphs (2), (3) or (5) of Rule 424(b) of the Rules and
Regulations. "Prospectus" means the Basic Prospectus together with the
Prospectus Supplement. Reference made herein to the Prospectus shall be deemed
to refer to and include any documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Securities Act, as of the date of the
Prospectus and any reference to any amendment or supplement to the Prospectus
shall be deemed to refer to and include any document filed under the Securities
Exchange Act of 1934 (the "Exchange Act") after the date of the Prospectus, and
incorporated by reference in the Prospectus and any reference to any amendment
to the Registration Statement shall be deemed to include any report of the
Depositor filed with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after the Effective Time that is incorporated by reference in the
Registration Statement. The Commission has not issued any order preventing or
suspending the use of the Prospectus or the effectiveness of the Registration
Statement and no proceedings for such purpose are pending or, to the Depositor's
knowledge, threatened by the Commission. There are no contracts or documents of
the Depositor which are required to be filed as exhibits to the Registration
Statement pursuant to the Securities Act or the Rules and Regulations which have
not been so filed or incorporated by reference therein on or prior to the
Effective Date of the Registration Statement other than such documents or
materials, if any, as any Underwriter delivers to the Depositor pursuant to
Section VIII (D) hereof for filing on Form 8-K. The conditions for use of Form
S-3, as set forth in the General Instructions thereto, have been satisfied.
To the extent that any Underwriter has provided to the Depositor
Computational Materials that such Underwriter has provided to a prospective
investor, the Depositor will file or cause to be filed with the Commission a
report on Form 8-K containing such Computational Materials, as soon as
reasonably practicable after the date of this Agreement, but in any event, not
later than 11:00 a.m. New York time the date on which the Prospectus is made
available to the Underwriter and is filed with the Commission pursuant to Rule
424 of the Rules and Regulations.
B. The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, when they become effective or are filed with the
Commission, as the case may be, in all respects to the requirements of the
Securities Act and the Rules and Regulations. The Registration Statement, as of
the Effective Date thereof and of any amendment thereto, did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
The Prospectus as of its date, and as amended or supplemented as of the Closing
Date does not and 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 that no representation or warranty is made as to information contained
in or omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with written information furnished to the Depositor in writing
by any Underwriters through the Representative expressly for use therein.
C. The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided that no representation
is made as to documents deemed to be incorporated by reference in the Prospectus
as the result of filing a Form 8-K at the request of the Underwriters except to
the extent such documents reflect information furnished by the Depositor to the
Underwriters for the purpose of preparing such documents.
D. Since the respective dates as of which information is given in the
Prospectus, there has not been any material adverse change in the general
affairs, management, financial condition, or results of operations of the
Depositor, otherwise than as set forth or contemplated in the Prospectus as
supplemented or amended as of the Closing Date.
E. The Depositor has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation and is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the conduct of its
business so requires such standing. The Depositor has all power and authority
necessary to own or hold its properties, to conduct the business in which it is
engaged and to enter into and perform its obligations under this Agreement, and
the Pooling and Servicing Agreement and to cause the Certificates to be issued.
F. There are no actions, proceedings or investigations pending with
respect to which the Depositor has received service of process before or
threatened by any court, administrative agency or other tribunal to which the
Depositor is a party or of which any of its properties is the subject (a) which
if determined adversely to the Depositor would have a material adverse effect on
the business or financial condition of the Depositor, (b) asserting the
invalidity of this Agreement, the Pooling and Servicing Agreement or the
Certificates (c) seeking to prevent the issuance of the Certificates or the
consummation by the Depositor of any of the transactions contemplated by the
Pooling and Servicing Agreement, or this Agreement, as the case may be, or (d)
which might materially and adversely affect the performance by the Depositor of
its obligations under, or the validity or enforceability of, the Pooling and
Servicing Agreement, this Agreement or the Certificates.
G. This Agreement has been, and the Pooling and Servicing Agreement
when executed and delivered as contemplated hereby and thereby will have been,
duly authorized, executed and delivered by the Depositor, and this Agreement
constitutes, and the Pooling and Servicing Agreement when executed and delivered
as contemplated herein will constitute, legal, valid and binding instruments
enforceable against the Depositor in accordance with their respective terms,
subject as to enforceability to (x) applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors' rights
generally, (y) general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law), and (z) with respect to rights
of indemnity under this Agreement, limitations of public policy under applicable
securities laws.
H. The execution, delivery and performance of this Agreement, and the
Pooling and Servicing Agreement by the Depositor and the consummation of the
transactions contemplated hereby and thereby, and the issuance and delivery of
the Certificates do not and will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Depositor is a party, by which the Depositor is bound or
to which any of the properties or assets of the Depositor or any of its
subsidiaries is subject, which breach or violation would have a material adverse
effect on the business, operations or financial condition of the Depositor or
its ability to perform its obligations under this Agreement, and the Pooling and
Servicing Agreement, nor will such actions result in any violation of the
provisions of the articles of incorporation or by-laws of the Depositor or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Depositor or any of its properties or assets,
which breach or violation would have a material adverse effect on the business,
operations or financial condition of the Depositor or its ability to perform its
obligations under this Agreement, and the Pooling and Servicing Agreement.
I. The Depositor has no reason to know that Xxxxxx Xxxxxxxx & Co. are
not independent public accountants with respect to the Depositor as required by
the Securities Act and the Rules and Regulations.
J. The direction by the Depositor to the Trustee to authenticate,
issue and deliver the Certificates has been duly authorized by the Depositor,
and, assuming the Trustee has been duly authorized to undertake such actions,
when executed; authenticated, issued and delivered by the Trustee in accordance
with the Pooling and Servicing Agreement, the Certificates will be validly
issued and outstanding and the holders of the Certificates will be entitled to
the rights and benefits of the Certificates as provided by the Pooling and
Servicing Agreement.
K. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States is required for the issuance of the Certificates and the sale of the
Offered Certificates to the Underwriters, or the consummation by the Depositor
of the other transactions contemplated by this Agreement and the Pooling and
Servicing Agreement except such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Offered
Certificates by the Underwriters or as have been obtained.
L. The Depositor possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now conducted by
it and as described in the Prospectus, and the Depositor has not received notice
of any proceedings relating to the revocation or modification of any such
license, certificate, authority or permit which if decided adversely to the
Depositor would, singly or in the aggregate, materially and adversely affect the
conduct of its business, operations or financial condition.
M. At the time of execution and delivery of the Pooling and Servicing
Agreement, the Depositor will: (i) have good title to the Home Equity Loans
conveyed by the Sellers, free and clear of any lien, mortgage, pledge, charge,
encumbrance, adverse claim or other security interest (collectively, "Liens");
(ii) not have assigned to any person any of its right or title in the Home
Equity Loans contemplated in the Pooling and Servicing Agreement or in the
Certificates being issued pursuant thereto; and (iii) have the power and
authority to sell its interest in the Home Equity Loans to the Trustee and to
sell the Offered Certificates to the Underwriters. Upon execution and delivery
of the Pooling and Servicing Agreement by the Trustee, the Trustee will have
acquired beneficial ownership of all of the right, title and interest in and to
the Home Equity Loans, free of any Liens. Upon delivery to the Underwriters of
the Offered Certificates, the Underwriters will have good title to the Offered
Certificates, free of any Liens.
N. Reserved.
O. As of the Statistical Calculation Date, each of the Home Equity
Loans will meet the eligibility criteria described in the Prospectus and will
conform to the descriptions thereof contained in the Prospectus.
P. Reserved.
Q. Neither the Depositor nor the Trust created by the Pooling and
Servicing Agreement is an "investment company" within the meaning of such term
under the Investment Company Act of 1940 (the "1940 Act") and the rules and
regulations of the Commission thereunder.
R. At the Closing Date, the Offered Certificates, and the Pooling and
Servicing Agreement will conform in all material respects to the descriptions
thereof contained in the Prospectus.
S. At the Closing Date, the Offered Certificates (other than the
Subordinate Certificates) shall have been rated in the highest rating category
by Xxxxx'x Investors Service, Inc. ("Moody's"), Standard & Poor's Rating
Services, a division of the XxXxxx-Xxxx Companies, Inc. ("Standard & Poor's")
and Fitch IBCA, Inc. ("Fitch") and the Subordinate Certificates shall have been
rated "Baa3" by Moody's, "BBB-" by Standard & Poor's and "BBB" by Fitch.
