Exhibit No. 1.1
Form of Underwriting Agreement
HEADLANDS MORTGAGE SECURITIES, INC.
$___________ (approximate)
Mortgage Pass-Through Certificates,
Series 199_-_
[ ], 1996
UNDERWRITING AGREEMENT
[Underwriter]
Ladies and Gentlemen:
SECTION 1. Introduction. Headlands Mortgage Securities, Inc.,
a Delaware corporation (the "Company"), proposes to sell to you (sometimes
referred to herein as the "Underwriter"), $__________ principal amount of its
Mortgage Pass-Through Certificates identified in Schedule I hereto (the "Offered
Certificates") having the aggregate Initial Certificate Balances set forth in
Schedule I (subject to an upward or downward variance, not to exceed the
percentage set forth in such Schedule I, the precise Initial Certificate Balance
within such range to be determined by the Company in its sole discretion). The
Offered Certificates, together with the two Classes of subordinate certificates
(the "Non-Offered Certificates") and the Class of residual certificates (the
"Residual Certificates"), collectively referred to herein as the "Certificates"
evidence the entire ownership interest in the assets of a trust fund (the
"Pool") consisting primarily of fully-amortizing, fixed interest rate,
conventional mortgage loans, as described in Schedule I (the "Mortgage Loans")
acquired by the Company pursuant to the Mortgage Loan Purchase Agreements (the
"Loan Purchase Agreement"), dated as of [ ], 1996, between the Company and
Headlands Mortgage Company (the "Seller"), and having, as of the close of
business on the date specified in Schedule I as the cut-off date (the "Cut-Off
Date"), the aggregate principal balance set forth in Schedule I. An election
will be made to treat the Pool as a real estate mortgage investment conduit (a
"REMIC") for purposes of federal income taxation. The Certificates are to be
issued pursuant to a pooling and servicing agreement (the "Pooling Agreement"),
dated
as of the Cut-Off Date, among the Company, as sponsor, the Seller, Headlands
Mortgage Company, as master servicer (in such capacity, the "Master Servicer")
and [ ], as trustee (the "Trustee"). The Offered Certificates will be issued in
the denominations specified in Schedule I.
Capitalized terms used herein that are not otherwise defined herein
have the meanings assigned thereto in the Pooling Agreement.
SECTION 2. Representations and Warranties of the
Company. The Company represents and warrants to the Underwriter
as follows:
(a) A Registration Statement on Form S-3 (File No. 333-[ ]),
including a prospectus and such amendments thereto as may have been
required to the date hereof, relating to the certificates and the
offering thereof from time to time in accordance with Rule 415 under
the Securities Act of 1933, as amended (the "Act"), has been filed with
the Securities and Exchange Commission (the "Commission"), and such
registration statement, as amended, has become effective. As used in
this Agreement, "Effective Time" means the date and the time as of
which such Registration Statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the Effective Time. "Registration
Statement" means such registration statement at the Effective Time;
including any documents incorporated by reference therein at such time;
"Preliminary Prospectus" means each prospectus included in such
Registration Statement, or amendments thereof, including a preliminary
prospectus supplement which, as completed, is proposed to be used in
connection with the sale of the Offered Certificates; and "Prospectus"
means such final prospectus, as supplemented by a prospectus supplement
(the "Prospectus Supplement") relating to the Offered Certificates in
the form first used to confirm sales of the Offered Certificates.
Reference made herein to any Preliminary Prospectus or to the
Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Act, as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any document filed under the Securities
Exchange Act of 1934 (the "Exchange Act") after the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or the
Prospectus,
2
as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to include any report of the
Company filed with the Commission pursuant to Section 13(a) or 15(d) of
the Exchange Act after the Effective Time that is incorporated by
reference in the Registration Statement.
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the Rules and
Regulations of the Commission (the "Rules and Regulations"), and none
of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and
the Rules and Regulations and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(c) The Registration Statement at the Effective Date and at
all times subsequent thereto up to the Closing Date hereinafter
mentioned and the Prospectus as of the date of the Prospectus
Supplement, and any amendments or supplements thereto filed prior to
the Closing Date, conformed or will conform in all material respects
with the requirements of the Act and the Exchange Act and the Rules and
Regulations of the Commission thereunder, and at the Effective Time the
Registration Statement does not include any untrue statement of a
material fact or 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 at the Closing Date, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements
contained therein, in the light of the circumstances under which they
were made, not misleading; except that the foregoing does not apply to
statements or omissions in the Registration Statement or the
Prospectus, as amended or supplemented if applicable, based upon
written information furnished to the Company by the Underwriter
specifically for use therein.
