Exhibit 1.1
FIRST ALLIANCE MORTGAGE COMPANY
AND
PRUDENTIAL SECURITIES INCORPORATED
UNDERWRITING AGREEMENT
FOR
FIRST ALLIANCE MORTGAGE LOAN TRUST 1998-4
MORTGAGE LOAN ASSET BACKED CERTIFICATES
6.225% CLASS A-1 FIXED RATE GROUP CERTIFICATES
CLASS A-2 VARIABLE RATE GROUP CERTIFICATES
December 7, 1998
December 7, 1998
First Alliance Mortgage Company
00000 Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Prudential Securities Incorporated,
Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
First Alliance Mortgage Company (the "Seller") hereby confirms
its agreement to sell certain mortgage loan asset backed certificates to
Prudential Securities Incorporated (the "Underwriter") as described herein
relating to the First Alliance Mortgage Loan Trust 1998-4 (the "Trust"). The
certificates, together with certain subordinate certificates to be issued by the
Trust, will evidence in the aggregate the entire beneficial interest in a trust
estate (the "Trust Estate") consisting of two pools (the "Mortgage Pools") of
closed-end mortgage loans (the "Initial Mortgage Loans") and such amounts as may
be held by the Trustee in the Pre-Funding Account (the "Pre-Funding Account"),
the Capitalized Interest Account (the "Capitalized Interest Account") and any
other accounts held by the Trustee for the Trust. The Initial Mortgage Loans
shall have, as of the close of business on December 1, 1998 (the "Cut-Off
Date"), an aggregate principal balance of $95,143,674.38. The certificates are
to be issued under a pooling and servicing agreement dated as of December 1,
1998 (the "Pooling and Servicing Agreement"), among the Seller, in its
individual capacity and in its capacity as servicer (the "Servicer") and Norwest
Bank Minnesota, National Association, in its capacity as trustee (the "Trustee")
and in its capacity as master servicer (the "Master Servicer"). On the Closing
Date, approximately $24,856,325.62 will be deposited in the name of the Trustee
in the Pre-Funding Account from the sale of the Certificates. It is intended
that additional Mortgage Loans satisfying the criteria specified in the Pooling
and Servicing Agreement (the "Subsequent Mortgage Loans") will be purchased by
the Trust for inclusion in both Group I and Group II from the Seller from time
to time on or before December 31, 1998 from funds on deposit in the Pre-Funding
Account at the time of execution and delivery of each Subsequent Transfer
Agreement ("Subsequent Transfer Agreement"). Funds in the Capitalized Interest
Account will be applied by the Trustee to cover shortfalls in interest during
the Funding Period.
On or prior to the date of issuance of the Certificates, the
Seller will obtain two certificate guaranty insurance policies (the "Policies")
issued by MBIA Insurance Corporation (the "Insurer") which will unconditionally
and irrevocably guarantee to the Trustee for the benefit of the holders of the
Class A-1 Certificates and the Class A-2 Certificates full and complete payment
of all amounts payable on the Class A-1 Certificates and the Class A-2
Certificates. All capitalized terms used but not otherwise defined herein have
the respective meanings set forth in the form of Pooling and Servicing Agreement
heretofore delivered to the Underwriter.
1. Securities. The certificates will be issued in classes as
follows: (i) a senior class with respect to each Mortgage Loan Group consisting
of the Class A-1 Fixed Rate Group Certificates (the "Class
A-1 Certificates") and the Class A-2 Variable Rate Group Certificates (the
"Class A-2 Certificates" and collectively with the Class A-1 Certificates, the
"Class A Certificates") and (ii) a residual class (the "Class R Certificates").
The Class A Certificates and the Class R Certificates are hereinafter referred
to as the "Certificates."
2. Representations and Warranties of the Seller. The Seller
represents and warrants to, and covenants with, the Underwriter that:
A. The Seller has filed with the Securities and Exchange
Commission (the "Commission"), a registration statement (No. 333-44585) on Form
S-3 for the registration under the Securities Act of 1933, as amended (the
"Act"), of Mortgage Loan Asset Backed Certificates and Notes (issuable in
series), which registration statement, as amended at the date hereof, has become
effective. Such registration statement, as amended to the date of this
Agreement, meets the requirements set forth in Rule 415(a)(1)(vii) under the Act
and complies in all other material respects with such Rule. The Seller proposes
to file with the Commission pursuant to Rule 424(b)(5) under the Act, a
supplement dated December 7, 1998 to the prospectus dated March 10, 1998
relating to the Certificates and the method of distribution thereof and has
previously advised the Underwriter of all further information (financial and
other) with respect to the Certificates to be set forth therein. Such
registration statement, including the exhibits thereto, as amended at the date
hereof, is hereinafter called the "Registration Statement"; such prospectus
dated March 10, 1998, in the form in which it will be filed with the Commission
pursuant to Rule 424(b)(5) under the Act is hereinafter called the "Basic
Prospectus"; such supplement dated December 7, 1998 to the Basic Prospectus, in
the form in which it will be filed with the Commission pursuant to Rule
424(b)(5) of the Act, is hereinafter called the "Prospectus Supplement"; and the
Basic Prospectus and the Prospectus Supplement together are hereinafter called
the "Prospectus." The Seller will file with the Commission (i) promptly after
receipt from the Underwriter of any Computational Material (as defined herein) a
Form 8-K incorporating such Computational Materials and (ii) within fifteen days
of the issuance of the Certificates a report on Form 8-K setting forth specific
information concerning the related Mortgage Loans (the "8-K").
B. As of the date hereof, when the Registration Statement
became effective, when the Prospectus Supplement is first filed pursuant to Rule
424(b)(5) under the Act, and at the Closing Date, (i) the Registration
Statement, as amended as of any such time, and the Prospectus, as amended or
supplemented as of any such time, will comply in all material respects with the
applicable requirements of the Act and the rules thereunder and (ii) the
Registration Statement, as amended as of any such time, did not and will not
contain any untrue statement of a material fact and did not and will not omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus, as amended or supplemented
as of any such time, did not and will not contain an untrue statement of a
material fact and did not and will not omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the Seller makes
no representations or warranties as to the information contained in or omitted
from the Registration Statement or the Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with the information
furnished in writing to the Seller by or on behalf of the Underwriter
specifically for use in connection with the preparation of the Registration
Statement and the Prospectus.
2
C. The Seller is duly organized, validly existing and in good
standing under the laws of the State of California, has full power and authority
(corporate and other) to own its properties and conduct its business as now
conducted by it, and as described in the Prospectus, and is duly qualified to do
business in each jurisdiction in which it owns or leases real property (to the
extent such qualification is required by applicable law) or in which the conduct
of its business requires such qualification except where the failure to be so
qualified does not involve (i) a material risk to, or a material adverse effect
on, the business, properties, financial position, operations or results of
operations of the Seller or (ii) any risk whatsoever as to the enforceability of
any Mortgage Loan.
D. There are no actions, proceedings or investigations pending,
or, to the knowledge of the Seller, threatened, before any court, governmental
agency or body or other tribunal (i) asserting the invalidity of this Agreement,
the Certificates, the Insurance Agreement, the Indemnification Agreement or of
the Pooling and Servicing Agreement, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated by this
Agreement, the Pooling and Servicing Agreement or any Subsequent Transfer
Agreement, (iii) which may, individually or in the aggregate, materially and
adversely affect the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement, the Certificates, the Pooling and
Servicing Agreement or any Subsequent Transfer Agreement, or (iv) which may
affect adversely the federal income tax attributes of the Certificates as
described in the Prospectus.
E. The execution and delivery by the Seller of this Agreement,
the Indemnification Agreement, the Insurance Agreement and the Pooling and
Servicing Agreement, the issuance of the Certificates and the transfer and
delivery of the Mortgage Loans to the Trustee by the Seller are within the
corporate power of the Seller and have been, or will be, prior to the Closing
Date duly authorized by all necessary corporate action on the part of the Seller
and the execution and delivery of such instruments, the consummation of the
transactions therein contemplated and compliance with the provisions thereof
will not result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any statute or any agreement or instrument to
which the Seller or any of its affiliates is a party or by which it or any of
them is bound or to which any of the property of the Seller or any of its
affiliates is subject, the Seller's charter or bylaws, or any order, rule or
regulation of any court, governmental agency or body or other tribunal having
jurisdiction over the Seller, any of its affiliates or any of its or their
properties; and no consent, approval, authorization or order of, or filing with,
any court or governmental agency or body or other tribunal is required for the
consummation of the transactions contemplated by this Agreement or the
Prospectus in connection with the issuance and sale of the Certificates by the
Seller except pursuant to the Act. Neither the Seller nor any of its affiliates
is a party to, bound by or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any statute, order,
rule or regulation of any court, governmental agency or body or other tribunal
having jurisdiction over the Seller or any of its affiliates, which materially
and adversely affects, or may in the future materially and adversely affect, (i)
the ability of the Seller to perform its obligations under the Pooling and
Servicing Agreement, this Agreement, the Insurance Agreement, the
Indemnification Agreement and any Subsequent Transfer Agreement or (ii) the
business, operations, results of operations, financial position, income,
properties or assets of the Seller, taken as a whole.
