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EXHIBIT 1.1
FUND AMERICA INVESTORS CORPORATION II
$236,526,000 (Approximate) Collateralized Mortgage Obligations, Series 1998-NMC1
UNDERWRITING AGREEMENT
New York, New York
As of June 24, 1998
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Fund America Investors Corporation II, a limited purpose finance
corporation (the "Company"), proposes to cause Fund America Investors Trust
1998-NMC1, a limited purpose Delaware business trust (the "Trust"), to issue and
sell to Salomon Brothers Inc (the "Underwriter"), approximately $236,526,000
aggregate principal amount of Collateralized Mortgage Obligations, Series
1998-NMC1, which will consist of four classes of bonds (collectively, the
"Bonds"), designated as Class A, Class M-1, Class M-2 and Class M-3.
The Bonds will be issued by the Trust to be formed pursuant to a trust
agreement (the "Trust Agreement") to be entered into between the Company and
Wilmington Trust Company, as trustee (the "Owner Trustee"). The Bonds will be
issued and secured pursuant to an indenture to be dated as of the Cut-off Date
between the Trust and Norwest Bank Minnesota, National Association ("Norwest"),
as indenture trustee (the "Indenture Trustee") (the "Indenture"). The beneficial
ownership interest in the Trust will be represented by certificates (the "Trust
Certificates") which will be transferred by the Company to National Mortgage
Finance Corporation ("NMFC"), a limited purpose wholly-owned subsidiary of
National Mortgage Corporation ("National Mortgage").
The Bonds will be secured by collateral consisting of, among other
things, adjustable rate, fully amortizing residential first mortgage loans (the
"Mortgage Loans") and related property. The Mortgage Loans will be serviced by
National Mortgage pursuant to the terms of a servicing agreement (the "Servicing
Agreement") to be entered into among National Mortgage, the Indenture Trustee
and the Owner Trustee.
The Company will acquire all the Mortgage Loans from National Mortgage
pursuant to a mortgage loan purchase agreement between the Company and National
Mortgage (the "Mortgage Loan Purchase Agreement"); and the Company will
contribute and assign the Mortgage Loans to the Trust pursuant to a mortgage
loan contribution agreement between the Company and the Trust (the "Mortgage
Loan Contribution Agreement"). The Mortgage Loans were originated or acquired by
National Mortgage primarily through its network of brokers and correspondents.
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Certain administrative functions with respect to the Trust will be
performed on behalf of the Trust by ▇▇▇▇▇▇▇, as manager (the "Manager"),
pursuant to a management agreement (the "Management Agreement") between the
Trust and the Manager.
The Bonds are described more fully in Schedule I hereto and in the
Prospectus (as defined below). The Mortgage Loans will be of the type described
and will have the aggregate principal balance set forth in Schedule I. The Bonds
will consist of four classes, designated as the Class A Bonds, the Class M-1
Bonds, the Class M-2 Bonds and the Class M-3 Bonds, and will be issued in the
denominations specified in Schedule I.
This Agreement, the Trust Agreement, the Indenture, the Servicing
Agreement, the Mortgage Loan Purchase Agreement, the Mortgage Loan Contribution
Agreement and the Management Agreement are collectively referred to herein as
the "Basic Agreements." Capitalized terms used but not defined herein shall have
the meanings assigned thereto in the Indenture.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, the Underwriter that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3
(File No. 333-33823) for the registration of the Bonds under the
Securities Act of 1933, as amended (the "1933 Act"), which registration
statement has become effective and copies of which have heretofore been
delivered to you. The Company proposes to file with the Commission
pursuant to Rule 424 under the 1933 Act a supplement to the form of
prospectus included in such registration statement relating to the
Bonds and the plan of distribution thereof. Such registration
statement, as from time to time amended through the date hereof,
including all exhibits thereto, and all documents therein incorporated
by reference from time to time pursuant to Item 12 of Form S-3 under
the 1933 Act that were filed under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), on or before the effective date of such
registration statement, each as amended at the date hereof, but
excluding Form T-1, is hereinafter referred to as the "Registration
Statement;" the related prospectus supplement, in the form in which it
shall be first filed with the Commission pursuant to Rule 424 under the
1933 Act, is hereinafter referred to as the "Prospectus Supplement;"
and the prospectus, in the form in which it shall be first filed with
the Commission pursuant to Rule 424 under the 1933 Act, as supplemented
by the Prospectus Supplement, is hereinafter referred to as the
"Prospectus". Any reference herein to the Registration Statement or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the 1934 Act on or before the date hereof; and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement or the Prospectus shall be deemed
to refer to and include the filing of any document under the 1934 Act
deemed to be incorporated by reference therein after the date hereof.