T. Any taxes, fees and other governmental charges in connection with
the execution, delivery and issuance of this Agreement, the Pooling and
Servicing Agreement and the Certificates have been paid or will be paid at or
prior to the Closing Date.
U. At the Closing Date, each of the representations and warranties of
the Depositor, ContiMortgage and ContiWest set forth herein, in and in the
Pooling and Servicing Agreement will be true and correct in all material
respects.
V. Any certificate signed by an officer of the Depositor and delivered
to the Representative or counsel for the Representative in connection with an
offering of the Offered Certificates shall be deemed, and shall state that it
is, a representation and warranty as to the matters covered thereby to each
person to whom the representations and warranties in this Section I are made.
SECTION II. PURCHASE AND SALE. The commitment of the Underwriters to
purchase the Offered Certificates pursuant to this Agreement shall be deemed to
have been made on the basis of the representations and warranties herein
contained and shall be subject to the terms and conditions herein set forth. The
Depositor agrees to instruct the Trustee to issue the Offered Certificates and
agrees to sell to the Underwriters, and the Underwriters agree (except as
provided in Sections X and XI hereof) severally and not jointly to purchase from
the Depositor, the aggregate initial principal amounts or percentage interests
of the Offered Certificates of each Class, as set forth opposite their names on
Schedule A, at the purchase price or prices set forth on Schedule A.
SECTION III. DELIVERY AND PAYMENT. Delivery of and payment for the
Offered Certificates shall be made at the offices of Stroock & Stroock & Xxxxx
LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as shall
be agreed upon by the Representative and the Depositor at 10:00 A.M. New York
City time on March 26, 1998 or at such other time or date as shall be agreed
upon in writing by the Representative and the Depositor (such date being
referred to as the " Closing Date"). Payment shall be made to the Depositor by
wire transfer of same day funds payable to the account of the Depositor.
Delivery of the Offered Certificates shall be made to the Representative for the
accounts of the Underwriters against payment of the purchase price thereof. The
Certificates shall be in such authorized denominations and registered in such
names as the Representative may request in writing at least two business days
prior to the Closing Date. The Offered Certificates will be made available for
examination by the Representative no later than 2:00 p.m. New York City time on
the first business day prior to the Closing Date.
SECTION IV. OFFERING BY THE UNDERWRITERS. It is understood that,
subject to the terms and conditions hereof, the Underwriters propose to offer
the Offered Certificates for sale to the public as set forth in the Prospectus.
SECTION V. COVENANTS OF THE DEPOSITOR. The Depositor and, to the
extent the provisions of subsections H and I below relate to ContiMortgage and
ContiWest, respectively, ContiMortgage and ContiWest agree as follows:
A. To prepare the Prospectus in a form approved by the Underwriters
and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the second business day
following the availability of the Prospectus to the Underwriters; to make no
further amendment or any supplement to the Registration Statement or to the
Prospectus prior to the Closing Date except as permitted herein; to advise the
Underwriters, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective
prior to the Closing Date or any supplement to the Prospectus or any amended
Prospectus has been filed prior to the Closing Date and to furnish the
Underwriters with copies thereof without charge; to file promptly all reports
and any definitive proxy or information statements required to be filed by the
Depositor with the Commission pursuant to Section 13(a), 13(c), 14 or l5(d) of
the Exchange Act subsequent to the date of the Prospectus and, for so long as
the delivery of a prospectus is required in connection with the offering or sale
of the Offered Certificates; to promptly advise the Underwriters of its receipt
of notice of the issuance by the Commission of any stop order or the institution
of or, to the knowledge of the Depositor, the threatening of any proceeding for
such purpose, or of: (i) any order preventing or suspending the use of the
Prospectus; (ii) the suspension of the qualification of the Offered Certificates
for offering or sale in any jurisdiction; (iii) the initiation of or threat of
any proceeding for any such purpose; or (iv) any request by the Commission for
the amending or supplementing of the Registration Statement or the Prospectus or
for additional information. In the event of the issuance of any stop order or of
any order preventing or suspending the use of the Prospectus or suspending any
such qualification, the Depositor promptly shall use its best efforts to obtain
the withdrawal of such order by the Commission.
B. To furnish promptly to the Underwriters and to counsel for the
Underwriters a signed copy of the Registration Statement as originally filed
with the Commission, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
C. To deliver promptly to the Underwriters without charge such number
of the following documents as the Underwriters shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case including exhibits); (ii)
the Prospectus and any amended or supplemented Prospectus; and (iii) any
document incorporated by reference in the Prospectus (including exhibits
thereto). If the delivery of a prospectus is required at any time prior to the
expiration of nine months after the Closing Date in connection with the offering
or sale of the Offered Certificates, and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during such
same period to amend or supplement the Prospectus or to file under the Exchange
Act any document incorporated by reference in the Prospectus in order to comply
with the Securities Act or the Exchange Act, the Depositor shall notify the
Underwriters and, upon any Underwriters' request, shall file such document and
prepare and furnish without charge to the Underwriters and to any dealer in
securities as many copies as the Underwriters may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which
corrects such statement or omission or effects such compliance, and in case the
Underwriters are required to deliver a Prospectus in connection with sales of
any of the Offered Certificates at any time nine months or more after the
Effective Time, upon the request of the Underwriters but at their expense, the
Depositor shall prepare and deliver to the Underwriters as many copies as the
Underwriters may reasonably request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Securities Act.
D. To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Depositor or the Underwriters, be required by
the Securities Act or requested by the Commission. Neither the Underwriters'
consent to nor their distribution of any amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section VI.
E. To furnish the Underwriters and counsel for the Underwriters, prior
to filing with the Commission, and to obtain the consent of the Underwriters for
the filing of the following documents relating to the Certificates: (i) any
Post-Effective Amendment to the Registration Statement or supplement to the
Prospectus, or document incorporated by reference in the Prospectus, or (ii)
Prospectus pursuant to Rule 424 of the Rules and Regulations.
F. To make generally available to holders of the Offered Certificates
as soon as practicable, but in any event not later than 90 days after the close
of the period covered thereby, a statement of earnings of the Trust (which need
not be audited) complying with Section 11(a) of the Securities Act and the Rules
and Regulations (including, at the option of the Depositor, Rule 158) and
covering a period of at least twelve consecutive months beginning not later than
the first day of the first fiscal quarter following the Closing Date.
G. To use its best efforts, in cooperation with the Underwriters, to
qualify the Offered Certificates for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States or
elsewhere as the Underwriters may designate, and maintain or cause to be
maintained such qualifications in effect for as long as may be required for the
distribution of the Offered Certificates. The Depositor will file or cause the
filing of such statements and reports as may be required by the laws of each
jurisdiction in which the Offered Certificates have been so qualified.
H. Unless the Underwriters shall otherwise have given their written
consent, no collateralized mortgage obligations or other similar securities
representing interests in or secured by other mortgage-related assets originated
or owned by ContiMortgage shall be publicly offered or sold, nor shall
ContiMortgage enter into any contractual arrangements that contemplate the
public offering or sale of such securities, until the earlier to occur of the
termination of the syndicate or the Closing Date.
I. Unless the Underwriters shall otherwise have given their written
consent, no collateralized mortgage obligations or other similar securities
representing interests in or secured by other mortgage-related assets originated
or owned by ContiWest shall be publicly offered or sold, nor shall ContiWest
enter into any contractual arrangements that contemplate the public offering or
sale of such securities, until the earlier to occur of the termination of the
syndicate or the Closing Date.
J. Unless the Underwriters shall otherwise have given their written
consent (such consent not to be unreasonably withheld), no collateralized
mortgage obligations or other similar securities representing interests in or
secured by other mortgage-related assets that are similar to the Home Equity
Loans originated or owned by the Depositor shall be publicly offered or sold
until the earlier to occur of the termination of the syndicate or the Closing
Date.
K. So long as the Offered Certificates shall be outstanding the
Depositor shall cause the Trustee, pursuant to the Pooling and Servicing
Agreement, to deliver to the Underwriters as soon as such statements are
furnished to the Trustee: (i) the annual statement as to compliance delivered to
the Trustee pursuant to Section 8.16 of the Pooling and Servicing Agreement;
(ii) the annual statement of a firm of independent public accountants furnished
to the Trustee pursuant to Section 8.17 of the Pooling and Servicing Agreement;
(iii) the monthly servicing report furnished to the Trustee pursuant to Section
7.08 of the Pooling and Servicing Agreement; and (iv) the monthly reports
furnished to the Certificateholders pursuant to Section 7.09 of the Pooling and
Servicing Agreement.