F. This Agreement and the Indemnification Agreement have been
duly executed and delivered by the Seller, and the Pooling and Servicing
Agreement, the Insurance Agreement and any Subsequent Transfer Agreement will be
duly executed and delivered by the Seller, and each constitutes and/or will
constitute, as applicable, the legal, valid and binding obligation of the Seller
enforceable in accordance with their respective terms, except as enforceability
may be limited by (i) bankruptcy, insolvency, liquidation, receivership,
moratorium, reorganization or other similar laws affecting the enforcement of
the rights of creditors and (ii) general principles of equity, whether
enforcement is sought in a proceeding at law or in equity.
3
G. The Certificates will conform in all material respects to
the description thereof to be contained in the Prospectus and will be duly and
validly authorized and, when duly and validly executed, authenticated, issued
and delivered in accordance with the Pooling and Servicing Agreement and sold to
the Underwriter as provided herein, will be validly issued and outstanding and
entitled to the benefits of the Pooling and Servicing Agreement.
H. On the Closing Date, the Initial Mortgage Loans will conform
in all material respects to the description thereof contained in the Prospectus
and the representations and warranties contained in this Agreement will be true
and correct in all material respects. The representations and warranties set out
in the Pooling and Servicing Agreement are hereby made to the Underwriter as
though set out herein, and at the dates specified in the Pooling and Servicing
Agreement, and in any Subsequent Transfer Agreement, such representations and
warranties were, or will be, true and correct in all material respects.
I. The transfer of the Initial Mortgage Loans to the Trust on
the Closing Date will be treated by the Seller for financial accounting and
reporting purposes as a sale of assets and not as a pledge of assets to secure
debt.
J. The Seller possesses all material licenses, certificates,
permits or other authorizations issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by it and as described in the Prospectus and, except as noted in the
Prospectus Supplement under the caption "RISK FACTORS -- Litigation", there are
no proceedings, pending or, to the best knowledge of the Seller, threatened,
relating to the revocation or modification of any such license, certificate,
permit or other authorization which singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would materially and adversely
affect the business, operations, results of operations, financial position,
income, property or assets of the Seller taken as a whole.
K. Any taxes, fees and other governmental charges in connection
with the execution and delivery of this Agreement, the Insurance Agreement, the
Indemnification Agreement, and the Pooling and Servicing Agreement or the
execution and issuance of the Certificates have been or will be paid on or prior
to the Closing Date.
L. There has not been 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 Seller
or its subsidiaries, taken as a whole, from September 30, 1998 to the date
hereof.
M. This Agreement and the Pooling and Servicing Agreement will
conform in all material respects to the descriptions thereof contained in the
Prospectus.
N. The Seller is not aware of (i) any request by the Commission
for any further amendment of the Registration Statement or the Prospectus or for
any additional information, (ii) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose or (iii) any
notification with respect to the suspension of the qualification of the
Certificates for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose.
O. Each assignment of Mortgages required to be prepared
pursuant to the Pooling and Servicing Agreement is based on forms recently
utilized by the Seller with respect to mortgaged properties located in the
appropriate jurisdiction and used in the regular course of the Seller's
business. Based on the Seller's experience with such matters it is reasonable to
believe that upon execution each such assignment will be in recordable form and
will be sufficient to effect the assignment of the Mortgage to which it relates
as provided in the Pooling and Servicing Agreement.
4
P. The Seller is current in all filings under the Securities
Exchange Act and is eligible to use the Registration Statement.
Any certificate signed by any officer of the Seller and
delivered to the Underwriter in connection with the sale of the Certificates
hereunder shall be deemed a representation and warranty as to the matters
covered thereby by the Seller to each person to whom the representations and
warranties in this Section 2 are made.
3. Agreements of the Underwriter.
A. The Underwriter agrees with the Seller that upon
the execution of this Agreement and authorization by the Underwriter of the
release of the Class A Certificates, the Underwriter shall offer the Class A
Certificates for sale upon the terms and conditions set forth in the Prospectus
as amended or supplemented.
B. The Underwriter may prepare and provide to
prospective investors certain Computational Materials and ABS Term Sheets in
connection with the offering of the Class A Certificates, subject to the
following conditions:
1. In connection with the use of
Computational Materials, the Underwriter shall comply with all
applicable requirements of the No-Action Letter, dated May 20, 1994,
issued by the Division of Corporation Finance of the Commission to
Xxxxxx, Peabody Acceptance Corporation I, Xxxxxx, Xxxxxxx & Co.
Incorporated and Xxxxxx Structured Asset Corporation, as made
applicable to other issuers and the Underwriter by the Division of
Corporation Finance of the Commission in response to the request of the
Public Securities Association ("PSA"), dated May 23, 1994
(collectively, the "Xxxxxx/PSA Letters"), as well as the PSA Letter
referred to below. In connection with the use of ABS Term Sheets, the
Underwriter shall comply with all applicable requirements of the
No-Action Letter, dated February 17, 1995, issued by the Division of
Corporation Finance to the Commission to PSA (the "PSA Letter" and,
together with the Xxxxxx/PSA Letters, the "No-Action Letters").
2. The term "Computational Materials" as
used herein shall have the meaning given to such term in the No-Action
Letters, but shall include only those Computational Materials that have
been prepared or delivered to prospective investors by or at the
direction of the Underwriter. The terms "ABS Term Sheets," "Collateral
Term Sheets" and "Structural Term Sheets" as used herein shall have the
meanings given to such terms in the PSA Letter, but shall include only
those ABS Term Sheets, Collateral Term Sheets or Structural Term Sheets
that have been prepared or delivered to prospective investors by or at
the direction of the Underwriter.
3. All Computational Materials and ABS Term
Sheets provided to prospective investors that are required to be filed
pursuant to the No-Action Letters shall bear a legend on each page in a
form previously agreed upon by the Seller and the Underwriter.
4. Any Computational Materials and ABS Term
Sheets are subject to review by and approval of the Seller prior to
their distribution to any prospective investors and a copy of such
Computational Materials and ABS Term Sheets as are delivered to
prospective investors shall, in addition to the foregoing delivery
requirements, be delivered to the Seller simultaneously with delivery
to prospective investors.
5. The Underwriter shall provide to the
Seller, for filing on Form 8-K as provided in Section 9 hereof, five
copies (in such format as required by the Seller) of all Computational
Materials and ABS Term Sheets that are required to be filed with the
Commission pursuant to the No-Action Letters. Each delivery of
Computational Materials or ABS Term Sheets to the Seller pursuant
5
to this paragraph shall be effected by delivering four copies of such
material to counsel for the Seller on behalf of the Seller and one copy
of such materials to the Seller. The Underwriter may provide copies of
the foregoing in a consolidated or aggregate form that includes all
information required to be filed. All Computational Materials and ABS
Term Sheets described in this Section must be provided to the Seller
not later than 10:00 a.m., New York time, on the Business Day before
the date on which filing thereof is required pursuant to the terms of
this Agreement. The Underwriter agrees that it will not provide to any
investor or prospective investor in the Class A Certificates any
Computational Materials or ABS Term Sheets on or after the day on which
Computational Materials and ABS Term Sheets are required to be provided
to the Seller pursuant to this Section (other than copies of
Computational Materials or ABS Term Sheets previously submitted to the
Seller in accordance with this Section for filing pursuant to Section 9
hereof), unless such Computational Materials or ABS Term Sheets are
preceded or accompanied by the delivery of a Prospectus to such
investor or prospective investor.