The Company will file with the Commission within fifteen days of the
issuance of the Bonds a current report on Form 8-K pursuant to Rule
13a-11 under the 1934 Act (a "Current Report") to which shall be
attached a copy of the Indenture and the Servicing Agreement as
executed and that sets forth specific information concerning the Bonds
and the Mortgage Loans to the extent that such information is not set
forth in the Prospectus.
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(b) As of the date hereof, when the Registration Statement
became effective, when the Prospectus is first filed pursuant to Rule
424 under the 1933 Act, when, prior to the Closing Date, any amendment
to the Registration Statement becomes effective, when any supplement to
the Prospectus is filed with the Commission 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, complies
and will comply in all material respects with the applicable
requirements of the 1933 Act, the 1934 Act and the Trust Indenture Act
of 1934, as amended (the "Trust Indenture Act"), as applicable, and the
rules and regulations 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 (iii) the Prospectus, as amended
or supplemented as of any such time, does not and will not contain an
untrue statement of a material fact and does not and will not omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Company makes no
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 Company by
or on behalf of the Underwriter specifically for use in connection with
the preparation of the Registration Statement and the Prospectus. For
all purposes of this Agreement, the Company acknowledges that the
statements set forth in the first sentence of the second to the last
paragraph and the last paragraph of the cover page, the paragraph
regarding making a market in the Bonds on the inside front cover page
and under the heading "Underwriting" in the Prospectus Supplement
constitute the only information furnished in writing by or on behalf of
the Underwriter for inclusion in the documents referred to in the
immediately preceding sentence.
(c) As of the date hereof, when the Registration Statement
became effective, when the Prospectus is first filed pursuant to Rule
424 under the 1933 Act, when, prior to the Closing Date, any amendment
to the Registration Statement becomes effective, when any supplement to
the Prospectus is filed with the Commission, and at the Closing Date,
there has not and will not have been (i) any request by the Commission
for any further amendment to the Registration Statement or the
Prospectus or for any additional information, (ii) any 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 Bonds for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose.
(d) The Bonds meet required ratings criteria for registration
under the Registration Statement. The Bonds and the Basic Agreements
will each conform in all material respects to the description thereof
contained in the Prospectus. The Bonds have been duly authorized, and
each of the Bonds, when validly authenticated and delivered in
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accordance with the Indenture and paid for by the Underwriter in
accordance with this Agreement, will be duly and validly issued and
will constitute legal, valid and binding obligations of the Trust
enforceable against the Trust in accordance with their 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 in equity or at law, and will be entitled to the benefits of
the Indenture. The Indenture has been duly authorized and duly
qualified under the Trust Indenture Act.
(e) The Trust Certificates represent undivided ownership
interests in the Trust created by the Trust Agreement. The Trust
Certificates have been duly authorized, and each of the Trust
Certificates, when validly authenticated and delivered in accordance
with the Trust Agreement will be duly and validly issued, fully paid
and non-assessable and will be entitled to the benefits of the Trust
Agreement.
(f) [Intentionally Omitted].
(g) Each of the Basic Agreements to which the Company is a
party has been or will be as of the Closing Date duly authorized,
executed and delivered by the Company and constitutes, or will
constitute as of the Closing Date, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance
with its 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 in equity or at law.
(h) As of the Closing Date, each of the Basic Agreements to
which the Trust is a party, assuming the due execution and delivery by
the parties thereto, will each constitute a legal, valid and binding
obligation of the Trust, enforceable against the Trust in accordance
with its 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 in equity or at law.
(i) The Company is a corporation duly organized and validly
existing as a corporation in good standing under the laws of Delaware
with corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus and
to enter into and perform its obligations under the Basic Agreements to
which it is a party. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction wherein it owns or leases any material properties or
conducts any material business and which requires such qualification.
(j) Neither the transfer of the Mortgage Loans, nor the
issuance and sale of the Bonds, nor the execution and delivery by the
Company of the Basic Agreements to
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which it is a party, nor the consummation by the Company of any of the
transactions herein or therein contemplated, nor compliance by the
Company with the provisions hereof or thereof, will conflict with or
result in a breach of any term or provision of the Certificate of
Incorporation or by-laws of the Company, or conflict with, result in a
breach, violation or acceleration of or constitute a default under, the
terms of any indenture or other agreement or instrument to which the
Company is a party or by which the Company is bound, or any statute,
order or regulation applicable to the Company, of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over the Company. The Company is not 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 or regulation of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over it, which materially and adversely affects, or
may in the future materially and adversely affect, (i) the ability of
the Company to perform its obligations under the Basic Agreements to
which it is a party or (ii) the business, operations, financial
condition, properties or assets of the Company.