L. To apply the net proceeds from the sale of the Offered Certificates
in the manner set forth in the Prospectus.
SECTION VI. CONDITIONS TO THE UNDERWRITERS' OBLIGATION. The
obligations of the Underwriters hereunder to purchase the Offered Certificates
pursuant to the Agreement are subject to: (i) the accuracy on and as of the
Closing Date of the representations and warranties on the part of the Depositor
herein contained; (ii) the performance by the Depositor of all of its
obligations hereunder; and (iii) the following conditions as of the Closing
Date:
A. The Underwriters shall have received confirmation of the
effectiveness of the Registration Statement. No stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission. Any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus shall
have been complied with.
B. The Underwriters shall not have discovered and disclosed to the
Depositor on or prior to the Closing Date that the Registration Statement or the
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 Xxxxx Xxxxxxxxxx
LLP, counsel for the Underwriters, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
C. All corporate proceedings and other legal matters relating to the
authorization, form and validity of this Agreement, the Pooling and Servicing
Agreement, the Certificates, the Registration Statement and the Prospectus, and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be satisfactory in all respects to counsel for the
Underwriters, and the Depositor shall have furnished to such counsel all
documents and information that they may reasonably request to enable them to
pass upon such matters.
X. Xxxxxxx & Xxxxxxx & Xxxxx LLP shall have furnished to the
Underwriters and MBIA their written opinion, as counsel to the Depositor,
addressed to the Underwriters and MBIA and dated the Closing Date, in form and
substance satisfactory to the Underwriters and MBIA, to the effect that:
(i) The conditions to the use by the Depositor of a registration
statement on Form S-3 under the Securities Act, as set forth in the
General Instructions to Form S-3, have been satisfied with respect to
the Registration Statement and the Prospectus.
(ii) The Registration Statement and any amendments thereto have
become effective under the Securities Act; to the best of such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and not withdrawn and no
proceedings for that purpose have been instituted or threatened and
not terminated; and the Registration Statement, the Prospectus and
each amendment or supplement thereto, as of their respective effective
or issue dates (other than the financial and statistical information
contained therein, as to which such counsel need express no opinion),
complied as to form in all material respects with the applicable
requirements of the Securities Act and the rules and regulations
thereunder.
(iii) To the best of such counsel's knowledge, there are no
material contracts, indentures or other documents of a character
required to be described or referred to in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration
Statement other than those described or referred to therein or filed
or incorporated by reference as exhibits thereto.
(iv) The statements set forth in the Basic Prospectus under the
captions "Summary of Prospectus," "Description of The Certificates,"
"The Trust" and "The Pooling and Servicing Agreement" and in the
Prospectus Supplement under the captions "Description of The Offered
Certificates" and "The Pooling and Servicing Agreement," to the extent
such statements purport to summarize certain provisions of the
Certificates or of the Pooling and Servicing Agreement, are fair and
accurate in all material respects.
(v) The statements set forth in the Basic Prospectus and the
Prospectus Supplement under the captions "ERISA Considerations,"
"Certain Legal Aspects of the Mortgage Assets" and "Certain Federal
Income Tax Considerations" to the extent that they constitute matters
of federal law, provide a fair and accurate summary of such law or
conclusions.
(vi) The Pooling and Servicing Agreement conforms in all material
respects to the description thereof contained in the Prospectus and is
not required to be qualified under the Trust Indenture Act of 1939, as
amended, and the Trust is not required to be registered under the
Investment Company Act of 1940, as amended.
(vii) Neither the Depositor nor the Trust is an "investment
company" or under the "control" of an "investment company" as such
terms are defined in the 1940 Act.
(viii) Assuming that (a) the Trustee causes certain assets of the
Trust Estate, as the Trustee has covenanted to do in the Pooling and
Servicing Agreement, to be treated as a "real estate mortgage
investment conduit" ("REMIC"), as such term is defined in the Internal
Revenue Code of 1986, as amended (the "Code"), and (b) the parties to
the Pooling and Servicing Agreement comply with the terms thereof,
REMIC I, REMIC II and REMIC III will each be treated as a REMIC, each
Class of the Class A Trust Certificates and the Subordinate
Certificates will be treated as "regular interests" in REMIC III, the
Class R Certificates will be treated as the sole "residual interest"
in REMIC III, the Class R-I Certificates will be treated as the sole
"residual interest" in REMIC I, and the Class R-II Certificates will
be treated as the sole "residual interest" in REMIC II. The Trust is
not subject to tax upon its income or assets by any taxing authority
of the State of New York.
(ix) To the best of such counsel's knowledge, there are no
actions, proceedings or investigations pending that would adversely
affect the status of REMIC I, REMIC II or REMIC III as a REMIC.
(x) As a consequence of the qualifications of REMIC I, REMIC II
and REMIC III as REMICs, the Class A Trust Certificates and the
Subordinate Certificates will be treated as "regular . . . interest(s)
in a REMIC" under Section 7701(a)(19)(C) of the Code and "real estate
assets" under Section 856(c) of the Code in the same proportion that
the assets in the Trust consist of qualifying assets under such
Sections. In addition, as a consequence of the qualification of REMIC
I, XXXXX XX and the REMIC III as REMICs, interest on the Offered
Certificates will be treated as "interest on obligations secured by
mortgages on real property" under Section 856(c) of the Code to the
extent that such Offered Certificates are treated as "real estate
assets" under Section 856(c) of the Code.
(xi) The Class A-8 Certificates do not involve any "separate
security" not registered under the Registration Statement.
(xii) The Certificates have been duly executed and delivered by
the Depositor to the Trustee for authentication.
Such counsel shall also have furnished to the Underwriters and MBIA a written
statement, addressed to the Underwriters and MBIA and dated the Closing Date, in
form and substance satisfactory to the Underwriters and MBIA to the effect that
nothing has come to the attention of such counsel which lead them to believe
that: (a) the Registration Statement, at the time such Registration Statement
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading (except as to financial or statistical data
contained in the Registration Statement); (b) the Prospectus, as of its date and
as of the Closing Date, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (c) any document
incorporated by reference in the Prospectus or any further amendment or
supplement to any such incorporated document made by the Depositor prior to the
Closing Date (other than any document filed at the request of an Underwriter to
the extent such document relates to Computational Materials) contained, as of
the time it became effective or was filed with the Commission, as the case may
be, an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
E. The Underwriters shall have received the favorable opinion, dated
the Closing Date, of Xxxxxxx & Stroock & Xxxxx LLP, special counsel to the
Depositor, addressed to the Depositor and satisfactory to Xxxxx'x, Standard &
Poor's, Fitch, MBIA and the Underwriters, with respect to certain matters
relating to the transfer of the Home Equity Loans to the Depositor and from the
Depositor to the Trust, and such counsel shall have consented to reliance on
such opinion by Xxxxx'x, Standard & Poor's, Fitch, MBIA and the Underwriters as
though such opinion had been addressed to each such party.
X. Xxxxxxx & Stroock & Xxxxx LLP, counsel for ContiMortgage in its
capacity as both a Seller and the Servicer and ContiWest in its capacity as a
Seller, shall have furnished to the Underwriters and MBIA their written opinion,
as counsel to ContiMortgage and ContiWest, addressed to the Underwriters and
MBIA and the Depositor and dated the Closing Date, in form and substance
satisfactory to the Underwriters and MBIA, to the effect that:
(i) ContiMortgage is duly organized, validly existing in good
standing as a corporation under the laws of the State of Delaware.
(ii) ContiMortgage has full corporate power and authority to
serve in the capacity of a seller and the servicer of the Home Equity
Loans as contemplated in the Pooling and Servicing Agreement and to
transfer the Home Equity Loans to the Depositor as contemplated in the
Pooling and Servicing Agreement.
(iii) The Pooling and Servicing Agreement, and this Agreement
have been duly authorized, executed and delivered by ContiMortgage,
and, assuming the due authorization, execution and delivery of such
agreements by the other parties thereto, constitute the legal, valid
and binding agreements of ContiMortgage, enforceable against
ContiMortgage in accordance with their respective terms, subject as to
enforceability to (x) bankruptcy, insolvency, reorganization,
moratorium, receivership or other similar laws now or hereafter in
effect relating to creditors' rights generally, (y) the qualification
that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to the
discretion, with respect to such remedies, of the court before which
any proceedings with respect thereto may be brought and (z) public
policy considerations under the securities laws which may limit the
availability of indemnification as to securities law liability.