6. All information included in the
Computational Materials and ABS Term Sheets shall be generated based on
substantially the same methodology and assumptions that are used to
generate the information in the Prospectus Supplement as set forth
therein; provided, however, that the Computational Materials and ABS
Term Sheets may include information based on alternative methodologies
or assumptions specified therein. If any Computational Materials or ABS
Term Sheets that are required to be filed were based on assumptions
with respect to the Mortgage Loans that are incorrect, that differ from
the final information about the Mortgage Pools in any material respect
or on structuring terms that were revised in any material respect prior
to the printing of the Prospectus, to the extent the Prospectus
Supplement does not specifically correct such inaccuracies, the
Underwriter shall prepare revised Computational Materials or ABS Term
Sheets, as the case may be, based on the final information about the
Mortgage Pools and structuring assumptions, circulate such revised
Computational Materials or ABS Term Sheets, as the case may be, to all
recipients of the preliminary versions thereof that indicated orally to
the Underwriter that they would purchase all or any portion of the
Class A Certificates and include such revised Computational Materials
or ABS Term Sheets (marked "as revised") in the materials delivered to
the Seller pursuant to 3.B.5.
7. The Seller shall not be obligated to file
any Computational Materials or ABS Term Sheets that (i) in the
reasonable determination of the Seller and the Underwriter and their
respective counsel are not required to be filed pursuant to the
No-Action Letters or (ii) have been determined to contain any material
error or omission, provided that, at the request of the Underwriter,
the Seller will file Computational Materials or ABS Term Sheets that
contain a material error or omission if clearly marked "superseded by
materials dated _____________" and accompanied by corrected
Computational Materials or ABS Term Sheets that are marked "material
previously dated __________________, as corrected." In the event that
at any time when a prospectus relating to the Class A Certificates is
required to be delivered under the Securities Act, any Computational
Materials or ABS Term Sheets are determined, in the reasonable judgment
of the Seller or the Underwriter to contain a material error or
omission, the Underwriter shall prepare a corrected version of such
Computational Materials or ABS Term Sheets, shall circulate such
corrected version of such Computational Materials or ABS Term Sheets to
all recipients of the prior version thereof that either indicated
orally to the Underwriter that they would purchase all or any portion
of the Class A Certificates, or actually purchased all or any portion
thereof, and shall deliver copies of such Computational Materials or
ABS Term Sheets (marked "as corrected") to the Seller for filing with
the Commission is a subsequent Form 8-K submission (subject to the
Seller's obtaining an accountant's comfort letter in respect of such
corrected Computational Materials or ABS Term Sheets, which shall be at
the expense of the Underwriter).
C. The Underwriter represents and warrants and agrees with the
Seller that, as of the date hereof and as of the Closing Date, that: (i) the
Computational Materials and ABS Term Sheets furnished to
6
the Seller pursuant to Section 3.B.5 constitute (either in original, aggregated
or consolidated form) all of the materials furnished to prospective investors by
the Underwriter prior to the time of delivery thereof to the Seller that are
required to be filed with the Commission with respect to the Class A
Certificates in accordance with the No-Action Letters, and such Computational
Materials and ABS Term Sheets comply with the requirements of the No-Action
Letters; (ii) on the date any such Computational Materials and ABS Term Sheets
with respect to such Class A Certificates (or any written or electronic
materials furnished to prospective investors on which the Computational
Materials and ABS Term Sheets are based) were last furnished to each prospective
investor and on the date of delivery thereof to the Seller pursuant to Section
3.B.5 and on the related Closing Date, such Computational Materials and ABS
Terms Sheets (or materials) were accurate in all material respects when read in
conjunction with the Prospectus (taking into account the assumptions explicitly
set forth in the Computational Materials), except to the extent of any errors
therein that are caused by errors in information about the Mortgage Pools
provided to the Underwriter by the Seller; (iii) the Underwriter has not and
will not represent to potential investors that any Computational Materials or
ABS Term Sheets were prepared or disseminated on behalf of the Seller; and (iv)
all Computational Materials and ABS Term Sheets (or underlying materials
distributed to prospective investors on which the Computational Materials and
ABS Term Sheets were based) contained and will contain the legend in the form
previously agreed upon by the Seller and the Underwriter as required by Section
3.B.3.
Notwithstanding the foregoing, the Underwriter makes no
representation or warranty as to whether any Computational Materials or ABS Term
Sheets (or any written or electronic materials furnished to prospective
investors on which the Computational Materials or ABS Term Sheets are based)
included or will include any inaccurate statement resulting directly from any
error contained in the information about the Mortgage Pools provided to the
Underwriter by the Seller.
D. If the Underwriter delivers any Computational Materials and
ABS Term Sheets to the Seller, the Underwriter shall also deliver to the Seller
a certificate, dated as of the date hereof, to the effect that the
representations and warranties of the Underwriter contained in this Section 3
are true and correct as of such date. If the Underwriter does not provide any
Computational Materials or ABS Term Sheets to the Seller pursuant to Section
3.B.5, the Underwriter shall be deemed to have represented, as of the Closing
Date, that it did not provide any prospective investors with any information in
written or electronic form in connection with the offering of the Class A
Certificates that is required to be filed with the Commission in accordance with
the No-Action Letters.
4. Purchase, Sale and Delivery of the Class A Certificates. The
Seller hereby agrees, subject to the terms and conditions hereof, to sell the
Class A Certificates to the Underwriter, who, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, hereby agrees to purchase the entire aggregate principal
amount of the Class A Certificates, consisting of the Class A-1 Certificates in
the amount of $96,000,000 and the Class A-2 Certificates in the amount of
$24,000,000. At the time of issuance of the Certificates, the Initial Mortgage
Loans will be sold by the Seller to the Trust pursuant to the Pooling and
Servicing Agreement. The Subsequent Mortgage Loans will be purchased by the
Trust for inclusion in both Mortgage Loan Groups, from time to time on or before
December 31, 1998. The Servicer and the Master Servicer will be obligated, under
the Pooling and Servicing Agreement, to service the Mortgage Loans either
directly or through sub-servicers.
The Class A Certificates to be purchased by the Underwriter
will be delivered by the Seller to the Underwriter (which delivery shall be made
through the facilities of The Depository Trust Company ("DTC")) against payment
of the purchase price therefor, equal to 99.744% of the aggregate principal
amount of each Class of the Class A Certificates, including accrued at the Class
A-1 Pass-Through Rate on the Class A-1 Certificates from December 1, 1998 to,
but not including, the Closing Date, by a same day federal funds wire payable to
the order of the Seller. No accrued interest will be payable on the Class A-2
Variable Rate Group Certificates, which shall be dated their date of delivery.
The Underwriter's fee shall be 45.00 basis points of each of the Class A
Certificates.
7
Settlement shall take place at the offices of Xxxxx & Xxxxxx
LLP, 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, at 10:00 a.m. (E.S.T.), on
December 15, 1998, or at such other time thereafter as the Underwriter and the
Seller determine (such time being herein referred to as the "Closing Date"). The
Class A Certificates will be prepared in definitive form and in such authorized
denominations as the Underwriter may request, registered in the name of Cede &
Co., as nominee of DTC.
The Seller agrees to have the Class A Certificates available
for inspection and review by the Underwriter in New York City not later than
1:00 p.m. (E.S.T.) on the business day prior to the Closing Date.
5. Covenants of the Seller. The Seller covenants and agrees
with the Underwriter that:
A. The Seller will promptly advise the Underwriter and its
counsel (i) when any amendment to the Registration Statement shall have become
effective, (ii) of any request by the Commission for any amendment to the
Registration Statement or the Prospectus or for any additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threatening of
any proceeding for that purpose and (iv) of the receipt by the Seller of any
notification with respect to the suspension of the qualification of the Class A
Certificates for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Seller will not file any amendment to the
Registration Statement or supplement to the Prospectus after the date hereof and
prior to the Closing Date for the Certificates unless the Seller has furnished
the Underwriter and its counsel copies of such amendment or supplement for their
review prior to filing and will not file any such proposed amendment or
supplement to which the Underwriter reasonably objects, unless such filing is
required by law. The Seller will use its best efforts to prevent the issuance of
any stop order suspending the effectiveness of the Registration Statement and,
if issued, to obtain as soon as possible the withdrawal thereof.