(k) No filing or registration with, notice to, or consent,
approval, authorization or order or other action of any court or
governmental authority or agency is required for the consummation by
the Company of the transactions contemplated by the Basic Agreements to
which it is a party, except (i) such as have been or will have been
obtained under the 1933 Act and the Trust Indenture Act prior to the
Closing Date in connection with the offer, sale, purchase and
distribution of the Bonds by the Underwriter, (ii) the recordation of
the assignments of the Mortgage Loans to the Indenture Trustee pursuant
to the Indenture that has not yet been completed and (iii) such
approvals, consents, registrations or qualifications as may be required
under state securities or blue sky laws of states other than the State
of New York in connection with the purchase and distribution of the
Bonds by the Underwriter.
(l) There is no action, suit, proceeding or investigation of
or against the Company before or by any court, administrative or
governmental agency, or other tribunal, domestic or foreign, now
pending or, to the best of the Company's knowledge, threatened against
the Company, (i) asserting the invalidity of the Basic Agreements, (ii)
seeking to prevent the issuance of the Bonds or the consummation of any
of the transactions contemplated by the Basic Agreements, (iii) which
might materially and adversely affect the performance by the Company of
its obligations under, or the validity or enforceability of, the Basic
Agreements, or the Bonds or the Trust Certificates, or (iv) seeking to
affect adversely the federal income tax attributes of the Bonds as
described in the Prospectus.
(m) As of the Closing Date, the Mortgage Loans will have been
duly and validly assigned and delivered to the Indenture Trustee,
subject to no prior lien, mortgage, security interest, pledge, adverse
claim, charge or other encumbrance other than Permitted Encumbrances.
(n) [Intentionally Omitted].
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(o) As of the Closing Date, the Company's representations and
warranties in the Basic Agreements to which it is a party will be true
and correct in all material respects.
(p) Immediately prior to the time of execution and delivery of
the Indenture, but after the execution and delivery of the Mortgage
Loan Purchase Agreement, the Company will have good and marketable
title to, and will be the sole owner of, the Mortgage Loans, free and
clear of any lien, mortgage, pledge, charge, encumbrance, adverse claim
or other security interest other than the Permitted Encumbrances
(collectively, "Liens"), and will not have assigned to any Person other
than the Trust or the Indenture Trustee any of its right, title or
interest in such Mortgage Loans.
(q) Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of the Basic
Agreements, the Trust Certificates and the Bonds have been or will be
paid at or prior to the Closing Date.
(r) The Company possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the business
now operated by it and as described in the Prospectus, and the Company
has received no notice of proceedings relating to the revocation or
modification of any such license, certificate, authority or permit
which singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
conduct of the business, operations, financial condition or income of
the Company.
(s) Neither the Company nor the Trust is, and, after giving
effect to the issuance of the Trust Certificates or the offering and
sale of the Bonds, will be, an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act") that is
registered or is required to be registered under the 1940 Act.
(t) [Intentionally Omitted].
(u) The transfer of the Trust Certificates to NMFC does not
require registration under the 1933 Act or any state securities or blue
sky laws.
(v) The Trust Agreement is not required to be qualified under
the Trust Indenture Act.
[(w) The Indenture has been duly qualified under the Trust
Indenture Act.]
Any certificate signed by an officer of the Company and delivered to
the Underwriter or counsel for the Underwriter in connection with the offering
of the Bonds shall be deemed a representation and warranty as to the matters
covered thereby to the Underwriter.
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2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, the Bonds at the purchase price set forth in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Bonds
shall be made at the office, on the date and at the time specified in Schedule I
hereto, or such later date and time not later than ten (10) Business Days after
such date and time specified in Schedule I hereto as shall be agreed upon by the
Company and the Underwriter (such date and time of delivery of, and payment for,
the Bonds, the "Closing Date"). Delivery of the Bonds shall be made to the
Underwriter or their designees against payment by the Underwriter of the
purchase price therefor to or upon the order of the Company by delivery of
immediately available funds. The Bonds shall be registered in such names and in
such denominations as the Underwriter may have requested in writing not less
than three (3) full Business Days prior to the Closing Date.