3
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (i) there has been no material adverse change
in the condition, financial or otherwise, earnings, affairs or business
prospects of the Company, whether or not arising in the ordinary course
of business and (ii) there have been no material transactions entered
into by the Company other than those in the ordinary course of
business.
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with corporate power and authority to execute, deliver and
perform the transactions contemplated by this Agreement, the Loan
Purchase Agreement and the Pooling Agreement.
(f) The Company is not in violation of its charter or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which it
is a party or by which it or any of its properties may be bound; no
consent, approval, authorization or order of any court or governmental
authority or agency is required for the consummation by the Company of
the transactions contemplated by this Agreement, except such as may be
required under the Act, the Rules and Regulations or state securities
or Blue Sky laws; and the execution and delivery of this Agreement and
the Pooling Agreement and the consummation of the transactions
contemplated herein and therein will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company pursuant to, any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company is a
party or by which it may be bound or to which any of the property or
assets of the Company is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or
any law, administrative regulation or administrative or court decree
applicable to the Company.
(g) Except as set forth in the Prospectus, there is no action,
suit or proceeding before or by any court or governmental agency or
body, domestic or foreign, now pending or, to the knowledge of the
Company, threatened against or affecting the Company, which might
result in any material adverse change in the condition, financial or
otherwise, earnings, affairs or business prospects of the
4
Company, or might materially and adversely affect the properties or
assets thereof or might materially and adversely affect the offering of
the Offered Certificates; and there are no material contracts or other
documents which are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which
have not been so filed.
(h) This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, except as rights to indemnity hereunder may be limited by
applicable law.
(i) The Pooling Agreement has been duly authorized, and when
executed and delivered by the Company, will be a valid and binding
agreement of the Company.
(j) The Certificates have been duly authorized, and, when
executed and authenticated in accordance with the provisions of the
Pooling Agreement and delivered to and, with respect to the Offered
Certificates, paid for by the Underwriter in accordance with this
Agreement, will be validly issued and outstanding and entitled to the
benefits of the Pooling Agreement.
(k) The Company 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 Offered Certificates for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.
SECTION 3. Purchase, Sale and Delivery of Offered
Certificates. On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Underwriter, and the Underwriter agrees
to purchase from the Company at a purchase price set forth in Schedule 1 hereto,
the respective principal amount of Offered Certificates set forth in Schedule I
hereto.
The Company will deliver the Offered Certificates to the Underwriter,
against payment of the purchase price therefor in same day funds wired to such
bank as may be designated by the Company, or by such other manner of payment as
may agreed upon by the Company and you, at the offices of ▇▇▇▇▇ & ▇▇▇▇ LLP, One
▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 A.M., New York time, on , 19 or
at such other place or time not later than seven full business days thereafter
as you and the Company determine, such time being referred to herein as the
"Closing Date."
The Offered Certificates so to be delivered will be in such
denominations and registered in such names as you request two full business days
prior to the Closing Date, as the case may be, and will be made available at the
office of [
] or, upon your request, through the facilities of The Depository
Trust Company, for checking and packaging at least one full business day prior
to the Closing Date.
SECTION 4. Offering by the Underwriter. It is understood that
the Underwriter proposes to offer the Offered Certificates subject to this
Agreement for sale to the public on the terms as set forth in the Prospectus.
SECTION 5. Covenants of the Company. The Company
hereby covenants and agrees with the Underwriter that:
(a) Immediately following the execution of this Agreement, the
Company will prepare the Prospectus Supplement setting forth the amount
of Offered Certificates covered thereby and the terms thereof not
otherwise specified in the Prospectus, the price at which the Offered
Certificates are to be purchased by the Underwriter from the Company,
either the initial public offering price or the method by which the
price at which the Offered Certificates are to be sold will be
determined, the selling concessions and allowances, if any, and such
other information as the Company deems appropriate in connection with
the offering of such Offered Certificates, but the Company will not
file any amendments to the Registration Statement as in effect with
respect to the Offered Certificates, or any amendments or supplements
to the Prospectus, without your consent, which will not be unreasonably
withheld; the Company will also advise you promptly of the filing or
effectiveness of any amendment or supplement to the Registration
Statement or the Prospectus, and of receipt of notification of the
institution by the Commission of any stop order proceedings in respect
of the Registration Statement or the initiation or threatening of any
proceeding for such purpose, and will use every reasonable effort to
prevent the issuance of any such stop order and to obtain as soon as
possible its lifting, if issued.