(iv) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body
having jurisdiction over ContiMortgage is required for the
consummation by ContiMortgage of the transactions contemplated by the
Pooling and Servicing Agreement except such consents, approvals,
authorizations, registrations and qualifications as have been
obtained.
(v) Neither the sale and transfer of the Home Equity Loans by
ContiMortgage to the Depositor, nor the execution, delivery or
performance by ContiMortgage of the Pooling and Servicing Agreement
and the transactions contemplated thereby (A) conflict with or result
in a breach of, or constitute a default under, (i) any term or
provision of the certificate of incorporation or by-laws of
ContiMortgage; (ii) any term or provision of any material agreement,
deed of trust, mortgage loan agreement, contract, instrument or
indenture, or other agreement to which ContiMortgage is a party or is
bound or to which any of the property or assets of ContiMortgage or
any of its subsidiaries is subject; (iii) to the best of such firm's
knowledge without independent investigation any order, judgment, writ,
injunction or decree of any court or governmental authority having
jurisdiction over ContiMortgage; or (iv) any law, rule or regulation,
applicable to ContiMortgage; or (B) to the best of such firm's
knowledge without independent investigation, results in the creation
or imposition of any lien, charge or encumbrance upon the Trust Estate
or upon the Certificates.
(vi) The execution of the Pooling and Servicing Agreement is
sufficient to convey all of ContiMortgage's, ContiWest's and the
Depositor's right, title and interest in the Home Equity Loans to the
Trust (except as otherwise specifically set forth in the Pooling and
Servicing Agreement) and following the consummation of the transaction
contemplated by Section 3.05 of the Pooling and Servicing Agreement,
the transfers of the Home Equity Loans by ContiMortgage and ContiWest
to the Depositor and by the Depositor to the Trust are sufficient to
vest in the Trust all of ContiMortgage's, ContiWest's and the
Depositor's right, title and interest in the Home Equity Loans (except
as otherwise specifically set forth in the Pooling and Servicing
Agreement).
(vii) There are, to the best of such counsel's knowledge without
independent investigation, no actions, proceedings or investigations
pending with respect to which ContiMortgage has received service of
process or threatened against ContiMortgage before any court,
administrative agency or other tribunal (a) asserting the invalidity
of the Pooling and Servicing Agreement, the Underwriting Agreement or
the Certificates, (b) seeking to prevent the consummation of any of
the transactions contemplated by the Pooling and Servicing Agreement
or (c) which would materially and adversely affect the performance by
ContiMortgage of its obligations under, or the validity or
enforceability of the Pooling and Servicing Agreement or the
Underwriting Agreement.
X. Xxxx X. Xxxxxx, Esq., Counsel for ContiWest, in its capacity as a
Seller, shall have furnished to the Underwriters and MBIA his written opinion,
addressed to the Underwriters and MBIA and dated as of the Closing Date, in form
and substance satisfactory to the Underwriters and MBIA, to the effect that:
(i) ContiWest is duly organized, validly existing in good
standing as a corporation under the laws of the State of Nevada.
(ii) ContiWest has full corporate power and authority to serve in
the capacity of a seller of the Home Equity Loans as contemplated in
the Pooling and Servicing Agreement and to transfer the Home Equity
Loans to the Depositor as contemplated in the Pooling and Servicing
Agreement.
(iii) The Pooling and Servicing Agreement and this Agreement have
been duly authorized, executed and delivered by ContiWest, and,
assuming the due authorization, execution and delivery of such
agreement by the other parties thereto, constitute the legal, valid
and binding agreements of ContiWest, enforceable against ContiWest in
accordance with its terms, subject as to enforceability to (x)
bankruptcy, insolvency, reorganization, moratorium, receivership or
other similar laws now or hereafter in effect relating to creditors'
rights generally, (y) the qualification that the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion, with respect to
such remedies, of the court before which any proceedings with respect
thereto may be brought and (z) public policy considerations under the
securities laws which may limit the availability of indemnification as
to securities law liability.
(iv) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body
having jurisdiction over ContiWest is required for the consummation by
ContiWest of the transactions contemplated by the Pooling and
Servicing Agreement except such consents, approvals, authorizations,
registrations and qualifications as have been obtained.
(v) Neither the sale and transfer of the Home Equity Loans by
ContiWest to the Depositor, nor the execution, delivery or performance
by ContiWest of the Pooling and Servicing Agreement and the
transactions contemplated thereby (A) conflict with or result in a
breach of, or constitute a default under, (i) any term or provision of
the Articles of incorporation or by-laws of ContiWest; (ii) any term
or provision of any material agreement, deed of trust, mortgage loan
agreement, contract, instrument or indenture, or other agreement to
which ContiWest is a party or is bound or to which any of the property
or assets of ContiWest or any of its subsidiaries is subject; (iii) to
the best of such counsel's knowledge without independent investigation
any order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over ContiWest; or (iv) any
law, rule or regulation, applicable to ContiWest; or (B) to the best
of such counsel' knowledge without independent investigation, results
in the creation or imposition of any lien, charge or encumbrance upon
the Trust Estate or upon the Certificates.
(vi) There are, to the best of such counsel's knowledge without
independent investigation, no actions, proceedings or investigations
pending with respect to which ContiWest has received service of
process or threatened against ContiWest before any court,
administrative agency or other tribunal (a) asserting the invalidity
of the Pooling and Servicing Agreement, the Underwriting Agreement or
the Certificates, (b) seeking to prevent the consummation of any of
the transactions contemplated by the Pooling and Servicing Agreement
or (c) which would materially and adversely affect the performance by
ContiWest of its obligations under, or the validity or enforceability
of, the Pooling and Servicing Agreement or the Underwriting Agreement.
X. Xxxx X. Xxxxxx, Esq., Counsel for the Depositor, shall have
furnished to the Underwriters and MBIA his written opinion, addressed to the
Underwriters and MBIA and dated the Closing Date, in form and substance
satisfactory to the Underwriters and MBIA, to the effect that:
(i) The Depositor has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware and is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the
conduct of its business so requires such standing except where the
failure to be in good standing would not result in a material adverse
change in the condition of the Depositor, whether or not arising in
the ordinary course of business. The Depositor has all power and
authority necessary to own or hold its properties and to conduct the
business in which it is engaged and to enter into and perform its
obligations under this Agreement and the Pooling and Servicing
Agreement and to cause the Certificates to be issued.
(ii) The Depositor is not in violation of its articles of
incorporation or by-laws or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Depositor is a
party or by which it or its properties may be bound, which default
might result in any material adverse changes in the financial
condition, earnings, affairs or business of the Depositor or which
might materially and adversely affect the properties or assets, taken
as a whole, of the Depositor.
(iii) This Agreement, and the Pooling and Servicing Agreement
have been duly authorized, executed and delivered by the Depositor
and, assuming the due authorization, execution and delivery of such
agreements by the other parties thereto, such agreements constitute
valid and binding obligations, enforceable against the Depositor in
accordance with their respective terms, subject as to enforceability
to (x) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, (y) general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (z)
with respect to rights of indemnity under this Agreement, limitations
of public policy under applicable securities laws.
(iv) The execution, delivery and performance of this Agreement,
and the Pooling and Servicing Agreement by the Depositor, the
consummation of the transactions contemplated hereby and thereby, and
the issuance and delivery of the Certificates do not and will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Depositor is a party or by which the Depositor
is bound or to which any of the property or assets of the Depositor or
any of its subsidiaries is subject, which breach or violation would
have a material adverse effect on the business, operations or
financial condition of the Depositor or its ability to perform its
obligations under this Agreement, and the Pooling and Servicing
Agreement nor will such actions result in a violation of the
provisions of the articles of incorporation or by-laws of the
Depositor or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Depositor
or any of its properties or assets, which breach or violation would
have a material adverse effect on the business, operations or
financial condition of the Depositor or its ability to perform its
obligations under this Agreement and the Pooling and Servicing
Agreement.
(v) The direction by the Depositor to the Trustee to execute,
issue, authenticate and deliver the Certificates has been duly
authorized by the Depositor and, assuming that the Trustee has been
duly authorized to do so, when executed, authenticated and delivered
by the Trustee in accordance with the Pooling and Servicing Agreement,
the Certificates will be validly issued and outstanding and will be
entitled to the benefits of the Pooling and Servicing Agreement.