B. If, at any time during the period in which the Prospectus is
required by law to be delivered, any event occurs as a result of which the
Prospectus as then amended or supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the Act or the rules under the Act, the Seller will
promptly prepare and file with the Commission, subject to Paragraph A of this
Section 5, an amendment or supplement that will correct such statement or
omission or an amendment that will effect such compliance and, if such amendment
or supplement is required to be contained in a post-effective amendment to the
Registration Statement, will use its best efforts to cause such amendment of the
Registration Statement to be made effective as soon as possible.
C. The Seller will furnish to the Underwriter, without charge,
executed copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a Prospectus by the Underwriter or a dealer may be
required by the Act, as many copies of the Prospectus, as amended or
supplemented, and any amendments and supplements thereto as the Underwriter may
reasonably request. The Seller will pay the expenses of printing (or otherwise
reproducing) all offering documents relating to the offering of the Class A
Certificates.
D. As soon as practicable, but not later than sixteen months
after the date hereof, the Seller will cause the Trust to make generally
available to Owners of the Certificates an earnings statement of the Trust
covering a period of at least 12 months beginning after the effective date of
the Registration Statement which will satisfy the provisions of Section 11(a) of
the Act and, at the option of the Seller, will satisfy the requirements of Rule
158 under the Act.
E. During a period of 20 calendar days from the date as of
which this Agreement is executed, neither the Seller nor any affiliate of the
Seller will, without the Underwriter's prior written consent
8
(which consent shall not be unreasonably withheld), enter into any agreement to
offer or sell mortgage loan asset-backed securities backed by mortgage loans,
except pursuant to this Agreement.
F. So long as any of the Class A Certificates are outstanding,
the Seller will cause to be delivered to the Underwriter (i) all documents
required to be distributed to Owners of the Class A Certificates and (ii) from
time to time, any other information concerning the Trust filed with any
government or regulatory authority that is otherwise publicly available.
G. The Seller, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all expenses
in connection with the transactions contemplated herein, including, but not
limited to, the expenses of printing (or otherwise reproducing) all documents
relating to the offering, the reasonable fees and disbursements of its counsel
and expenses of the Underwriter incurred in connection with (i) the issuance and
delivery of the Certificates, (ii) preparation of all documents specified in
this Agreement, (iii) any fees and expenses of the Trustee, the Insurer and any
other credit support provider (including legal fees), accounting fees and
disbursements, and (iv) any fees charged by investment rating agencies for
rating the Class A Certificates.
H. The Seller agrees that, so long as any of the Class A
Certificates shall be outstanding, it will deliver or cause to be delivered to
the Underwriter (i) the annual statement as to compliance delivered to the
Trustee pursuant to the Pooling and Servicing Agreement, (ii) the annual
statement of a firm of independent public accountants furnished to the Trustee
pursuant to the Pooling and Servicing Agreement as soon as such statement is
furnished to the Seller and (iii) any information required to be delivered by
the Seller or the Servicer to prepare the report by the Trustee pursuant to
Section 7.8 of the form of Pooling and Servicing Agreement heretofore delivered
to the Underwriter.
I. The Seller will enter into the Pooling and Servicing
Agreement, the Insurance Agreement, and all related agreements on or prior to
the Closing Date.
J. The Seller will endeavor to qualify the Class A Certificates
for sale to the extent necessary under any state securities or Blue Sky laws in
any jurisdictions as may be reasonably requested by the Underwriter, if any, and
will pay all expenses (including fees and disbursements of counsel) in
connection with such qualification and in connection with the determination of
the eligibility of the Class A Certificates for investment under the laws of
such jurisdictions as the Underwriter may reasonably designate, if any.
6. Conditions of the Underwriter's Obligation. The obligation
of the Underwriter to purchase and pay for the Class A Certificates as provided
herein shall be subject to the accuracy as of the date hereof and the Closing
Date (as if made at the Closing Date) of the representations and warranties of
the Seller contained herein (including those representations and warranties set
forth in the Pooling and Servicing Agreement and incorporated herein), to the
accuracy of the statements of the Seller made in any certificate or other
document delivered pursuant to the provisions hereof, to the performance by the
Seller of its obligations hereunder, and to the following additional conditions:
A. The Registration Statement shall have become effective no
later than the date hereof, and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened, and the Prospectus shall have
been filed pursuant to Rule 424(b).
B. The Underwriter shall have received the Pooling and
Servicing Agreement and the Class A Certificates in form and substance
satisfactory to the Underwriter, duly executed by all signatories required
pursuant to the respective terms thereof.
9
C.1. The Underwriter shall have received the favorable opinion
of the General Counsel to the Seller, with respect to the following
items, dated the Closing Date, to the effect that:
(a) The Seller has been duly organized and is validly
existing as a corporation in good standing under the laws of
the State of California, and is qualified to do business in
each state necessary to enable it to perform its obligations as
Servicer under the Pooling and Servicing Agreement. The Seller
has the requisite power and authority to execute and deliver,
engage in the transactions contemplated by, and perform and
observe the conditions of, this Agreement, the Pooling and
Servicing Agreement, any Subsequent Transfer Agreement, the
Insurance Agreement and the Indemnification Agreement.
(b) This Agreement, the Certificates, the Pooling and
Servicing Agreement, the Insurance Agreement and the
Indemnification Agreement have been duly and validly
authorized, executed and delivered by the Seller, all requisite
corporate action having been taken with respect thereto, and
each (other than the Certificates) constitutes the valid, legal
and binding agreement of the Seller enforceable against the
Seller in accordance with its respective terms.
(c) Neither the transfer of the Initial Mortgage
Loans to the Trust, the issuance or sale of the Certificates
nor the execution, delivery or performance by the Seller of the
Pooling and Servicing Agreement, this Agreement, any Subsequent
Transfer Agreement, the Insurance Agreement or the
Indemnification Agreement (A) conflicts or will conflict with
or results or will result in a breach of, or constitutes or
will constitute a default under, (i) any term or provision of
the articles of incorporation or bylaws of the Seller; (ii) any
term or provision of any material agreement, contract,
instrument or indenture, to which the Seller is a party or is
bound; or (iii) any order, judgment, writ, injunction or decree
of any court or governmental agency or body or other tribunal
having jurisdiction over the Seller; or (B) results in, or will
result in the creation or imposition of any lien, charge or
encumbrance upon the Trust Estate or upon the Certificates,
except as otherwise contemplated by the Pooling and Servicing
Agreement.
(d) The endorsement and delivery of each Note, and
the preparation, delivery and recording of an Assignment in
recordable form, with respect to each Mortgage (in the absence
of the delivery of the opinions described in Section
3.5(b)(ii)(y) of the Pooling and Servicing Agreement), as and
in the manner contemplated by the Pooling and Servicing
Agreement, is sufficient fully to transfer to the Trustee for
the benefit of the Owners all right, title and interest of the
Seller in the Note and Mortgage, as noteholder and mortgagee or
assignee thereof, and will be sufficient to permit the Trustee
to avail itself of all protection available under applicable
law against the claims of any present or future creditors of
the Seller and to prevent any other sale, transfer, assignment,
pledge or other encumbrance of the Mortgage Loans by the Seller
from being enforceable.
(e) No consent, approval, authorization or order of,
registration or filing with, or notice to, courts, governmental
agency or body or other tribunal is required under the laws of
the State of California, for the execution, delivery and
performance of the Pooling and Servicing Agreement, the
Insurance Agreement, this Agreement, the Indemnification
Agreement or the offer, issuance, sale or delivery of the
Certificates or the consummation of any other transaction
contemplated thereby by the Seller, except such which have been
obtained.
(f) There are no actions, proceedings or
investigations pending or, to such counsel's knowledge,
threatened against the Seller before any court, governmental
agency or
10
body or other tribunal (i) asserting the invalidity of the
Pooling and Servicing Agreement, the Insurance Agreement, this
Agreement, the Indemnification Agreement or the Certificates,
(ii) seeking to prevent the issuance of the Certificates or the
consummation of any of the transactions contemplated by the
Pooling and Servicing Agreement, the Indemnification Agreement,
the Insurance Agreement or this Agreement or (iii) which would
materially and adversely affect the performance by the Seller
of obligations under, or the validity or enforceability of, the
Pooling and Servicing Agreement, the Certificates, the
Indemnification Agreement, the Insurance Agreement or this
Agreement.
(g) To the best of such counsel's knowledge, the
Registration Statement, the Prospectus Supplement and the Basic
Prospectus do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading with respect to the statements set forth in the
Basic Prospectus under the caption "CERTAIN LEGAL ASPECTS OF
MORTGAGE LOANS AND RELATED MATTERS."