The Company agrees to have the Bonds available for inspection, checking
and packaging in New York, New York, not later than 10:00 a.m. New York time on
the Business Day prior to the Closing Date.
4. Offering by the Underwriter. It is understood that the
Underwriter proposes to offer the Bonds for sale as set forth in the Prospectus.
5. Agreements. The Company agrees with the Underwriter that:
(a) The Company will, prior to the termination of the offering
of the Bonds, promptly advise the Underwriter (i) when any amendment to
the Registration Statement has become effective or any revision of or
supplement to the Prospectus has been so filed, (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 Company of
any notification with respect to the suspension of the qualification of
the Bonds for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof. The Company will
not file any amendment to the Registration Statement or any revision of
or supplement to the Prospectus (including the supplement relating to
the Bonds included in the Prospectus) prior to the termination of the
offering of the Bonds unless the Company has furnished to the
Underwriter a copy for its review and will not file such proposed
amendment or supplement to which any Underwriter reasonably objects.
Subject to the foregoing sentence, the Company will cause the
Prospectus to be filed with the Commission pursuant to Rule 424 under
the 1933 Act by means reasonably calculated to result in a timely
filing with the Commission pursuant to Rule 424 and promptly will
advise the Underwriter when the Prospectus has been so filed.
(b) If, at any time when a prospectus relating to the Bonds is
required to be delivered under the 1933 Act (i) any event occurs as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or
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omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, or (ii) it shall be necessary
to revise, amend or supplement the Prospectus to comply with the 1933
Act or the rules and regulations of the Commission thereunder, the
Company promptly will notify the Underwriter and promptly will prepare
and file with the Commission, subject to subsection (a) of this Section
5, a revision, amendment or supplement that will correct such untrue
statement or omission or 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 to the Registration Statement to be declared effective as
soon as possible.
(c) The Company will (i) furnish to the Underwriter and
counsel for the Underwriter, without charge, signed copies of the
Registration Statement including exhibits thereto and each amendment
thereto that became effective on or prior to the Closing Date and, so
long as delivery of a prospectus relating to the Bonds is required
under the 1933 Act, as many copies of the Prospectus and any revisions
thereof or amendments or supplements thereto as may be reasonably
requested, and (ii) file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934
Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required under the 1933 Act in connection
with the offering or sale of the Bonds.
(d) The Company will pay or cause to be paid all expenses
incidental to the performance of its obligations under this Agreement
and the Basic Agreements, including but not limited to: (i) the fees
and disbursements of counsel to the Company, (ii) expenses of printing
the Prospectus, (iii) any fees charged by the Rating Agencies (as
hereinafter defined) for rating the Bonds, (iv) accounting fees and
disbursements, (v) the costs and expenses in connection with the
qualification or exemption of the Bonds under state securities or blue
sky laws, including filing fees and reasonable fees and disbursements
of counsel in connection with the preparation of any blue sky survey
and in connection with any determination of the eligibility of the
Bonds for investment by institutional investors and the preparation of
any legal investment survey, and (vi) the fees and expenses of the
Owner Trustee and the Indenture Trustee and any agent of the Owner
Trustee and Indenture Trustee and the fees and disbursements of counsel
for the Owner Trustee and the Indenture Trustee in connection with the
Trust Agreement, the Servicing Agreement, the Indenture and the Bonds.
It is understood that, except as provided in this subsection (d) and in
Sections 7 and 11 hereof, the Underwriter will pay all of its own
expenses, including the fees of any counsel to the Underwriter, any
transfer taxes on resale of any of the Bonds by the Underwriter and
advertising expenses connected with any offers of the Bonds that the
Underwriter may make.
(e) So long as any Bonds are outstanding, the Company will
cause the Servicer to furnish to the Underwriter, as soon as available,
a copy of (i) the annual statement of compliance delivered by the
Servicer to the Indenture Trustee pursuant to the Servicing Agreement,
(ii) the annual independent public accountants' report furnished
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to the Indenture Trustee pursuant to the Servicing Agreement, (iii)
each report of the Company or the Trust regarding the Bonds filed with
the Commission under the 1934 Act or mailed to the holders of the
Bonds, and (iv) from time to time, such other information concerning
the Bonds as the Underwriter may reasonably request and which may be
furnished by the Company, the Servicer or the Indenture Trustee without
undue expense and without violation of applicable law.