(b) If, during such period of time after the first
date of the public offering of the Offered Certificates as
6
in the opinion of counsel for the Underwriter a prospectus relating to
the Offered Certificates is required by law to be delivered in
connection with sales by the Underwriter or dealer, any event occurs as
a result of which the Prospectus as then amended or supplemented would,
in the judgment of the Underwriter and its counsel, include any untrue
statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary at
any time to amend or supplement the Prospectus to comply with the Act
or any other law, the Company will promptly prepare and file with the
Commission, an amendment or supplement which will correct such
statement or omission or an amendment that will effect such compliance
and will notify you and, upon your request, prepare and furnish without
charge to the Underwriter and to any dealer in securities as many
copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance.
(c) The Company will deliver to each of you as many signed and
conformed copies of the Registration Statement and of each amendment
thereto (including exhibits filed therewith) as you may reasonably
request and will also deliver to you a conformed copy of the
Registration Statement and each amendment thereto for each of the
Underwriters.
(d) The Company will endeavor, in cooperation with you, to
qualify the Offered Certificates for offering and sale under the
applicable securities laws of such states and other jurisdictions of
the United States as you may designate, and will maintain such
qualifications in effect for as long as may be required for the
distribution of the Offered Certificates; provided, however, that the
Company shall not be required to qualify to do business in any
jurisdiction where it is now not qualified or to take any action which
would subject it to general or unlimited service of process in any
jurisdiction in which it is now subject to service of process. The
Company will file such statements and reports as may be required by the
laws of each jurisdiction in which the Offered Certificates have been
qualified as above provided.
(e) To the extent that the Underwriter (i) has provided to the
Company Collateral Term Sheets (as hereinafter defined) that the
Underwriter has provided to a prospective investor, the Company has
filed such Collateral
7
term sheets as an exhibit to a report on Form 8-K within two business
days of its receipt thereof, or (ii) has provided to the Company
Structural Term Sheets or Computational Materials (each as defined
below) that the Underwriter has provided to a prospective investor, the
Company will file or cause to be filed with the Commission a report on
Form 8-K containing such Structural Term Sheet and Computational
Materials, as soon as reasonably practicable after the date of this
Agreement, but in any event, not later than the date on which the
Prospectus is filed with the Commission pursuant to Rule 424 of the
Rules and Regulations.
SECTION 6. Conditions to the Obligations of the Underwriter.
The obligations of the Underwriter to purchase and pay for the Offered
Certificates on the Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company herein as of the date
hereof and as of the Closing Date with the same force and effect as if made as
of that date, to the performance by the Company of its obligations hereunder and
to the following additional conditions precedent:
(a) Prior to the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted, or to the
knowledge of the Company or you, shall have been contemplated by the
Commission.
(b) Each Class of Offered Certificates shall have been rated
not less than "[ ]" and "[ ]" by [ ] and [ ], respectively, (each a
"Rating Agency") and such ratings shall not have been rescinded.