2. The Underwriter shall have received the favorable opinion of
Xxxxx & Xxxxxx LLP, special counsel to the Seller, dated the Closing
Date, to the effect that:
(a) The Certificates, assuming due execution and
authentication by the Trustee, and delivery and payment
therefor pursuant to this Agreement are validly issued and
outstanding and are entitled to the benefits of the Pooling and
Servicing Agreement.
(b) No consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental
authority or court is required under federal laws or the laws
of the State of New York, for the execution, delivery and
performance by the Seller of the Pooling and Servicing
Agreement, this Agreement, any Subsequent Transfer Agreement,
the Indemnification Agreement, the Insurance Agreement or the
offer, issue, sale or delivery of the Certificates or the
consummation of any other transaction contemplated thereby by
the Seller, except such which have been obtained.
(c) Neither the transfer of the Initial Mortgage
Loans to the Trustee, the issuance or sale of the Class A
Certificates, nor the execution, delivery or performance by the
Seller of the Pooling and Servicing Agreement, the Insurance
Agreement, any Subsequent Transfer Agreement, the
Indemnification Agreement or this Agreement will (a) conflict
with or result in a breach of, or constitute a default under
any law, rule or regulation of the State of New York or the
federal government, or (b) to such counsel's knowledge, without
independent investigation, results in, or will result in, the
creation or imposition of any lien, charge or encumbrance upon
the Trust Estate or upon the Certificates, except as otherwise
contemplated by the Pooling and Servicing Agreement.
(d) Each Subsequent Transfer Agreement at the time of
its execution and delivery will be sufficient to convey all of
the Seller's right, title and interest in the Subsequent
Mortgage Loans to the Trustee and following the consummation of
the transaction contemplated by each Subsequent Transfer
Agreement, the transfer of the Subsequent Mortgage Loans by the
Seller to the Trustee will be a sale thereof.
(e) The Registration Statement, the Basic Prospectus
and the Prospectus Supplement (other than the financial and
statistical data included therein, as to which such counsel
need express no opinion), as of the date on which the
Registration Statement was declared effective and as of the
date hereof, comply as to form in all material respects with
the requirements of the Act and the rules and regulations
thereunder, and such counsel does not
11
know of any amendment to the Registration Statement required to
be filed, or of any contracts, indentures or other documents of
a character required to be filed as an exhibit to the
Registration Statement or required to be described in the
Registration Statement, the Basic Prospectus or the Prospectus
Supplement which has not been filed or described as required.
(f) Neither the qualification of the Pooling and
Servicing Agreement under the Trust Indenture Act of 1939 nor
the registration of the Trust created by such Agreement under
the Investment Company Act of 1940 is presently required.
(g) The statements in the Basic Prospectus set forth
under the captions "DESCRIPTION OF THE SECURITIES" and "THE
POOLING AND SERVICING AGREEMENT" and the statements in the
Prospectus Supplement set forth under the captions "DESCRIPTION
OF THE CLASS A 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.
(h) Except as to any financial or statistical data
contained in the Registration Statement, the statements set
forth in the Basic Prospectus under the caption "DESCRIPTION OF
CREDIT ENHANCEMENT," and in the Prospectus Supplement under the
caption "THE CERTIFICATE INSURANCE POLICIES AND THE CERTIFICATE
INSURER," and any Computational Materials as to which no
opinion or belief need be expressed, to the best of such
counsel's knowledge, the Registration Statement, the Basic
Prospectus and the Prospectus Supplement do not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to
make the statements therein not misleading.
(i) Upon receipt by the Trustee, on behalf of the
Owners of the Certificates, of the related Notes, endorsed as
described in the Pooling and Servicing Agreement, and the
receipt by the Seller of the purchase price for the
Certificates and for so long as the Trustee maintains actual
physical possession of such Notes, (i) the Trustee shall be
vested with good and indefeasible title to, and shall be the
sole owner of, and shall obtain all right, title and interest
of the Seller in, each Mortgage Loan, (ii) in the event that
the sale of the Mortgage Loans were to be recharacterized as a
financing secured by the Mortgage Loans, the Trustee has a
first perfected security interest in the Mortgage Loans and
(iii) in the jurisdictions listed in such opinion, the
recordation of the assignments of the Mortgages is not required
for the Trustee to obtain such rights, as against creditors of,
and purported transferees of, the Seller.
(j) To the best of the knowledge of such counsel, the
Commission has not issued any stop order suspending the
effectiveness of the Registration Statement or any order
directed to any prospectus relating to the Certificates
(including the Prospectus), and has not initiated or threatened
any proceeding for that purpose.
3. The Underwriter shall have received the favorable opinion of
Xxxxx & Xxxxxx LLP, special tax and bankruptcy counsel to the Seller, dated the
Closing Date, to the effect that:
(a) Assuming the REMIC election is made in compliance
with the Pooling and Servicing Agreement, (i) the Trust,
exclusive of the Pre-Funding Account, the Available Funds Cap
Carry-Forward Account and the Capitalized Interest Account (as
defined in the Prospectus Supplement) will qualify as a real
estate mortgage investment conduit ("REMIC") (as defined in the
Internal Revenue Code of 1986, as amended (the "Code")) for
Federal income tax purposes and (ii) each Class of the Class A
Certificates (as defined in the Prospectus
12
Supplement) will be treated as "regular interests" in the REMIC
and the Class R Certificates will be treated as the sole
"residual interest" in the REMIC.
(b) To the best of such counsel's knowledge, there
are no actions, proceedings or investigations pending that
would adversely affect the Trust Estate (exclusive of the
Pre-Funding Account, the Available Funds Cap Carry-Forward
Account and the Capitalized Interest Account) as a real estate
mortgage investment conduit ("REMIC") as such term is defined
in the Code.
(c) The statements under the captions "SUMMARY OF
PROSPECTUS -- CERTAIN FEDERAL INCOME TAX CONSEQUENCES" and
"CERTAIN FEDERAL INCOME TAX CONSEQUENCES" in the Basic
Prospectus and under the captions "SUMMARY -- TAX ASPECTS" and
"CERTAIN FEDERAL INCOME TAX CONSEQUENCES" in the Prospectus
Supplement as they relate to federal tax matters are true and
correct in all material respects.
(d) As a consequence of the qualification of the
Trust (exclusive of the Pre-Funding Account, the Available
Funds Cap Carry-Forward Account and the Capitalized Interest
Account) as a REMIC, the Class A 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
the Trust (exclusive of the Pre-Funding Account, the Available
Funds Cap Carry-Forward Account and the Capitalized Interest
Account) as a REMIC, interest on the Class A 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 Class A Certificates are treated as "real estate
assets" under Section 856(c) of the Code.
(e) The Trust will not be subject to tax upon its
income or assets by the taxing authority of New York State or
New York City.
(f) The Trust will not be subject to the California
state income tax. While REMICs are subject to the California
state minimum franchise tax imposed under Article 2, Section
23153 of the California Revenue and Taxation Code, such counsel
does not express an opinion as to whether the Trust is subject
to such tax.
(g) A court would hold that the conveyance by the
Seller of all right, title and interest in the Mortgage Loans
to the Trustee (except for the Seller's right, title and
interest in the principal and interest due on such Mortgage
Loans on or prior to the Cut-Off Date), constitutes a sale of
the Mortgage Loans and not a borrowing by the Seller secured by
the pledge of the Mortgage Loans. A court would find that,
following such conveyance, the Mortgage Loans and proceeds
thereof (net of payments of principal and interest due on such
Mortgage Loans on or prior to the Cut-Off Date) are not
property of the estate of the Seller within the meaning of
Section 541 of the Bankruptcy Code, and, further that the
Trustee's rights with respect to the Mortgage Loans and the
proceeds thereof would not subject it to the automatic stay
provisions of Section 362 of the Bankruptcy Code. Since the
conveyance of the Mortgage Loans (net of payments of scheduled
principal due and interest accrued on or prior to the Cut-Off
Date) constitutes a sale of said Mortgage Loans then the
payments thereunder (net of payments of scheduled principal due
on and interest accrued on or prior to the Cut-Off Date) are
not property of the estate of the Seller and the distributions
of such payments by the Trustee to the Owners of the
Certificates are not preferential payments made by, for, or on
behalf of the Seller under the provisions of Section 547 of the
Bankruptcy Code.