(vi) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issuance of the Certificates, and the sale of the
Offered Certificates to the Underwriters, or the consummation by the
Depositor of the other transactions contemplated by this Agreement and
the Pooling and Servicing Agreement, except such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Securities Act or state securities or Blue Sky laws in
connection with the purchase and distribution of the Offered
Certificates by the Underwriters or as have been previously obtained.
(vii) There are not, to the best of his knowledge without
independent investigation, any actions, proceedings or investigations
pending with respect to which the Depositor has received service of
process before or threatened by any court, administrative agency or
other tribunal to which the Depositor is a party or of which any of
its properties is the subject: (a) which if determined adversely to
the Depositor would have a material adverse effect on the business,
results of operations or financial condition of the Depositor; (b)
asserting the invalidity of, the Pooling and Servicing Agreement or
the Certificates; (c) seeking to prevent the issuance of the
Certificates or the consummation by the Depositor of any of the
transactions contemplated by, the Pooling and Servicing Agreement or
this Agreement, as the case may be; or (d) which might materially and
adversely affect the performance by the Depositor of its obligations
under, or the validity or enforceability of the Pooling and Servicing
Agreement, this Agreement or the Certificates.
(viii) The Certificates have been duly and validly authorized and
issued and, immediately prior to the sale of the Offered Certificates
to the Underwriters, such Certificates are owned by the Depositor,
free and clear of all Liens.
I. The Underwriters and MBIA shall have received the favorable opinion
of counsel to the Trustee, dated the Closing Date, addressed to the Underwriters
and MBIA and in form and scope satisfactory to counsel to the Underwriters and
MBIA, to the effect that:
(i) The Trustee is a banking corporation duly incorporated and
validly existing under the law of the State of New York.
(ii) The Trustee has the full corporate trust power to execute,
deliver and perform its obligations under the Pooling and Servicing
Agreement.
(iii) The execution and delivery by the Trustee of the Pooling
and Servicing Agreement, and the performance by the Trustee of its
obligations under the Pooling and Servicing Agreement, have been duly
authorized by all necessary corporate action of the Trustee.
(iv) The Pooling and Servicing Agreement is a valid and legally
binding obligations of The Trustee enforceable against the Trustee.
(v) The execution and delivery by the Trustee of the Pooling and
Servicing Agreement does not (a) violate the Organization Certificate
of the Trustee or the by-laws of the the Trustee, (b) to such
counsel's knowledge, violate any judgment, decree or order of any New
York or United States federal court or other New York or United States
federal governmental authority by which the Trustee is bound or (c)
assuming the non-existence of any judgment, decree or order of any
court or other governmental authority that would be violated by such
execution and delivery, violate any New York or United States federal
statute, rule or regulation or require any consent, approval or
authorization of any New York or United States federal court or other
New York or United States federal governmental authority.
(vi) The Trust Certificates have been duly executed,
authenticated and delivered by the Trustee.
(vii) If the Trustee were acting as Servicer under the Pooling
and Servicing Agreement as of the date of such opinion, the Trustee
would have the full corporate trust power to perform the obligations
of the Servicer under the Pooling and Servicing Agreement; and
(viii) To the best of such counsel's knowledge, there are no
actions, proceedings or investigations pending or threatened against
or affecting the Trustee before or by any court, arbitrator,
administrative agency or other governmental authority which, if
decided adversely to the Trustee, would materially and adversely
affect the ability of the Trustee to carry out the transactions
contemplated in the Pooling and Servicing Agreement.
J. The Underwriters and MBIA shall have received the favorable opinion
or opinions, dated the Closing Date, of counsel for the Underwriters, with
respect to the issue and sale of the Offered Certificates, the Registration
Statement, this Agreement, the Prospectus and such other related matters as the
Underwriters may reasonably require.
K. The Underwriters and MBIA shall have received executed copies of
the Broker-Dealer Agreement and the Auction Agent's Agreement with respect to
the Class A-8 Certificates.
L. The Depositor, ContiMortgage, ContiWest and ContiFinancial shall
each have furnished to the Underwriters and MBIA a certificate, dated the
Closing Date and signed by the Chairman of the Board, the President or a Vice
President of the Depositor, ContiMortgage, ContiWest and ContiFinancial,
respectively, stating as it relates to each, as of the Closing Date:
(i) The representations and warranties of the Depositor,
ContiMortgage and ContiWest in this Agreement are true and correct as
of the Closing Date; and the Depositor, ContiMortgage and ContiWest
have complied with each of their respective agreements contained
herein which are to have been complied with on or prior to the Closing
Date;
(ii) The information contained in the Prospectus relating to the
Depositor, ContiMortgage, ContiWest and the Home Equity Loans is true
and accurate in all material respects and nothing has come to his or
her attention that would lead such officer to believe that the
Registration Statement or the Prospectus includes any untrue statement
of a material fact or omits to state a material fact necessary to make
the statements therein not misleading;
(iii) There has been no amendment or other document filed
affecting the certificate of incorporation or by-laws of the Depositor
since May 18, 1995 or the certificate of incorporation or by-laws of
ContiMortgage since October 19, 1990 or the Articles of incorporation
or by-laws of ContiWest since January 1, 1997 and no such amendment
has been authorized. No event has occurred since December 31, 1997
which has affected the good standing of the Depositor, ContiMortgage
or ContiWest under the laws of the States of Delaware and Nevada, as
applicable; and
(iv) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Depositor, ContiMortgage, ContiWest or
ContiFinancial from December 31, 1997. No publicly-held debt of
ContiFinancial shall have been downgraded or put on credit watch for
possible downgrade since December 31, 1997; there has been no
suspension of trading in ContiFinancial's publicly-held common stock
since December 31, 1997.
M. The Trustee shall have furnished to the Underwriters and MBIA a
certificate of the Trustee, signed by one or more duly authorized officers of
the Trustee, dated the Closing Date, as to the due authorization, execution and
delivery of the Pooling and Servicing Agreement by the Trustee and the
acceptance by the Trustee of the Trusts created thereby and the due execution,
authentication and delivery of the Certificates by the Trustee thereunder and
such other matters as the Representative shall reasonably request.
N. [Reserved]
O. The Offered Certificates (other than the Subordinate Certificates)
shall have been rated in the highest rating category by Xxxxx'x Investors
Service, Inc. ("Moody's"), Standard & Poor's Rating Services, a division of the
XxXxxx-Xxxx Companies, Inc. ("Standard & Poor's") and Fitch IBCA, Inc. ("Fitch")
and the Subordinate Certificates shall have been rated "Baa3" by Moody's, "BBB-"
by Standard & Poor's and "BBB" by Fitch; no Class of Offered Certificates shall
have been put on credit watch for possible downgrade.
P. The Depositor shall have furnished to the Underwriters such further
information, certificates and documents as the Underwriters may reasonably have
requested not less than three full business days prior to the Closing Date.
Q. Prior to the Closing Date, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the
Certificates as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained, and
all proceedings taken by the Depositor in connection with the issuance and sale
of the Certificates as herein contemplated shall be satisfactory in form and
substance to the Underwriters and counsel for the Underwriters.
R. Subsequent to the execution and delivery of this Agreement none of
the following shall have occurred: (i) trading in securities generally on the
New York Stock Exchange, the American Stock Exchange or the over-the-counter
market shall have been suspended or minimum prices shall have been established
on either of such exchanges or such market by the Commission, by such exchange
or by any other regulatory body or governmental authority having jurisdiction;
(ii) a banking moratorium shall have been declared by Federal or state
authorities; (iii) the United States shall have become engaged in hostilities,
there shall have been an escalation of hostilities involving the United States
or there shall have been a declaration of a national emergency or war by the
United States; or (iv) there shall have occurred such a material adverse change
in general economic, political or financial conditions (or the effect of
international conditions on the financial markets of the United States shall be
such) as to make it in each of the instances set forth in clauses (i), (ii),
(iii) and (iv) herein, in the reasonable judgment of the Underwriters,
impractical or inadvisable to proceed with the public offering or delivery of
the Certificates on the terms and in the manner contemplated in the Prospectus.
S. The Representative shall have received letters, including
bring-down letters, from Xxxxxx Xxxxxxxx LLP, dated on or before the Closing
Date, in form and substance satisfactory to the Representative and counsel for
the Underwriters, to the effect that they have performed certain specified
procedures requested by the Representative with respect to the information set
forth in the Prospectus and certain matters relating to ContiMortgage and
ContiWest.