(c) You shall have received an opinion of ▇▇▇▇▇ & Wood LLP,
dated the Closing Date, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of Delaware with corporate power and authority to
execute, deliver and perform the transactions contemplated by
this Agreement, the Loan Purchase Agreement and the Pooling
Agreement;
(ii) Each of this Agreement, the Loan Purchase
Agreement and the Pooling Agreement has been duly authorized,
executed and delivered by the Company;
(iii) The Certificates have been duly authorized,
executed and delivered by the Company;
8
(iv) No consent, approval, authorization or order
of any court or governmental authority or agency is required
in connection with the transactions contemplated by this
Agreement, the Loan Purchase Agreement or the Pooling
Agreement, except such as may be required under the state
securities or Blue Sky laws and such other approvals as have
been obtained; and, to the best of such counsel's knowledge
and information, the execution and delivery of this Agreement,
the Loan Purchase Agreement and the Pooling Agreement and the
consummation of the transactions contemplated herein will not
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company
pursuant to any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the
Company is a party or by which it may be bound or to which any
of the property or assets of the Company is subject, nor will
such action result in any violation of the provisions of the
charter or by-laws of the Company, or any law, administrative
regulation or administrative or court decree applicable to the
Company; and
(v) Assuming each of the Loan Purchase Agreement
and the Pooling Agreement has been duly authorized, executed
and delivered by the parties thereto, each of such documents
constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with
its terms, subject, as to enforceability, to bankruptcy,
insolvency, reorganization, moratorium, or other similar laws
affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is
sought in a proceeding in equity or at law;
(vi) The Registration Statement has become
effective under the Act; to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or threatened under the Act;
and the Registration Statement and the Prospectus (other than
the financial and statistical information therein as to which
such counsel need express no opinion) as of their respective
effective or issue dates complied as to form in all material
respects with the requirements of the Act and the Rules and
Regulations;
9
(vii) The Pooling Agreement and the Certificates
conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus;
(viii) The Pooling Agreement will not be required to
be qualified under the Trust Indenture Act of 1939, as
amended, and the Pool is not required to be registered under
the Investment Company Act of 1940, as amended;
(ix) Assuming that the Certificates have been duly
authorized, executed and authenticated in the manner
contemplated in the Pooling Agreement, when delivered and paid
for by you as provided in this Agreement, the Certificates
purchased by you will be validly issued and outstanding and
entitled to the benefits of the Pooling Agreement;
(x) The statements in the Prospectus under the
headings "Certain Federal Income Tax Consequences" and "ERISA
Considerations" and the summaries thereof under the headings
"Summary of the Prospectus -- Tax Status of REMIC
Certificates," "-- Tax Status of Non-REMIC Certificates" and
"-- ERISA Considerations," to the extent they constitute
matters of Federal law or legal conclusions with respect
thereto, have been reviewed by such counsel and are correct in
all material respects; and
[ (xi) The Pool described in the Prospectus Supplement and the
Pooling Agreement will qualify as a "real estate investment
conduit" ("REMIC") within the meaning of Section 860D of the
Internal Revenue Code of 1986, as amended (the "Code"),
assuming: (i) an election is made to treat the Pool as a
REMIC, (ii) compliance with the Pooling Agreement and (iii)
compliance with changes in the law, including any amendments
to the Code or applicable Treasury regulations thereunder.]
Such counsel also shall state that it has no reason to believe that at
its effective date the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus on the Closing Date
includes any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading (other
than the financial and
10
statistical information contained therein as to which such
counsel need express no opinion);
(d) You shall have received an opinion of [ ],
counsel to the Seller, dated the Closing Date, to the effect
that:
(i) The Seller has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the state of its incorporation and is duly qualified
to do business in, and is in good standing as a foreign
corporation in each jurisdiction in which the Seller owns or
leases property or in which the conduct of its business
requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not
have a material adverse effect on the Seller;
(ii) Each of the Pooling Agreement and the Loan
Purchase Agreement has been duly authorized, executed
and delivered by the Seller;
(iii) No consent, approval, authorization or order
of any court or governmental authority or agency is required
for the consummation by the Seller of the transactions
contemplated by the terms of Loan Purchase Agreement or the
Pooling Agreement except such as may be required under the
"Blue Sky" or state securities laws of any jurisdiction in
connection with the offering, sale or acquisition of the
Certificates and such other approvals as have been obtained;
(iv) The sale of the Mortgage Loans to the Company
pursuant to the Loan Purchase Agreement and the consummation
of any of the transactions contemplated by the terms of the