(f) The Company will endeavor, in cooperation with the
Underwriter and the Underwriter's counsel, to qualify the Bonds for
offering and sale under the applicable securities and blue sky laws of
such jurisdictions as the Underwriter may reasonably designate, and
will maintain such qualifications in effect for a period of not less
than one year after the date hereof, unless the offering and sale of
the Bonds is exempt from such qualification under the Secondary
Mortgage Market Enhancement Act of 1984, and will cooperate with the
Underwriter and its counsel to determine the eligibility of the Bonds
for investment by institutional investors in such jurisdictions. The
Company will, at the Underwriter's request or the request of the
Underwriter's counsel, file such statements and reports as may be
required by the laws of each jurisdiction in which the Bonds have been
qualified as above provided. Notwithstanding the foregoing, no such
qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be subject to general service of process,
other than by reason of the offer and sale of the Bonds, qualification
as a foreign corporation or to taxation as a foreign corporation doing
business in such jurisdiction.
(g) The Company will cause the Trust to make generally
available to holders of the Bonds as soon as practicable, but in any
event not later than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the 1993 Act),
an earnings statement of the Trust (which need not be audited)
complying with Section 11(a) of the 1933 Act and the rules and
regulations of the Commission thereunder (including, at the option of
the Company, Rule 158).
6. Conditions to the Obligation of the Underwriter. The
obligation of the Underwriter to purchase and pay for the Bonds shall be subject
to the accuracy in all material respects of the representations and warranties
on the part of the Company contained herein as of the date hereof, as of the
date of effectiveness of any amendment to the Registration Statement prior to
the Closing Date and as of the Closing Date, to the accuracy of the statements
of the Company made in any officer's certificate pursuant to the provisions
hereof, to the performance in all material respects by the Company of its
obligations hereunder, and to the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted and be pending or shall have
been threatened, and the Prospectus shall have been filed or mailed for
filing with the Commission not later than required pursuant to the
rules and regulations of the Commission.
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(b) The Company shall have furnished to the Underwriter a
certificate, dated the Closing Date, signed by the President or a vice
president of the Company to the effect that the signer of such
certificate has carefully examined the Registration Statement, the
Prospectus, and this Agreement and that:
(i) subsequent to the date of this Agreement and
the Registration Statement, there has been no material adverse
change in the condition, financial or otherwise, earnings,
business affairs, regulatory situation or business prospects
of the Company whether or not arising in the ordinary course
of business;
(ii) the representations and warranties of the
Company in Section 1 of this Agreement are true and correct in
all material respects as though made at and as of the date
hereof;
(iii) the Company has in all material respects
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the date hereof;
(iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or
threatened; and
(v) nothing has come to our attention that would
lead us to believe that the Prospectus contains any untrue
statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The Company shall also have furnished to the Underwriter a certificate, dated
the Closing Date, signed by the Secretary or a vice president of the Company, in
form and substance acceptable to the Underwriter, as to certain corporate
matters and shall attach to such certificate a true and correct copy of the
Company's Certificate of Incorporation and by-laws and a Certificate of Good
Standing for the Company issued by the Secretary of the State of Delaware at
least thirty days prior to the Closing Date, all of which are in full force and
effect on the date of such certificate, and a certified true copy of the
resolution of its Board of Directors with respect to the transactions
contemplated in this Agreement.
(c) The Company shall have furnished to the Underwriter an
opinion, dated as of the Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the
Company, reasonably satisfactory in form and substance to counsel for the
Underwriter.
Such opinion may express its reliance as to factual matters on the
representations and warranties made by, and on certificates or other documents
furnished by, officers of the parties to the Basic Agreements. Such opinion may
assume the due authorization, execution and delivery of the agreements,
instruments and documents referred to therein by the parties thereto other than
the Company and that such other agreements are the valid, legal and binding
obligations of such other parties. Such opinion may be qualified as an opinion
only on the general corporation law of
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the State of Delaware, the laws of the State of New York, the laws of each state
in which the writer of the opinion is admitted to practice law and the federal
law of the United States. To the extent that such firm relies upon the opinion
of other ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, general counsel to the Company, and counsel (which
counsel shall be reasonably satisfactory to the Underwriter) in rendering any
portion of its opinion, the opinion of such other counsel shall be attached to
and delivered with the opinion of such firm that is delivered to the
Underwriter.
(d) The Company shall also furnish to the Underwriter such other
opinion or opinions, dated as of the Closing Date, of their counsel as shall be
reasonably required by and reasonably satisfactory to the Rating Agencies.