13
(h) If a court characterized the transfer of the
Mortgage Loans to the Trustee, on behalf of the Owners of the
Certificates, as a pledge of collateral rather than an absolute
sale or assignment, with respect to the Mortgage Loans and
other property included in the Trust on the date hereof, to the
extent governed by the laws of the State of New York, a valid
security interest has been created in favor of the Trustee,
which security interest of the Trustee will be perfected and
will constitute a first perfected security interest, with
respect to the Seller's right, title and interest in and to the
Notes, upon endorsement and delivery thereof to the Trustee.
With respect to the security interest of the Trustee in the
Notes, New York law would govern.
4. The Underwriter shall have received the favorable opinion of
Stroock & Stroock & Xxxxx LLP, special counsel to the Underwriter,
dated the Closing Date, to the effect that:
(a) The Certificates, assuming due execution and
authentication by the Trustee, and delivery and payment
therefor pursuant to this Agreement, are validly issued and
outstanding and are entitled to the benefits of the Pooling and
Servicing Agreement.
(b) No fact has come to such counsel's attention
which causes them to believe that the Prospectus (other than
the financial statement and other financial and statistical
data contained therein, as to which such counsel need express
no opinion), as of the date thereof, contained any untrue
statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) Such other matters as the Underwriter may
reasonably request.
In rendering their opinions, the counsels described in this
Paragraph (c) may rely, as to matters of fact, on certificates of responsible
officers of the Seller, the Trustee and public officials. Such opinions may also
assume the due authorization, execution and delivery of the instruments and
documents referred to therein by the parties thereto other than the Seller.
D. The Underwriter shall have received a letter from Deloitte &
Touche LLP, dated on or before the Closing Date, in form and substance
satisfactory to the Underwriter and counsel for the Underwriter, to the effect
that they have performed certain specified procedures requested by the
Underwriter with respect to the information set forth in the Prospectus and
certain matters relating to the Seller.
E. The Class A Certificates shall have been rated in the
highest rating category by Xxxxx'x Investors Service, Inc., and by Standard &
Poor's Ratings Service, a division of The XxXxxx-Xxxx Companies, Inc., and such
ratings shall not have been rescinded. The Underwriter and its counsel shall
have received copies of any opinions of counsel supplied to the rating
organizations relating to any matters with respect to the Class A Certificates.
Any such opinions shall be dated the Closing Date and addressed to the
Underwriter or accompanied by reliance letters to the Underwriter or shall state
that the Underwriter may rely upon them.
F. The Underwriter shall have received from the Seller a
certificate, signed by the president, a senior vice president or a vice
president of the Seller, dated the Closing Date, to the effect that the signer
of such certificate has carefully examined the Registration Statement, the
Pooling and Servicing Agreement and this Agreement and that, to the best of his
or her knowledge based upon reasonable investigation:
1. the representations and warranties of the Seller in this
Agreement, and in the Indemnification Agreement, as of the Closing
Date, in the Pooling and Servicing Agreement, in the Insurance
Agreement and in all related agreements, as of the date specified in
such agreements, are true
14
and correct, and the Seller has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date;
2. there are no actions, suits or proceedings pending, or to
the best of such officer's knowledge, threatened against or affecting
the Seller which if adversely determined, individually or in the
aggregate, would be reasonably likely to adversely affect the Seller's
obligations under the Pooling and Servicing Agreement, the Insurance
Agreement, this Agreement or under the Indemnification Agreement in any
material way; and no merger, liquidation, dissolution or bankruptcy of
the Seller is pending or contemplated;
3. the information contained in the Registration Statement and
Prospectus relating to the Seller, the Mortgage Loans or the servicing
procedures of it or its affiliates or the subservicer 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 and Prospectus includes any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein not misleading;
4. the information set forth in the Schedules of Mortgage Loans
required to be furnished pursuant to the Pooling and Servicing
Agreement is true and correct in all material respects;
5. there has been no amendment or other document filed
affecting the articles of incorporation or bylaws of the Seller since
August 1, 1996, and no such amendment has been authorized. No event has
occurred since December 7, 1998, which has affected the good standing
of the Seller under the laws of the State of California;
6. 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 Seller and its subsidiaries, taken as a whole, from
September 30, 1998;
7. 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, if any,
accorded the Seller or in any rating accorded any securities of the
Seller, if any, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the Act; and
8. each person who, as an officer or representative of the
Seller, signed or signs the Registration Statement, the Pooling and
Servicing Agreement, this Agreement, the Indemnification Agreement, the
Insurance Agreement, or any other document delivered pursuant hereto,
on the date of such execution, or on the Closing Date, as the case may
be, in connection with the transactions described in the Pooling and
Servicing Agreement, the Indemnification Agreement, the Insurance
Agreement and 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.
The Seller shall attach to such certificate a true and correct
copy of its certificate or articles of incorporation, as appropriate, and bylaws
which are in full force and effect on the date of such certificate and a
certified true copy of the resolutions of its Board of Directors with respect to
the transactions contemplated herein.
G. The Underwriter shall have received an opinion of counsel to
the Trustee, dated the Closing Date and in form and substance satisfactory to
the Underwriter and its counsel, to the effect that:
15
1. the Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States and has the power and authority to enter into and to take
all actions required of it under the Pooling and Servicing Agreement;
2. the Pooling and Servicing Agreement has been duly
authorized, executed and delivered by the Trustee and the Pooling and
Servicing Agreement constitutes the legal, valid and binding obligation
of the Trustee, enforceable against the Trustee in accordance with its
terms, except as enforceability thereof may be limited by (A)
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally, as such laws would
apply in the event of a bankruptcy, insolvency or reorganization or
similar occurrence affecting the Trustee, and (B) general principles of
equity regardless of whether such enforcement is sought in a proceeding
at law or in equity;
3. no consent, approval, authorization or other action by any
governmental agency or body or other tribunal is required on the part
of the Trustee in connection with its execution and delivery of the
Pooling and Servicing Agreement or the performance of its obligations
thereunder;
4. the Certificates have been duly executed, authenticated and
delivered by the Trustee;
5. the execution and delivery of, and performance by the
Trustee of its obligations under, the Pooling and Servicing Agreement
do not conflict with or result in a violation of any statute or
regulation applicable to the Trustee, or the articles or bylaws of the
Trustee, or to the best knowledge of such counsel, any governmental
authority having jurisdiction over the Trustee or the terms of any
indenture or other agreement or instrument to which the Trustee is a
party or by which it is bound; and
6. in the event that the Servicer defaults in its obligation to
make advances under the Pooling and Servicing Agreement, the Trustee or
any affiliate of the Trustee, is not prohibited by a provision of its
Articles of Incorporation or Bylaws or by any provision of the banking
and trust laws of the United States of America or the State of New
York, as the case may be (or any rule, regulation, decree or order
thereunder), from assuming its obligation to make such advances.
In rendering such opinion, such counsel may rely, as to matters
of fact, on certificates of responsible officers of the Seller, the Trustee and
public officials. Such opinion may also assume the due authorization, execution
and delivery of the instruments and documents referred to therein by the parties
thereto other than the Trustee.
H. The Underwriter shall have received from the Trustee a
certificate, signed by the President, a senior vice president or an assistant
vice president of the Trustee, dated the Closing Date, to the effect that each
person who, as an officer or representative of the Trustee, signed or signs the
Certificates, the Pooling and Servicing Agreement or any other document
delivered pursuant hereto, on the date hereof or on the Closing Date, in
connection with the transactions described in the Pooling and Servicing
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.
I. The Policies relating to the Class A Certificates 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.
J. The Underwriter shall have received a favorable opinion of
Xxxxx Xxxx, counsel to the Insurer, dated the Closing Date and in form and
substance satisfactory to counsel for the Underwriter, to the effect that:
16
1. The Insurer is a stock insurance corporation, duly
incorporated and validly existing under the laws of the State of New
York. The Insurer is validly licensed and authorized to issue the
Policies and perform its obligations under the Policies in accordance
with the terms thereof, under the laws of the State of New York.
2. The execution and delivery by the Insurer of the Policies,
the Insurance Agreement and the Indemnification Agreement are within
the corporate power of the Insurer and have been authorized by all
necessary corporate action on the part of the Insurer; the Policies
have been duly executed and are the valid and binding obligations of
the Insurer enforceable in accordance with their terms except that the
enforcement of the Policies may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium, receivership and
other similar laws affecting creditors' rights generally and by general
principles of equity.