Pooling Agreement or the Loan Purchase Agreement do not
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Seller pursuant
to, any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Seller
is a party or by which it may be bound or to which any
property or assets of the Seller is subject, nor will such
action result in any violation of the provisions of the
charter or by-laws of the Seller, or any law, administrative
regulation or administrative or court decree;
11
(v) There are no legal or governmental actions,
investigations or proceedings pending to which the Seller is a
party, or, to the best knowledge of such counsel, threatened
against the Seller, (A) asserting the invalidity of this
Agreement, the Pooling and Servicing Agreement or Loan
Purchase Agreement, (B) seeking to prevent the sale of the
Mortgage Loans to the Company or the consummation of any of
the transactions contemplated by this Agreement, the Loan
Purchase Agreement or the Pooling and Servicing Agreement or
(C) which might materially and adversely affect the
performance by the Seller of its obligations under, or the
validity or enforceability of, the Loan Purchase Agreement,
the Pooling Agreement or the Mortgage Loans;
(vi) Assuming that the Loan Purchase Agreement and
the Pooling and Servicing Agreement have each been duly
authorized, executed and delivered by the other parties
thereto, each constitutes a valid, legal and binding agreement
of the Seller enforceable against the Seller in accordance
with its terms, subject, as to enforceability to bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is
sought in a proceeding in equity or at law; and
(e) You shall have received an opinion of [
], counsel to the Master Servicer,
dated the Closing Date, to the effect that:
(i) The Master Servicer has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the state of its incorporation and is duly qualified
to do business in, and is in good standing as a foreign
corporation in each jurisdiction in which the Master Servicer
owns or leases property or in which the conduct of its
business requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Master
Servicer;
(ii) The Pooling Agreement has been duly
authorized, executed and delivered by the Master
Servicer;
(iii) No consent, approval, authorization or order
of any court or governmental authority or agency is
12
required for the consummation by the Master Servicer of the
transactions contemplated by the terms of the Pooling
Agreement except such as may be required under the "Blue Sky"
or state securities laws of any jurisdiction in connection
with the offering, sale or acquisition of the Certificates and
such other approvals as have been obtained;
(iv) The servicing of the Mortgage Loans pursuant
to the Pooling Agreement and the consummation of any of the
transactions contemplated by the terms of the Pooling
Agreement do not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Master Servicer, pursuant to, any material contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Master Servicer is a party or by which
it may be bound or to which any property or assets of the
Master Servicer is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of the
Master Servicer or any law, administrative regulation or
administrative or court decree;
(v) There are no legal or governmental actions,
investigations or proceedings pending to which the Master
Servicer is a party, or, to the best knowledge of such
counsel, threatened against the Master Servicer, (A) asserting
the invalidity of the Pooling Agreement, (B) seeking to
prevent the consummation of any of the transactions
contemplated by the Pooling Agreement or (C) which might
materially and adversely affect the performance by the Master
Servicer of its obligations under, or the validity or
enforceability of, the Pooling Agreement or the Mortgage
Loans; and
(vi) Assuming that the Pooling Agreement has been
duly authorized, executed and delivered by the other parties
thereto, the Pooling Agreement constitutes a valid, legal and
binding agreement of the Master Servicer enforceable against
the Master Servicer in accordance with its terms, subject, as
to enforceability to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally and to general principles of equity regardless of
whether enforcement is sought in a proceeding in equity or at
law.
(f) You shall have received copies of any opinions of
counsel for the Company that the Company is required to
13
deliver to the Rating Agency. Any such opinions shall be dated the
Closing Date and addressed to the Underwriter or accompanied by
reliance letters addressed to the Underwriter.
(g) You shall have received from [ ], special counsel for the
Underwriter, such opinion or opinions, dated the Closing Date, in form
and substance satisfactory to you, with respect to the organization of
the Company, the validity of the Certificates, the Registration
Statement, the Prospectus and other related matters as you may require,
and the Company shall have furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass
upon such matters.
(h) At the Closing Date you shall have received a certificate
of an executive officer of the Company, dated as of the Closing Date,
to the effect that the representations and warranties of the Company
contained in Section 2 are true and correct with the same force and
effect as though made on and as of the Closing Date.
(i) You shall have received from [ ],
independent public accountants, two letters, the first
delivered the day of but prior to the execution of, and
dated the date of, this Agreement and the other dated the
Closing Date, addressed to the Underwriter, in the form
heretofore agreed (and in the case of the second such letter
consistent with the first such letter) with such variations
as are reasonably acceptable to you.