(e) National Mortgage shall have furnished to the Underwriter an
opinion, dated as of the Closing Date, of counsel to National Mortgage, which
opinion shall be reasonably satisfactory in form and substance to counsel for
the Underwriter.
Such opinion may express its reliance as to factual matters on the
representations and warranties made by, and on certificates or other documents
furnished by officers of the parties to this Agreement and the other Basic
Agreements to which National Mortgage is a party. Such opinion may assume the
due authorization, execution and delivery of the instruments and documents
referred to therein by the parties thereto other than National Mortgage and that
such other agreements are the valid, legal and binding obligations of such other
parties. Such opinion may be qualified as an opinion only on the general
corporation law of the State of Delaware, the laws of the State of New York, the
laws of each state in which the writer of the opinion is admitted to practice
law and the federal law of the United States. To the extent that such firm
relies upon the opinion of other counsel (which counsel shall be reasonably
satisfactory to the Underwriter) in rendering any portion of its opinion, the
opinion of such other counsel shall be attached to and delivered with the
opinion of such firm that is delivered to the Underwriter.
National Mortgage shall also furnish to the Underwriter such other
opinion or opinions, dated as of the Closing Date, of their counsel relating to
bankruptcy or insolvency matters as shall be reasonably requested by the
Underwriter and such other opinion or opinions as shall be reasonably required
by and satisfactory to the Rating Agencies.
(f) The Underwriter shall have received an opinion or opinions, dated
as of the Closing Date, of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, counsel to the Owner
Trustee, reasonably satisfactory in form and substance to counsel for the
Underwriter.
Such opinion may express its reliance as to factual matters on the
representations and warranties made by, and on certificates or other documents
furnished by, officers of the parties to this Agreement and the other Basic
Agreements to which the Owner Trustee or the Trust is a party. 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 Owner
Trustee or the Trust. Such opinion may be qualified as an opinion only on the
laws of the State of Delaware, the laws of New York and the laws of each state
in which the writer of the opinion is admitted to practice law and the federal
law of the United States. To the extent that such firm relies upon the opinion
of other counsel in rendering any portion of its opinion, the opinion of such
other counsel shall be attached to and delivered with the opinion of such firm
that is delivered to the Underwriter.
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The Owner Trustee shall also furnish to the Underwriter such other
opinion or opinions, dated as of the Closing Date, of their counsel, as shall be
reasonably required by and reasonably satisfactory to the Rating Agencies.
(g) The Underwriter shall have received an opinion, dated as of the
Closing Date, of counsel to Norwest (in its capacity as Indenture Trustee),
reasonably satisfactory in form and substance to counsel for the Underwriter.
Such opinion may express its reliance as to factual matters on the
representations and warranties made by, and on certificates or other documents
furnished by officers of, the parties to this Agreement and the other Basic
Agreements to which Norwest is a party. Such opinion may assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than Norwest. Such opinion may be
qualified as an opinion only on the laws of the State of New York, the laws of
the State of Minnesota, the laws of each state in which the writer of the
opinion is admitted to practice law and the federal laws of the United States.
To the extent that such firm relies upon the opinion of other counsel in
rendering any portion of its opinion, the opinion of such other counsel shall be
attached to and delivered with the opinion of such firm that is delivered to the
Underwriter.
Norwest shall also furnish to the Underwriter such other opinion or
opinions, dated as of the Closing Date, of their counsel, as shall be reasonably
required by and reasonably satisfactory to the Rating Agencies.
(h) [Intentionally omitted].
(i) The Underwriter shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇,
counsel for the Underwriter, such opinion or opinions in form and substance
satisfactory to the Underwriter, dated as of the Closing Date, with respect to
the issuance and sale of the Bonds and the Prospectus and such other related
matters as the Underwriter may reasonably require.
(j) The Underwriter shall have received from Deloitte & Touche, LLP,
independent certified public accountants, a letter dated the date of the
Prospectus and satisfactory in form and substance to the Underwriter and counsel
for the Underwriter, to the effect that they have performed certain specified
procedures as a result of which they determined that certain information of an
accounting, financial or statistical nature, set forth in the Prospectus
Supplement on the cover thereof and under the captions "Yield Considerations",
"Risk Factors", "Servicing of the Mortgage Loans" and "Description of the
Mortgage Pool", including any Mortgage Loan information filed by the Company in
any Current Report, agrees with the records of the Servicer.