3. The Insurer is authorized to deliver the Insurance
Agreement, and the Indemnification Agreement, and the Insurance
Agreement and the Indemnification Agreement have been duly executed and
are the valid and binding obligations of the Insurer enforceable in
accordance with their terms except that the enforcement of the
Insurance Agreement and 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.
4. No consent, approval, authorization or order of any state or
federal court or governmental agency or body is required on the part of
the Insurer, the lack of which would adversely affect the validity or
enforceability of the Policies; to the extent required by applicable
legal requirements that would adversely affect validity or
enforceability of the Policies, the form of the Policies has been filed
with, and approved by, all governmental authorities having jurisdiction
over the Insurer in connection with such Policies.
5. To the extent any Policy constitutes a security within the
meaning of Section 2(1) of the Act, it is a security that is exempt
from the registration requirements of the Act.
6. The information set forth under the caption "THE CERTIFICATE
INSURANCE POLICIES AND THE CERTIFICATE INSURER" in the Prospectus
Supplement dated December 7, 1998, insofar as such statements
constitute a description of the Policies, accurately summarizes the
Policies.
In rendering this opinion, such counsel may rely, as to matters
of fact, on certificates of responsible officers of the Seller, the Trustee, the
Insurer 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 the Insurer.
K. 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, if any, accorded the Seller or in
any rating accorded any securities of the Seller, if any, by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of the Act.
L. On or prior to the Closing Date there shall not have
occurred any downgrading, nor shall any notice have been given of (A) any
intended or potential downgrading or (B) any review or possible change in rating
the direction of which has not been indicated, in the rating accorded the
Insurer's claims paying ability by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the Act.
17
M. There has not occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or in
the earnings, business or operations, since September 30, 1998, (A) of the
Seller or its subsidiaries and affiliates, or (B) of the Insurer, that is in the
Underwriter's judgment material and adverse and that makes it in the
Underwriter's judgment impracticable to market the Class A Certificates on the
terms and in the manner contemplated in the Prospectus.
N. The Underwriter shall have received from the Insurer a
certificate, signed by the President, a senior vice president or a vice
president of the Insurer, dated the Closing Date, to the effect that the signer
of such certificate has carefully examined the Policies, the Insurance
Agreement, the Indemnification Agreement and the related documents and that, to
the best of his or her knowledge based on reasonable investigation:
1. each person who as an officer or representative of the
Insurer, signed or signs the Policies, the Insurance Agreement, 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 a duly authorized
representative of the Insurer and is authorized to execute and deliver
this certificate.
2. The financial data presented in the table set forth under
the heading "THE CERTIFICATE INSURANCE POLICIES AND THE CERTIFICATE
INSURER" in the Prospectus Supplement presents fairly the
capitalization of the Insurer and its wholly-owned subsidiaries as of
December 31, 1997 and September 30, 1998, respectively, and to the best
of the Insurer's knowledge since such date, no material and adverse
change has occurred in the financial position of the Insurer other than
as set forth in the Prospectus Supplement.
3. The audited financial statements dated as of December 31,
1997 and the unaudited financial statements dated as of September 30,
1998 incorporated by reference into the Prospectus Supplement are true
and accurate.
4. The information which relates to the Insurer or the Policies
under the caption titled "THE CERTIFICATE INSURANCE POLICIES AND THE
CERTIFICATE INSURER" in the Prospectus Supplement is true and correct
in all material respects.
5. There are no actions, suits, proceedings or investigations
pending or, to the best of the Insurer's knowledge, threatened against
it at law or in equity or before or by any court, governmental agency,
board or commission or any arbitrator which, if decided adversely,
would materially and adversely affect its condition (financial or
otherwise) or operations or which would materially and adversely affect
its ability to perform its obligations under the Policies or the
Insurance Agreement.
6. The execution and delivery of the Insurance Agreement and
the Policies and the compliance with the terms and provisions thereof
will not conflict with, result in a breach of, or constitute a default
under any of the terms, provisions or conditions of the Restated
Charter or By-Laws of the Insurer or of any agreement, indenture or
instrument to which the Insurer is a party.
7. The issuance of the Policies and the execution, delivery and
performance of the Insurance Agreement have been duly authorized by all
necessary corporate proceedings. No further approvals or filings of any
kind, including, without limitation, any further approvals or further
filing with any governmental agency or other governmental authority, or
any approval of the Insurer's board of directors or stockholders, are
necessary for the Policies and the Insurance Agreement to constitute
the legal, valid and binding obligations of the Insurer.
18
The officer of the Insurer certifying to items 2 and 3 shall be
an officer in charge of a principal financial function.
The Insurer shall attach to such certificate a true and correct
copy of its certificate or articles of incorporation, as appropriate, and its
bylaws, all of which are in full force and effect on the date of such
certificate.
O. The Underwriter shall have received from Stroock & Stroock &
Xxxxx LLP, special counsel to the Underwriter, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the Certificates, the
Prospectus and such other related matters as the Underwriter shall reasonably
require.
P. The Underwriter and its counsel shall have received copies
of any opinions of counsel to the Seller or the Insurer supplied to the Trustee
relating to matters with respect to the Certificates or the Policies. Any such
opinions shall be dated the Closing Date and addressed to the Underwriter or
accompanied by reliance letters to the Underwriter or shall state that the
Underwriter may rely thereon.
Q. The Underwriter shall have received such further
information, certificates and documents as the Underwriter may reasonably have
requested not fewer than three (3) full business days prior to the Closing Date.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all respects when and as provided in this Agreement, if
the Seller is in breach of any covenants or agreements contained herein or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriter and its counsel, this Agreement and all
obligations of the Underwriter hereunder, may be canceled on, or at any time
prior to, the Closing Date by the Underwriter. Notice of such cancellation shall
be given to the Seller in writing, or by telephone or telegraph confirmed in
writing.
7. Expenses. If the sale of the Class A Certificates provided
for herein is not consummated by reason of a default by the Seller in its
obligations hereunder, then the Seller will reimburse the Underwriter, upon
demand, for all reasonable out-of-pocket expenses (including, but not limited
to, the reasonable fees and expenses of Stroock & Stroock & Xxxxx LLP) that
shall have been incurred by the Underwriter in connection with its investigation
with regard to the Seller, the Class A Certificates and the proposed purchase
and sale of the Class A Certificates.
8. Indemnification and Contribution. A. Regardless of whether
any Class A Certificates are sold, the Seller will indemnify and hold harmless
the Underwriter, each of its respective officers and directors and each person
who controls the Underwriter within the meaning of the Act or the Securities
Exchange Act of 1934 (the "1934 Act"), against any and all losses, claims,
damages, or liabilities (including the cost of any investigation, legal and
other expenses incurred in connection with any amounts paid in settlement of any
action, suit, proceeding or claim asserted), joint or several, to which they may
become subject, under the Act, the 1934 Act or other federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained (i) in
the Registration Statement, or any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact necessary to make the statements therein, not misleading or (ii)
in the Basic Prospectus or the Prospectus Supplement or any amendment thereto or
supplement thereto, 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 light of the circumstances under which they were made, not
misleading, and will reimburse each such indemnified party for any legal or
other expenses reasonably incurred by it in connection with investigating or
defending against such loss, claim, damage, liability or
19
action; provided, however, that the Seller shall not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Seller by or on behalf of the Underwriter
specifically for use in connection with the preparation thereof.
B. Regardless of whether any Class A Certificates are sold, the
Underwriter agrees to indemnify and hold harmless the Seller, each of its
officers and directors and each person, if any, who controls the Seller within
the meaning of the Act or the 1934 Act against any losses, claims, damages or
liabilities to which they or any of them become subject under the Act, the 1934
Act or other federal or state law or regulation, at common law or otherwise, to
the same extent as the foregoing indemnity, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in (i) the Registration Statement, or any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading or in (ii) the Basic Prospectus or the Prospectus
Supplement or any amendment thereto or supplement thereto, 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 light of the circumstances under
which they were made, not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made therein in reliance upon and in conformity with
written information furnished to the Seller by or on behalf of the Underwriter
specifically for use in the preparation thereof and so acknowledged in writing,
and will reimburse the Seller for any legal or other expenses reasonably
incurred by the Seller in connection with investigating or defending against
such loss, claim, damage, liability or action.