(j) You shall have received an opinion of
_______________________, counsel to the Trustee, dated the Closing
Date, in form and substance satisfactory to you and your counsel, to
the effect that:
(i) the Trustee has been duly incorporated and is
validly existing as a ______________ under the laws of the
_________________ and has the power and authority to enter
into and to perform all actions required of it under the
Pooling Agreement;
(ii) the Pooling Agreement has been duly
authorized, executed and delivered by the Trustee and
constitutes a legal, valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with
its terms, except as such enforceability may be limited by (A)
bankruptcy, insolvency, liquidation, reorganization,
moratorium, conservatorship, receivership or other similar
laws now
14
or hereafter in effect relating to the enforcement of
creditors' rights in general, and (B) general principles of
equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) as well as
concepts of reasonableness, good faith and fair dealing;
(iii) the Certificates have been duly
authenticated and delivered by the Trustee;
(iv) the execution and delivery of the Pooling
Agreement by the Trustee and the performance by the Trustee of
the terms thereof do not conflict with or result in a
violation of (A) any law or regulation of the United States of
America or the State of ___________ governing the banking or
trust powers of the Trustee, or (B) the certificate of
incorporation or articles of association or by-laws of the
Trustee; and
(v) no approval, authorization or other action
by, or filing with, any governmental authority of the United
States of America or the State of ___________ having
jurisdiction over the banking or trust powers of the Trustee
is required in connection with the execution and delivery by
the Trustee of the Pooling Agreement or the performance by the
Trustee thereunder.
(k) At the Closing Date counsel for the Underwriter shall have
been furnished with such other documents and opinions as they may
reasonably require.
If any condition specified in this Section 6 shall not have
been fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriter by notice to the Company at any time at or prior
to the Closing Date, and such termination shall be without liability of any
party to any other party except as provided in Section 7.
SECTION 7. Payment of Expenses. The Company will pay all
costs, expenses, fees and taxes incident to (i) the preparation by the Company,
including, printing, filing and distribution under the Act of the Registration
Statement (including financial statements and exhibits), of the Prospectus, each
Preliminary Prospectus and all amendments and supplements to any of them prior
to or during the period specified in Section 5(b), (ii) the preparation,
printing (including word processing and duplication costs) and delivery of this
Agreement, the Pooling Agreement, Preliminary and Supplemental Blue Sky
Memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection with the
15
offering of the Offered Certificates, (iii) the registration with the
Commission, and the issuance by the Company of the Offered Certificates, (iv)
the registration or qualification of the Offered Certificates for offer and sale
under the securities or Blue Sky laws of the several states as described in
Section 5(e) (including the reasonable fees and disbursements of your counsel
relating to such registration or qualification), (v) the fees and expenses of
the Rating Agencies, (vi) filings and clearance with the National Association of
Securities Dealers, Inc. in connection with the offering, if applicable, and
(vii) the performance by the Company of its other obligations under this
Agreement.
If this Agreement is terminated by you in accordance with the provisions of
Section 6 or Section 10(i), the Company shall reimburse you for all of your
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriter.
SECTION 8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages,
liabilities or judgments (including without limiting the foregoing the
reasonable legal and other expenses incurred in connection with any
action, suit or proceeding or any claim asserted) arising out of any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar
as such losses, claims, damages, liabilities or expenses are caused by
(i) any such untrue statement or omission or alleged untrue statement
or omission based upon information furnished in writing to the Company
by the Underwriter expressly for use therein or (ii) any such untrue
statement or omission made in Derived Information incorporated therein
as a result of any filing pursuant to Section 5(f), assuming all
Seller-Provided Information (as defined below) is accurate and complete
in all material respects. This indemnity agreement will be in addition
to any liability which the Company may otherwise have to the persons
referred to above in this Section 8(a).
(b) The Underwriter agrees to indemnify and hold
harmless the Company, the directors of the Company, the
16
officers of the Company who sign the Registration Statement and each
person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages and liabilities caused
by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any Preliminary Prospectus, or caused by any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, but only with reference to (i) information relating to the
Underwriter furnished to the Company in writing by the Underwriter
expressly for use in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any preliminary prospectus or (ii)
any such untrue statement or omission made in Derived Information
incorporated therein as a result of any filing pursuant to Section
5(f), assuming all Seller-Provided Information is accurate and complete
in all material respects. This indemnity agreement will be in addition
to any liability which the Underwriter may have to the persons referred
to above in this Section 8(b).