(k) The Underwriter shall have received from Deloitte & Touche, LLP,
independent certified public accountants, the letters satisfactory in form and
substance to the Underwriter and counsel for the Underwriter, to the effect that
(i) they have reviewed certain of the Mortgage Loans and performed certain
specified procedures as a result of which they determined that
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certain information of an accounting, financial or statistical nature set forth
in the Prospectus are, based on the assumptions set forth therein,
mathematically accurate and internally consistent.
(l) The Underwriter shall have received from each Person that is a
party to the Basic Agreements, a certificate dated as of the Closing Date of an
authorized officer of such Person in form and substance reasonably satisfactory
to the Underwriter.
(m) Each Class of the Bonds shall be rated as set forth in the
Prospectus by the Rating Agencies specified in such Prospectus, and such Rating
Agencies shall not have rescinded such ratings and shall not have made any
public announcement that such ratings of the Bonds has been placed under review.
(n) The Underwriter shall have received copies of any opinions of
counsel to the Company supplied to the Rating Agencies or the Indenture Trustee
relating to certain matters with respect to the Bonds including without
limitation any true sale and non-substantive consolidation opinions. 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.
(o) Each Person that is a party to the Basic Agreements shall have
furnished to the Underwriter such further information, certificates, opinions
and documents as the Underwriter may reasonably have requested, and all
proceedings in connection with the transactions contemplated by this Agreement
and all documents incident hereto shall be in all material respects reasonably
satisfactory in form and substance to the Underwriter and their counsel.
(p) The Underwriter shall have received an indemnification agreement
executed by National Mortgage in favor of the Underwriter substantially in the
form of Exhibit A hereto.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
if the Company is in breach of any materials 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 counsel for the Underwriter, this
Agreement and all obligations of the Underwriter hereunder may be canceled at,
or at any time prior to, the Closing Date by the Underwriter. Notice of such
cancellation shall be given to the Company in writing, or by telephone or
facsimile confirmed in writing.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Underwriter,
the directors, officers and employees and agents of the Underwriter, and each
person who controls the Underwriter within the meaning of either the 1933 Act or
the 1934 Act, against any and all losses, claims, damages or liabilities, joint
or several, to which they may become subject under the 1933 Act, the 1934 Act or
other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities or actions in respect
thereof arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus or in any amendment thereto or
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supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by it or them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company as stated herein by or on behalf of the Underwriter specifically for
use in connection with the preparation thereof. This indemnity agreement will be
in addition to any liability which the Company may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who signs the Registration Statement
and each person, if any, who controls the Company within the meaning of the 1933
Act or the 1934 Act, to the same extent as the foregoing indemnity from the
Company to the Underwriter, but only with reference to written information
relating to the Underwriter furnished to the Company as herein stated by or on
behalf of the Underwriter specifically for use in the preparation of the
documents referred to in the foregoing indemnity contained in subsection (a) of
this Section 7. This indemnity agreement will be in addition to any liability
that the Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, promptly notify the indemnifying party in writing of the commencement
thereof; provided, however, that the omission so to notify the indemnifying
party will not relieve the indemnifying party from any liability which it may
have to any indemnified party under the foregoing provisions of this Section 7
unless and only to the extent that such omission results in the forfeiture of
substantive rights of the indemnifying party. If any such action is brought
against any indemnified party and that party notifies the indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to
participate therein, and to the extent that it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party, which counsel shall not be counsel to
the indemnifying party except with the consent of the indemnified party, and
after receipt of notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation by the indemnified
party undertaken with notice to and approval by the indemnifying party. If the
indemnifying party elects not to assume the defense, all fees, disbursements and
other charges incurred by the indemnified party shall be reimbursed by the
indemnifying party promptly as they are incurred. An indemnifying party will not
be liable for any settlement of any action or claim effected without its consent
(which consent shall not be unreasonably withheld).
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(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subsections (a) and
(b) of this Section 7 is due in accordance with its terms but is for any reason
held by a court to be unavailable on grounds of policy or otherwise, the Company
and the Underwriter shall contribute to the aggregate losses, claims, damages
and liabilities (or actions in respect thereof) to which the Company and the
Underwriter may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriter on
the other from the offering of the Bonds. The relative benefits received by the
Company on the one hand and the Underwriter on the other hand shall be deemed to
be in the same proportion as the total proceeds from the offering of the Bonds
(before deducting expenses) bear to the total compensation or profit (before
deducting expenses) received or realized by the Underwriter from the purchase
and resale, or underwriting, of the Bonds. If the foregoing allocation is not
permitted by applicable law, then such contribution shall be determined based on
such proportions as is appropriate to reflect not only the relative benefits as
described above but also the relative fault of the Company on the one hand and
the Underwriter on the other hand as well as any other relevant equitable
considerations. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company or the Underwriter. The Company and the Underwriter agrees that it would
not be just and equitable if contribution were determined by pro rata allocation
or any other method of allocation that does not take account of the equitable
considerations referred to above.