C. In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Paragraphs A and B above such person
(hereinafter called the indemnified party) shall promptly notify the person
against whom such indemnity may be sought (hereinafter called the indemnifying
party) in writing thereof; but the omission to notify the indemnifying party
shall not relieve such indemnifying party from any liability which it may have
to any indemnified party otherwise than under such Paragraph. The indemnifying
party, upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and any
others the indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding any indemnified party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel, or (ii) the named
parties to any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
for all such indemnified parties, and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by the
Underwriter in the case of parties indemnified pursuant to Paragraph A and by
the Seller in the case of parties indemnified pursuant to Paragraph B. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there is a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
above, 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
20
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
D. If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages or
liabilities referred to herein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Seller and the Underwriter from the sale of the Class A
Certificates or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only relative benefits referred to in clause (i) above but also the relative
fault of the Seller and of the Underwriter in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations.
The relative benefits received by the Seller and the
Underwriter shall be deemed to be in such proportion so that the Underwriter is
responsible for that portion determined by multiplying the total amount of such
losses, claims, damages and liabilities, including legal and other expenses, by
a fraction, the numerator of which is (x) the excess of the Aggregate Resale
Price of the Class A Certificates purchased by the Underwriter over the
aggregate purchase price of the Class A Certificates specified in Section 4 of
this Agreement and the denominator of which is (y) the Aggregate Resale Price of
the Class A Certificates purchased by the Underwriter and the Seller is
responsible for the balance, provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of the immediately preceding
sentence, the "Aggregate Resale Price" of the Class A Certificates at the time
of any determination shall be the weighted average of the purchase prices (in
each case expressed as a percentage of the aggregate principal amount of the
Class A Certificates so purchased), determined on the basis of such principal
amounts, paid to the Underwriter by all subsequent purchasers that purchased the
Class A Certificates on or prior to such date of determination. The relative
fault of the Seller and the Underwriter shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Seller or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
E. The Seller and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Paragraph D. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in Paragraph D shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, the Underwriter shall not be required to contribute any amount in
excess of the amount of the underwriting discounts and commissions received by
the Underwiter in connection with its purchase of the Certificates.
F. Reserved.
G. The Underwriter agrees, assuming all information provided to
it by the Seller is accurate and complete in all material respects, to indemnify
and hold harmless the Seller, each of the Seller's officers and directors and
each person who controls the Seller within the meaning of Section 15 of the
Securities Act against any and all losses, claims, damages or liabilities, joint
or several, to which they may become subject
21
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 the Underwriter 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
obligations of the Underwriter under this Section 8(G) shall be in addition to
any liability which the Underwriter may otherwise have.
H. The Seller and the Underwriter each expressly waive, and
agree not to assert, any defense to their respective indemnification and
contribution obligations under this Section 8 which they might otherwise assert
based upon any claim that such obligations are unenforceable under federal or
state securities laws or by reasons of public policy.
I. The obligations of the Seller under this Section 8 shall be
in addition to any liability which the Seller may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
the Underwriter within the meaning of the Act or the 1934 Act; and the
obligations of the Underwriter under this Section 8 shall be in addition to any
liability that the Underwriter may otherwise have and shall extend, upon the
same terms and conditions, to each director of the Seller and to each person, if
any, who controls the Seller within the meaning of the Act or the 1934 Act;
provided, however, that in no event shall the Seller or the Underwriter be
liable for double indemnification.
9. Information Supplied by the Underwriter. The statements set
forth in the last paragraph on the front cover page of the Basic Prospectus
regarding market-making and under the headings "RISK FACTORS -- LIMITED RESALE"
and "UNDERWRITING" in the Prospectus Supplement (to the extent such statements
relate to the Underwriter), together with the Computational Materials,
constitute the only information furnished by the Underwriter to the Seller for
the purposes of Sections 2(B) and 8(A) hereof. The Underwriter confirms that
such statements (to such extent) are correct.
The Seller will cause any Computational Materials with respect
to the Class A Certificates that are delivered to the Seller as provided in
Section 3.B.5 to be filed with the Commission on a Current Report on Form 8-K at
or before the time of filing of the Prospectus pursuant to Rule 424(b) under the
Securities Act; to cause any ABS Term Sheets with respect to the Class A
Certificates that are delivered by the Underwriter to the Seller as provided in
Section 3.B.5 to be filed with the Commission on one or more Current Reports on
Form 8-K (i) at or before the time of filing of the Prospectus pursuant to Rule
424(b) of the Rules and Regulations in the case of Structural Term Sheets, and
(ii) within two Business Days of first use in the case of Collateral Term
Sheets. Prior to any such filing of Computational Materials or ABS Term Sheets
(other than any Collateral Term Sheets that are not based on Mortgage Pool
information provided to the Underwriter by the Seller) by the Seller, however,
the Underwriter must comply with its obligations pursuant to Section 3.B and the
Seller must receive a letter from independent, certified public accountants,
satisfactory in form and substance to the Seller and its counsel, to the effect
that such accountants have performed certain specified procedures, all of which
have been agreed to by the Seller, as a result of which they determined that all
information that is included in the Computational Materials and ABS Term Sheets
(if any) provided by the Underwriter to the Seller for filing on Form 8-K, as
provided in Section 3.B and this Section 9, is accurate except as to such
matters that are not deemed by the Seller to be material. The Seller shall file
any corrected Computational Materials or ABS Term Sheets described in Section
3.B.7 as soon as practicable following receipt thereof.
10. Notices. All communications hereunder shall be in writing
and, if sent to the Underwriter, shall be mailed or delivered or telecopied and
confirmed in writing to the Underwriter at Prudential Securities Incorporated,
Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxx Xxxx;
and, if sent to the Seller, shall be mailed, delivered or telegraphed and
confirmed in writing to the Seller at the address set forth above, Attention:
Director of Secondary Marketing.
22
11. Survival. All representations, warranties, covenants and
agreements of the Seller contained herein or in agreements or certificates
delivered pursuant hereto, the agreements of the Underwriter and the Seller
contained in Section 8 hereof, and the representations, warranties and
agreements of the Underwriter contained in Section 3 hereof, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Underwriter or any controlling persons, or any subsequent
purchaser or the Seller or any of its officers, directors or any controlling
persons, and shall survive delivery of and payment for the Class A Certificates.
The provisions of Sections 5, 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Termination. The Underwriter shall have the right to
terminate this Agreement by giving notice as hereinafter specified at any time
at or prior to the Closing Date if (a) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (b) trading of any securities
of the Seller shall have been suspended on any exchange or in any
over-the-counter market, (c) a general moratorium on commercial banking
activities shall have been declared by either federal or New York State
authorities, (d) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis which,
in the Underwriter's reasonable judgment, is material and adverse, and, in the
case of any of the events specified in clauses (a) through (d), such event
singly or together with any other such event makes it in the Underwriter's
reasonable judgment impractical to market the Class A Certificates. Any such
termination shall be without liability of any other party except that the
provisions of Paragraph G of Section 5 (except with respect to expenses of the
Underwriter) and Sections 7 and 8 hereof shall at all times be effective. If the
Underwriter elects to terminate this Agreement as provided in this Section 12,
the Seller shall be notified promptly by the Underwriter by telephone, telegram
or facsimile transmission, in any case, confirmed by letter.
13. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns
(which successors and assigns do not include any person purchasing a Class A
Certificate from the Underwriter), and the officers and directors and
controlling persons referred to in Section 8 hereof and their respective
successors and assigns, and no other persons will have any right or obligations
hereunder.
14. Applicable Law; Venue. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York. Any
action or proceeding brought to enforce or arising out of any provision of this
Agreement shall be brought only in a state or federal court located in the
Borough of Manhattan, New York City, New York, and the parties hereto expressly
consent to the jurisdiction of such courts and agree to waive any defense or
claim of forum non conveniens they may have with respect to any such action or
proceeding brought.
15. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall together constitute but one and the same
instrument.
16. Amendments and Waivers. This Agreement may be amended,
modified, altered or terminated, and any of its provisions waived, only in a
writing signed on behalf of the parties hereto.
23
IN WITNESS WHEREOF, the parties hereto hereby execute this Underwriting
Agreement, as of the day and year first above written.
FIRST ALLIANCE MORTGAGE COMPANY
By: /s/ Xxxxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Executive Vice President/CFO
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Xxx Xxxx
-----------------------------------
Name: Xxx Xxxx
Title: Managing Director
{UNDERWRITING AGREEMENT SIGNATURE PAGE}