(c) In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be
instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, 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 and the indemnifying party, upon
request of the indemnified party, shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
action or 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
17
shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (a) the reasonable fees and
expenses of more than one separate firm (in addition to any local
counsel) for the Underwriter and all persons, if any, who control the
Underwriter within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act and (b) the reasonable fees and
expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section and that all such
fees and expenses shall be reimbursed as they are incurred. In the case
of any such separate firm for the Underwriter and such control persons
of the Underwriter, such firm shall be designated in writing by the
Underwriter. In the case of any such separate firm for the Company, and
such directors, officers and control persons of the Company, such firm
shall be designated in writing by the Company. 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 be 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. 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, liabilities or judgments referred to therein, 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, liabilities and
expenses (i) 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 Offered 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 the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the
18
Underwriter on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the
Underwriter on the other shall be deemed to be in the same proportions
as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriter, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault of
the Company on the one hand and the Underwriter on the other shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company 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 Company and the Underwriter agree that it would not be
just and equitable if contribution pursuant to Section 8(d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
in the immediately preceding paragraph. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages,
liabilities or judgments referred to in the immediately preceding
paragraph 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 Section 8(d),
in no event shall the Underwriter be required to contribute any amount
in excess of the amount by which the total price at which the Offered
Certificates underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
(f) The Underwriter agrees to provide the Company (i) all
Collateral Term Sheets, immediately upon distribution to any potential
investor and (ii) any other Derived Information no later than [two]
[Four] Business Days prior to which the Prospectus Supplement is
required to be filed pursuant to Rule 424. For purposes of this
Agreement, the
19
term "Derived Information" means such portion, if any, of the
information delivered to the Company by the Underwriter pursuant to
this Section for filing with the Commission on Form 8-K as:
(i) is not contained in the Prospectus without taking
into account information incorporated therein by reference;
(ii) does not constitute Seller-Provided Information;
and
(iii) is of the type of information defined as Collateral
Term Sheets, Structural Term Sheets or Computational Materials
(as such terms are interpreted in the No-Action Letters (as
defined below)).
"Seller-Provided Information" means the information contained on any
computer tape furnished to the Underwriter by a Seller concerning the
assets comprising the Trust.
The terms "Collateral Term Sheet" and "Structural Term Sheet"
shall have the respective meanings assigned to them in the February 13, 1995
letter (the "PSA Letter") of Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ on behalf of the
Public Securities Association (which letter, and the SEC staff's response
thereto, were publicly available February 17, 1995). The term "Collateral Term
Sheet" as used herein includes any subsequent Collateral Term Sheet that
reflects a substantive change in the information presented. The term
"Computational Materials" has the meaning assigned to it in the May 17, 1994
letter (the "▇▇▇▇▇▇ Letter" and together with the PSA Letter, the "No-Action
Letters") of ▇▇▇▇▇ & ▇▇▇▇ on behalf of ▇▇▇▇▇▇, Peabody & Co., Inc. (which
letter, and the SEC staff's response thereto, were publicly available May 20,
1994).
(g) The Underwriter confirms that the information set forth
(i) in the last paragraph on the cover page and (ii) in the second
paragraph under the caption "Method of Distribution" in the Prospectus
Supplement is correct and constitutes the only information furnished in
writing to the Company by or on behalf of the Underwriter specifically
for inclusion in the Registration Statement and the Prospectus.
SECTION 9. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Company
submitted hereto, including indemnity and contribution agreements, shall remain
operative and in full force and effect, regardless of any
20
termination of this Agreement, or any investigation made by or on behalf of the
Underwriter or any person controlling the Underwriter by or on behalf of the
Company, its officers or directors, and shall survive acceptance and payment for
the Offered Certificates hereunder.
SECTION 10. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the execution and delivery hereof by the
parties hereto.