Notwithstanding the provisions of this paragraph 7(d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 7, each person,
if any, who controls the Underwriter within the meaning of the 1933 Act or the
1934 Act and each director, officer, employee or agent of the Underwriter shall
have the same rights to contribution as the Underwriter, and each person, if
any, who controls the Company within the meaning of the 1933 Act or the 1934
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this subsection (d), notify such party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any other obligation it or they may have hereunder or
otherwise than under this subsection (d).
8. Termination. This Agreement shall be subject to termination, in the
absolute discretion of the Underwriter, by notice given to the Company prior to
delivery of and payment for the Bonds, if prior to such time (i) trading in
securities generally on the New York Stock Exchange shall have been suspended or
materially limited or any setting of minimum prices for trading on such
exchange, (ii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities, (iii)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war or other calamity or crisis
the effect of which on the financial markets of the United States is such as to
make it, in the judgment of the Underwriter, impracticable or inadvisable to
market the Bonds, or (iv) any change, or any development involving a prospective
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change, in or affecting particularly the business or properties of the Company,
or National Mortgage, or any of their respective affiliates, in the judgment of
the Underwriter, materially impairs the investment quality of the Bonds.
9. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and its respective officers and of the Underwriter set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Underwriter, the Company or any of
the officers, directors or controlling persons referred to in Section 7 hereof,
and will survive delivery of and payment for the Bonds. The provisions of
Section 5(d), Section 7 and Section 11 hereof shall survive the termination or
cancellation of this Agreement.
10. Reimbursement of Underwriter's Expenses. If the sale to the
Underwriter of the Bonds as provided for herein is not consummated for any
reason, other than by reason of a default by the Underwriter, the Underwriter's
reasonable costs and expenses shall be reimbursed by the Company.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, partners and controlling persons referred to in Section 7
hereof and their respective successors and assigns, and no other person will
have any right or obligation hereunder.
12. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
13. Miscellaneous. This Agreement supersedes all prior or
contemporaneous agreements and understandings relating to the subject matter
hereof. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated except by a writing signed by the party against whom
enforcement of such change, waiver, discharge or termination is sought. This
Agreement may be signed in any number of counterparts, each of which shall be
deemed an original, which taken together shall constitute one and the same
instrument.
14. Notices. Communications hereunder will be in writing and effective
only on receipt and, if sent to the Underwriter, will be delivered to Salomon
Brothers Inc, Seven World Trade Center, New York, New York 10048, Attention:
Head: Mortgage Finance or if sent to the Company, will be delivered to Fund
America Investors Corporation II, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, President.
15. Underwriter Representation. The Underwriter represents to the
Company that no "computational materials" or "structural term sheets" were, or
will be, distributed to investors.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned one counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement by
and between the Company and the Underwriter.
Very truly yours,
FUND AMERICA INVESTORS
CORPORATION II
By:
-----------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
SALOMON BROTHERS INC
By:
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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SCHEDULE I
Underwriter:
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Purchase Price for the Bonds: _____% of the initial principal amount of the
Bonds.
Title of Bonds: Collateralized Mortgage Obligations, Series 1998-NMC1, which
consist of four classes of bonds, designated as the Class A Bonds, the Class M-1
Bonds, the Class M-2 Bonds and the Class M-3 Bonds.
Principal Balances for the Bonds: Aggregate original principal balance of
approximately $236,526,000 allocated among each of the four classes as follows:
Class A Bonds: $192,024,000
Class M-1 Bonds: $ 19,264,000
Class M-2 Bonds: $ 10,851,000
Class M-3 Bonds: $ 14,387,000
Description of Bonds: The Bonds are more fully described in the Prospectus.
Type of Mortgage Loans: One- to four-family adjustable rate, fully amortizing
residential mortgage loans having original terms to maturity of up to 30 years.
Aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date:
Approximately $243,841,234.
Cut-Off Date: June 1, 1998
Ratings of Bonds: As provided in the Prospectus.
Denominations of the Bonds: Minimum denominations of $10,000 and increments of
$1.00 in excess thereof.
Closing Office: Hunton & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇
Closing Date and Time of Delivery of and Payment for the Bonds: June 29, 1998,
2:00 p.m. Eastern Standard Time)