T. The Underwriters shall have received any other opinions delivered
to the Ratings Agencies.
U. The Policy shall have been duly executed and issued at or prior to
the Closing Date and shall conform in all material respects to the description
thereof in the Prospectus. The Insurance Agreement and the Indemnification
Agreement shall each have been duly executed and delivered by MBIA and the other
parties thereto at or prior to the Closing Date.
V. The Underwriters shall have received a favorable opinion of Xxxxx
Xxxx, counsel to MBIA, dated the Closing Date and in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) MBIA is a stock insurance corporation, duly incorporated and
validly existing under the laws of the State of New York. MBIA is
validly licensed to do business in New York and is authorized to issue
the Policy and perform its obligations under the Policy in accordance
with the terms thereof.
(ii) The execution and delivery by MBIA of the Policy and the
Indemnification Agreement are within the corporate power of MBIA and
have been authorized by all necessary corporate action on the part of
MBIA; the Policy has been duly executed and is the valid and binding
obligation of the Insurer enforceable in accordance with its terms
except that the enforcement of the Policy may be limited by laws
relating to bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting creditors' rights
generally and by general principles of equity.
(iii) MBIA is authorized to deliver the Indemnification
Agreement, and such agreement has been duly executed and delivered and
constitutes the legal, valid and binding obligations of MBIA
enforceable in accordance with its terms except that the enforcement
of the Indemnification Agreement may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium, receivership and
other similar laws affecting creditors' rights generally and by
general principles of equity and by public policy considerations
relating to indemnification for securities law violations.
In rendering this opinion, such counsel may rely, as to matters of
fact, on certificates of responsible officers of MBIA and public officials. Such
opinion may assume the due authorization, execution and delivery of the
instruments and documents referred to therein by the parties thereto other than
MBIA.
W. The Underwriters shall have received from MBIA a certificate,
signed by the president, a senior vice president or a vice president of MBIA,
dated the Closing Date, to the effect that the signer of such certificate has
carefully examined the Policy, the Indemnification Agreement and the related
documents and that, to the best of his or her knowledge based on reasonable
investigation:
(i) There are no actions, suits or proceedings pending or
threatened against or affecting MBIA which, if adversely determined,
individually or in the aggregate, would adversely affect the Insurer's
performance under the Policy or the Indemnification Agreement;
(ii) Each person who as an officer or representative of MBIA,
signed or signs the Policy, the Indemnification Agreement or any other
document delivered pursuant hereto, on the date thereof, or on the
Closing Date, in connection with the transactions described in this
Agreement was, at the respective times of such signing and delivery,
and is now, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such persons
appearing on such documents are their genuine signatures;
(iii) The information contained in the Prospectus Supplement
under the captions "Credit Enhancement - The Certificate Insurance
Policy" and "The Certificate Insurer" is true and correct in all
material respects and does not omit to state a material fact with
respect to the description of the Policy or the ability of MBIA to
meet its payment obligations under the Policy;
(iv) The tables regarding MBIA's capitalization set forth under
the caption "The Certificate Insurer" presents fairly the
capitalization of the Insurer as of December 31, 1997;
(v) On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating accorded
the claims paying ability of MBIA by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of the Securities Act;
(vi) The audited balance sheet of MBIA as of December 31, 1997
and the related statement of income and retained earnings for the
fiscal year then ended, and the accompanying footnotes, together with
the related opinion of an independent certified public accountant,
copies of which are incorporated by reference in the Prospectus
Supplement, fairly present in all material respects the financial
condition of MBIA as of such date and for the period covered by such
statements in accordance with generally accepted accounting principles
consistently applied; the unaudited balance sheet of MBIA as of
December 31, 1997 and the related statement of income and retained
earnings for the three-month period then ended, copies of which are
included in the Prospectus Supplement, fairly present in all material
respects the financial condition of MBIA as of such date and for the
period covered by such statements in accordance with generally
accepted accounting principles applied consistently with those
principles applied in preparing the December 31, 1997 audited
statements.
(vii) to the best knowledge of such officer, since December 31,
1997, no material adverse change has occurred in the financial
position of MBIA other than as set forth in the Prospectus Supplement.
The officer of MBIA certifying to items (v) - (vii) shall be an
officer in charge of a principal financial function.
MBIA shall attach to such certificate a true and correct copy of its
certificate or articles of incorporation, as appropriate, and its by-laws, all
of which are in full force and effect on the date of such certificate.
If any condition specified in this Section VII shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriters by notice to the Depositor at any time at or prior to the
Closing Date, and such termination shall be without liability of any party to
any other party except as provided in Section VII.
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 Underwriters.
SECTION VII. PAYMENT OF EXPENSES. The Depositor agrees to pay:
(a) the costs incident to the authorization, issuance, sale and
delivery of the Certificates and any taxes payable in connection therewith; (b)
the costs incident to the preparation, printing and filing under the Securities
Act of the Registration Statement and any amendments and exhibits thereto; (c)
the costs of distributing the Registration Statement as originally filed and
each amendment thereto and any post-effective amendments thereof (including, in
each case, exhibits), the Prospectus and any amendment or supplement to the
Prospectus or any document incorporated by reference therein, all as provided in
this Agreement; (d) the costs of reproducing and distributing this Agreement;
(e) the fees and expenses of Xxxxx Xxxxxxxxxx LLP in qualifying the Certificates
under the securities laws of the several jurisdictions as provided in Section V
(G) hereof and of preparing, printing and distributing a Blue Sky Memorandum and
a Legal Investment Survey (including related fees and expenses of counsel to the
Representative); (f) any fees charged by securities rating services for rating
the Offered Certificates; (g) the cost of the accountants comfort letter
relating to the Prospectus; and (h) all other costs and expenses incidental to
the performance of the obligations of the Depositor (including costs and
expenses of counsel to the Depositor); PROVIDED THAT, except as provided in this
Section VII, the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel, any transfer taxes on the Offered
Certificates which they may sell and the expenses of advertising any offering of
the Offered Certificates made by the Underwriters, and the Underwriters shall
pay the cost of any accountant's comfort letters relating to any Computational
Materials (as defined herein).
If this Agreement is terminated by the Underwriters in accordance with
the provisions of Section VI or Section XI, the Depositor shall cause the
Underwriters to be reimbursed for all reasonable out-of-pocket expenses,
including fees and disbursements of Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters.
SECTION VIII. INDEMNIFICATION AND CONTRIBUTION.
A. The Depositor agrees to indemnify and hold harmless each
Underwriter, each Underwriter's respective officers and directors and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Securities Act from and against any and all loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of the Offered Certificates), to which such Underwriter or
any such controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any amendment thereof
or supplement thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (iii) any untrue statement or alleged untrue statement
of a material fact contained in the Prospectus, or any amendment thereof or
supplement thereto, or (iv) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading and shall reimburse such Underwriter and each such controlling person
promptly upon demand for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; PROVIDED, HOWEVER, that the Depositor
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
the Prospectus, or any amendment thereof or supplement thereto, or the
Registration Statement, or any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Depositor by or on behalf of such Underwriter through the Representative,
specifically for inclusion therein. The foregoing indemnity agreement is in
addition to any liability which the Depositor may otherwise have to any
Underwriter or any such officer or director or any controlling person of any
such Underwriter.
B. Each Underwriter severally agrees to indemnify and hold harmless
the Depositor, each of its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Depositor
within the meaning of Section 15 of the Securities Act against any and all loss,
claim, damage or liability, or any action in respect thereof, to which the
Depositor or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereof or supplement thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (iii)
any untrue statement or alleged untrue statement of a material fact contained in
the Prospectus, or any amendment thereof or supplement thereto, or (iv) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Depositor by or on behalf of such Underwriter
specifically for inclusion therein, and shall reimburse the Depositor and any
such director, officer or controlling person for any legal or other expenses
reasonably incurred by the Depositor or any director, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any Underwriter may otherwise have to the Depositor or any such director,
officer or controlling person.
C. Promptly after receipt by any indemnified party under this Section
VIII of notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section VIII, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section VIII except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section
VIII.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, except to the extent
provided in the next following paragraph, the indemnifying party shall not be
liable to the indemnified party under this Section VIII for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to one local counsel per jurisdiction) at any time for all such
indemnified parties, which firm shall be designated in writing by the related
Underwriter, if the indemnified parties under this Section VIII consist of one
or more Underwriters or any of its or their controlling persons, or the
Depositor, if the indemnified parties under this Section VIII consist of the
Depositor or any of the Depositor's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section VIII (A) and (B), shall use its reasonable best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject of such action.