This Agreement may be terminated for any reason at any time
prior to the Closing Date by the Underwriter upon the giving of written notice
of such termination to the Company, if prior to the Closing Date (i) there has
been, since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the condition, financial
or otherwise, earnings, business affairs or business prospects of the Company,
whether or not arising in the ordinary course of business, or (ii) there has
occurred any outbreak or escalation of hostilities or other calamity or crisis
or material change in existing financial, political, economic or securities
market conditions, the effect of which is such as to make it, in the judgment of
the Underwriter, impracticable or inadvisable to market the Offered Certificates
in the manner contemplated in the Prospectus or enforce contracts for the sale
of the Offered Certificates, or (iii) trading generally on either the American
Stock Exchange or the New York Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium has
been declared by either Federal New York State or New York City authorities. In
the event of any such termination, the provisions of Section 7, the indemnity
agreement and contribution provisions set forth in Section 8, and the provisions
of Sections 9 and 14 shall remain in effect.
[ SECTION 11. Default. If, on the Closing Date any one or more of the
Underwriters shall fail or refuse to purchase Offered Certificates that it or
they have agreed to purchase hereunder on such date, and the aggregate principal
amount of Offered Certificates which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Offered Certificates to be purchased on such
date, the other Underwriters shall be obligated severally in the proportions
that the principal amount of Offered Certificates set forth opposite their
respective names in Schedule I bears to the aggregate principal amount of
Offered Certificates set forth opposite the names of all such non-defaulting
Underwriters, or in such other
21
proportions as you may specify, to purchase the Offered Certificates which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the principal amount of Offered
Certificates that any Underwriter has agreed to purchase pursuant to Section 3
be increased pursuant to this Section 11 by an amount in excess of one-ninth of
such principal amount of Offered Certificates without the written consent of
such Underwriter. If, on the Closing Date any Underwriter or Underwriters shall
fail or refuse to purchase Offered Certificates and the aggregate principal
amount of Offered Certificates and the aggregate principal amount of Offered
Certificates with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Offered Certificates to be purchased on such
date, and arrangements satisfactory to you and the Company for the purchase of
such Offered Certificates are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Company. In any such case either you or the Company shall
have the right to postpone the Closing Date but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.]
SECTION 12. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriter directed to [ ]; notices to the Company shall be directed to it at
Headlands Mortgage Securities, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention: [ ].
SECTION 13. Parties. This Agreement shall inure to the benefit
of and be binding upon the Company, the Underwriter, any controlling persons
referred to herein and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person, firm or corporation any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. No purchaser of Offered Certificates from the Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 14. Governing Law. This Agreement shall be governed by
the laws of the State of New York.
22
SECTION 15. Counterparts. This Agreement may be signed in two
or more counterparts each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
23
If the foregoing is in accordance with your understanding of our
agreement, please sign this Agreement and return it to us.
Very truly yours,
HEADLANDS MORTGAGE SECURITIES, INC.
By ________________________________
Name:
Title:
Confirmed and Accepted, as of the date first above written:
[UNDERWRITER]
By
By
24
SCHEDULE I
Offered Certificates: Mortgage Pass Through Certificates, Series
1996-1, Class A-1, Class X and Class M-1.
Initial Principal Amount of Offered Certificates:
Initial Class Certificate
Class Balance
------------------------------ -----------------------------------------
Class A-1 $
Class X $
Class M-1 $
Purchase Price:
Class Purchase Price
Class A-1 %*
Class X %*
Class M-1 %*
-----------------------
*Plus accrued interest at the applicable Certificate Rate from the Cut-off Date
to, but not including, the Closing Date.
A-1
Classes of Book-Entry Certificates:
Description of Mortgage Loans: Fixed rate, conventional first
mortgage loans having an
aggregate principal balance as
of the Cut-Off Date of approxi-
mately $_____________. The
Mortgage Loans are fully-
amortizing, ___ to ___ month,
fixed interest rate, conven-
tional mortgage loans secured
by one- to four-family
residential properties.
Denominations: The Offered Certificates will
be issued in book-entry form.
Each such Class of
Certificates will be evidenced
by one or more certificates
registered in the name of CEDE
& Co. ("CEDE") in the
aggregate amount equal to the
Initial Class Certificate
Balance of such Class.
Interests in such Classes of
Offered Certificates issued in
the name of CEDE may be
purchased by investors in
minimum denominations of
$[ ] and integral
multiples of $[ ].
Cut-Off Date: ________________
Certificate Rate:
Class Rate
------------------------------ --------------------------------
Class A-1 % per annum
Class X % per annum
Class M-1 % per annum
A-2