Notwithstanding the foregoing paragraph, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement.
D. Each Underwriter agrees to provide the Depositor no later than two
Business Days prior to the day on which the Prospectus Supplement is required to
be filed pursuant to Section I (A) hereof with a copy of any Computational
Materials (defined below) produced by such Underwriter for filing with the
Commission on Form 8-K.
E. Each Underwriter severally agrees, to indemnify and hold harmless
the Depositor, each of the Depositor's officers and directors and each person
who controls the Depositor within the meaning of Section 15 of the Securities
Act against any and all losses, claims, damages or liabilities, to which they
may become subject under the Securities 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 of a material fact contained in the
Computational Materials provided by such Underwriter, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading when read in conjunction with the
Prospectus, and agrees to reimburse each such indemnified party for any legal or
other expenses reasonably incurred by him, her or it in connection with
investigating or defending or preparing to defend any such loss, claim, damage,
liability or action as such expenses are incurred; PROVIDED, HOWEVER, that in no
event shall an Underwriter be liable to the Depositor under this paragraph E in
an amount in excess of the fees received by such Underwriter in connection with
the offering of the Offered Certificates. The obligations of an Underwriter
under this Section VIII (E) shall be in addition to any liability which such
Underwriter may otherwise have.
The procedures set forth in Section VIII (C) shall be equally
applicable to this Section VIII (E).
F. The Depositor agrees to indemnify and hold harmless each
Underwriter, each Underwriter's respective officers and directors and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of the Offered Certificates), to which they may become
subject, under the Securities 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 of a material fact contained in the Seller Provided
Information (as defined below) provided by the Company, 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
the light of the circumstances under which they were made, not misleading, and
agrees to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by him, her or it in connection with investigating or
defending or preparing to defend any such loss, claim, damage, liability or
action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which the Depositor may otherwise have to any
Underwriter or any such officer or director or any controlling person of any
such Underwriter.
The procedures set forth in Section VIII (C) shall be equally
applicable to this Section VIII (F).
G. If the indemnification provided for in this Section VIII shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section VIII (A), (B), (E) or (F) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Depositor on the one hand and the Underwriters on the other from
the offering of the relevant class of Offered Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law or if
the indemnified party failed to give the notice required under Section VIII (C),
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Depositor on
the one hand and the related Underwriter on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations.
The relative benefits of an Underwriter and the Depositor shall be
deemed to be in such proportion as the sum of the original principal amount of
the offering, plus the total proceeds to the Depositor from the sale of the
Class A-10 IO Certificates (before deducting expenses) bears to the total
underwriting discounts and commissions received by the related Underwriter from
time to time in negotiated sales of the related Offered Certificates.
The relative fault of an Underwriter and the Depositor shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Depositor or by such Underwriter, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission and other equitable
considerations.
The Depositor and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section VIII (G) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purposes) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
VIII (G) shall be deemed to include, for purposes of this Section VIII (G), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
For purposes of this Section VIII, in no case shall any Underwriter
(except with respect to any document (other than the Computational Materials)
incorporated by reference into the Registration Statement or Prospectus at the
request of such Underwriter through the Representative and except as may be
provided in any agreement among the Underwriters relating to the offering of the
Offered Certificates) be responsible for any amount in excess of the amount by
which (x) the amount received by such Underwriter in connection with its sale of
the Offered Certificates exceeds (y) the amount paid by such Underwriter to the
Depositor for the Offered Certificates hereunder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of
fraudulent misrepresentation.
H. For purposes of this Section VIII, as to each Underwriter the term
"Computational Materials" means collectively, "Computational Materials,"
"Collateral Term Sheets" and "Structural Term Sheets" as such terms are defined
in the No-Action Letter of May 20, 1994 issued by the Securities and Exchange
Commission (the "Commission") to Xxxxxx, Xxxxxxx Acceptance Corporation I,
Xxxxxx, Xxxxxxx & Co. Incorporated and Xxxxxx Structured Asset Corporation, as
made applicable to other issuers and underwriters by the Commission in response
to the request of the Public Securities Association dated May 24, 1994, and the
No-Action Letter of February 17, 1995 issued by the Commission to the Public
Securities Association, PROVIDED, that the term Computational Materials shall
not include any Seller Provided Information. "Seller Provided Information" means
any computer tape (or other information) furnished to any Underwriter by any
Seller concerning the assets comprising the Trust.
I. The Underwriters confirm that the information set forth in the last
paragraph on the cover page of and under the caption "Underwriting" in the
Prospectus Supplement and the Computational Materials are correct and constitute
the only information furnished in writing to the Depositor by or on behalf of
any Underwriter specifically for inclusion in the Registration Statement and the
Prospectus.
SECTION IX. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Depositor submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Underwriters or controlling
persons thereof, or by or on behalf of the Depositor, and shall survive delivery
of any Offered Certificates to the Underwriters.
SECTION X. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters participating in the public offering of the Offered
Certificates shall fail at the Closing Date to purchase the Offered Certificates
which it is (or they are) obligated to purchase hereunder (the "Defaulted
Certificates"), then the non-defaulting Underwriters shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Certificates in such amounts as may be agreed
upon and upon the terms herein set forth. If, however, the Underwriters have not
completed such arrangements within such 24-hour period, then
(i) if the aggregate principal amount of Defaulted Certificates
does not exceed 10% of the aggregate principal amount of the Offered
Certificates to be purchased pursuant to this Agreement, the
non-defaulting Underwriters named in this Agreement shall be obligated
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all such non-defaulting Underwriters, or
(ii) if the aggregate principal amount of Defaulted Certificates
exceeds 10% of the aggregate principal amount of the Offered
Certificates to be purchased pursuant to this Agreement, this
Agreement shall terminate, without any liability on the part of any
non-defaulting Underwriters.
No action taken pursuant to this Section X shall relieve any
defaulting Underwriter from the liability with respect to any default of such
Underwriter under this Agreement.
In the event of a default by any Underwriter as set forth in this
Section X, each of the Underwriters and the Depositors shall have the right to
postpone the Closing Date for a period not exceeding five Business Days in order
that any required changes in the Registration Statement or Prospectus or in any
other documents or arrangements may be effected.
SECTION XI. TERMINATION OF AGREEMENT. The Underwriters may terminate
this Agreement immediately upon notice to the Depositor, at any time at or prior
to the Closing Date if any of the events or conditions described in Section VI
(R) of this Agreement shall occur and be continuing, or if any other closing
condition set forth in Section VI shall not have been fulfilled when required to
be fulfilled. In the event of any such termination, the covenant set forth in
Section V (H), the provisions of Section VII, the indemnity and contribution
agreements set forth in Section VIII, and the provisions of Sections IX, XIV and
XVI shall remain in effect.
SECTION XII. NOTICES. All statements, requests, notices and agreements
hereunder shall be in writing, and:
A. if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Bear, Xxxxxxx & Co. Inc., Attention: Asset Backed
Securities Group (Fax: 000-000-0000); and
B. if to the Depositor, shall be delivered or sent by mail, telex or
facsimile transmission to care of ContiSecurities Asset Funding Corp., 0000 Xxxx
Xxxxxxxxxx Xxxxxxxxx, Xxx Xxxxx, Xxxxxx 00000, with a copy to ContiFinancial
Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Counsel
(Fax: 000-000-0000).
SECTION XIII. PERSONS ENTITLED TO THE BENEFIT OF THIS AGREEMENT. This
Agreement shall inure to the benefit of and be binding upon the Underwriters and
the Depositor, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
the representations, warranties, indemnities and agreements contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any of the Underwriters within the meaning of Section 15 of
the Securities Act, and for the benefit of each Underwriter's respective
officers and directors and for the benefit of directors of the Depositor,
officers of the Depositor who have signed the Registration Statement and any
person controlling the Depositor within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section XIII, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
SECTION XIV. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Depositor and the Underwriters contained in
this Agreement, or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Certificates and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
SECTION XV. DEFINITION OF THE TERM "BUSINESS DAY". For purposes of
this Agreement, "Business Day" means any day on which the New York Stock
Exchange, Inc. is open for trading.
SECTION XVI. GOVERNING LAW: SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to the principles of
conflicts of law thereof.
The parties hereto hereby submit to the jurisdiction of the United
States District Court for the Southern District of New York and any court in the
State of New York located in the City and County of New York, and appellate
court from any thereof, in any action, suit or proceeding brought against it or
in connection with this Agreement or any of the related documents or the
transactions contemplated hereunder or for recognition or enforcement of any
judgment, and the parties hereto hereby agree that all claims in respect of any
such action or proceeding may be heard or determined in New York State court or,
to the extent permitted by law, in such federal court.
The parties hereto hereby irrevocably waive, to the fullest extent
permitted by law, any and all rights to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
SECTION XVII. COUNTERPARTS. This Agreement may be executed in
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION XVIII. HEADINGS. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the
Depositor and the Underwriters, please indicate your acceptance in the space
provided for the purpose below.
Very truly yours,
CONTISECURITIES ASSET FUNDING CORP.
By:...................................
Name:
Title:
By:...................................
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
BEAR, XXXXXXX & CO. INC.
Acting on its own behalf and as Representative of the Several Underwriters
referred to in the foregoing Agreement
By:........................
Name:
Title:
CONTIMORTGAGE CORPORATION CONTIWEST CORPORATION
Accepts and hereby agrees solely to the provisions of SecAccepts(and xxxxxx
agrees solely to the provisions of Section V (I)
By: By:....................
Name: Name:
Title: Title:
By:............................................. By:....................
Name: Name:
Title: Title:
SCHEDULE A
Class A-1 Certificates
UNDERWRITERS Principal Amount Underwriting
DISCOUNT
Bear, Xxxxxxx & Co. Inc. $17,179,170 0.0800%
Credit Suisse First Boston Corporation $17,179,166 0.0800%
Greenwich Capital Markets, Inc. $17,179,166 0.0800%
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated $17,179,166 0.0800%
Xxxxxx Xxxxxxx & Co. Incorporated $17,179,166 0.0800%
Nomura Securities International, Inc. $17,179,166 0.0800%
Class A-2 Certificates
UNDERWRITERS Principal Amount Underwriting
DISCOUNT
Bear, Xxxxxxx & Co. Inc. $56,744,335 0.1500%
Credit Suisse First Boston Corporation $56,744,333 0.1500%
Greenwich Capital Markets, Inc. $56,744,333 0.1500%
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated $56,744,333 0.1500%
Xxxxxx Xxxxxxx & Co. Incorporated $56,744,333 0.1500%
Nomura Securities International, Inc. $56,744,333 0.1500%
Class A-3 Certificates
UNDERWRITERS Principal Amount Underwriting
DISCOUNT
Bear, Xxxxxxx & Co. Inc. $61,601,335 0.1850%
Credit Suisse First Boston Corporation $61,601,333 0.1850%
Greenwich Capital Markets, Inc. $61,601,333 0.1850%
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated $61,601,333 0.1850%
Xxxxxx Xxxxxxx & Co. Incorporated $61,601,333 0.1850%
Nomura Securities International, Inc. $61,601,333 0.1850%
Class A-4 Certificates
UNDERWRITERS PRINCIPAL AMOUNT Underwriting
DISCOUNT
Bear, Xxxxxxx & Co. Inc. $21,113,670 0.2500%
Credit Suisse First Boston Corporation $21,113,666 0.2500%
Greenwich Capital Markets, Inc. $21,113,666 0.2500%
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated $21,113,666 0.2500%
Xxxxxx Xxxxxxx & Co. Incorporated $21,113,666 0.2500%
Nomura Securities International, Inc. $21,113,666 0.2500%
Class A-5 Certificates
UNDERWRITERS PRINCIPAL AMOUNT Underwriting
DISCOUNT
Bear, Xxxxxxx & Co. Inc. $20,201,835 0.3250%
Credit Suisse First Boston Corporation $20,201,833 0.3250%
Greenwich Capital Markets, Inc. $20,201,833 0.3250%
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated $20,201,833 0.3250%
Xxxxxx Xxxxxxx & Co. Incorporated $20,201,833 0.3250%
Nomura Securities International, Inc. $20,201,833 0.3250%
Class A-6 Certificates
UNDERWRITERS PRINCIPAL AMOUNT Underwriting
DISCOUNT
Bear, Xxxxxxx & Co. Inc. $13,444,670 0.3500%
Credit Suisse First Boston Corporation $13,444,666 0.3500%
Greenwich Capital Markets, Inc. $13,444,666 0.3500%
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated $13,444,666 0.3500%
Xxxxxx Xxxxxxx & Co. Incorporated $13,444,666 0.3500%
Nomura Securities International, Inc. $13,444,666 0.3500%
Class A-7 Certificates
UNDERWRITERS PRINCIPAL AMOUNT Underwriting
DISCOUNT
Bear, Xxxxxxx & Co. Inc. $18,411,835 0.4000%
Credit Suisse First Boston Corporation $18,411,833 0.4000%
Greenwich Capital Markets, Inc. $18,411,833 0.4000%
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated $18,411,833 0.4000%
Xxxxxx Xxxxxxx & Co. Incorporated $18,411,833 0.4000%
Nomura Securities International, Inc. $18,411,833 0.4000%
Class A-8 Certificates
UNDERWRITERS Underwriting
PRINCIPAL AMOUNT DISCOUNT
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx &
Xxxxx Incorporated $218,675,000 0.2300%
Class A-9 Certificates
UNDERWRITERS PRINCIPAL AMOUNT Underwriting
DISCOUNT
Bear, Xxxxxxx & Co. Inc. $26,057,335 0.2000%
Credit Suisse First Boston Corporation $26,057,333 0.2000%
Greenwich Capital Markets, Inc. $26,057,333 0.2000%
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated $26,057,333 0.2000%
Xxxxxx Xxxxxxx & Co. Incorporated $26,057,333 0.2000%
Nomura Securities International, Inc. $26,057,333 0.2000%
ContiFinancial Services Corporation $15,000,000 0.2000%
Class A-10 IO Certificates
UNDERWRITERS Percentage Interest Underwriting
DISCOUNT
Bear, Xxxxxxx & Co. Inc. 100% 0.5000%
Class B Certificates
UNDERWRITERS PRINCIPAL AMOUNT Underwriting
DISCOUNT
Bear, Xxxxxxx & Co. Inc. $9,633,335 0.6000%
Credit Suisse First Boston Corporation $9,633,333 0.6000%
Greenwich Capital Markets, Inc. $9,633,333 0.6000%
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated $9,633,333 0.6000%
Xxxxxx Xxxxxxx & Co. Incorporated $9,633,333 0.6000%
Nomura Securities International, Inc. $9,633,333 0.6000%
EXHIBIT A
[LETTERHEAD OF CONTIFINANCIAL CORPORATION]
March 5, 1998
Bear, Xxxxxxx & Co. Inc.
As Representative of the Several Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Guaranty is made by ContiFinancial Corporation, a Delaware corporation with
its principal office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("CFC"), in
favor of Bear, Xxxxxxx & Co, Inc., as Representative of the Several
Underwriters, with its principal office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
As an inducement to you and in consideration of your entering into the
Underwriting Agreement referred to below, CFC hereby absolutely, unconditionally
and irrevocably guarantees the prompt performance of the obligations, including
any payment obligations, of ContiSecurities Asset Funding Corp., ("Depositor"),
a Delaware corporation with its principal office at 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, under Section VIII of the Underwriting Agreement, dated as of
March 5, 1998, between Depositor and Bear, Xxxxxxx & Co, Inc., as Representative
of the Several Underwriters. This Guaranty is a guaranty of performance and
payment and not of collection. The obligations of CFC hereunder shall not be
impaired by failure of Depositor to provide notice to CFC of any modification or
amendment of said contract agreed to by the parties thereto. This Guaranty may
be amended only by an instrument in writing executed by the undersigned.
This Guaranty shall be governed by the laws of the State of New York
applicable to agreements made and to be performed in the State of New York
without giving effect to the conflict of law rules thereof.
IN WITNESS WHEREOF, CFC has caused this Guaranty to be executed by duly
authorized corporate officers the day and year first above written.
CONTIFINANCIAL CORPORATION
By:
Name:
Title:
By:
Name:
Title:
ACCEPTED
as of March 5, 1998
BEAR, XXXXXXX & CO. INC.
as representative of the Several Underwriters
By:
Name:
Title:
